The National Company Law Appellate Tribunal (NCLAT) has dismissed the appeal against the order in favor of Hindustan Unilever rejecting the application under Section 9 of the Insolvency and Bankruptcy, 2016 on the grounds of invoices not being within three years of limitation, the aggregate of invoices falling below the threshold, and the existence of a pre-existing dispute.
“We do not find any merit in the Appeal. Appeal is dismissed,” said Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member).
Before the Appellate Tribunal, the creditor argued that a running account exists between the parties and invoices related to the period from 2008 to 2018 submitting that the creditor was entitled to charge 24% interest and in the event, Principal Amount i.e. ₹ 59 Lakhs is added to 24% interest amount, it will be more than One Crore.
The Hindustan Unilever argued that if the cheque is deposited and bounced then only penalty of 24% is to be imposed, provided in Clause (f) of the Credit Terms.
The Appellate Tribunal declined to allow the plea while observing that under the Creditor Terms, the creditor was entitled to charge a 24% penalty in the event of delayed payment observing that the aforesaid clause cannot be read to claim 24% interest by the creditor.
