In the matter of Madhya Bharat Papers Limited

o IN,THE NATIONAL COMPANY LA'W TRIBUNAL CUTTACK BENCH CUTTACK CP (U)Np.27 /CB/2022 In the Matter of: An application under section 9 of the Insolvency and Bankruptcy Code 2076 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2QL6. -And- In the matter ofi GRASTM rNDUsrRrEs LTMITED, (chemical Division), Birla Aurora, l0th Floor, Near Century Bhavan, Woril, Mumbai- 400 030, Maharashtra State; ...Operational Creditor Yersus- MADHYA BHARAT PAPERS LIMITED, having its Registered office at- Birgahni Rly & P.o Champa- 495 671, Districf Janjgir Champa, Chhattisgarh State. ...Co1porate Debtor

Coram: Shri P. Mohan Raj Member (Judicial) Shri Kaushalendra Kumar Singh Member (Technigait; Appearances (through hybrid mode): For the Petitioner Mr. Baibaswata Panigarhi, Adv. Mr. Subham Sharma, Adv. For the Respondent Mr. Rishav Banerjee, Adv. Mr. Supriyo Gole, Adv. Ms. Madhuja Barman, Adv. Order pronounced oru 74,02,2024 OSD LB 1. This petition is filed to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor under Section 9 of lnsolvency and gd 9d

IN THE NATIONAL COMPANY I,AW ]'RII]UNAL CU'TTACK BENCH ellU)wa z7/CB/2!22

Bankruptcy Code, 2016 R/w Rule 4 of Insolvency and Bankruptcy (Application to Adjudication Authority) Rules, 2016. 2, Brtef contents of the petition rue as follows: The petitioneiloperational creditor supplied various kinds of materials to the respondent/corporute debtor in response to purchase orders placed by it. The petitioner had raised invoices for the materials supplied and delivered to the respondent. The amounts under the invoices were payabte on the due dates mentioned in the invoices. As per payment condition, in case of delay the respondent is liable to pay L8o/o interest. The petitioner maintains running account of the respondent and used to give credit to the payments or partpayments made by the respondent. The respondent is liable to pay balance amount in respect of 24 rnvoices dated from 26.10,20L4 to 03.t2.2016. The respondent lastly paid a sum of Rs.6,25,000/- on LL.02.2019. Out of Rs.6,25,000/- a sum of Rs.5,57,045/-was credited into invoice No. 200101,902t dated 12.02.20t9 andbalance amount of Rs.67,955/- was credited to old dues on L2.02.2019. The respondent confirmed the due amount of Rs.22,32,029/- by letter of confirmation dated 27,09,2016, There after the respondent failed to make any payment towards the dues. The principal due amount is Rs.66,35,6t7 /- and interest is Rs.85,7L,L88/, total due amount as on 3L.07 .2020 is Rs.1,49,14,L42/ - The petitioner sent statutory Form 3 notice dated 02.04.202L to the respondent, then reminders also issued tiut the respondent failed to pay the dues. Hence this petition. 3. Brief contents of reply are as follows: The respondent is carrying on paper manufacturing business and having business transaction with Aditya Bkla Chemical Industries Ltd, amidst of ongoing ffansactions in the year 20L6 Aditya Birla Chemical Industries Ltd, merged with Grasim Industries Limited/ petitioner. The petitioner sent a legal notice dated 3 .3 .20t9 demanding an amount of Rs.22,3 L,909 / - with regard to the Purchase order No.4/006 dated t4.4.2014. In the said legal notice petitioner reiteruted that respondent vide letter dated 27.09.20L6 has confirmed outstanding qd 9A Page 2 of t5

