Adjudicating Authority Is Not Appropriate Forum To Determine Liability Of Corporate Debtor To Pay Interest Under MSME Act: NCLT Amrawati
Mohd Malik Chauhan
10 Sept 2025 3:30 PM IST
The National Company Law Tribunal (NCLT) Amrawati bench of Shri Kishore Vemulapalli, Member (Judicial) and Shri Umesh Kumar Shukla and Member (Technical) has held that the Adjudicating Authority is not the appropriate forum for determination on the liability of the Corporate Debtor to pay interest under the MSME Act or Interest Act. The present application has been filed under section...
The National Company Law Tribunal (NCLT) Amrawati bench of Shri Kishore Vemulapalli, Member (Judicial) and Shri Umesh Kumar Shukla and Member (Technical) has held that the Adjudicating Authority is not the appropriate forum for determination on the liability of the Corporate Debtor to pay interest under the MSME Act or Interest Act.
The present application has been filed under section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.
The Applicant submitted that as of 15.12.2024, an amount of Rs.1,20,14,708.18/- remained outstanding towards the principal amount. In addition, the interest on the said outstanding amount for the delay period shall be paid as per the provisions of the MSME Act, 2006 and damages, compensation, etc., for the loss suffered by the Operational Creditor for the dues payable by the Corporate Debtor.
The Tribunal observed that the NCLAT in SNJ Synthetics Ltd. v. PepsiCo India Holdings Pvt. Ltd. held that the Adjudicating Authority is not the appropriate forum for determination on the liability of the Corporate Debtor to pay interest under the MSME Act or Interest Act.
It further observed that the Operational Creditor admitted that during the hearing, the corporate debtor paid Rs. 30 Lakh subsequent to issuance of a demand notice and filing of the petition. Considering this amount to have been paid by the Corporate Debtor, the amount claimed by the Operational Creditor does not cross the threshold limit under section 4 of the IBC. Accordingly, the present application was dismissed.
Case Title: Green Morning Horticulture Pvt. Ltd. Versus Lakshmi Infrastructure and Developers India Pvt. Ltd.
Case Number: CP (IB)/23/9/AMR/2025
Order Date: 28/07/2025