Whether interest can be clubbed with principal debt to crossover the threshold limit of 1 Crore for filing CIRP petition under Section 9 of the IBC? – Gandhar Oil Refinery (India) Ltd. Vs. City Oil Pvt. Ltd. – NCLT Kolkata Bench
April 30, 2023
The Operational Creditor has failed to bring forth any agreement between the parties that a default in payment would attract interest. The interest of 24% is levied only in terms of a unilateral clause in the invoice and the Corporate Debtor never agreed or promised. Without clubbing such interest with the Principal amount, threshold as per Section 4 of the Code is not met. The Adjudicating Authority held that levying of interest being neither mentioned in any agreement entered into by the parties, nor being specifically admitted by the Corporate Debtor, in absence of any promise of the Corporate Debtor to pay such interest, could not be clubbed with the principal amount due to hold the interest as a ‘debt’ so as crossover the threshold amount of 1 Crore as ingrained in Section 4 of the Code by virtue of notification No. SO 1205(E) dated 24 March, 2020 of the Ministry of Corporate Affairs increasing the threshold limit from one lakh to one crore for the purpose of section 4 of the Code.
