# In the matter of Assam Company India Ltd. (Srei Infrastructure Finance Ltd. Vs Kannan Tiruvengadam & Anr.) I.A. No. 34-2018 in CP (IB)-20-GB-2017

> NCLT judgment dated 2018-07-23. Citation: TCN-2018-NCLT-01094. Srei Infrastructure Finance Limited, as a Financial Creditor (FC), filed an application under…

- **Court:** NCLT
- **Order date:** 23 Jul 2018
- **Citation:** TCN-2018-NCLT-01094
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/assam-company-india-ltd-srei-infrastructure-finance-ltd-vs-kannan-tiruvengadam-a-3ecd587e

## Summary

### Background

Srei Infrastructure Finance Limited, as a Financial Creditor (FC), filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Assam Company India Limited. The petition was admitted, and CIRP was initiated against the Corporate Debtor (CD). An Interim Resolution Professional (IRP) was appointed to conduct CIRP. The IRP invited claims from creditors, and Srei Infrastructure Finance Limited lodged its claim. The Committee of Creditors (COC) was formed, and in its first meeting, the IRP decided to exclude penal interest for the purpose of determining voting rights. Later, the Resolution Professional (RP) sought to reduce the claim of the applicant, leading to the present

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## Facts

Srei Infrastructure Finance Limited (SIFL) filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Assam Company India Ltd (ACIL). The application was admitted on 2017-10-26, and an Interim Resolution Professional (IRP) was appointed. SIFL, as a financial creditor, submitted a claim of Rs. 648,80,93,833/- as of 2017-10-26, which included principal, interest, and penal interest. The IRP, in the first Committee of Creditors (COC) meeting, decided to exclude penal interest for determining voting rights. Subsequently, the Resolution Professional (RP) revised SIFL's claim to Rs. 241.27 crores, excluding compounded penal interest. SIFL challenged this revision, arguing that the RP

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## Issues and analysis

### Issue 1: Whether the Resolution Professional (RP) was justified in revising and reducing the claim of the …

**Ratio:** Penal interest cannot be capitalized and is not permissible under the law. The RP has the

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**Reasoning:** The court relied on the decision of the Supreme Court in Central Bank of India vs.

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**Interpretation:** The Insolvency and Bankruptcy Code allows the RP to verify and determine the

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**Application:** The RP found that the applicant's claim included compounded and capitalized

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## Parties

- **Judges:** P. K. S…
- **Appellants:** SREI Infrastructur…
- **Respondents:** Assam Company…; Mr.Kannan…
- **Advocates:** Mr.R Ban…; Mr R. G…; +5 more

## Timeline

- **2017-10-26 — CIRP Init…**: The petition filed by Srei Infrastructure Finance Limited was admitted, triggering the…
- **2017-10-26 — Appointment…**: Shri V. Kothari was appointed as the Interim Resolution Professional (IRP) to conduct…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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