# In the matter of Shah Paper Mills Ltd. vs. Shree Rama Newsprint & Paper Ltd.

> NCLAT judgment dated 2024-09-09. Citation: TCN-2024-NCLAT-00208. The appeal was filed against an order dated 18.10.2023, where an application under Section 9…

- **Court:** NCLAT
- **Order date:** 9 Sept 2024
- **Citation:** TCN-2024-NCLAT-00208
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/shah-paper-mills-ltd-vs-shree-rama-newsprint-paper-ltd-575c2f1e

## Summary

### Background

The appeal was filed against an order dated 18.10.2023, where an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, was dismissed by the National Company Law Tribunal, Ahmedabad Bench. The appellant, an operational creditor, had served a demand notice to the respondent under Section 8 of the Code on 28.11.2018, which was replied to on 11.12.2018. Subsequently, the appellant filed an application under Section 9 claiming Rs. 55,23,253/- along with interest at 18%, which was contested by the respondent. The Tribunal initially dismissed the application on 20.07.2022, leading to an appeal that was allowed on 21.12.2022, setting aside the order and directing the Adjudicating Authority to pass an order of admission under Section 9 within one month. The

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## Facts

Shah Paper Mills Ltd. (Appellant) filed an appeal against Shree Rama Newsprint & Paper Ltd. (Respondent). The appellant, an operational creditor, initiated proceedings under Section 9 of the Insolvency and Bankruptcy Code (IBC) claiming Rs. 55,23,253/- along with 18% interest. The appellant had served a demand notice under Section 8 of the IBC on 28.11.2018, which the respondent replied to on 11.12.2018. The NCLT initially dismissed the application on 20.07.2022, leading to an appeal that was allowed on 21.12.2022, directing reconsideration. The respondent offered to pay the principal amount without interest on 03.01.2023. The respondent then filed I.A. No. 123 of 2023 seeking dismissal of the CP (IB) 251 of 2019. The appellant returned a RTGS transfer of Rs.

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## Issues and analysis

### Issue 1: Whether the Appellant can claim interest after receiving the principal amount which though has been …

**Ratio:** The amount of interest, on the basis of invoice, which has not been consented to for the

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**Reasoning:** The court relied on the decision in Mohit Motawat (Supra) and other cases, emphasizing

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**Interpretation:** The legal principle is that interest cannot be claimed solely based on invoices

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**Application:** In this case, the purchase order was silent on interest, and the invoices were

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## Parties

- **Judges:** Rakesh Kuma…; Naresh Sa…; +1 more
- **Appellants:** Shah Paper Mills…
- **Respondents:** Shree Rama…
- **Advocates:** Shivek T…; Ishaan…; +2 more

## Timeline

- **2018-11-28 — Demand Notice…**: Appellant served demand notice upon the…
- **2018-12-11 — Demand Notice…**: Respondent replied to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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