Smt Bharati Ojha vs Simplex Infrastructures Limited
2023 Latest Caselaw 2614 Cal/2

                 IN THE HIGH COURT AT CALCUTTA

                  Ordinary Original Civil Jurisdiction

                            ORIGINAL SIDE



Present :

Hon'ble Justice Moushumi Bhattacharya.


                             AP/493/2023

                         SMT BHARATI OJHA
                                VS
                 SIMPLEX INFRASTRUCTURES LIMITED

                                 AND

                             AP/494/2023

                         SMT BHARATI OJHA
                                VS
                 SIMPLEX INFRASTRUCTURES LIMITED

                                 AND

                             AP/496/2023

                         SMT BHARATI OJHA
                                VS
                 SIMPLEX INFRASTRUCTURES LIMITED

                                 AND

                             AP/497/2023

                          SMT BHARATI OJHA
                                VS
                 SIMPLEX INFRASTRUCTURES LIMITED
                                             2


     For the petitioner              :           Mr. Supratim Laha, Adv.

                                                 Mr. Bikash Shaw, Adv.



     For the respondent              :           Mr. Abhishek Banerjee, Adv.

                                                 Mr. Danyal Ahmad, Adv.



     Last heard on                   :           12.09.2023



     Delivered on                       :        13.09.2023.




Moushumi Bhattacharya, J.

1. The petitioner and the respondent are represented by learned counsel.

2. The facts in all four matters are identical, between the same parties and

the contentions made on behalf of the parties including on the maintainability

of the application are identical. The Court hence proposes to dispose of all four

applications by way of this judgment.

3. It is also relevant that the Court has delivered a judgment in

AP/492/2023 and AP/495/2023 in the Commercial Division yesterday i.e., on

12th September, 2023. Both the applications involve the same parties as are

before the Court in the four present applications.

4. Learned counsel appearing for the parties also agree that there are no

differences either on the facts or in the submissions made on the relevant law

between the two matters which were disposed of yesterday by way of a

judgment and the four matters today. The only difference is that AP/492/2023

and AP/495/2023 were disposed of in the Commercial Division whereas the

present four matters are in the Non-Commercial Division.

5. There are minor variations in the dates and the figures/amount claimed

in the four applications. Hence, the Court does not wish to go into the

individual facts of each of the Arbitration Petitions.

6. The Court hence proposes to dispose of the present applications also on

the same reasons and grounds as the judgment in AP/492/2023 and

AP/495/2023.

7. All the four applications are under Section 11 of The Arbitration and

Conciliation Act, 1996. The petitioner seeks appointment of an Arbitrator in

respect of the disputes and differences which have arisen between the

petitioner and the respondent.

8. The disputes arise out of work orders extended by subsequent work

orders. The only dispute is whether the petitioner approaching the MSME

Facilitation Council under the provisions of the Micro Small and Medium

Enterprises Development Act, 2006 would save the limitation period for filing of

the present applications. Admittedly, the MSME proceedings were dropped by

the Council on 20.9.2022.

9. The petitioner was engaged as a contractor by the respondent for a

project in Chennai.

10. The respondent takes a point of maintainability and urges through

learned counsel that the present application is not maintainable on two

grounds. First, that the petitioner has clubbed separate and independent

claims arising out of two separate work orders where the equipments referred

to in the work orders as well as the rates are admittedly different. Counsel

submits that the petitioner should hence have made two separate references

under each of the work orders. Second, the claims made by the petitioner are

barred by limitation. According to counsel, the alleged claims are for the period

2018-2019 and the petitioner is not entitled to get any relief under section 14

of the Limitation Act, 1963 since the MSME Council is not a Court and the

petitioner did not initiate the proceedings in "good faith".

11. The first ground of objection to the maintainability of the application is

that the petitioner has clubbed the claims arising out of two separate and

distinct work orders. The work orders contain arbitration clauses which

stipulate that in the event of any dispute or difference arising out of or in

connection with "this work order" and that if the parties fail to settle their

differences or disputes, the same shall be referred to arbitration. Contrary to

the stand taken on behalf of the respondent, namely, that the two work orders

issued by the respondent to the petitioner are completely different in scope and

purpose, it appears that both the work orders in fact relate to the same project.

Moreover, the order numbers namely S3176 and C3176 in the two work orders

are also identical together with the scope of the work under the orders. Both

the work orders relate to "Construction of civil, structural and architectural

works including piling, ground improvement etc. in entire area, construction of

RCC Chimney and NDCT for Unit 1& 2 of 2X660 MW Sets Super Thermal

Power Project at Chennai".

12. There is no difference at all in the scope of work delineated in the two

work orders and both the work orders are headlined with "Work Order for

Hiring Equipment".

13. Hence, the respondent's argument of the petitioner attempting to club

claims under two separate and distinct work orders is completely misplaced

and misconceived. There is little doubt that both the work orders, apart from

containing identical clauses, relate to the same project, namely, "Super

Thermal Power Project at Chennai". There is no material disclosed before the

Court to hold that the petitioner is trying to make a composite reference in

relation to two different or unconnected work orders. The first ground of

objection is therefore rejected.

14. The second ground relates to the claims allegedly being barred by

limitation. The respondent relies on the earlier notice issued by the petitioner

on 25.11.2022 which was later withdrawn by the petitioner. The respondent

also says that the order of the MSME Council of 20.9.2022 dropping the

petitioner's reference cannot save limitation.

