NCLAT Rejects Creditor’s Insolvency Plea Against Hindustan Unilever
Finds no merit in the argument about imposing the penalty interest;
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NCLAT Rejects Creditor’s Insolvency Plea Against Hindustan Unilever
Finds no merit in the argument about imposing the penalty interest
The National Company Law Appellate Tribunal (NCLAT) has dismissed the creditor’s appeal against Hindustan Unilever.
The application filed under Section 9 of the Insolvency and Bankruptcy (IBC), 2016 was rejected for invoices not being within three years of limitation, the aggregate of invoices falling below the threshold and the existence of a pre-existing dispute.
The Coram of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) held, "We do not find any merit and the appeal is dismissed.”
The creditor argued that a running account existed between the parties and invoices from 2008 to 2018 submitted that the creditor was entitled to charge a 24 percent interest. In that case, the principal amount of Rs.59 lakh, with interest, was over Rs.1 crore.
However, Hindustan Unilever argued that if the cheque was deposited and bounced, only the penalty of 24 percent was to be paid, as provided in Clause (f) of the Credit Terms.
Thus, the appellate tribunal dismissed the plea, observing that under the terms, the creditor was entitled to charge a 24 percent penalty in the event of delayed payment. The clause could not be read to merely claim the interest.