Defaulting firm's debt includes both principal and interest: NCLAT

Case related to a company that challenged insolvency proceeding against it for delaying payments to borrower

The National Company Law Appellate Tribunal (NCLAT) said last week that debt owed by a defaulting company includes both the principal amount and the interest on it.

A bench of Justice Ashok Bhushan, Justice M. Satyanarayana Murthy, Member (Judicial), and Naresh Salecha, Member (Technical), said the total amount for maintainability of the claim will include both principal debt amount as well as interest on delayed payment, which was stipulated in the invoice itself in the present case.

“The ratio laid down in this judgment was much needed. This will come as a relief to many creditors,” said Srinivas Kotni,