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TMI Blog2019 (2) TMI 1571X X X X Extracts X X X X X X X X Extracts X X X X ..... ries assignments of supplying goods and services. The Operational Creditor was engaged by the Corporate Debtor for supplying goods and services as per work order no. 9101/82 dated 12.5.2014 for Rosa Power Plant at Shahjahanpur, Uttar Pradesh. The Operational Creditor provided goods and services worth Rs. 74,83,177/- till last invoice dated 28.2.2015. The Corporate Debtor made payment of Rs. 41,10,597/-. A total of six invoices from 30.9.2014 to 28.2.2015 are outstanding and remain unpaid by the Corporate Debtor. The total outstanding amount is Rs. 33,72,579/- alongwith interest of Rs. 22,19,401/ @ 18% per annum as per Section 15 and section 16 of the Micro, Small and Medium Enterprises Development Act (MSME Act). Further, the Corporate Debtor has deducted TDS against all invoices. The Operational Creditor has annexed 26AS Form for last TDS deduction made on 28.2.2015. 3. When the Operational Creditor ailed to realize its dues, demand notice dated 27.10.2017 under Section 8 of the IBC was issued demanding payment within 10 days from the date of receipt of notice. The Corporate Debtor sent a reply on 8.11.2017 raising following allegations: a) The claim of Rs. 33,72,579/- along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sanjay Ruia. Therefore, the Memorandum of Appearance / Vakalatnama is not correct and the application filed and argued on behalf of the alleged Operational Creditor by persons not validly authorized to do so, ought not to be entertained by this Bench. b) The proposed Interim Resolution Professional, Mrs. Bhavna Sanjay Ruia, is proposed to be paid exorbitant sums of money and is the wife of the professional representative of the Petitioner. Further, she has already been suspended by IBBI. c) It is contended that the entire principal amount of the debt has been paid during pendency of the petition. The outstanding amount is only interest portion. The Operational Creditor has placed reliance on the MSME Act for claiming the statutory interest. In any event, the Operational Creditor has failed to establish how it is entitled to interest under the MSME Act. d) Grave prejudice would be caused to the Corporate Debtor, a huge conglomerate on the basis of its present status. The Corporate Debtor was founded in 1922 and has been continuously involved in various infrastructure projects. The present debt of the Corporate Debtor is approximately Rs. 14,000 crores. The lenders include ID ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner is entitled to interest in accordance with Section 61 of the Sales of Goods Act and Section 3 of the Interest Act. I am of the considered view that it is never the intention of the legislature under the Code that the Tribunal should determine the rate of interest and grant time to the Company to pay the amount as per the directions. It is clearly intended that an application filed under Section 9 of the Act is either to be admitted or rejected within a period of 14 days of the receipt of the application. There is no scope of passing an interim order like the one suggested by the learned counsel of the applicant/ petitioner. 20. In view of the aforesaid discussion, I hold that the entire amount of debt as per the intention of the legislature under the Code having been paid by way of cheques, the instant petition is rejected. However, in case the cheques issued by the respondent are dishonoured, the petitioner would be at liberty to file fresh petition, if so advised or take other appropriate steps in accordance with the Law." c) 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 Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the MSME Act, the Operational Creditor is required to show the unpaid amount along with interest due in its Statement of Accounts at the end of each accounting year to claim the interest under the provisions of Section 16 of MSME Act. 12. The Professional appearing for Operational Creditor stated that the Petitioner is MSME registered and the certificate is duly annexed at page 53A of the petition. Further stated, that the Operational Creditor is entitled to claim compound interest at three times the bank rate under Section 16 of the MSME Act and hence the demand for interest amounting to Rs. 26,82,515/- as on date at the revised rate of interest of 15% is justified. Section 16 of MSME Act is reproduced below: "16. Where any buyer fails to make payment of the amount to the supplier, as required under section 15, the buyer shall, not withstanding anything contained in any agreement between the buyer and the supplier or in any law for the time being in force, be liable to pay compound interest with 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he allotment of UAN itself proves that all the necessary compliances for registration have been done. 18. With regards to the defense of Corporate Debtor that as per Section 22 of the MSME Act, the Operational Creditor is to show the unpaid amount along with the interest due in its Audited Financial Statement, the Operational Creditor has stated that the section has been misread by the Corporate Debtor. It is further stated that Section 22 of MSME Act requires the buyer to do so and not the seller. In the present case, buyer being the Corporate Debtor, the compliance was to be done by it and not by the Operational Creditor who is the seller. Attention was also drawn to the definition of 'buyer' under the MSME Act. 19. With respect to the relationship of the professional representative and the proposed Interim Resolution Professional, the Operational Creditor states that same cannot form a ground for dismissal of the petition. Further stated that recusal affidavit dated 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 ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of job orders. The agreement inter-se parties provided for non-payment of interest and an arbitral award was in appeal under S. 37 of the Arbitration and Conciliation Act. During the pendency of the petition, the entire principal amount was paid. The Ld. NCLT, Delhi Bench held that disputed interest arising from MSME Act could only be referred to the Micro and Small Enterprises Facilitation Council. 30. The Hon'ble Supreme Court in the case of 'Mobilox Innovations (P) Ltd. v Kirusa Software (P) Ltd. Civil Appeal No. 9405 of 2017' noted, "It is 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)[ii](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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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