Union Territory Of Jammu And ... vs M/S R R Prefeb Industry Sidco ...
2022 Latest Caselaw 86 j&K

                                                                            Sr. No. 1



        HIGH COURT OF JAMMU & KASHMIR AND LADAKH
                         AT JAMMU
                                 (Through Virtual Mode)
CJ Court

Case: Arb P No. 1 of 2022

Union Territory of Jammu and Kashmir                       .....Appellant/Petitioner(s)


                                  Through :- Sh. D.C.Raina, Advocate General with
                                             Sh. Vishal Bharti, Dy. AG.
                           v/s

M/s R R Prefeb Industry SIDCO Industrial                            .....Respondent(s)
 Complex, Bari Brahmana, Jammu and
another
                                  Through :-


     CORAM: HON'BLE THE CHIEF JUSTICE

                                      ORDER

04.02.2022

1. This is a petition under Section 34 of Arbitration and Conciliation Act

1996 for setting aside the arbitration award dated 07.08.2021 passed by the

Micro and Small Enterprises Facilitation Council, Jammu.

2. The Office has reported the petition to be beyond time by 46 days.

3. Sh. D.C. Raina, learned Advocate General, submits that in fact there is

no delay. The cause of action had arisen during the COVID period.

4. In view of the judgment and order dated 23.09.2021 passed by the

Supreme Court in SMW (C) No. 3 of 2020, as the limitation for filing cases

stood extended, there is no delay in the filing of the petition.

5. I have heard Sh. D.C. Raina, learned Advocate General assisted by Sh.

Vishal Bharti, learned Deputy Advocate General for the petitioner on the

merits of the petition.

6. It is submitted that the contract contained an arbitration clause

whereunder Chief Engineer was supposed to act as an arbitrator in the event of

dispute between the contractor and the Divisional Officer and the same was

stated to be binding upon the contractor.

7. The contractor-respondent no. 1 never invoked the said arbitration clause

so as to get the dispute referred to the sole arbitration of Chief Engineer nor has

approached the Chief Justice for appointment of an arbitrator.

8. Thus, there is no reference and the award is wholly without jurisdiction

9. Even under the provisions of the 'Micro, Small and Medium Enterprises

Development Act, 2006,' there was no reference to the Micro and Small

Enterprises Facilitation Council and the award has been passed ex-parte behind

the back of the petitioner.

10. It is also submitted that the principal amount awarded is only

₹ 12,90,120/- as claimed by the respondent no. 1 whereas the interest alone is

to the extent of ₹ 87,40,757/- up to 31.07.2020 again as demanded by the

respondent no. 1. The award is silent as to the period for which the interest has

been awarded as also the rate of interest.

11. The total contract amount was around ₹. 96.00 Lakhs out of which

₹ 85.00 lakhs approximately stood already paid to the respondent no. 1.

12. Issue notice to the respondent no. 1, who may file counter affidavit

within a period of six weeks from today.

13. List for admission/final disposal on 26.05.2022.

14. Until further orders of this Court, the effect and operation of the

impugned order dated 07.08.2021 passed by the Micro and Small Enterprises

Facilitation Council shall remain stayed provided the petitioner deposits the

principal amount as of ₹ 12,90,120/- as awarded with the Court within a period

of three weeks from today and furnishes security for the interest amount of

₹ 87,40,757/- other than cash and Bank guarantee within the same period.

15. The amount so deposited shall not be disbursed and shall be invested in a

short term fixed deposit with the Nationalized Bank.

(PANKAJ MITHAL) CHIEF JUSTICE

JAMMU 04.02.2022 TILAK