Nu-World Industries (Pty) Ltd vs Veira Electronics Private Limited

Company Appeal (AT) (Insolvency) No. 1024 of 2025 [Arising out of the Impugned Order dated 17.04.2025 passed by the Adjudicating Authority, National Company Law Tribunal, New Delhi Bench in C.P. (IB) No. 666/(ND)/2024]. In the matter of: NU-WORLD INDUSTRIES (PTY) LTD., 35 Third Street, Johannesburg, Gauteng 2090, South Africa, Through its Authorized representative Mobile number: +27828832687 Email: jgoldberg@nuworld.co.za ...Appellant Versus Veira Electronics Private Limited, at B-9, Ground Floor, Naraina Vihar, New Delhi- 110028.

Also at: Plot No. A3A, Sector-81, Block-A, Phase 2, Noida-201305, Uttar Pradesh, India

Also at: 63, Lajpat Nagar-III South Delhi, Delhi, Delhi, India, 110024 Phone number: +91-9910332380 Email: head.service@veiragroup.com .... Respondent Present:

For Appellant : Mr. Varun Singh, Mr. Parijat, Ms. Urvashi Chauhan, Advocates. For Respondent : Ms. Supriya Juneja, Mr. Mohit Seth, Advocates. JUDGMENT

(Hybrid Mode)

Per: Barun Mitra, Member (Technical)

The present appeal filed under Section 61 of Insolvency and Bankruptcy

Code 2016 ('IBC' in short) by the Appellant arises out of the Order dated

17.04.2025 (hereinafter referred to as 'Impugned Order') passed by the

Adjudicating Authority (National Company Law Tribunal, New Delhi Bench-IV)

in C.P. (IB) No. 666/(ND)/2024. By the impugned order, the Adjudicating

Authority has dismissed the Section 9 application filed by the Appellant-

Operational Creditor. Aggrieved by the impugned order, the present appeal has

been preferred by the Appellant.

2. Coming to the factual matrix of the present case, the Corporate Debtor-

Veira Electronic Pvt. Ltd. had entered into a business agreement with the

Operational Creditor-NU-WORLD Industries (Pty) Ltd. for purchase, assembly

and distribution of TV and Home-Audio products. In pursuance of the

agreement, goods were supplied by the Appellant and invoices raised from

07.03.2019 to 21.05.2024. Against the invoices raised by the Operational

Creditor to the tune of USD 798,247.40, the Corporate Debtor had cleared

payment amounting USD 716,421.98 thus leaving an outstanding principal

amount of USD 81,825.42 only. In terms of the business agreement between the

two parties, the Corporate Debtor was also liable to pay interest @ 1.5% per

month on the outstanding dues which worked out to an amount of USD

44,151.57. The interest amount coupled with the net principal totalling USD

Page 2 of 13 Company Appeal (AT) (Insolvency) Nos. 1024 of 2025 125,976.99 thus remained outstanding and the said amount not having been

cleared by the Respondent-Corporate Debtor, the Appellant issued a Section 8

Demand Notice on 26.06.2024. The Corporate Debtor did not either reply to the

Section 8 Demand Notice nor did they release any further payment to the

Operational Creditor following which a Section 9 application was filed by the

Appellant on 08.07.2024. The Adjudicating Authority, however, dismissed the

Section 9 application by holding that if the invoices raised during the Section

10A period and the interest accrued on such invoices are excluded as warranted

in terms of Section 10A of IBC, the claim amount fell below the minimum

threshold limit of Rs 1 Cr. rendering the application non-maintainable. Assailing

the impugned order, the Appellant has come up in appeal.

3. Making submissions on behalf of the Appellant, the Ld. Counsel

emphatically asserted that the two parties were maintaining a running account

and the default on the part of the Corporate Debtor being a continuing default,

the cause of action got triggered from the first invoice onwards starting from

07.03.2019. Clearly therefore the default began prior to the Section 10A period

and continued thereafter even beyond the Section 10A period. On the

maintainability aspect of the present Section 9 application, in the backdrop of

Section 10A of IBC, reliance has been placed on the judgment of this Tribunal in

Narayan Mangal Vs Vatsalya Builders & Developers Pvt. Ltd. in CA(AT)(Ins)

No. 294 of 2023 and Beetel Teletech Ltd. Vs Arcelia IT Services Pvt. Ltd. in

CA(AT)(Ins) No. 1459 of 2022 to contend that if a default is committed prior to

Page 3 of 13 Company Appeal (AT) (Insolvency) Nos. 1024 of 2025 Section 10A period and the default persists even during the Section 10A period

and also thereafter, there is no prohibition in filing of Section 9 application.

