NCLT Kolkata: Interest Cannot Be Clubbed With Operational Debt To Meet ₹1 Crore Threshold For Initiating CIRP
Law Firm News Correspondent
1 Jun 2026 7:57 AM IST
The National Company Law Tribunal (NCLT), Kolkata Bench comprising Labh Singh (Member Judicial) and Rekha Kantilal Shah (Member Technical) dismissed a Section 9 application filed by K.L. Steels (P) Ltd. (Operational Creditor) seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Bridge and Roof Co. (India) Ltd. (Corporate Debtor), holding that the petition was not maintainable as the principal operational debt fell below the statutory threshold of ₹1 crore prescribed under the Insolvency and Bankruptcy Code, 2016 (IBC).
The Operational Creditor claimed an amount of ₹1,54,93,391, comprising a principal amount of ₹97,84,977 and interest of ₹57,08,414, towards supply of structural steel and execution of civil and structural works at various project sites of the Corporate Debtor. The claim for interest was based on clauses contained in invoices stipulating interest at the rate of 0.07% per day (24% per annum) for delayed payments.
The Corporate Debtor sought dismissal of the petition, contending that there was no contractual agreement providing for payment of interest and that the interest component had been unilaterally imposed through invoices. It argued that interest could not be treated as part of the operational debt for crossing the ₹1 crore threshold under the IBC. The Corporate Debtor also relied on the Minutes of Meeting dated 20.03.2025, executed between the parties during settlement discussions, wherein the Operational Creditor acknowledged that it was entitled to only ₹97,84,977.86. It further highlighted that the Form C filed by the Operational Creditor on the NeSL portal was also for recovery of ₹97,84,977.86, indicating that the claim beyond the principal amount was unsustainable.
The Tribunal noted that the admitted principal debt stood at ₹97.84 lakh, below the statutory threshold, and exceeded ₹1 crore only after inclusion of the disputed interest component. It observed that there was no prior agreement between the parties providing for payment of interest and that nothing on record established any mutually accepted contractual stipulation regarding interest, apart from the unilateral clause contained in the invoices.
Reliance was placed on Gandhar Oil Refinery (India) Limited v. City Oil Private Limited C.P. (IB) No. 150/KB/2021, Prashant Agarwal Vs. Vikas Parasrampuria (Company Appeal (AT) (INS) No. 690 of 2022), Shivani Enterprises Versus S Square Cargo Movers Pvt. Ltd. (2026) to hold that if the levying of interest is not mentioned in any Agreement entered by the parties or being specifically admitted by the Corporate Debtor, it cannot be clubbed together with the principal debt to meet the threshold of Rs 1 Crore for initiating CIRP.
The Tribunal also referred to the Supreme Court's decision in Anjani Technoplast Ltd. v. Shubh Gautam, which reiterated that the IBC is intended for insolvency resolution and revival of corporate debtors as going concerns, and not as a mechanism for recovery of individual debts.
In view of the above, the Bench held that the Section 9 application was not maintainable. It observed that the proceedings had been initiated primarily for recovery of dues rather than resolution of insolvency and noted that the Corporate Debtor is a profit-earning Central Public Sector Enterprise (CPSE) under the Ministry of Heavy Industries. Liberty was granted to the Operational Creditor to avail alternative remedies in accordance with law for recovery of its dues.
Advocates for Operational Creditor: Mr. Milan Singh Negi, and Mr. Nikhil Kumar Jha, Advocates
Advocates for Corporate Debtor: Ms. Urmila Chakraborty, Mr. Amit Meharia, Ms. Paramita Banerjee, Mr. Rohan Raj, Ms. Shristi Sharma, Advocates [MCO Legals – Meharia & Company]
