Delhi High Court
Union Of India vs M/S Sirus Global Pvt Ltd on 23 August, 2019
$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision : 23rd August, 2019
+ LPA 42/2019 and CM Nos. 2683, 2686, 10426, 20357-
20359/2019
UNION OF INDIA ..... Appellant
Through: Mr. Malaya Kumar Chand, Sr.
Panel Counsel-UOI
versus
M/S SIRUS GLOBAL PVT LTD ..... Respondent
Through: Mr. H. Banerjee, Adv.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE C.HARI SHANKAR
ORDER
% 23.08.2019
D.N. PATEL, CHIEF JUSTICE (ORAL)
1. This Letters Patent Appeal has been preferred by the original
petitioner in W.P.(C) 2273/2018, which was dismissed by the learned
Single Judge vide order dated 25th September, 2018.
2. Having heard learned counsel for the appellant (original
petitioner) and the respondent, it appears that the Micro and Small
Enterprises Facilitation Council, Delhi (hereinafter referred as MSEF
Council for the sake of brevity) has passed an order on 1st May, 2017,
(which is at page 74 of this appeal). As per this order by passed
MSEF Council, Delhi, meetings were held on 10th December, 2016,
10th February, 2017 and 7th April, 2017, and the Council made all
efforts to facilitate conciliation between the parties to this litigation,
but conciliation could not be arrived at and hence as per Section 18(3)
of the Micro, Small and Medium Enterprises Development Act, 2006,
the council has referred the dispute for arbitration.
3. Being aggrieved by the aforesaid order, dated 1st May, 2017, of
the MSEF Council, Delhi, a writ petition was preferred by this
appellant, being W.P.(C) No. 2273/2018.
4. The said writ petition has been dismissed by the learned Single
Judge vide order dated 25th September, 2018 and hence the original
petitioner has preferred the present Letters Patent Appeal.
5. It appears from the facts of the case that despite an arbitration
clause in the agreement between the parties to the litigation, the MSEF
Council, Delhi has the power, jurisdiction and authority to refer the
dispute to arbitration, under Section 18(3) of the Act, 2006.
6. MSEF Council, Delhi has power, jurisdiction and authority to
act as an Arbitrator or a Conciliator especially looking to Section
18(4) of the Act, 2006 read with Section 24 of the Act, 2006.
7. For ready reference, Section 18(3), 18(4) and Section 24 of the
Micro, Small and Medium Enterprises Development Act, 2006 read as
under :
"18(3). Where the conciliation initiated under
sub-section (2) is not successful and stands
terminated without any settlement between the
parties, the Council shall either itself take up the
dispute for arbitration or refer to it any institution
or centre providing alternate dispute resolution
services for such arbitration and the provisions of
the Arbitration and Conciliation Act, 1996 (26 of
1996) shall then apply to the dispute as if the
arbitration was in pursuance of an arbitration
agreement referred to in sub-section (1) of section 7
of that Act.
18(4). Notwithstanding anything contained
in any other law for the time being in force, the
Micro and Small Enterprises Facilitation Council
or the centre providing alternate dispute resolution
services shall have jurisdiction to act as an
Arbitrator or Conciliator under this section in a
dispute between the supplier located within its
jurisdiction and a buyer located anywhere in India.
*****
24. Overriding effect --The provisions of sections
15 to 23 shall have effect notwithstanding anything
inconsistent therewith contained in any other law
for the time being in force."
8. In view of the aforesaid provisions of law, no error has been
committed by the learned Single Judge while deciding W.P.(C)
2273/2018, vide order dated 25th September, 2018. Thus, despite an
arbitration clause in the agreement between the parties to the
litigation, if the Micro, Small and Medium Enterprises Development
Act, 2006 is applicable to them, the MESF Council, has the power,
jurisdiction and authority under Section 18(3) to either take up the
matter for arbitration itself or refer the matter for arbitration to any
institution or centre providing alternate dispute resolution services
once the conciliation proceedings before MESF Council fails. This
provision has overriding effect, looking to Section 18(4) and Section
24 of the Act, 2006. This aspect of the matter has been properly
appreciated by the learned Single Judge while deciding W.P.(C)
2273/2018, vide order dated 25th September, 2018, especially looking
to para 10 of the judgment delivered by the Hon'ble Gujarat High
Court in First Appeal No. 637/2016, wherein it has been observed as
under :
"10. In view of the above and for the reasons
stated above, no error has been committed by the
learned Council in not entertaining the application
under Section 8 of the Arbitration Act, 1996. We see
no reason to interfere with the order passed by the
learned Council. As observed herein above and
considering the sub-section (1) of Section 18 of the
Act, 2006 the Facilitation Council has jurisdiction to
act as Arbitrator and/or conciliator any dispute
between the parties and that Council had only one of
two courses of action open to it, either to conduct an
arbitration itself or to refer the parties to a centre or
institution providing alternate dispute resolution
services stipulated in Section 18(3) of the Act, 2006.
Therefore, while dismissing the present appeal, it is
observed that Council shall now act in accordance
with provision of sub-section (3) of Section 18 and
either to conduct an arbitration itself or to refer the
parties to a centre or institution providing alternate
dispute resolution services. With the above
observations, present appeal is dismissed. No costs.
In view of dismissal of the First Appeal, Civil
Application stands dismissed accordingly."
9. In view of the aforesaid facts, reasons and judicial
pronouncements, there is no substance in this appeal and the same is,
therefore, dismissed.
10. No other argument than what is stated hereinabove has been
canvassed by the learned counsel for the appellant (original
petitioner).
CM Nos. 2683/2019, 2686/2019, 10426/2019, 20357/2019,
20358/2019 and 20359/2019
1. In view of the orders passed in the appeal, these applications
stand disposed of.
CHIEF JUSTICE
AUGUST 23, 2019/kr C. HARI SHANKAR, J.