4. Further adverting attention to Part-IV of the Section 9 application which has

been placed at page 153 of Appeal Paper Book ("APB" in short), it was pointed

out that a principal amount of USD 81,825.42 alongwith an amount of USD

44,151.57 as interest, totalling USD 125,976.99 (equivalent to Rs

105,68,291.58) remained outstanding to be paid by the Corporate Debtor which

amount clearly met the threshold limit set by Section 4 of the IBC. It was further

added that even if the Section 10A period invoices and interest thereon is

excluded, and part-payment received during Section 10A period is adjusted, the

threshold limit would still be Rs 105,08,371.49 which amount was clearly above

the prescribed threshold. It was contended that the Adjudicating Authority had

also erroneously concluded that there was ambiguity in the computation of the

interest amount. There was no cogent reason on the part of the Adjudicating

Authority for not taking into consideration the invoice dated 21.05.2024 by

which the interest amount had been raised to hold that the Section 9 application

did not fulfil the threshold limit. When there was a debt above Rs 1 Cr which

was due and payable, and part-payments thereto made from time to time, this

amounted to be a clear acknowledgement of liability and hence a fit case for filing

a Section 9 application which could not have been dismissed by the Adjudicating

Authority. Assailing the impugned order, it was vehemently contended that the

dismissal of the Section 9 application by outright rejection of the interest

computation was incorrect and needs to be set aside.

Page 4 of 13 Company Appeal (AT) (Insolvency) Nos. 1024 of 2025

5. Rebutting the contentions made by the Appellant, the Ld. Counsel for the

Respondent submitted that the Adjudicating Authority had rightly rejected the

Section 9 application on grounds of the application being non-maintainable as

it did not meet the threshold limit of Rs 1 Cr. It was asserted that the Appellant

in the interest computation had added the interest amount which accrued on

the invoices raised during the Section 10A embargo period which was not

permissible. The Adjudicating Authority had rightly concluded that had the

interest calculation been made after exclusion of Section 10A period invoices and

interest thereupon, the total claim amount including principal outstanding

would fall below the statutory threshold limit. It was pointed out that entries in

the Form-IV shows that the calculation of interest was calculated on "36 month

straight line on OS balance @ 1.5% per month upto 21.05.2024" without specifying

the details of the invoices on which the interest amount has been calculated or

the period for which interest has been calculated in respect of each such invoice

and adjustment of any part-payment having been made against such invoice and

the date of such adjustment. It was strenuously contended that since the

calculation methodology was not found to be clear, the Adjudicating Authority

gave an opportunity to the Appellant on 06.12.2024 to file written submissions

on the maintainability aspect. However, the Appellant deliberately did not

exercise this option to clear the air. Even later when the matter was heard by

this Tribunal on 13.10.2025, this Tribunal offered another opportunity to the

Appellant, as prayed, to file an additional affidavit to remove the ambiguities in

the manner of computation of the interest amount. However, they again chose

not to file an affidavit which clearly shows the opacity on the part of Appellant Page 5 of 13 Company Appeal (AT) (Insolvency) Nos. 1024 of 2025 with regard to interest calculation which was critical on deciding the

maintainability of the Section 9 application.

6. We have duly considered the arguments advanced by the Learned Counsel

for the parties and perused the records carefully.

7. The short question before us for our consideration is whether the

threshold limit of Rs 1 Cr. for admission of the Section 9 application stands

satisfied or not in the facts of the present case.

8. Before we dwell upon the tenability of the rival submissions, made on the

maintainability aspect of the Section 9 application, we would like to first notice

the reasons given by the Adjudicating Authority in the impugned order to hold

that the threshold limit was not met by the Appellant. At this stage, for easy

referencing, we reproduce paras 12, 15 and 16 of the impugned order as below:

"12. It is categorically submitted herein that the invoices raised during the 10A period need to be segregated for the purpose of calculating the threshold as prescribed under Section 4 of the Code; and along with the interest charged thereupon. However, due to ambiguous charge of interest on ground of running account and relative payments, it is unclear to establish the computation of the interest charged on these invoices.

......

15. It can be established from hereinabove that the invoices raised during l0A period have not been exempted for the purpose of calculation of interest charged thereupon, which is strictly against the intent of the said section.

16. As a result, this Adjudicating Authority has arrived at the conclusion that the invoice dated 21.05.2024 raised for the purpose of calculation of the interest would not be considered or involved for the purpose of ascertaining the amount meeting the minimum threshold in accordance with Section 4 of the Code."