IN TI_IE NATIONAL COMPANY LAW TRIBUNAL CUI-TACK BENCH elIIDNp,-Z/eE/2A22 amount of Rs.22,32,029/-. In the said legal notice dated 03.03.2019 the petitioner mentioned about 13 invoices and due amount of Rs.22,32,029/- The respondentmade the payments for the invoices raised in the year 2018 which was adjusted against invoice no. 2301017172 dated 28.011201.8. The contention of petitioner that they have maintained running account is denied. The invoices filed by the petitioner were never acknowledged by the respondent. The unauthenticated invoices produced by the petitioner are time barced. The invoices relates back to the year 20L6. The respondent paid a sum of Rs.6,25,000/- on L1.02.2019. After deducting a sum of Rs.6,25,000/- from the notice menrioned amount of Rs. 22,32,029/, the due amount is Rs.16,07,029/-. By addng contractual rate of interest it comes to Rs.37,50,t8t/- as on the date of filing of the petition, which is less than the threshold amount. It is also noted that the petitioner given different date of default. The petitioner mentioned in partlY Q) of Form the defaultdate is 31.07.2020, so the petition is hitby Section 10A of IBC 2016.

3. Brief contents of the rejoinder are as follows: The corporute debtor in the meeting held on 08.02,20t9 agreedto clear all old dues and .by e-mail dated L1.02.20L9 agreed to clear the all-old dues. The petitioner had sent a notice dated 3.3.20L9 to the respondent and not receive d any reply letter dated 3.720L9 from the respondent as alleged in the reply. The invoices mentioned in the letter dated 03.03.2019 are in respect purchase orders rcferued to poly Aluminium chloride. The outstandng24 invoices mentioned in the petition are in respect of other purchase orders and other product supplied by the operational creditor to the corporate debtor. The maintaining of running account by the petitioner is evident from Annexure-Al.0 to Annexure-Al2. This company petition is fiIed within limitation. It is denied that the invoices are unauthenticated as alleged by the respondent. The payment and pafi-payment made by the resiondent between 2OL4 and 2016 are reflected in the Axis Bank statement of account of the petitioner. The statementprepared by the petitioner in this regard is Annexure-l5. The corporate debtor had gsignead thre Balance s&

IN TI-IE NA'IIONAL COMPANY LAW TRIBUNAL CUT'TACI( BENC}I eIXilNe,2Z/cB/2A2 confirmation letter dated 27,09.20t6 for supply of liquid PAC as on 31.03.2016. Further by email dated 1L.02.2019 the respondent acknowledged and agreed to clear all old over dues. In pursuance of consensus anled at between the parties the respondent paid a sum of Rs.6,25,000/-. on tL.02.2019. As per affangement a sum of Rs.5,57,045/- was adjusted towards the invoice no.20010LL9021 dated 12.02.20L9 Annexure-AL6 and balance amount of Rs.67,955/ was adjusted towards old over dues. It is denied that the respondent not confirmed the balance of due amount mentioned in letter dated 27.09.20L6 Annexure-A9. The default took place in the year 20t9 as stated in the company petition, the date referrecl in petition 31.07.2020 is the cutoff date for calculating the total amount of default, hence the petition is not hit by Section 10A of BC 2016. 4. Bnef facts of the Sur-rejoinder are as follows: The corporate debtor denies the contention of the petitioner that the respondent agreed to clear all old dues vide e-mail dated 1L.02.2019, It is stated that no amount is due and outstanding to be paid by the respondent to the petitioner. The notice sent by the petitioner dated 03.03.2019 demanding an amount of Rs.22,3L,909/- was with regard to the Purchase order No.4/006 dated t4.4.20t4. Even if the notice of the petitioner dated 03.03.2019 is considered then the respondent is liable to pay a sum of Rs.22,3l,g0g/- and not the amount claimed in the petition. In the scenario it can be inferued that the petitioner has different claims arising out of different work order, having different amount and different dates of default which cannot be clubbed together. The respondent not signed the balance confirmation letter dated 27.09.2016.The company petition is liable to be dismissed. 5. Points for consideration are: 1. Whether the petition is barred by limitation? 2.Whether the interest to be clubbed with principal to meet threshold limit of ' Rs.1 crore? Dd /-t r-' 3d

