Adding Inflated Interest To Outstanding Liability Merely To Cross Threshold U/S 4 Of IBC Is Not Permissible: NCLAT
The National Company Law Appellate Tribunal New Delhi bench of Justice Ashok Bhushan, Mr. Arun Baroka and Mr. Barun Mitra has held that the interest cannot be added to the outstanding liability when there is no contract between the parties to this effect and no past practice justifying such action merely to cross the threshold of Rs. Brief Facts: A petition under Section 9 of the Code was filed by M/s Riddhi Siddhi Metals seeking initiation of Corporate Insolvency Resolution Process against M/s Aquarius H2O Dynamics Pvt. The Operational Creditor issued a demand notice under section 8 of the code to the corporate debtor on 19 March 2024. Consequently, the Adjudicating Authority closed the corporate debtor's rights to file a reply and admitted the petition under section 9 of the code ex-parte. It further said that there is a clear mismatch, and the Adjudicating Authority was misled into admitting the petition under Section 9 of the Code, which was not maintainable because if the payment made by the Corporate Debtor to the Operational Creditor is taken into consideration, the petition fails to meet the threshold of Rs.
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