Delhi High Court
Ms Bsa Citi Couriers Pvt Ltd vs Union Of India & Ors. on 24 February, 2021
Digitally Signed By:DINESH
SINGH NAYAL
Signing Date:25.02.2021 16:02:04
$~12
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 24th February, 2021
+ W.P.(C) 2554/2021 & CM APPL. 7515/2021
MS BSA CITI COURIERS PVT LTD ..... Petitioner
Through: Mr. Arjun Devan, Advocate.
versus
UNION OF INDIA & ORS. ..... Respondents
Through: Mr. Amit Mahajan and Mr. Dhruv
Pande, Advocate for R-1.
Mr. Ramesh Singh and Mr. Shok
Chandra, Advocates for R-2 & 3.
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J.(Oral)
1. This hearing has been done through video conferencing.
2. The present petition has been filed by the Petitioner in view of the
delay being caused in the processing of its complaint before Respondent
No.3. - Micro and Small Enterprises Facilitation Council (hereinafter,
"MSEFC").
3. The case of the Petitioner is that it is a registered Micro Small and
Medium Enterprise and had a dispute with Respondent No.4 with respect to
alleged non-payment for its services. The Petitioner had accordingly filed an
application/complaint bearing number DL/01E0000588/S/0001 on 17th
June, 2019 with the MSEFC. The said complaint was not acted upon and
finally after the Petitioner repeatedly wrote to the grievance cell, the matter
was sent for conciliation. The conciliation process failed and on 6th July,
2020, the claim was converted into a reference, as per section 18 of the
Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter,
Signature Not Verified
Digitally Signed
By:PRATHIBA M SINGH W.P.(C) 2554/2021 Page 1 of 3
Signing Date:25.02.2021 13:35
Digitally Signed By:DINESH
SINGH NAYAL
Signing Date:25.02.2021 16:02:04
"MSMED Act"). However, till date an arbitrator has not been appointed in
accordance with Section 18(3) of the MSMED Act, inspite of the scheme of
the Act providing for a disposal of such proceedings within 90 days
according to section 18(5) of the MSMED Act.
4. Mr. Chandra, appearing for Respondent No. 2- MSEFC, submits that
according to the notification of the GNCTD issued on 30th September,
2020, 11 new councils have been constituted. In view of this reconstitution,
there has been a delay in examining the Petitioners reference
5. This court is of the opinion that the entire purpose of the MSMED Act
would be completely defeated if references are delayed in this manner.
Under Section 18 of the MSMED Act, the entire reference is to be decided
within a period of 90 days. However, in the present case, inspite of the
conciliation having failed and having been converted into a reference in
July, 2020, there is no progress till date. The entire purpose of enacting this
Act would be set at naught if the MSEFC fails to act diligently. The scheme
of the MSMED Act and the importance of timely dispensation of references
under Section 18 of the said act has been repeatedly affirmed by this Court
including in the judgment titled Driplex Water Engineering Pvt. Ltd. v.
MSEFC and ors., 2015 SCC Online Del 13879. In the said judgment, a ld.
Single Judge of this Court observed as under:
"11. It would thus be seen that the Act aforesaid has
provided for the establishment of the Council to enable
Micro and Small Enterprises, which may turn sick if the
dues owed to them by the buyers of their goods and
services are not recovered immediately, to expeditiously
recover their dues and to not depend upon the
procedure of the ordinary civil courts before whom
owing to huge volumes, disposal of cases takes
Signature Not Verified
Digitally Signed
By:PRATHIBA M SINGH W.P.(C) 2554/2021 Page 2 of 3
Signing Date:25.02.2021 13:35
Digitally Signed By:DINESH
SINGH NAYAL
Signing Date:25.02.2021 16:02:04
considerably longer. Section 18(5) of the Act mandates
the Council to decide the references made to it by Micro
and Small Enterprises within a period of 90 days only.
12. In this light, the "inadvertent error" on the part of
the respondent no.1 Council in dealing with and/or
disposing of the references/claims made by the
petitioner for the last over two years is alarming.
Notwithstanding the Council having been established, it
has not served the purpose for which it was established.
...
22. The purport of the aforesaid discussion is to remind
the respondents of the statutory provisions by which they
are equally bound and to consider devising ways and
means for abiding therewith."
6. Considering the settled legal position as also the clear mandate in
section 18(5) of the MSMED Act, there can be no reason to delay the matter
any further. The MSEFC is, accordingly, directed to appoint an arbitrator in
terms of the Act, within a period of two weeks from today, failing which the
Petitioner is permitted to approach this Court by way of an application. After
appointment of the arbitrator, the said reference shall be disposed of within
90 days in terms of the statutory stipulation.
7. With these observations this petition all pending applications are
disposed of.
PRATHIBA M. SINGH
JUDGE
FEBRUARY 24, 2021
dj/Ak
Signature Not Verified
Digitally Signed
Signing Date:25.02.2021 13:35
