Claim of interest income after 9 yrs when discovered in books was rightly rejected by AA: NCLAT

Case Details: Himalayan Crest Power (P.) Ltd. v. Pankaj Khaitan, Resolution Professional of Sasi Power (P.) Ltd. - [2022] 137 taxmann.com 56 (NCLAT- New Delhi)

Judiciary and Counsel Details

• • Anant Bijay Singh, Judicial Member and Ms. Shreesha Merla, Technical Member
  • Ms.Purti Gupta and Ms. Heena George, Advs. for the Appellant. 
  • Neeraj Kumar Gupta, Adv. for the Respondent.

Facts of the Case

In the instant case, the appellant-financial creditor had provided a loan facility to the corporate debtor. The Corporate debtor was unable to discharge its liability and CIRP was initiated against it. The appellant filed its claim towards the principal amount and interest amount. The Resolution Professional only admitted the claim towards the principal amount and rejected the interest component.

The NCLT by impugned order rejected the appellant’s claim towards the interest component – Whether interest was nowhere reflected in audited financial statements of the corporate debtor or appellant.

NCLAT Held

The NCLAT observed that since the interest was never booked as an expense by the corporate debtor and was never recognized as income by the appellant, the statement of accounts purporting to be the ledger account of the appellant in the books of the corporate debtor was bogus as the same did not match with audited account nor did it match with tally data by ex-director of the corporate debtor.

The Appellate Tribunal held that since there was an inordinate delay of 9 years in recognizing interest income by the appellant in its balance sheet and also there was no corresponding booking of interest in its accounts by the corporate debtor, the NCLT rightly rejected the application filed by the appellant.

Case Review

• • Himalyan Crest Power Ltd. v. Resolution Professional [2022] 137 taxmann.com 55 (NCLT – New Delhi) (para 19) affirmed [See annex].

List of Cases Referred to

• • Hussan Kadri v. Edelweiss Asset Reconstruction Co. Ltd. [2020] 117 taxmann.com 388/160 SCL 190 (NCLAT – New Delhi) (para 6)
  • S. Natarajan v. Sama Dharman [Crl. Appeal No. 1524 of 2014, dated 15-7-2014] (para 7)
  • Vivek Jha v. Daimler Financial Services India (P.) Ltd. [2020] 117 taxmann.com 98/162 SCL 159 (NCLAT – New Delhi) (para 7)
  • Asset Reconstruction Co. (India) Ltd. v. Bishal Jaiswal [2021] 126 taxmann.com 200/166 SCL 82 (SC) (para 8)
  • Urvashi Aggarwal v. Kushagr Ansal [Civil Appeal No. 2525 of 2019, dated 6-3-2019] (para 13).