IN TI-IE NATIONAL COMPANY LAW TRIBUNAL CUTTACK BENCH eIIDN-oJZGB/2!22

6. Point No.1: 7. The petitioner has filed this petition for initiation of CIRP against the respondent for non-payment of consideration for the goods supplied vnder 24 invoices mentioned below. S. Invoice No. Invoice Payable Principal Interest Part No. Date Date payment and date 1. 9205039373 26.10.2014 10.12.2014 Rs.4,28,638 Rs.3,76,431 Adjusted Rs.91,765 on 20.09.20t8 2. 9205043294 20.t2.2014 03.02.2075 Rs. 3,89,254 Rs.5,77.001 3. 9205044292 02.01.20ts 76.02.2015 Pts.1,72,434 Rs.2,53.037 4. 9205044417 05.01 .2015 19.02.2015 Rs, 1,68,770 Rs.2,47.143 5 920504500s 05.01 .2015 29.02.2015 Rs. 1,68,158 Rs.2.44.559 6. 9205045166 16.01 .2015 2.03.201s Rs.1,72,085 Rs.2.49.888 7. 9200022067 08.02.207s, 09.03.1201s Rs.3,92,507 Rs.5.66.916 8. 9205045739 24.012015 10.03.2015 Pts.1,72,871 Pis.2,49,494 9. 920s046310 31.01201s 17.03.2015 Pts.1,74,676 Rs.7.50.660 10 9200021882 03.02.20t5 20.03.2015 Rs.38,84,338 Pis.7,33,627 Adjusted payment Rs. 1,96,662 0n 37.t2.2076 Adjusted payment Rs. 4236 on 23.03.2020 11. 9200022105 09.02.20t5 27.03.2015 Rs.2,51,599 Rs.3,58,397 t2. 920s04709s 7t.02.2015 28.03.2015 Pts.1,72,609 Rs.43,046 ec _sc

IN TFIE NATIONAL COMPANY LAW TRIBUNAL CUTTACK I}ENCH gDNe-27JeU2!A CP

13. 9200022266 14.02.2015 02.04.2015 Rs.3,88,684 Rs.5,51,111 t4. 9200022296 14.022015 02.04.20ts Pts.3,97,472 Rs.5,63,571 15. 9200022482 20.02.201.5 06.04.2015 Rs.3,95,528 Rs.5,59,082 t6. 9205047845 22.02.201s 08.04.2015 Rs. 1,71,999 Pts.2,42,746 17. 9205048047 25.022075 tL.04.2015 Rs. 1,70,689 Pts.2,40,337 18. 9200023098 12.03 20t5 28.04.20t5 Rs.4,26,883 Rs.5,93,337 t9. 9205050729 05.042015 20.05.201s Pls.1,77,644 Pts.2,34,456 20. "9205051083 70.04.2075 20.05.20t5 Rs1,70,770 Pts.2,32,328

21. 920505t324 13.042075 24.05.2015 Rs.77,42,643 Rs.2,36,522 22. 9205051.6t8 77.04.2015 01.06,201s Rs.1,71,120 Pts.2,31,524 23. 9200037969 23.06 2016 08.03.2016 Pts.4,99,470 Fls.4,65,822 24. 9200042834 03.t2.20t6 18.01 .2017 Rs.4,45,115 Rs.3,53,838

Total Rs.66,35,617 Rs.85,71,188 Rs,2,92,663

8" As per the statement of account submitted by the petitioner a sum of Rs.63,42,954/- is due towards principal ar,d a sum of Rs.85,71,1,88/- is due towards interest in total a sum of Rs.1,49,74,142/- is due and payable by the respondent as on 31.07.2020. The invoices on which claim of the petitioner based are dated from 26.10.2014 to 03.12.2016 and amount payable there on from 10.12.2014 to 18.01 .2017. This petition is filed on 24.l2.20zL rhus, when we calculate three years from the last invoice due date, the limitation period expires with 18.01 .2020. 9. On the petitioner side submitted that the petitioner maintains running account. The last payment a sum of Rs.6,25,000/- was paid by the respondent on 17.02.2019. The petitioner further submitted that out of Rs.6,25,000/- a sum of Rs.5,57,045/- was adjusted against invoice no.20010119021 dated 12.02.2019 (not belongs to subject invoices) andbalance sum of Rs.67,955/- was adjusted toward old dues. Inpart IV (2) of the petition referred working sheet Annexure-I -' 3d sd