Page 6 of 13 Company Appeal (AT) (Insolvency) Nos. 1024 of 2025

9. We find from the above excerpts of the impugned order that it has been

held at para 12 of the impugned order that for calculating the threshold limit,

the invoices raised during the Section 10A period need to be segregated from

those invoices not arising during the Section 10A period. It has further held at

paras 15 and 16 of the impugned order that the Appellant has relied on an

invoice dated 21.05.2024 for the purpose of interest calculation wherein the

interest calculation has been made on the aggregate amount of outstanding dues

without excluding/exempting the invoices raised during the Section 10A period,

hence, this interest calculation goes against the intent and spirit of Section 10A

of the IBC.

10. We also take notice of the fact that the Adjudicating Authority vide its

interim order dated 06.12.2024 gave the Appellant an opportunity to submit its

written submission to throw light on the maintainability aspect. The said order

is as reproduced below:

06.12.2024

ORDER

Learned Counsel for the applicant is present physically. Heard the arguments on maintainability. Applicant is permitted to file written submissions on maintainability within a week.

List this matter on 03.01.2025.

However, material on record shows that this opportunity was not availed by the

Appellant.

11. It is the case of the Appellant that the present Section 9 application has

been predicated on a default which arose prior to the Section 10A period which

Page 7 of 13 Company Appeal (AT) (Insolvency) Nos. 1024 of 2025 default continued into the Section 10A period and even thereafter, there was no

statutory bar in the filing of the Section 9 application. We find no reasons to

disagree with the above contention of the Appellant that the default having

occurred on 07.03.2019, which clearly pre-dated the Section 10A period, the

filing of the Section 9 application was legally valid and tenable.

12. The bone of contention between the two parties is on the maintainability

of the Section 9 application from the perspective of whether the threshold

parameter stood met.

13. We would like to begin by noticing the computation of principal and

interest outstanding as claimed by the Appellant in Part-IV of Section 9

application which is as extracted below:

Part IV Particulars of Operational Debt Total amount under the Invoices raised USD 798,247.40 by the Operational Creditor excluding the invoice for interest (A) Part Payments made by the Corporate USD 7,16,428.98 Debtor to the Operational Creditor (B) Net Principal Amount Due (A- B) USD 81,825.42 INTEREST 36 MONTH STRAIGHT USD 44,151.57 LINE ON OS BALANCE @ 1.5% per month upto 21.05.2024 (C) Total Amount Due (A-B+C) USD 125,976.99 equivalent to INR 1,05,68,291.58 (as on date)

14. When we look at the above computation chart in Part-IV, we find that the

interest calculation has been shown as USD 44,151.57. The basis of this interest

Page 8 of 13 Company Appeal (AT) (Insolvency) Nos. 1024 of 2025 calculation is admittedly the invoice dated 21.05.2024 as placed at page 112 of

APB which depicts "Interest 36 months on the outstanding Balance 1.5% per

month upto 21.05.2024" which is as reproduced below:

"NU- WORLD GLOBAL INVOICE Invoice Date: 21 May 2024

Invoice Number: NWG - INV5001

Description Quantity Unit Price Amount USD INTEREST 36 1.00 44,151.57 44,151.57 MONTH STRAIGHT LINE ON OS BALANCE Subtotal 44,151.57 TOTAL USD 44,151.57

Due Date: 21 May 2024

Beneficiary Name: NU-WORLD GLOBAL LIMITED"

As already noted at para 9 above, the Adjudicating Authority held that the

interest calculation on the basis of the invoice dated 21.05.2024 was not in order

as it did not exclude interest on invoices which were hit by the Section 10A period

embargo.

15. The Appellant has contended that it was misplaced on the part of the

Adjudicating Authority to hold that the claim amount of the Operational Creditor

did not meet the minimum threshold on the ground that the interest calculation

made by them in terms of the invoice dated 21.05.2024 was not in conformity

with Section 10A of the IBC.

16. It was emphatically asserted that the Appellant is fully conscious that

invoices belonging to the Section 10A period cannot be included either for the

Page 9 of 13 Company Appeal (AT) (Insolvency) Nos. 1024 of 2025 purposes of calculation of debt and/or interest. Submission was pressed orally

that all the six Section 10A period invoices from 23.04.2020 to 20.10.2020

amounting USD 239,337.65 was specifically excluded for calculation of the

operational debt. Furthermore, eight part-payments amounting USD 388,750

made by the Corporate Debtor from 27.09.2020 to 27.02.2021 during the Section

10A period was also adjusted. Basis this exclusion of Section 10A period invoices

and adjustment of part-payment receipts including exclusion of interest

calculation thereon, the total outstanding amount still stood at Rs

1,05,08,371.49/- which amount still remained clearly above the threshold limit.

