Financial creditors insolvency application maintainable for “interest alone” even if principal amount is not due

Base Realtors Private Limited Vs Grand Realcon Private Limited (NCLAT Delhi)

Financial creditors insolvency application is maintainable for ‘interest alone’ even if principal amount is not due.

Synopsys of the judgement is as follows:

1. Appellant filed sec. 7 application in respect of interest of three quarters which accrued and became payable as a debt, to the tune of rs.71 lakh, rs.84 lakh and rs.84 lakh respectively

2. NCLT dismissed an application for insolvency u/s 7 of the IBC against corporate debtor wherein it was held that only the interest amount would not fall within the definition of financial debt until, unless principal amount had also become due and payable.

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