(MENAFN- KNN India) BHEL slapped with first ever notice for delayed payment under IBC, MSMEs say much more to be done
New Delhi, Aug 18 (KNN) In line with the frequent cases of delayed payments to the Micro, Small and Medium Enterprises (MSMEs) by the PSU's, Bharat Heavy Engineering Limited (BHEL) was served the first notice under Section 9 of IBC by NCLT in response to the plea filed by an MSME regarding pending payment for over 11 years.
Talking to KNN, Shishir Gupta, Director, Teknow Consultants & Engineers Pvt Ltd, the MSME that have taken the case against BHEL explained the scenario.
Gupta informed that it is not new that a PSU is observed denying payment to the MSME, there are thousands of such cases that already exists in the country wherein the MSME is denied its payment. However it is for the first time in the country that the plea of an MSME is heard and a legal notice is served by the National Company Law Tribunal (NCLT) to the PSU giant.
'We have been approaching from pillar to post at BHEL to seek the pending payment. We have sent multiple notices to the company, earlier under the MSME act followed by the notice under section 8 of the IBC. BHEL didn't respond to any of the notices explained Gupta.
Following which the entrepreneur decided to take the case to the court and it is for the first time ever that a PSU is served a notice under Section 9 which mandates BHEL to respond within a timeframe, i.e. by 21st August. In case BHEL fails to reply, a receiver will be appointed by the court and legal action will be initiated against the PSU.
Explaining the problem of delayed payments that the MSMEs face, Gupta added that the country's big giants stand because of the small and micro units, If the MSMEs in the country cease to exist, the economy will come to a standstill.
Is Asking Payment a Crime?
Raising question over the matter, the Counsel appearing from the side of the entrepreneur asked the jury in the court whether it is a crime to ask for payment in return of goods and services that were served. The Counsel also raised concern over the fact that when the PSU's indulge in delayed payments, how will an MSME feel safe to operate in such an environment.
Not every MSME is able to approach litigation
Gupta informed that the MSMEs don't feel empowered as it is not feasible for a micro or a small unit to take the legal route as it would require a lot of money and time. This helplessness on the part of the MSMEs also leaves scope for the large giants to indulge in delayed payments.
The MSMEs work on credit given by the bank. With the payment not made in time, the interest on the unit keeps piling up, in such a scenario how would an MSME go for litigation.
Insolvency and bankruptcy Code
Gupta added that the IBC can be seen as a hope for the MSMEs. It is because of the IBC that BHEL could be dragged to court. The MSMEs must gather energy to fight for their payment through the IBC.
The MSME Entrepreneur said that it is high time for the government to realise that the MSMEs should be taken seriously in order to continue with the larger vision of economic growth in the country and bring in strict norms for the PSUs so that such cases can be avoided.
With the next hearing due on 21st , once a receiver is appointed by the court, Gupta expects that other MSMEs that have been facing similar issues with the PSU will come up and register their complaints. This will help form a larger message that the MSMEs are no more going to be absorbent to the undue behaviour of the Corporate giants and PSUs. (KNN/ DA)
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