The M.D. Mah. State Electricity ... vs The Micro, Small Enterprises ...
2017 Latest Caselaw 3609 Bom

 2706WP4435.11-Judgment                                                                         1/8


              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                        NAGPUR BENCH, NAGPUR.


                      WRIT PETITION NO.  4435  OF    2011


 PETITIONER :-                        The   Managing   Director,   Maharashtra   State
                                      Electricity   Distribution   Company   Ltd.,
                                      Prakashgarh,   Bandra   (East)   Mumbai,
                                      (Formerly   Chairman   of   MSEB),   The
                                      Chairman   Maharashtra   State   Electricity
                                      Distribution   Company   Ltd.,   Prakashgarh,
                                      Bandra (East) Mumbai.         


                                         ...VERSUS... 


 RESPONDENT :-                   1. The   Micro,   Small   Enterprises   Facilitation
                                    Council,   through   its   Chairman   having   its
                                    office at Udyog Bhavan, Civil Lines, Nagpur. 

                                 2. M/s. Ramkrishna Electricals Ltd., Plot No.M-
                                    5, MIDC, Industrial Area, Nagpur-440 016,
                                    having office at N-5, MIDC Industrial Area,
                                    Nagpur-440 016 through its Director Shri K.
                                    Nagrajan, Aged about : 45 years. 


 ---------------------------------------------------------------------------------------------------
                     Mr. S.V.Purohit, counsel for the petitioner.
           Mr. I.J.Damle, Asstt.Govt.Pleader for the respondent No.1.
                   Mr. S. Dhole, counsel for the respondent No.2.
 ---------------------------------------------------------------------------------------------------



                                        CORAM : SMT. VASANTI    A    NAIK & 
                                                    ARUN  D. UPADHYE
                                                                     ,   JJ.

DATED : 27.06.2017

2706WP4435.11-Judgment 2/8

O R A L J U D G M E N T (Per Smt.Vasanti A Naik, J.)

By this writ petition, the petitioner seeks a declaration that

the respondent No.1-Micro, Small Enterprises Facilitation Council

would not have jurisdiction to decide the original application No.24 of

2010 filed by the respondent No.2 before the respondent No.1-council.

The petitioner seeks a writ, order or direction restraining the

respondent No.1-council from deciding the original application filed by

the respondent No.2.

2. The petitioner-Maharashtra State Electricity Distribution

Company Limited required transformers and various electrical

equipments for its use and hence it entered into a contract with the

respondent No.2 to purchase the transformers of various capacities and

an agreement was executed between the petitioner and the respondent

No.2 in that regard. According to the respondent No.2, the petitioner

was liable to pay the amount for the material supplied by the

respondent No.2, within sixty days. The petitioner cleared the bills of

the respondent No.2, but there was some delay in making the payment.

The respondent No.2, therefore, filed an application under the Micro,

Small and Medium Enterprises Development Act, 2006 before the

2706WP4435.11-Judgment 3/8

respondent No.1-council for granting interest on the alleged delayed

payment of the bills. On receipt of the notice of the application filed by

the respondent No.2, the petitioner filed an application before the

respondent No.1-council for dismissal of the original application filed by

the respondent No.2 before the respondent No.1-council in view of the

existence of an arbitration agreement between the petitioner and the

respondent No.2. According to the petitioner, the respondent No.1-

council had no jurisdiction to proceed with the application filed by the

respondent No.2 under section 18 of the Act in view of the existence of

an arbitration agreement. Since the application of the petitioner was not

decided and the respondent No.1-council proceeded to take up the

matter, the petitioner has filed the instant petition seeking the aforesaid

relief.

3. Shri Purohit, the learned counsel for the petitioner,

submitted that the issue involved in this case stands answered in favour

of the petitioner by the judgment of the Division Bench of this court,

reported in AIR 2012 Bom. 178 (M/s. Steel Authority of India Ltd.,

and anr. v. Micro, Small Enterprises Facilitation Council, through

Joint Director of Industries, Nagpur Region, Nagpur). It is submitted

that an identical issue like the one involved in this case was decided in

favour of the petitioner therein. It is submitted that this court has held

2706WP4435.11-Judgment 4/8

in the judgment, reported in AIR 2012 Bom. 178 that the Micro, Small

Enterprises Facilitation Council is not entitled to proceed under section

18(3) of the Act in view of the independent arbitration agreement

between the parties. It is submitted that the relief sought by the

petitioner needs to be granted in view of the judgment, reported in AIR

2012 Bom.178.

4. Shri Dhole, the learned counsel for the respondent No.2,

has denied the claim made by the petitioner. It is submitted that it

would not be permissible for the petitioner to file a writ petition under

Article 226 of the Constitution of India to seek the aforesaid relief. The

learned counsel relied on the judgments of the Hon'ble Supreme Court,

reported in 2010 AIR SCW 6378 (Shalini Shyam Shetty v. Rajendra

Shankar Patil) and (2014) 7 SCC 255 (Lalitkumar V. Sanghavi v.

Dharamdas V. Sanghavi) to substantiate his submission in this regard.

It is submitted that the judgment reported in AIR 2012 Bom. 178 may

not apply to the case of the petitioner in view of the judgments

rendered by the Hon'ble Supreme Court from time to time that when

jurisdiction is conferred upon a court or a tribunal by a special statute,

any other court or forum would not derive jurisdiction, apart from the

statute. It is submitted that jurisdiction is conferred on the Micro, Small

Enterprises Facilitation Council by section 18 of the special statute, i.e.

