{"id":199875,"date":"2018-08-08T15:10:23","date_gmt":"2018-08-08T09:40:23","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=199875"},"modified":"2018-08-27T17:50:12","modified_gmt":"2018-08-27T12:20:12","slug":"every-interest-on-principal-amount-is-not-included-in-debt-application-under-section-9-ib-code-rejected-nclat","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2018\/08\/08\/every-interest-on-principal-amount-is-not-included-in-debt-application-under-section-9-ib-code-rejected-nclat\/","title":{"rendered":"Every \u2018interest\u2019 on principal amount is not included in \u2018debt\u2019; application under Section 9 I&#038;B Code rejected: NCLAT"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>National Company Law Appellate Tribunal (NCLAT): <\/strong>A two-member bench comprising of Justice S.J. Mukhopadhaya, Chairperson and Justice Bansi Lal Bhat, Member (Judicial), dismissed an appeal filed by the Operational Creditor against the judgment of the National Company Law Tribunal, Mumbai whereby appellant\u2019s application under Section 9 I&amp;B Code was dismissed.<\/p>\n<p style=\"text-align: justify;\">The appellant had filed an application for initiation of Insolvency Resolution Process against the Corporate Debtor. Before the NCLT, the respondent submitted that the principal amount of debt due was already paid. The NCLT dismissed the application of the appellant. Aggrieved thus, the present appeal was filed. The appellant, placing reliance on Section 3(11) of the Code which defines <em>debt<\/em>, contended that <em>debt<\/em> means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. It was submitted that the debt as defined in the Code, includes the <em>interest<\/em> due on the principal amount as well.<\/p>\n<p style=\"text-align: justify;\">The Appellate Tribunal was of the view that such submission was untenable. It is NCLT, not every <em>interest<\/em> that can be treated as a <em>debt<\/em>. If in terms of the agreement, <em>interest<\/em> is payable to the Operational or Financial Creditor, then the <em>debt<\/em> will include <em>interest<\/em>; otherwise, the principal amount is to be treated as <em>debt<\/em> which is the liability in respect of the claim that can be made from the Corporate Debtor. The Court noted that in the present matter, the principal amount had already been paid, and as per the agreement, no <em>interest<\/em> was payable. As such, the application under Section 9 on the basis of entitlement of payment of <em>interest <\/em>was not maintainable. The appeal was accordingly dismissed. [Krishna Enterprises v. Gammon India Ltd.,<a href=\"http:\/\/www.scconline.com\/DocumentLink\/QDpEd367\"><b>2018 SCC OnLine NCLAT 360<\/b><\/a>, dated 27-07-2018]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>National Company Law Appellate Tribunal (NCLAT): A two-member bench comprising of Justice S.J. Mukhopadhaya, Chairperson and Justice Bansi Lal Bhat, Member (Judicial), <\/p>\n","protected":false},"author":8808,"featured_media":153604,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,11],"tags":[31346,2591,12521,31347],"class_list":["post-199875","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-tribunals_commissions_regulatorybodies","tag-debt","tag-Interest","tag-nclt","tag-section-9-ib-code"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Every \u2018interest\u2019 on principal amount is not included in \u2018debt\u2019; application under Section 9 I&amp;B Code rejected: NCLAT | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2018\/08\/08\/every-interest-on-principal-amount-is-not-included-in-debt-application-under-section-9-ib-code-rejected-nclat\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Every \u2018interest\u2019 on principal amount is not included in \u2018debt\u2019; application under Section 9 I&amp;B Code rejected: NCLAT\" \/>\n<meta property=\"og:description\" content=\"National Company Law Appellate Tribunal (NCLAT): A two-member bench comprising of Justice S.J. 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