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2026 Supreme(Online)(NCLT) 244
NATIONAL COMPANY LAW TRIBUNAL
SAMEER KAKAR, Technical Member, NILESH SHARMA, Judicial Member
Nilesh Rathi Proprietor of Venkateshwara Steels – Appellant
Versus
R Nutan Builders Private Limited – Respondent
C.P. (IB) 710/MB/2025
For the Appellants/Petitioners: Mr. Manoj Mishra i/b Mishra Legal
For the Respondents: Mr. Ameya Wadkar i/b Wisdom Legal
Unilateral interest in invoices not includible in operational debt for IBC Section 4 threshold without agreement or acknowledgment; principal alone considered if below Rs.1 crore; NCLT not forum for MSMED interest claims.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 4, 5(21), 9 r/w Rule 6 of AA Rules - MSMED Act, 2006 - Sections 15, 16, 17 - Section 9 application by MSME operational creditor for supply of goods - Claim of Rs.1,10,99,035/- comprising principal Rs.87,34,615/- and interest Rs.23,64,420/- @24% p.a. stipulated unilaterally in invoices - No written agreement, purchase order, or acknowledgment of interest by corporate debtor - No prior payment of interest - Corporate debtor confirmed principal outstanding but disputed interest - Invoices unilateral and do not bind without mutual consent - Interest under MSMED Act not includible in operational debt for threshold under Section 4 as NCLT not appropriate forum - Principal below Rs.1 crore threshold - Application not maintainable. (Paras 7.11, 7.15, 7.17, 7.27)
(B) Debt Threshold - Inclusion of interest - Three factors: prior payments of interest; written agreement; acknowledgment by debtor - Unilateral invoice clauses insufficient without acceptance - Later NCLAT judgments prevail over earlier conflicting ones - Supply agreement terms prevail over unilateral invoices absent mutual consent discernible from conduct. (Paras 7.11, 7.17, 7.22)
Facts of the case:
Operational creditor (MSME) supplied goods via six invoices totaling Rs.90,84,515/-, received Rs.3,49,900/-, claimed unpaid principal Rs.87,34,615/- plus interest to exceed Rs.1 crore threshold. Orders via communications, goods delivered with proofs. Corporate debtor acknowledged principal via confirmations/ledger but disputed interest. Demand notice issued, no payment or pre-existing dispute. Tribunal closed right to file reply due to non-compliance. Application dismissed as principal below threshold.
Findings of Court:
Principal operational debt Rs.87,34,615/- falls below Rs.1 crore threshold under Section 4. No contractual basis or acceptance for interest @24% p.a. MSME interest claim not entertainable by NCLT.
Issues: Whether interest unilaterally stipulated in invoices forms part of operational debt for Section 4 threshold; whether MSME statutory interest includible without agreement; maintainability of Section 9 application.
Ratio Decidendi: Unilateral interest clauses in invoices do not create binding obligation absent agreement, prior payment, or acknowledgment. Operational debt for threshold limited to principal; MSMED Act interest not for NCLT determination. Later co-equal bench judgments prevail.
Result: Section 9 application rejected as not maintainable.
| Table of Content |
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| 1. section 9 ibc application filed for cirp initiation. (Para 1 , 2 , 3) |
ORDER
[PER: BENCH]
1. BACKGROUND
1.1 This Company Petition No. C.P. (IB) 710/MB/2025 (Application) was filed on 12.07.2025 under Section 9 of the Insolvency and Bankruptcy Code, 2016 (‘IBC’) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (‘AA Rules’) by Nilesh Rathi Proprietor of Venkateshwara Steels, the Operational Creditor (OC), for initiating Corporate Insolvency Resolution Process (CIRP) of R Nutan Builders Private Limited, the Corporate Debtor (CD).
1.2 The total amount of default alleged is Rs. 1,10,99,035/- (Rupees One Crore Ten Lakhs Ninety-Nine Thousand and Thirty-Five only) along with interest @ 24% p.a. till the date of payment/realization.
1.3 As stated in Part IV of the application, the date of default is stated as 06.01.2024.
2. CASE OF THE OC:
2.1 The Operational Creditor is a registered as an MSME having Udyog Regn. No. UDYAM-MH-19-009090630 and the Corporate Debtor is a Private Limited Company incorporated on 05.10.2020.
2.2 It is submitted that the project was commenced by the Corporate Debtor in April 2023, in respect of which the Company required TMT bars.
2.3 It is further submitted that the Respondent used to place orders with the Applicant for the supply of TMT bars through WhatsApp communications, which were sent by the Respondent’s Director, Mr. Ritesh Seth. A copy of the entire WhatsApp communication exchanged between the Proprietor of the Applicant and Mr. Ritesh Seth, Director of the Respondent, is annexed as Exhibit “MMM”.
2.4 Accordingly, the Applicant would procure the TMT bars from VRU Steel Industries (“Reseller”), which, in turn, resold goods manufactured by M/s Jaideep Metallics & Alloys Private Limited (“Factory”), and thereafter supplied the same to the Corporate Debtor.
2.5 Therefore, the Applicant had been supplying TMT bars to the Respondent on a regular basis, in accordance with the orders placed by the Respondent, thereby constituting the Applicant as the “Operational Creditor” and the Respondent as the “Corporate Debtor” within the meaning of the IBC.
2.6 Since the inception of the business relationship, the payment terms were mutually agreed as 30 (thirty) days from the date of supply or the invoice date. The due date was consistently mentioned on each invoice. Furthermore, the trailer was weighed by the Factory’s representative at the time of loading the material and was again weighed by the Respondent’s site personnel at the time of unloading, as part of the standard procedural requirements. Accordingly, the trailer number is reflected in all the invoices, delivery challans, e-way bills, and weight slips.
2.7 Further, the Respondent has never raised any dispute with respect to the quality or quantity of the goods supplied by the Operational Creditor, nor has it disputed the outstanding amount due and payable to the Operational Creditor at any point in time.
2.8 Therefore, there are a total of 6 (six) invoices that remain fully or partly outstanding, in the following manner:
2.9 Details of all the 6 invoices are mentioned below:
I. 1st Invoice: that the Applicant had supplied certain TMT Bars to the Respondent, against which the Applicant had raised invoice bearing no.VVS06/23-24 for an amount of Rs. 15,15,350/- dated 10.10.2023.
II. 2nd Invoice: that the Applicant has supplied certain TMT bars to the Respondent, which the Applicant had raised invoice bearing no. VS077/23-24 for an amount of Rs. 16,03,540/- dated 27.10.2023.
III. 3rd Invoice: that the Applicant has supplied certain TMT bars to the Respondent, which the Applicant had raised invoice bearing no. VS079/23-24 for an amount of Rs. 14,05,174/- dated 28.10.2023.
IV. 4th Invoice: that the Applicant has supplied certain TMT bars to the Respondent, which the Applicant had raised invoice bearing no. VS085/23-24 for an amount of Rs. 14,50,488/- dated 17.11.2023.
V. 5th Invoice: that the Applicant has suppli
