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Mere mention of interest in invoices does not establish a legal obligation: NCLAT

NCLAT Delhi Bench observed that mere mention of interest in invoices does not establish a legal obligation.

The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra & Arun Baroka (Technical Members) was hearing an appeal and upheld the dismissal of the Section 9 application, finding that the Operational Creditor submitted tampered documents with frivolous intent. The NCLAT Bench affirmed the Adjudicating Authority's decision that the appellant's claim lacked merit due to discrepancies in invoices and timing of payment. The Appellate Tribunal ruled that mere mention of interest in invoices does not establish legal obligation.

The National Company Law Appellate Tribunal (NCLAT) heard the counsel for the appellant in an appeal filed against an order dated November 30, 2023, in Company Petition (IB) No. 314/KB/2022. This order was passed by the Learned Adjudicating Authority (National Company Law Tribunal, Division Bench, Court – II, Kolkata), rejecting a Section 9 application filed by the appellant.

In the adjudication, the Adjudicating Authority highlighted discrepancies in the invoices submitted by the operational creditor, particularly concerning the interest rate claimed. It was observed that the interest rate of 24% per annum was allegedly manipulated, and the validity of the claimed interest was questioned. Additionally, it was noted that the demand notice was issued and payment was made by the corporate debtor before the application was filed, suggesting a lack of merit in the appellant's claims.

The Adjudicating Authority, therefore, concluded that the appellant had filed the application with tampered documents and with frivolous intent to inflate the claimed amount to meet the threshold financial limit as prescribed under Section 4 of the I&B Code. Consequently, the application was dismissed with costs imposed.

During the proceedings, the appellant's counsel argued that there was a verbal agreement regarding the interest amount, justifying the 24% interest claimed. However, the Adjudicating Authority maintained its stance, emphasizing the lack of credibility in the appellant's submission.

Upon review, the NCLAT found no grounds to interfere with the impugned order, stating that it was not a fit case for appellate jurisdiction. However, considering the circumstances, the NCLAT decided to delete the penalty of Rs. 5 lakhs imposed on the appellant.

Therefore, the NCLAT dismissed the appeal, with the condition of deleting the penalty, and granted the appellant the liberty to pursue other legal remedies available for its claim.


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