TMI Blog2023 (8) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... im will include both Principal Debt amount as well as the Interest on the delayed payment which is stipulated in the Invoice dues. In the instant case, the Principal amount is said to be Rs. 1,65,60,017/- and the interest portion at 24 % as per the second Clause in Invoice No. 2 is Rs. 56,31,027/-. Therefore, this Tribunal is of the considered view that the amount has crossed the threshold of Rs. 1,00,00,000/- and also that the amounts due and payable are for a period prior to 25/03/2020. The date of default mentioned in the Section 9 Application is 22/02/2020. Therefore, it is clear that for any amounts due and payable prior to 25/03/2020, Section 10A cannot be made applicable. Pre existing dispute between the Parties as there was a Barter Transaction and when the Respondent / Operational Creditor had initiated Arbitration Proceedings under the MSME Council - HELD THAT:- It is seen from the record that the MSME Council has rejected the Application and there is no Claims / Suit pending in any Court of Law before any Tribunal and there is no Arbitration Proceeding pending prior to the initiation of the Section 8 Notice. Additionally, the Appellant had stated in Para 8 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng but the said application was dismissed by the MSME Council simply on the ground that the subject matter of claim is not that of a small enterprise, supply of goods or services and it pertained to supply of only raw material as a trader and there existed no other reciprocal obligations. It was held that MSMED Act, 2006 dies not provide scope for arbitration of non-MSME subject matter in dispute even if claimant is registered as MSME for other procedural reasons. It has simply held that it has no jurisdiction to conduct the arbitration in the claim between the claimant of the Applicant and the Respondent. 20. It is pertinent to note that in reply to the petition filed before the MSME Council, the Respondent had admitted the debt and pleaded that it was making all sorts of efforts to settle the outstanding dues as soon as possible. In this case, the invoices are not disputed by the Respondent. The structure of payments against the invoices is also not in dispute. The record under statement shows that a sum of Rs. 1,65,60,617/- was payable against the aforesaid invoices. 2. The Learned Counsel appearing for the Appellant has strenuously contended that the Adjudicating Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Invoice but in the Rejoinder they had adopted a 30 days period for payment of each Invoice which is incorrect. There are glaring inconsistencies with respect to the Invoice Numbers as pointed out before the MSME Council and the Invoices mentioned in the Application. 4. The Learned Senior Counsel strenuously contended that the dues claimed are prior to 25/03/2020 and interest has been calculated from that date and the date of default written in Section 9 Application is 22/02/2020 and the calculation of interest is from 01/04/2020 and therefore, is hit by Section 10A of the Code. 5. At the outset, this Tribunal addresses to the issue as to whether the Application is hit by Section 10A of the Code. A brief perusal of the Invoices under which the amounts are said to be in default are detailed as hereunder. Invoice date Invoice No. Amount of material supplied PRINCIPAL AMOUNT (Rs.) Due date by giving 30 days credit (as per condition No. 2 of each invoices) 22.12.2019 85/19-20 28,07,676.00 21.01.2020 11.01.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim which is due from any person and includes a financial debt and operational debt. Since, the word claim is mention in definition of debt in Section 3(11) we need to refer to definition of claim under Section 3(6) of IBC which is as follows: 3.(6) claim means (a) a right to payment, whether or not such right is reduced to judgment, Fixed, disputed, undisputed, legal, equitable, secured or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured; Since, interest on delayed payment was clearly stipulated in invoice and therefore, this will entitle for right to payment (Section 3(6) IBC) and therefore will form part of debt (Section 3(11) IBC) (vi) It is , therefore clear from these facts that the total amount of maintainability of claim will include both principal debt amount as well as interest on delayed payment which was clearly stipulated in the invoice itself. It is noted that the total principal debt amount of Rs. 97,87,220/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the Notice of the Operational creditor the existence of the 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 a 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 dispute truly exists in fact and is not spurious, hypothetical, or illusory, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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