Interest u/s 5(21) of IBC does not constitute an operational debt: NCLAT

The NCLAT has ruled that interest under Section 5(21) of the Insolvency and Bankruptcy Code (IBC) does not constitute an operational debt. The case involved Khushbu Dye Chem Pvt. Ltd., which supplied chemicals worth ₹1,82,54,891 to Chemical Suppliers India Pvt. Ltd. The corporate debtor issued six cheques to discharge its liability, but they were returned unpaid. The operational creditor filed a petition under Section 9 of the IBC, which was dismissed by the Adjudicating Authority on the grounds that the claimed amount did not cross the threshold limit and there was a pre-existing dispute. The NCLAT clarified that interest is not included in the definition of operational debt under Section 5(21) of the IBC, whereas it is included under Section 5(8) for financial debt. This ruling provides clarity on the classification of debts under the IBC.