NCLT Mumbai Dismisses CIRP Plea Against Shapoorji Pallonji, Says Claim Inflated With Unilateral Interest

A bench comprising Judicial Member Nilesh Sharma and Technical Member Sameer Kakar while dismissing the petition observed:

“It is therefore safe to conclude that the present Section 9 Application has been filed by artificially inflating the alleged default through an interest claim which has no contractual or legal basis. Accordingly, the interest component claimed by the Applicant cannot be included while computing the amount of default. Upon exclusion of the said interest, the principal amount falls below the statutory threshold under Section 4 of the IBC.”

GKS Associates claimed a total default of Rs 1.38 crore, comprising Rs 77.24 lakh as principal and Rs 61.53 lakh as interest, alleging non-payment of dues arising from the supply of scaffolding and shuttering materials on hire basis for projects including Ozone Metrozone in Chennai, Christian Medical College in Vellore, and IIT Palakkad. The work orders were issued between July 2017 and January 2022 and invoices were raised periodically for equipment hire charges.

The tribunal observed that the claim crossed the Rs 1 crore threshold only because of the interest component. However, the applicant relied solely on unilateral entries in invoices to claim interest at 24 percent per annum without producing any purchase order, agreement, or other document showing that the corporate debtor had agreed to pay such interest.

Relying on settled precedents, the bench held that unilateral stipulations in invoices cannot form the basis for claiming interest in the absence of a contractual clause or evidence of acceptance by the debtor.

Once the interest component was excluded, the tribunal noted that the principal operational debt stood at Rs 77.24 lakh, which falls below the statutory threshold of Rs 1 crore prescribed under Section 4 of the IBC. The tribunal said:

“Accordingly, we hold that the Application under Section 9 of the IBC is not maintainable as the principal operational debt which is Rs.77,24,136/- falls below the prescribed threshold limit. Further, the Applicant has failed to establish any legal or contractual entitlement to interest as required under law. The Application is thus liable to be dismissed on this ground alone.”

Holding that the insolvency application had been filed by artificially inflating the claim through an unsupported interest demand, the tribunal dismissed the petition as not maintainable while granting liberty to the creditor to pursue recovery before an appropriate forum.

For Applicant: Advocates Saurabh P. Patil, Shinde