How this Chandigarh startup is helping MSMEs solve their payment problems through a digital court
The problem of late payments among micro, small and medium enterprises (MSMEs) is a serious concern. Reports suggest that MSMEs have submitted nearly a lakh of claims over the past four years indicating non-payment of their contributions. It puts the financial health of these companies at stake, which still need a lot of support from government institutions to break out of the traditional shell.
Although the government urged central and state departments, PSUs and others to pay MSME dues within 45 days of receiving the goods through its MSME – MSME Samadhaan deferred payment portal, the problem only grew. ‘aggravate.
To resolve these issues, Raman aggarwal begin MPME digital court under Judicial justice technologies in September 2021, one of the first âprivate digital courtsâ for private justice, which offers an amicable settlement, but digitally.
He says the problem is not only late payments, but also non-payment by the parties. There is an addressable solution to a late payment, but what if the party is in denial mode? In both cases, this gives rise to a dispute, which again has to go through a formal procedure of filing a complaint and appealing to the court by law, which takes a long time.
For this, Raman has developed one of India’s first digital courts to quickly resolve growing disputes between small and medium-sized businesses and assist civil and commercial disputes through the private justice mechanism.
He states: âThe MPME digital court developed by Jupitice is committed to helping SME owners resolve commercial disputes through various ADR mechanisms, namely arbitration, conciliation and mediation, among others.
In an interaction with SMBShistory, Raman explains how he aims to improve MSME liquidity through Jupitice by providing fast, cost-effective and efficient dispute resolution through his online dispute resolution (ODR) platform. It also explains how it has endeavored to reduce the rate of litigation and hence reduce the burden on the judiciary / public system.
Edited excerpts from the interview:
SMBStory (SMBS): What is the major problem that the Jupitice MPME digital court is seeking to solve?
Raman Aggarwal (RA): Lack of working capital is one of the major issues facing startup owners in the country. Since MSMEs do not have sufficient security to offer the bank in return for raising alternative capital, they continue to work with their limited capital. Now, in the event of a dispute, the entire capital is doomed to be blocked. Therefore, it is imperative that MSMEs have expeditious justice given the long delay that litigation tribunals take.
Keeping the facts in mind, Jupitice announced one of the first digital MSME courts. The AI-powered platform will resolve civil, commercial, personal, consumer, and more disputes. within the framework of the private justice system.
Normally, it takes more than seven years to resolve an MSME dispute. However, Jupitice MSME Digital Court is developed in such a way that we promise MSMEs that their disputes will not take more than 90 days to be resolved.
SMBS: How is Jupitice different from MSME Samadhaan?
RA: The Ministry of MSMEs launched MSME deferred payment portal – MSME Samadhaan – allow micro and small entrepreneurs across the country to directly register their late payment cases by central ministries / departments / CPSE / state governments.
On the contrary, the Jupitice MSME Digital Court has a 360 degree approach to resolving MSME disputes. While the MSME Samadhaan only deals with late payments, which are mostly uncontested money, some of the other types of disputes or disputed amounts are a gray area that the government has yet to address. This is where the Jupitice MSME Digital Court comes as a relief for MSMEs.
Jupitice MSME Digital Court registers cases relating to late payments by the buyer, and also registers disputes between sellers and MSMEs, MSMEs and large companies, and MSME-buyers (delayed payments), among others.
Second, in order to file a case on Samadhaan MSMEs, MSMEs must be registered with the MSME Ministry and must also have a valid Udyog Aadhaar number and Udyam registration number. This criterion often excludes many small businesses that have not registered with the ministry. One of the other major differences is the quick resolution of disputes as Jupitice takes up to 90 days to resolve a dispute and MSME Samadhaan takes around 15 days to affect the board itself.
SMBS: What happens in the event of non-compliance with the verdict by one of the parties?
RA: It may happen that one of the parties does not comply with the verdict. In this case, there are two ways – compliance and enforcement.
To comply, under the Arbitration and Conciliation Act 1996, parties must comply with the
the award rendered by the arbitrator. But if this does not happen, then there is “enforcement”, or if one of the parties does not comply with the orders of the arbitrator, then the order can be filed with the jurisdictional court, and further, the court will enforce the order through the police or other designated officers.
SMBS: What has been the biggest challenge so far, and what goal are you aiming for?
RA: The biggest challenge the company faces is the lack of awareness among people regarding the private justice system. It’s been almost a month since we launched the digital MSME court, and we realized that few people knew about the out-of-court settlement. Every day we get dozens of calls from small business owners on our helpline and none of them has a clue how to resolve their disputes quickly.
Jupitice understands that capital plays an important role in any business large or small, so guiding more and more business owners on the idea of ââthe private justice system is our top priority.
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