IN TI-IE NATIONAL COMPANY LAW'II{IBUNAL CUTTACI( BENCH QP_IBN_o,ZZ1e812U2

Qtage 109 of petition) In this working computation table chart the amount of Rs.67,955/- patd on 11.02.2019 is not given credit, hence it shows that the said amount might be credited towards any other dues unconnected with petition invoices. 10. The petitioner also filed the HDFC Bank statement of Account of the petitioner for the period from 01 .01 .2019 to 3 1 .03 .20 19 .(Annexure I in petition page 110)The payment of Rs.6,25,000/- of the respondent credited into the account of the petitioner on 1L02.2019. On the petitioner side submitted that since the petition is filed within three years from the date of last payment 71.02.2019 the petition is filed in time and not barued by limitation. This last payment is not given credit to any of 24 invoices filed in this petition, this amount has credited into invoice dated 12.2.2019 hence the amount paid for in respect entirely different transaction will not helpful to extend the period of limitation of this petition. 11. On the petitioner side filed Axis Bank statement of Account of the petitioner for the period from 01 .04.2014 to 31.03.2015.(Annexure 15 in rejoinder page 45-92) In the said Bank statement the amount received from the Respondent were credited into the account of the petitioner are marked with 1l tick mark. The following payments of respondents are given credit to the account of the petitioner:

Date Amount Credited S.No. 1. 08.04.2014 Rl720326.00 2. 08.04.2014 Rs. 569753.00 3. 09.04.2014 Rs.450399.00 4. 03.05.2014 Rs.456438.00 5. 09.05.2014 Pts.749402.00 gdr sd iN TI-IE NATIONAL COMPANY LAW TRIBUNAI, CIJ'ITACK BENCI{ eilB)Ire-2zleBAU2

6. 22.05.20t4 Rs. 525245.00 7. 03.06.201,4 Rs. 512258.00 8. 03.06.2014 Rs.711602.00 9. 03.06,2014 Rs. 545601.00 10. 05.06.2014 Rs. 537157.00 11. 19.06,2014 Rs.940569.00 12. 27.06.2014 Rs.48284.00 13. 03.07.2014 Rs.499615.00 14. 77.07.2014 Rs.442325.00 15. 05.08.2014 Rs.96568.00 t6. t7.08.2014 Rs. 562383.00 17. 14.08.2014 Rs. 505996.00 18. 2t.08.2014 Rs.450745.00 19. 05.09.2014 Rs.439359.00 20. 0s.09,2014 Rs.449433.00 27. 23.09.2014 Rs.494680.00 22. 09.10.20t4 Rs. 515382.00 23. 23.t0.2014 Rs.593931.00 24. 03.11.2014 Rs. 575706.00 25. 05.01 .2015 Rs.505181.00 26. 08.01 .201s Rs.458337.00 27. 18.02.201s Rs. 712816.00

28. 24.04.20t5 Rs.496948.00

29. 30.04.2015 Rs.459990.00 30. 03.06.2015 Rl292174.00 31. t9.06.2015 Rs. 315320.00 32. 30.06.2015 Rs.293371.00 Total Rs, 1,59,27 ,294.00 3d sd