15. Upon considering the order passed by the Facilitation Council on

20.9.2022, it is found that the petitioner (supplier unit) made a reference for its

claims relating to unpaid bills in 2020; the Council refers to "Case no. 61 of

2020" in the order. The order contains the view of the Council in light of the

Supreme Court decision in M/s. Vaishno Enterprises vs. Hamilton Medical Ag

and M/s. Silpi Industries vs Kerala State Road Transport Corporation whereby

according to the Council, the petitioner was disentitled from getting any relief

under the MSMED Act, 2006. The Council hence proceeded to dispose of the

petitioner's case on the ground of maintainability and gave liberty to the

petitioner (supplier unit) to file its claim before the appropriate forum for

realisation of its dues.

16. The order passed by the Facilitation Council shows that the petitioner

referred its claim to the Council in 2020 on the assumption that the

Facilitation Council is the appropriate forum for adjudicating the petitioner's

claim as a supplier unit. The Supreme Court decision in Silpi Industries and

Vaishno Enterprises came much later in 2021 and 2022 respectively. Thus the

petitioner could not have known at the time of filing the reference in 2020 that

its case would be dropped in September, 2022 in view of the judgments of the

Supreme Court.

17. Therefore, the delay in the interregnum from 2020-2022 cannot be

attributed to the petitioner. The Court finds the respondent's argument of the

petitioner not being entitled to seek recourse under section 14 of the Limitation

Act, 1963 to be unacceptable. Section 14 of the Limitation Act provides for

extension of time with regard to any civil proceeding which the plaintiff has

been prosecuting with due diligence against the defendant and the proceeding

relates to the same matter in issue and is prosecuted in good faith in a Court

which is subsequently found to be incompetent.

18. There is little doubt that the petitioner referred to its claim to the

Facilitation Council under the provisions of the MSMED Act, 2006 in good faith

that the Council is the appropriate forum for adjudicating on the dispute.

There is nothing on record to suggest that the petitioner instituted the

proceeding in bad faith as has been contended on behalf of the respondent. As

stated above, the decisions of the Supreme Court in Silpi Industries and

Vaishno Enterprises were delivered subsequently and the petitioner's reference

hence cannot be sublimated on the ground of being bad in faith.

19. The respondent's other contention of the Facilitation Council not being a

Court is equally suspect. The Facilitation Council has been invested with wide

powers, notwithstanding any other law for the time in force, for adjudicating a

claim for recovery of amounts due under the MSMED Act. Sections 18(3) and

(4) clothe the Council with jurisdiction to act as an Arbitrator or Conciliator in

a dispute between a supplier and the buyer. The respondent's objection to the

Council being referred to as a "Court" is simply a desperate attempt to avoid

the applicability of section 14 of the Limitation Act since the respondent seeks

to shut out the petitioner's claim as being time barred.

20. The facts persuade the Court to hold that the petitioner's reference before

the Council in 2020 and the disposal of it in September, 2022, would entitle

the petitioner to take advantage of section 14 of the Limitation Act where the

petitioner has been able to tick all the boxes, mainly of the subject matter and

the parties to the dispute being the same and the petitioner prosecuting the

proceeding before the Council in good faith. Therefore, the second objection of

the respondent is also rejected.

21. The respondent's argument of whether the petitioner was registered as

an MSME on the date of entering into the contract with the respondent is

completely irrelevant to the issue before the Court. The petitioner is not seeking

any relief from this court on the basis of the petitioner being an MSME. Hence

the decisions relied upon by the respondent are not relevant. Ram Bhawan

Singh vs. Jagdish; (1990) 4 SCC 309 on section 14 of the Limitation Act was

decided on the appellants before the Supreme Court being unable to show any

affidavit for condonation of delay or any other material to prove that the

appellants had exercised due diligence in availing of their remedies. The

Supreme Court hence found lack of good faith on the part of the appellants. In

Silpi Industries vs. Kerala State Road Transport Corporation; 2021 SCC OnLine

SC 439, the Supreme Court found that section 43 of the Act makes the

provisions of the Limitation Act applicable to arbitrations. This case may not

assist the petitioner at this stage since arbitration is still to commence between

the parties.

22. The Court has already found that the respondent has not been able to

make out any case on the non-maintainability of the application. The merits of

the matter are accordingly being dealt with.

23. There is no doubt that a dispute exists between the parties as would be

evident from the very submissions made on behalf of the parties. The

petitioner's notice under section 21 of the 1996 Act dated 19.4.2023 clearly

states the matters in dispute relating to unpaid bills. The petitioner has

claimed outstanding amounts as on the dates mentioned in the applications.

The respondent has not replied to the notice. The work orders issued by the

respondent to the petitioner contain arbitration clauses. The work relates to a

common project and the second work order is in continuation of the first work

order. The arbitration clauses provide for reference of the disputes to

arbitration of a single arbitrator.

24. The facts placed before the court show that the petitioner has been able

to establish a case under section 11(6) of the 1996 Act.

25. AP/493/2023, AP/494/2023, AP/496/2023 and AP/497/2023 are

accordingly allowed and disposed of by appointing Mr. Arindam Banerjee,

Advocate to act as the Arbitrator subject to the learned Arbitrator

communicating his consent in the prescribed format to the Registrar, Original

Side of this Court within 3 weeks from date. The advocate on record of the

petitioner shall communicate this order to the Arbitrator within 3 days from

the date of this judgment with the required details of the contact person of the

petitioner.

26. Needless to say, all points are left open to be urged before the Arbitrator

appointed in the matters.

Urgent photostat certified copies of this judgment, if applied for, be

supplied to the parties upon fulfillment of requisite formalities.

(Moushumi Bhattacharya, J.)

R.Bhar