In order to club other charges such as interest, legal charges, balance cost of amortization and/or notice period rent with principal amount to meet threshold limit u/s 4 of IBC express stipulation has to be incorporated specifically in the agreement, the purchase order or the invoice and in the absence of the same, neither interest nor any other charges can be clubbed with the principal amount – North West Carrying Company, LLP Vs. Metro Cash and Carry India Pvt. Ltd. – NCLT Bengaluru Bench
June 5, 2023
In this Section 9 application, the petitioner has clubbed, principal amount of Rs. 12,46,204/-, interest upto 28 Feb 2022 of Rs. 1,13,80,361/-, Legal charge of Rs. 21,49,925/-, Balance cost of Amortization of Rs. 1,77,727 and Notice Period Rent of Rs. 14,17,582/- to arrive at the total amount of Rs. 1,63,71,799/-. The Adjudicating Authority held that in order to club other charges with the principal amount express stipulation has to be incorporated specifically in the agreement, the purchase order or the invoice and in the absence of the same, neither interest nor any other charges can be clubbed with the principal amount. Therefore this Tribunal observes that the threshold limit stipulated under section 4 of the Code is not met in this case.