TaxTMI 
TaxTMI 
2023 (8) TMI 320
X X X X Extracts X X X X
X X X X Extracts X X X X
....aid 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 Authority' ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut 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 11.01.2020 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 22.03.20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ach 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/- along with interest the total debt makes total outstanding as Rs. 1,60,87,838/-. Thus, the total debt outstanding of OC is above Rs. 1 crore as per requirement of Section 4 IBC read with notification No. S.O. 1205(E) dated 24.03.2020 (Supra), and meets the criteria of Rs. 1crore as per Section 4 of IBC and Application is therefore maintainable in present case." (Emphasis Supplied) 8. From the aforenoted ratio, it is clear that the total amount for maintainability of Claim will include both 'Principal Debt am....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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, 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 is a spurious one and is an illusory one. Additionally, it is significant to mention that before the very same 'MSME Council', the Appellant / Corporate Debtor in his Reply, in Paras 4 and 5 (Reply to MSME Annexure A4) has ....