Andhra Pradesh High Court - Amravati
Rashtriya Ispat Nigam Limited ... vs The Union Of India on 23 February, 2024
Author: Ninala Jayasurya
Bench: Ninala Jayasurya
IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI
(Special Original Jurisdiction)
[
3209
]
FRIDAY ,THE TWENTY THIRD DAY OF FEBRUARY
TWO THOUSAND AND TWENTY FOUR
APHC010617032022
PRESENT
THE HONOURABLE SRI JUSTICE NINALA JAYASURYA
IA 2 OF 2023
IN
WRIT PETITION NO: 36946 OF 2022
Between:
RASHTRIYA ISPAT NIGAM LIMITED VISAKHAPATNAM STEEL PLANT ...PETITIONER(S)
AND
THE UNION OF INDIA AND OTHERS ...RESPONDENT(S)
Counsel for the Petitioner(s):SRI. V SUBRAHMANYAM
Counsel for the Respondents: SRI. DIVYA DATLA(CENTRAL GOVERNMENT COUNSEL)
The Court made the following:
Heard Mr.W.B.Srinivas, learned Senior Counsel for the petitioner.
Also heard Mr.Ramachandra Rao Gurram, learned counsel appearing on behalf of the 4th respondent.
The learned Senior Counsel, inter alia, submits that the petitioner, a Government of India Enterprise, invited
tenders for execution of works and the 4th respondent was the successful bidder. He submits that the 4th respondent on
16.03.2017 entered into an agreement for Structural Steel and Roof Sheeting Work for A-B Bay of Power Plant Blower
House in Thermal Power Plant at Visakhapatnam Steel Plant. He submits that it is a works contract, that the agreement
contains an arbitration clause. Be that as it may, he submits that making certain claims in respect of the agreement
mentioned above, the 4th respondent approached the Micro Small and Medium Enterprises Development Council
(MSME) on the premise that the agreement between the parties is a contract of supply of goods. He submits that the 3 rd
respondent has no jurisdiction to entertain the matter as works in respect of the agreement in question is not a supply or
service, but purely a works contract. Drawing the attention of this Court to the relevant portion of the agreement, the
learned counsel submits that in respect of some of the agreements relating to works contracts, the petitioner herein filed
W.P.No.27670 of 2021 & batch (Rashtriya Ispat Nigam Limited v. Union of India) and a learned Single Judge allowed
the writ petitions by Order dated 26.04.2022. Referring to the findings recorded by the learned Single Judge and stating
that the 4th respondent and others filed appeals against the said judgment, he submits that the MSME Council on the
premise that the above mentioned judgment was overruled by a Judgment of High Court of Calcutta proceeded in the
matter and passed the impugned order under Section 16 of the Arbitration & Conciliation Act holding that the contract is
a service contract and even if the contract is a 'works contract', the Council can adjudicate the claims. He submits that
the said order is not sustainable in the light of the Judgment rendered by the learned Single Judge and the categorical
findings recorded therein. He submits that the MSME Council is now proceeding in the matter and if any order is
passed with regard to claims of the 4th respondent, the petitioner will suffer serious prejudice and writ petition would
become infructuous. He accordingly seeks interim reliefs, pending further adjudication of the writ petition.
Mr.Ramachandra Rao, counsel for the respondent No.4, on the other hand, strenuously contended that the
present application is not maintainable. He submits that as the MSME Council passed orders with regard to its
jurisdiction under Section 16 of the Arbitration Act, the petitioner has only remedy under Section 34 of the said Act. He
places reliance on the decision of the Hon'ble Supreme Court of India in SBP & Co., v. Patel Engineering Limited
[(2005) 8 SCC 618] and Bhaven Construction v. Sardar Sarovar Narmada Nigam Limited [(2022) 1 SCC 75]. Referring
to the contention that the agreement is a works contract, the learned counsel submits that it is purely a service contract;
that the 4th respondent entered into different agreements with the petitioner and it cannot be treated that all of them are
works contracts. He submits that in Jaiprakash Associates Limited v. Micro and Small Enterprises (2023 SCC Online
Del.4601), a Division Bench of High Court of Delhi had not accepted the contentions inter alia that the works contracts/
agreements involved were composite indivisible contracts for different works itself ousts the jurisdiction of the MSME
Council, that the said decision was not interfered with by the Hon'ble Supreme Court. He submits that MSME Council
has jurisdiction to determine the nature of the agreements in question and the contentions contra are untenable.
Making the said submissions, the learned counsel urges for dismissal of the present application.
This Court has considered the submissions made. At the outset, it may be pertinent to mention that there is no
dispute that on the earlier occasion in respect of some of the agreements between the same parties, a learned Judge
after referring to various Case Law concluded that the MSME Council has no jurisdiction to entertain the claims made
by the 4th respondent by categorically holding that "the contracts are works contracts with an element of supply and not
merely supply and service contracts."
Admittedly, against the said decision of the Learned Judge, the respondent No.4 herein filed Writ Appeals and
the same are pending consideration before this Court. Therefore, the view expressed by the MSME Council that the
decision in Rashtriya Ispat Nigam Limited was overruled by the High Court of Calcutta is misconceived. The question of
overruling of decision of one High Court by another High Court does not arise at all. Further the decision of another
learned Single Judge in Dalapathi Constructions appears to be in a different fact situation.
This Court prima facie is of the opinion that the 3rd respondent ought not to have proceeded in the matter and
recorded any findings which runs counter to the decision in Rashtriya Ispat Nigam Limited.
As the issue is one with regard to inherent lack of jurisdiction, in the light of the decision in Rashtriya Ispat
Nigam Limited and keeping in view the balance of convenience and prejudice in favour of the petitioner, this Court is
inclined to grant interim relief, pending further consideration of the matter. Accordingly, there shall be interim suspension
of the impugned order as prayed for.
Since it is represented that the batch of Writ Appeal Nos.657 of 2022 etc., against the decision of the learned
Judge in Rashtriya Ispat Nigam Limited are coming up for consideration before the Hon'ble Division Bench, it is deemed
appropriate to tag these matters to the said batch.
Registry to place the matter before the Hon'ble the Chief Justice for necessary orders.
_____
NJS, J
BLV