IN THE NATIONAL COMPANY LAW TRIBUNAL CUTTACK BENCI{ eP-$-B-WzZlCBALU

1'2. As per the Axis Bank account statement the last payment was made on 30.06.2015 but these payments are not pertaining to any of 24 invoices filed in this petition, even otherwise since the last payment was made on 30.06.2015 it will not in any way save the limitation for this petition filed on24.1,2.2021. 13. The above credited amounts in the Bank accounts are not reflected in the computation table chart Annexure I and not given in credit to the due amounts payable under the subject invoices, so these payments are not helpful to the petitioner to extend limitation. t4. The petitioner filed statement of collection received from the respondent during the financial years 20L4-20L6 Qtage 94 of rejoinder) The invoice numbers, mentioned in the said statement are not relating to the invoices involved in this petition upon which this petition has been filed. Further the last payment was made as per the statement of collection is 01.02.2016, then this statement also not useful to extend the period of limitation. 15. On perusal of Annexure-I, shows that the petitioner given credit to a sum of /- Rs. 91,765 aspafipayment on 30.09.2018 in respect of invoice No.9205039373. As a pafi payment a sum of Rs.1,96,662 paid on 3L.L2,2016 and a sum of Rs.4,236/- paid on 23.03.2020 in respect of invoice No.9200021882, But no document has been filed to prove that these payments were made by the respondent. The Bank statements also not reflected these payments. The computation chart table discloses that the petitioner dealtthe dues of each invoice in separate manner not in composite manner, t6. Normally in business transaction, maintaining running account means the supplier continuously supply the goods to the customer, the customer has not paid the amount to any specific supply/bills, but whatever the amount the customer paid has been given credit to the due amount. Here the records shows that the petitioner has been given credit to the specific invoices. In the situation 6d --

IN THE NATIONAL COMPANY LAW'TRIBI]NAI- CUI"|ACI( BENCH eUIBNa2ZCBAA2 limitation period not to be calculated from the total struck of balance amount shown in the account of the petitioner, instead limitation to be calculated from the date of default of each invoices as provided under Article 15 of Limitation Act t963. 17. In our case as per Annexure-I commutation chafi the due date for the payment of amount as per invoices are on or prior to 18.01.20L7, Part payment adjustment was made in respect of invoice (a) No.9205039373 dated26.I0.20t4. The amount payable due date as per this invoice is 10.12.2014 but the part payment of Rs.91,765/- was paid on 30.09.2018 after the explry of three years limitation period hence this part payment adjustment is not useful to extend the period of limitation. The payment adjustment was made in respect of invoice o No.920002t882 dated 03.02,202015. The due date for Rs.3,88,438/- as per rhe invoice is 20.03.2015, a sum of Rs.1,96,662/-was adjusted as part payment on 31.L2.2016, this payment extends the limitation since it was paid before the exprry of limitation period, another pafi payment adjustment was made on 23,03,2020 after the expry of extended period of limitation. Even though there is no document to show that these part payments were made by the respondent, even otherwise if the contention of the petitioner is admitted since they were made after exptry of limitation period, the pafi payments will not assist the case of the petitioner. 18. The next plea of the petitioner in respect of limitation is, it is stated. that the respondent acknowledged the debt by executing letter of confirmation dated 3t.03,20L6. For this on the petitioner side rely upon (Annexure 9 of petition page No.221) This is the letter addressed by the petitioner to the respondent requesting him to confirm the balance of Rs.22,32,039/- as on 31,.03.2016. The letter was received in the Kolkata office of the respondent on 17.10.20L6 by acknowledging the receipt of letter after afftxing the seal "Received the contents Not verified D.I.Ltd Kolkata." The receipt of *re requisition letter alone will not amount to acknowledgement of debt. The portion ear marked in the letter for confirmation of debt is kept b1ank,/unsrgned. The acknowledgement is also not for the clefault ,-1 3J \. 3d

