9911796707
TMI Blog2023 (8) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... the Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'the Code'), observing as follows: 19. As regards the contention that there are pre-existing disputes as to the debts claimed, admittedly, the Applicant prior to filing this application, had initiated proceedings before MSME Council seeking the same amount claimed as outstanding 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of default under Invoices Nos. 85, 94, 102, 111, 112, 113 issued by the Respondent. 3. It is submitted that the MSME Council rejected the Application vide Order dated 28/09/2021 noting that 'Adjudication of present Claim involves determination of reciprocal rights and liabilities of Barter Trading as alleged by Respondent by examining witness and voluminous evidence. The Proceedings before the Council are summary in nature and such examination of 'Trading Transaction' is outside the means and scope of the Council under Act 2006'. It is submitted that the MSME Council appreciated that the transactions between the Parties was in the nature of the Barter System and would require a trial to determine outstanding liabilities and therefore dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 11.01.2020 94/19-20 28,64,080.00 10.02.2020 28.01.2020 102/19-20 28,28,733.00 27.02.2020 21.02.2020 111/19-20 27,81,035.00 22.03.2020 22.02.2020 113/19-20 28,32,115.00 23.03.2020 22.02.2020 112/19-20 28,37,680.00 23.03.2020 TO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it will also be pertinent to go through legal definition of debt. The definition of debt as per section 3(11) of IBC is as under:- 3(11) "debt" means a liability or obligation in respect of a 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 paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 9. The next issue raised by the Learned Counsel is with respect to a '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. It is not in dispute that this Application was dismissed with an observation that such kind of trading activities requires voluminous evidences and therefore, cannot be adjudicated by the MSME Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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, the Adjudicating Authority has to reject the application." (Emphasis Supplied) 10. This Tribunal is of the considered view that the ratio of the aforenoted Judgment is squarely applicable to the facts of this case as this Tribunal is of the considered view that the 'Dispute' raised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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