TMI Blog2019 (2) TMI 1571X X X X Extracts X X X X X X X X Extracts X X X X ..... ute that has been raised is relating to the interest amount which is being claimed on the basis of the MSME Act. The contention of the Operational Creditor is based on the fact that as per the statutory provision of the MSME Act, Petitioner is entitled for interest even without any prior agreement. The Corporate Debtor has raised the dispute regarding the registration of the Operational Creditor as a MSME unit. There is a plausible contention in the argument raised by the Corporate Debtor which requires further investigation and it appears that the dispute raised by the Corporate Debtor is not a patently feeble legal argument or an assertion of fact unsupported by evidence. Hon’le Supreme Court in Mobilox Innovations (P) Ltd. (2017 (9) TMI 1270 - SUPREME COURT OF INDIA), in case of an existing dispute, the application under Section 9, IBC is to be dismissed. The Adjudicating Authority does not have powers of a civil court to adjudicate upon the entitlement of the Operational Creditor to the benefits accruing from the MSME Act. The petition does not deserve to be admitted. In this scenario, the objections raised by the Corporate Debtor regarding the eligibility of Mr. Sanj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 raising following allegations: a) The claim of ₹ 33,72,579/- along with the interest is untenable. b) Substantial part of Petitioner s claim is time-barred i.e. invoice no. RA-3 dated 30.9.2014 of ₹ 23,34,245/- and invoice no. RA-4 dated 31.10.2014 of ₹ 11,98,519/-. c) That the invoices/RA Bills annexed do not bear acknowledgment by the Respondent and therefore deny the claim in respect of claim. d) The Respondent denies the application of MSME Act in respect of interest calculation on the outstanding amount. 4. The Operational Creditor has stated in its petition that it is an admitted fact that there are no instances of return of goods by the Corporate Debtor against the Operational Creditor s services and the Corporate Debtor has never in the past raised any such objections. Further, stated that such dispute cannot be raised belatedly and in order to classify as a dispute under S. 8(2)(a) of the IBC, it needs to be pre-existing and cannot be raised once the demand notice has been served. 5. The Operational Creditor has annexed attested copy of Bank statement along with the certificate issued by the Vijaya Bank, confirming that no payment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructure projects. The present debt of the Corporate Debtor is approximately ₹ 14,000 crores. The lenders include IDBI Bank, Bank of Baroda, LIC of India, United India Insurance Company, Punjab National Bank and others. None of these institutions have initiated action against the Corporate Debtor under the IBC and in fact many lenders have converted a portion of their debt into equity and today 63.07% of the shareholding of the Corporate Debtor is held by the lenders. The Corporate Debtor employs around 2,000 persons and has approximately 60 ongoing projects. The Corporate Debtor has awards/ decrees of around ₹ 400 crores against the Central and State Government institutions. 9. The Counsel for Corporate Debtor argued that the invoices forming the basis for claim of the Operational Creditor annexed at page nos. 41 to 46 of the petition do not contain any provision for interest. Further submitted that admittedly, the entire principal amount has been paid and at present the claim is relatable to interest only. 10. The Counsel further argued that the present Section 9 application can be admitted if the alleged debt (i.e. interest) falls within the definition of Opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) It has also been submitted that the above-mentioned case of Wanbury Ltd. v. Panacea Biotech Ltd was taken in appeal before the Hon ble NCLAT in Company appeals (AT) (Ins) No. 64 of 2017 and Hon ble NCLAT was not pleased to interfere with the same and the matter was disposed of by consent of the parties. d) Reliance has also been placed on the orders of NCLT, Mumbai Bench in the cases of Orissa Sales v. Gammon India Limited CP 1294/MB/2017, Krishna Enterprises v. Gammon India Limited CP 1299/MB/2017 , Pavan Enterprises v. Gammon India Limited CP 1296/MB/2017 , Om Industrial Corporation v. Gammon India Limited CP 1298/MB/2017 , Swastik Enterprises v. Gammon India Limited CP 1297/MB/2017 which were dismissed. Appeals were preferred before the Hon ble NCLAT against these dismissal orders. The Hon ble NCLAT vide a common order dated 27.7.2018 Company Appeal (AT) (Insolvency) No. 144 of 2018 dismissed the appeals. e) Reliance has also been placed on the order of NCLT, Delhi Bench in the case of Teknow Consultants Engineers Pvt. Ltd. v Bharat Heavy Electricals Limited CP 269/ND/2017 to submit that interest cannot form the basis of a claim u/s 9 of IBC, even when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th monthly rests to the supplier on that amount from the appointed day or, as the case may be, from the date immediately following the date agreed upon, at three times of the bank rate notified by the Reserve Bank. 13. The Professional appearing for Operational Creditor stated that the reliance on Wanbury Ltd. v. Panacea Biotech Ltd is misleading. It is stated that the Bench is of the opinion that in situation where there is no specific provision with respect to interest, it is more prudent to rely on the documents on record or agreements between the parties, if any. Further stated that in the present case since the Petitioner is registered under the MSME Act, Section 16 of MSME Act is applicable. 14. Further, the Operational Creditor stated the cases of Orissa Sales v. Gammon India Limited , Krishna Enterprises v. Gammon India Limited, Pavan Enterprises v. Gammon India Limited, Om Industrial Corporation v. Gammon India Limited, Swastik Enterprises v. Gammon India Limited also differ from the case in hand. In these judgments, the Petitioners did not establish their eligibility to claim interest and hence they were not entitled to the same and petitions were dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 8.6.2018 of the proposed Interim Resolution Professional, Ms. Bhavna Sanjay Ruia has already been filed. 20. With respect to the defect in the Vakalatnama, the Operational Creditor has stated that this mistake cannot be a ground for dismissal of the petition. 21. With regards to the maintainability of the present petition, the Operational Creditor has submitted that the Petitioner has duly signed Letter of Authority in favour of Professionals and Vakalatnama in favour of Advocates, giving them authority to represent on its behalf. 22. We have heard the parties and perused the records. 23. Admittedly, the entire principal amount has been paid by the Corporate Debtor to the Operational Creditor during the pendency of the present petition. The Operational Creditor vehemently argued that the statutory interest provided for by the MSME Act on the delayed payments is still pending and the present petition should be admitted. 24. The interest arising from the MSME Act has been disputed by the Corporate Debtor. The Counsel for the Corporate Debtor vehemently argued that the Operational Creditor has not produced any document to show that it is registered under the MSME Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditor the existence of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the dispute is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. 31. In this case undisputedly the principal amount has been paid off during the pendency of the petition. Dispute that has been raised is relating to the interest amount which is being claimed on the basis of the MSME Act. The contention of the Operational Creditor is based on the fact that as per the statutory provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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