TaxTMI 
TaxTMI 
2018 (7) TMI 393
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....e thousands one hundred ninety and paise seventy only) out of which the Operational Creditor has received Rs. 47,27,918.07 (Rupees Forty-seven lakhs twenty-seven thousands nine hundred eighteen and paise seven only) and filed the application on account of failure of the corporate debtor in paying the actual outstanding principal amount to the tune of Rs. 25,37,272.63 (Rupees Twenty-five lakhs thirty-seven thousand two hundred seventy-two and paise sixty-three only). However, the corporate debtor have admitted the balance outstanding amount of Rs. 22,74,898/- (Rupees twenty-two lakhs seventy-four thousands eight hundred ninety-eight only) taken as the principal amount due to the operational creditor. The operational creditor is entitled to claim that amount with interest which has been calculated @ 1.5 times of Prime Lending Rate (PLR) charged by State Bank of India, which is in accordance with Small Scale and Ancillary Industrial Undertakings Act, 1993 (SSI Act, 1993), for the period from 31.10.2001 to 01.10.2006 and @ 3 times of the bank rate notified by the Reserve Bank of India, which is in accordance with the Micro, Small and Medium Enterprises Development Act, 2006 for the per....
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....he applicant is barred by limitation. The application is not in proper form and the signatory who signed the application is not authorized to institute the application and. therefore, it is incomplete and is liable to be dismissed. There is no debt which is either due or payable by the respondent to the applicant and as such there is no default on the part of the respondent in payment of such alleged debts. There are disputed issues pertaining to the contract in question and since there is pre-existing disputes in respect of the alleged claim of the applicant also, this application is not liable to be admitted. 8. The respondent has bona fide defence to the alleged claim of the applicant/operational creditor. The respondent company was established in the year 1952. However, due to liberalization of economy, which took place in the year 1991, the respondent became sick. So also the rapid technological changes in the telecom sector also contributed largely in the progress and prospect of corporate debtor and became more sick and was registered with Board of Industrial and Financial Reconstruction (BIFR) in the year 2002. Thereafter, the respondent was compelled to stop its product....
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.... rejoinder contending that the contentions of the respondent in the reply affidavit are false. There is no pre-existing dispute in respect of the claim. The reply affidavit is nothing but an evil design of the respondent to frustrate the action of the petitioner which it is entitled to initiate under the I&B Code 2016 and prays for allowing the application upholding the contentions of the operational creditor. 12. Heard the Pr. C.S for the applicant/operational creditor and Ld. Sr. Counsel for the Corporate Debtor and perused the records and citations referred to from both sides. 13. This is an application filed under Section 9 of the I&B Code 2016 by the Operational Creditor claiming that Rs. 4,50,75,953.08 (Rupees Four Crores Fifty Lakh Seventy Five Thousand Nine Hundred Fifty Three and Eight paise only) is due from the Corporate Debtor which includes interest calculated not on the strength of any contract but on the strength of section 4 of the SSI Act, 1993 and under section 15 of the MSMED Act, 2006. According to the applicant, despite issuance of demand notice dated 21.09.2017, the respondent did not repay the unpaid amounts and, therefore, the application is liable to ....
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....ed its receipt. 17. According to the Ld. Pr. C.S. all those letters amount to admission of the liability of the corporate debtor in respect of the principal amount and, therefore, even if admission is beyond the period of limitation it would amount to valid acknowledgement. To strengthen his said submission, he relied upon Section 25(3) of Indian Contracts Act. According to him, when the acknowledgement of liability was made by the Corporate Debtor after prescribed period of limitation, it amounts to fresh contract under sub-section (3) of Section 23 of the Indian Contracts Act and therefore, there is no question of limitation in the case in hand. He also referred to a judgment of the Hon'ble High Court of Madras in R. Madesh v. M. Rathinam on 11.2.2015 (Civil Suit No.250 of 2007). The Hon'ble High Court of Madras considered similar question of saving limitation upon the admission made by the defendant after the period of limitation referring to Section 25(3) of the Indian Contracts Act. The Hon'ble High Court observed in the Paragraph No.14 as follows: "It is thus clear that there are a catena of decisions and plethora of authority for holding that though a debt might ....
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....ot admit the validity of the agreements entered into with all sundry creditors including the applicant as per public notice issued by it prior to the issuance of the demand raised in this case. This application being filed under section 9 of the I&B code, if any dispute in respect of the debt claimed and it falls under the definition of section 5(6) of the I&B Code, an application of this nature is liable to be rejected. Truly herein this case dispute is in respect of the respondent liability to pay the interest. A debt under section 3(11) of the I&B Code means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt; an operational debt is defined under section 5(21) of the I&B Code. 'Operational debt' means a claim in respect of the provision of goods or services including employment or a debt in respect of the repayment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority. 22. It is also good to read the meaning of financial debt as defined under section 5(8) of l&B Code. It read as follows:- (8) "financial deb....
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....ntertained in a summary proceedings of this nature? Our considered opinion is no. It is significant to read sections 17 and 18 of the MSMED Act. It reads as follows:- "Section 17: For any goods supplied or services rendered by the supplier, the buyer shall be liable to pay the amount with interest thereon as provided under section 16. Section 18: Reference to Micro and Small Enterprises Facilitation Council - (1) Notwithstanding anything contained in any other law for the time being in force, any party to a dispute may, with regard to any amount due under section 17, make a reference to the Micro and Small Enterprises Facilitation Council. (2) On receipt of a reference under sub-section (1),the Council shall either itself conduct conciliation in the matter of seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution or centre, for conducting conciliation and the provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to such a dispute as if the conciliation was initiated under Part III of that Act. (3) Where the conci....
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....iability including deduction of TDS when the question arises at the time of payment of interest to MSMED registered undertaking. That means those industries registered under the Act in general is referred and the name of the operational creditor in the case in hand is not at all specifically referred to in the financial report. Therefore, the said contention of the Ld. Pr. C.S. that the reference of liability towards operational creditor registered under MSMED Act 2006 amounts to implied admission of its liability to pay interest is devoid of any merit 27. So also the total advantage which may be reasonably be taken to have been expected from the transaction also to be looked into in a case of this nature. Admittedly the applicant was in receipt of letter dated 19.05.2017 by which the applicant was asked to submits its claim along with documents for its verification and settling the claim. The transaction was during the years 2001 to 2002 and even according to the applicant the default first occurred on 31.10.2001. The applicant's claim of interest is not on the basis of any contractual right but on the strength of provisions of SSI Act and MSMED Act. It has come out in evidence....