# In the matter of Vijay Engifab India Private Limited CP (IB) No.1193-MB-IV-2020

> NCLT judgment dated 2023-03-24. Citation: TCN-2023-NCLT-04053. The case originates from a Company Petition filed under Section 9 of the Insolvency &…

- **Court:** NCLT
- **Order date:** 24 Mar 2023
- **Citation:** TCN-2023-NCLT-04053
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vijay-engifab-india-private-limited-cp-ib-no1193-mb-iv-2020-68b2845c

## Summary

### Background

The case originates from a Company Petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) by Mr. Amit Mittal, operating as M/s. Shyam Udyog (Operational Creditor), seeking initiation of Corporate Insolvency Resolution Process (CIRP) against M/s. Vijay Engifab India Pvt. Ltd (Corporate Debtor). The Operational Creditor claimed an amount of Rs. 1,03,37,635/- due, including interest at 24% p.a. on a principal amount of Rs. 84,19,041/- from the default date of 21.09.2019 until 15.08.2020, with further interest at 24% p.a. until payment or realization. The Corporate Debtor failed to file a reply to the application, leading to the forfeiture of their right to do so.

## Facts

Mr. Amit Mittal, operating as M/s. Shyam Udyog (Operational Creditor), filed a petition under Section 9 of the IBC against M/s. Vijay Engifab India Pvt. Ltd (Corporate Debtor), seeking initiation of CIRP. The Operational Creditor claimed Rs. 1,03,37,635/- due, including interest at 24% p.a. on a principal amount of Rs. 84,19,041/-. The debt arose from the sale and delivery of steel materials under 13 invoices raised between 01.08.2019 and 19.09.2019, with payment terms of 60 days and a 24% interest clause for delayed payments. The Corporate Debtor made part payments of Rs. 10,60,288/- on 14.10.2019 and Rs. 10,98,639 on 01.11.2019. The Operational Creditor raised a debit note on 15.08.2020 for Rs. 19,18,594/- towards delayed interest payment. A demand notice was issued

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## Issues and analysis

### Issue 1: Whether the interest claimed by the Operational Creditor can be included as part of the debt for …

**Ratio:** The legal principle applied is that interest can be considered part of the debt if there

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**Reasoning:** The court reasoned that the interest was expressly stated on the invoice, and the

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**Interpretation:** The interpretation is that if the terms of the agreement, purchase order, or

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**Application:** In this case, the court applied the ratio by finding that the invoices

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** Amit Mi…
- **Respondents:** Vijay Engifab…

## Timeline

- **2019-08-01 — Invoices…**: Operational Creditor raised 13 invoices to Corporate Debtor between 2019-08-01 and…
- **2019-09-19 — Invoices…**: Operational Creditor raised 13 invoices to Corporate Debtor between 2019-08-01 and…

## 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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