IN'fI{E NATIONAL COMPANY LAW TRIBI]NAL CUT:TACI( BENCH CP (I&Ne,Z/e812022 amount mentioned in this petition it is only fot Rs.22,32039 / - As per section 18 of Limitation Act 1963 the acknowledgement must be signed personally or duly avthorized agent, so in the absence any signature the unsigned letter of requisition of petitioner is not amounts to an acknowledgement of debt. . L9 The petitioner sent demand notice dated 03.03.2019 (Annerure A14 rejoinder) to the respondent demanding the respondent to pay a sum of Rs.22,31,909/- in respect of 14 invoices out of 24 rnvoices involved in this petition. In this notice petitioner called upon the respondent to pay the due amount of Rs.22,3L,909/- within seven days. Further in the notice it is stated that a sum of Rs.2,33,640/- received on 0t.04.2018 was given credit to the invoice No.2301017t72 dated 28.0L.2018 it shows that the petitioner dealt the invoices individually. The contention of the petitioner that a sum of Rs.5,57,045/- out of Rs.6,25,000/- paid on LL.02.2019 was given credit to the invoice no.20010t902L dated 12.2,20t9 also fortified the fact that the petitioner dealt each invoices specifi callyl individually. 20. The petitioner sent statutory notice dated02.04,2021to the respondent to its registered office was refurned with an endorsement "addressee cannot belocated" hence notice was delivered on respondent's branch office at Kolkata. In the notice it is mentioned that petitioner sent earlier notice dated L6.09.2020 but due to certain discrepancy it was canceled, but the copy of the said canceled notice is not produced. The period of limitation to file petition under section 7 &9 trBC 2016 is three years under Article 137 of Limitation Act 1963. The Hon'ble supreme court in 'B.K. Educational Services Pw. Ltd. Ys. Parug Gupta and Ors., (Z0tg) ll SCC 633 held as follows: It 42. is thus clear that since the Limitation Act is applicable to applications filed under Sections 7 and 9 of the Code from the inception of the Code, Artick 137 of the Limitation Act gets attracted. "The right to sue", therefore, accrues when a default occurs. If the default has occurred over three years prior to the date n gd. gA

IN THE NATIONAL COMPANY LAW f'RIBUNAI- CUITACI( BENCTI CP (IB) No. 27 / CB / 2022 of"fihng of the application, the application would be bared under Article 137 of the Limitation Act, saue and except in those cases wltere, in the facts of the case, Section 5 of the Limitation Aa may be applied to condone the delay infiling such application." 21. In this case cause of action arose or right to sue accrues on the day on which the due date fixed for payment in the invoices. Here the petition under section 9 IBC 2016 was filed after the expry of three years limitation period from the amount payable date recorded in the invoices. Further in respect calculating period of limitation when the petition is filed on the basis of invoices The NCLAT-Delhi in Company Appeal (AT) Insolvency No. 28L of 2022 S,M, Ghogbhai, Yersus Schedulers Logistics India Pvt. Ltd. dated 23.05,2022 held as follows: From the last payment, the Application could hat e been filed within tltree years. Application under Section 9 rtkd by the Appellant was on the basis of 174 invoices as has been noticed by the Adjudicating Authority in the Impugned Order. We are satisfied that for the limitation for filing Section 9 application it is Article 137 of the Limitation Act, 1963 which is attracted. Under Aticle 137, timefrom which period begins to run is "when the right to apply accrues" the right to apply accrues when inyoices issued by the Appellant to the Corporate Debtor were not paid. Inttoices on the basis of which payment is claimed are mole than three years earlier from the date of filing of Section 9 Application which is the basis for rejection of the Application of the Appellant by the Adjudicating Authority, We are not persuaded with the submissions of Learned Counselfor the Appellant that present is the I case where Article is applicable and limitation should be counted from 3Lst March, 2017. Limitation as per Article 137 will begin to run from the date when the right to apply accrues and the (gd Application filed on the basis of 174 inyoices and all invoices being 3A

IN THE NATIONAL COMPANY LAW TRIBUNAL CU'MACI( BENCI{ CP (IH No-UJ1812022 prior to much before three years perild from filing of Seaion 9 Application, the Adjudicating Authority has rightly rejected the Application. We do not find any merit in the Appeal; the Appeal is dismissed, 22. This right to sue accrues from 10.12,2014 to 18.01 .2017 on the basis of 24 invoices prior to three years period from filing of this petition on24.12.2021. This petition is filed after the expiry of three years period; hence it is answered that the petition is barred by limitation. 23. PorntNo.2: 24. The petitioner relies upon 24 tnvoices and submitted that respondent is liable to pay 18% interest, for default period, as per the default clause mentioned in the invoices. The petitioner claims a sum of Rs.63,42,954/- as principal and a sum of Rs.85,71,188/ -towards the defatilt interest and reached the threshold amount of Rs.1,49,t4,742/-. On the respondent side denies the liabilify of paying default interest. It is further submitted that all 24 invoices are not acknowledged by the respondent. On perusal of invoices filed in this petition reveals that the invoices are not acknowledged by the respondent, in the absence of any acknowledgement made by the respondent, it cannot be construed as concluded agreement. There is no pale of controversy the threshold amount includes principal and interest, to include interest as paft of threshold there must be a written agreement for interest. In this case even though there is a clause in the invoices to charge 18% interest on delayed payment, but the invoices are not acknowledged/signed by the respondent, in such a circumstances the default interest clause found in invoices are not binding upon the respondent. 25. In this case no agreement was entered between the parties that interest is payable by the respondent, except as mentioned in the invoices that a 18% interest shall be charged on delayed payments. The imposition of interest is solely on unilateral condition of the invoice, it is not binding upon the respondent. In the absence of any promise of the respondent to pay such default interest, the x gdr sd