17. On the lines of the above oral submission made by the Appellant during

the last hearing held by us on 27.11.2025, as allowed, the Appellant has

submitted a tabular chart of their computation of principal and interest amount

after excluding the Section 10A period invoices and adjusting part-payments

received in respect of Section 10A period invoices in their written submission

which is as reproduced below:

"9. Further, the net principal amount due under the agreement, as stated hereinabove, which does not include the 10A invoices, is thus as follows:

Net Principal Amount (A) INR 4,66,49,342.2/-

Net Part Payments Received after INR 3,98,25,075/- adjusting the amounts due towards 10A Invoices (B) Total Outstanding Dues after Adjusting INR 68,24,267.2/- the Part Payments made by the Corporate Debtor (A-B=C)

Page 10 of 13

Company Appeal (AT) (Insolvency) Nos. 1024 of 2025 Interest at the rate of 1.5% per month on INR 36,84,104.29/ the Total Outstanding Dues for 36 months. (D) [The Demand Notice dated 26.06.2024 at Point 2 @P129 records that the last payment was made on 08.07.2021, which is also the Date of Default. The Appellant has issued the Invoice dated 21.05.2024, levying interest on the Total Outstanding Dues of INR 68,24,267.2/- from the date of the last payment/ date of default (08.07.2021) [Annexure A-6 (Colly) at P 112] Total Amount along with Interest due INR 1,05,08,371.49/- and payable by the Corporate Debtor (C+D) "

18. Before we make our observations on this fresh tabular chart of principal

and interest computation placed before us by the Appellant by way of written

submission after the matter was reserved for orders, we must add that this had

not been placed before us by way of an affidavit, though an opportunity to do so

was prayed for by the Appellant which had been allowed by this Tribunal on

13.10.2025. Be that as it may, for meeting the ends of justice, we have perused

the fresh tabular chart on principal and interest computation.

19. It is critical for us to have a look at the invoice dated 21.05.2024, which is

already reproduced above at para 14 above. Quite clearly, it is a cryptic invoice

which is strikingly bald in terms of details. The said invoice seems to have been

raised on the basis of a communication received by the Operational Creditor from

their external independent auditor-Sino Corp CPA Ltd. dated 19.08.2024 which

is placed at page 113 of APB. This communication inter alia states that the

Page 11 of 13 Company Appeal (AT) (Insolvency) Nos. 1024 of 2025 interest amount owed by the Corporate Debtor to the Operational Creditor is

USD 44,151.57 and is found to be equally bereft of details.

20. Even if we accept the argument of the Appellant that the invoices of Section

10A period have been excluded both for the purpose of principal and interest

amount in this revised chart, we are afraid that this revised chart fails to illumine

us as to on what basis and how the interest amount has been calculated. Prima

facie, if the exclusion of principal and interest component in respect of invoices

arising during the Section 10A period had taken place, this ought to have

substantially brought down both the principal amount and interest amount.

However, when we see the revised calculation at para 17 above which has only

been given in rupees figure, we find the total outstanding principal amount

alongwith interest is shown as Rs 1,05,08,371.49 which is nominally below the

amount depicted in Part-IV as USD 125,976.99 (equivalent to Rs 1,05,68,291.58)

which is merely Rs 60,000/- less than the original Part-IV figure. The calculation

of interest component on 36 months straight line has not been specifically co-

related invoice-wise. It does not even depict the period for which interest

calculation has been done invoice-wise. It is also not clear whether invoices

raised during the Section 10A period were segregated and excluded for interest

calculation purposes. Clearly the computation of interest in the said invoice of

21.05.2024 lacks clarity. Thus, the Adjudicating Authority cannot be faulted for

holding that the invoice of 21.05.2024 cannot be sufficient basis for the purpose

of determining the interest component and for ascertaining whether the claimed

amount met the threshold requirements.

Page 12 of 13 Company Appeal (AT) (Insolvency) Nos. 1024 of 2025

21. Given the aforesaid discussion, we do not find any infirmity in the

impugned order dismissing the Section 9 application for not meeting the

threshold limit prescribed under Section 4 of the IBC. Accordingly, the Appeal

is dismissed. We however would like to add that we have not expressed our views

on the merits of debt and default. The Appellant shall be at liberty to approach

any other competent court to seek appropriate remedies in accordance with law.

No order as to costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

Place: New Delhi Date: 10.12.2025

Abdul

Page 13 of 13 Company Appeal (AT) (Insolvency) Nos. 1024 of 2025