Disputed Interest Does Not Bar Section 9 IBC Plea If Principal Debt Exceeds ₹1 Crore: NCLT Allahabad

The Allahabad Bench of the National Company Law Tribunal (NCLT) on 8 October held that a dispute over interest on delayed payments does not defeat insolvency proceedings when the admitted principal debt exceeds the statutory threshold under the Insolvency and Bankruptcy Code, 2016 (IBC).

A Bench comprising Judicial Member Praveen Gupta and Technical Member Ashish Verma admitted a Section 9 application filed by Boston Ivy Healthcare Solutions Private Limited against Zaneka Healthcare Limited, holding that the corporate debtor's admission of the principal liability established the debt despite its objections to interest and other aspects of the transaction. It observed:

“...we are satisfied that there is a debt of more than Rs. 1 Crore even after excluding the interest component and also a default has occurred on the part of the Respondent/Corporate Debtor to pay this debt.”

Boston Ivy Healthcare Solutions Private Limited supplied goods to Zaneka Healthcare Limited under purchase orders and raised invoices for supplies made in February and March 2025. The operational creditor claimed that Rs. 1.32 crore remained unpaid and sought Rs. 1.41 crore, including interest at 18% per annum.

Zaneka Healthcare Limited disputed the claim, alleging delays and deficiencies in the supply of goods. It also challenged the interest as unilaterally imposed and argued that the parties maintained a running account with regular part-payments, leaving no default warranting insolvency proceedings.

The Tribunal noted that Zaneka Healthcare Limited expressly admitted its liability of Rs. 1.32 crore in its reply to the demand notice. It also acknowledged the business relationship and receipt of goods. It also held that the admission of liability and the absence of a denial of the outstanding principal established the debt.

It further observed that maintaining a running account and making periodic payments did not justify evading the remaining liability. It found that Zaneka Healthcare Limited had produced no evidence to establish an outright denial of liability and had placed no correspondence or documents on record disputing the timing or quality of supplies before the demand notice.

The Bench also noted that Zaneka Healthcare Limited raised its objection to interest only in its reply to the demand notice, despite the invoices mentioning the interest component.

Accordingly, the NCLT admitted the Section 9 application, finding that the admitted principal debt exceeded the Rs. 1 crore threshold under Section 4 of the IBC even after excluding the disputed interest.