IN T'I{E NA'IIONAL COMPANY LAW TRiI]UNAL CUT'|ACI( I]ENCH eillLNe-2Lrc812%2 interest cannot be clubbed with the principal amount to reach the threshold amount of Rs.lcrore as stated in section 4 of IBC 20t6 A11 interest cannot be treated as a debt, if any interest is payable in terms of an agreement then debt includes the interest. In respect of non-binding of unilateral imposition of interest in invoices the Karnataka High Coufi elaborated in Jyothi Limited vs Boving Fouress Limited [MANU/KA / 1022/2000] as follows: c) Interest cannot be awarded merely on the basis of a term in a bill or inuoice, unless the cyeditor proves that suclt provision is based on a contract or agreement on the part of the purcltaser to pay interest. This is because a credit bill or an inyoice is a unilateral demand by the sapplier and is neither a bilateral agreement flor a promise by the purchaser to pay interest. Interest can be awarded on the basis of a provision in a bill/invoice, if it is supported by an agreement or promise to pay interest by the purchaser. Such agreement may be established with reference to correspondence, or by countersigning ofthe bill by the purchaser, or by acceptance by the purchaser of the term in the bill relating to interest. V,4tere in the absence of an agreement or contract for payment of interest on the value of goods supplied, a notice of demand is sent by the supplier requiring payment of the wlue of goods supplied with interest thereon and a reply is sent by the purchaser in general terms seeking time to pay the bill amoun6 such reply cannot be construed as an admission to pay interest. Either an agreement to pay interest or a specific admission or promise to pay interest or an order or decvee granting interest by a court or tribunal empowered to award interest, is a condition precedent to hold that interest is a debt due, for the purpose of a winding up petition. In the absence of a contractual or legal liability, mere omission to deny a demand made in a notice will gd 3A

IN'fI{E NATIONAL COMPANY LAW TRIBUNAL CIJTTACK BENCH eilIilNe-21eil2lU not cyeate a liability, nor act as an estoppel in regard to a subsequent denial by the cornpany in legal proceedings." 26. The NCLAT-Delhi in C.A.No.L48 of 20L8 Pavan Enterprises vs Gammon India dated 27,07,2018 held, "if in tenns of any agreernent interest is payable to the Operational or Financial Creditor then the debt will include interest" The petitioner has failed to bring forth any agreement between the parties that a default in payment would attract interest. The interest is claimed only in terms of a unilateral clause in the invoice and respondent never agreed or counter signed hence the interest claimed in this petition cannot be clubbed with principal to arrive threshold limit. 27. In the circumstances it is answered that inclusion of interest of Rs.85,71,188/ with principal amount of Rs.63,42,954/ to reach threshold limit is not valid, In consequence the petition does not rcach the threshold amount of Rs.1 crore. Thus, this point is answered. 28. v/ In view of answers arrivedto issues framedthis petition is Dismi ssed. 29. Certified copy of the order may be issued to all the concerned parties, if applied for, upon compliance with all requisite formalities. sd 3d Kaushalendra Kumar gingh effafamai Member (Technical) Member (Judicial) Signed on this, 74th day of February, 2024.

Supriya_P.S