2706WP4435.11-Judgment 5/8

the Micro, Small and Medium Enterprises Development Act, 2006 and

the said jurisdiction cannot be taken away in view of the existence of an

arbitration agreement between the parties. It is submitted that when a

public forum is created for the adjudication of the dispute, a party

cannot be permitted to avail a private forum. The learned counsel

relied on the judgments reported in (2012) 4 SCC 307 (Kanwar Singh

Saini v. High Court of Delhi, 2004 AIR SCW 1266 (Secur Industries

Ltd. v. M/s. Godrej & Boyce Mfg.Co.Ltd.), (2017) 1 SCC 554 (Bhim

Singh v. CIT), (2012) 7 SCC 462 (Purbanchal Cables & Conductors

(P) Ltd. v. Assam SEB), 1969 AIR 78 (Dhulabhai and others v. The

State of Madhya Pradesh and another), 2017 ALL SCR 879 (Vimal

Kishor Shah v. Jayesh Dinesh Shah, (2011) 5 SCC 532 (Booz Allen &

Hamilton Inc. v. SBI Home Finance Ltd.), and the unreported

judgments of this court in Writ Petition No.2202 of 2015 (Kirloskar

Brothers Limited v. The Micro and Small Enterprises Facilitation Council

at Pune and others), bunch of Letters Patent Appeal No.245 of 2013

(Maharashtra State Electricity Distribution Company Limited v. Prerna

Cables Pvt.Ltd.) and Allahabad High Court in Writ - C No.24343 of 2014

(M/s. Paper & Board Convertors Thru' Parnter Rajeev Agrawal v.

U.P.State Micro & Small Enterprises and 2 others) to substantiate his

submission.

2706WP4435.11-Judgment 6/8

5. On hearing the learned counsel for the parties and on a

perusal of the judgments referred to herein above, we find that the issue

involved in this case was also involved in the case of M/s. Steel

Authority of India Limited and this court held in the said judgment

that the Micro, Small Enterprises Facilitation Council would not be

entitled to proceed under the provisions of section 18(3) of the Act of

2006, in view of the independent arbitration agreement between the

parties. This court has observed in the aforesaid judgment that it

cannot be said that because section 18 provides for a forum of

arbitration, an independent arbitration agreement entered into between

the parties will cease to have effect. The court went on to add in the

judgment in the case of M/s. Steel Authority of India Limited that

there is no question of an independent arbitration agreement ceasing to

have any effect because the overriding clause under section 24 of the

Act only overrides things inconsistent therewith and there is no

inconsistency between an arbitration conducted by the respondent

No.1-council under section 18 of the Act of 2006 and the arbitration

conducted under an arbitration clause since both are governed by the

provisions of the Arbitration and Conciliation Act, 1996. After recording

the reasons for overruling the objections raised on behalf of the Micro,

Small Enterprises Facilitation Council and the respondent therein, this

court has concluded that the Micro, Small Enterprises Facilitation

2706WP4435.11-Judgment 7/8

Council would not be entitled to proceed under the provisions of section

18(3) of the Act, in view of the arbitration agreement between the

parties. In the instant case since admittedly, there is an arbitration

agreement between the petitioner and the respondent No.2, the Micro,

Small Enterprises Facilitation Council ought to have decided the

application filed by the petitioner for dismissal of the application filed

by the respondent No.2 under section 18 of the Act. Since the issue

involved in this case stands answered in favour of the petitioner herein

by the judgment reported in AIR 2012 Bom. 178 the prayer made in

the writ petition needs to be granted. Before granting the relief in

favour of the petitioner, in view of the judgment in the case of M/s.

Steel Authority of India Limited, we are not inclined to take another

view in the matter in view of the judgments reported in (2012) 4 SCC

307, 2004 AIR SCW 1266, (2017) 1 SCC 554, (2012) 7 SCC 462,

1969 AIR 78, 2017 ALL SCR 879, (2011) 5 SCC 532, and the

unreported judgments of this court in Writ Petition No.2202 of 2015,

Letters Patent Appeal No.245 of 2013 and others and the Allahabad High

Court in Writ - C No.24343 of 2014 and relied on by the counsel for the

respondent No.2. Except the judgment of the Allahabad High Court,

the other judgments referred to and relied on by the counsel for the

respondent No.2 do not deal with the issue involved in this case. Since

the very issue that is involved in this case stands answered in favour of

2706WP4435.11-Judgment 8/8

the petitioner herein, in view of the judgment in the case of M/s. Steel

Authority of India Limited, we are inclined to grant the relief, as

claimed by the petitioner.

6. Hence, for the reasons recorded herein above and for the

reasons recorded in the judgment reported in AIR 2012 Bom. 178, the

writ petition is allowed. It is hereby held that the respondent No.1-

Micro, Small Enterprises Facilitation Council would not be entitled to

proceed with the original application filed by the respondent No.2

bearing No.24 of 2010, in view of the existence of arbitration

agreement between the parties. Rule is made absolute in the aforesaid

terms with no order as to costs.

                        JUDGE                                              JUDGE 



 KHUNTE