Karnataka High Court
M/S Satchmo Holdings Limited vs M/S Impact Risk Management on 27 May, 2024
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
-1-
NC: 2024:KHC:17701
WP No. 11109 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF MAY, 2024
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 11109 OF 2023 (GM-RES)
BETWEEN:
M/S SATCHMO HOLDINGS LIMITED
(EARLIER KNOWN AS M/S. NITESH
ESTATES PRIVATE LIMITED)
A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT
110, B WING, ANREWS BUILDING,
LEVEL 1, M.G. ROAD,
BENGALURU-560 001,
REPRESENTED BY ITS
AUTHORISED SIGNATORY.
...PETITIONER
(BY SRI. VIKRAM UNNI RAJAGOPAL.,ADVOCATE)
AND:
1. M/S IMPACT RISK MANAGEMENT
SOLUTIONS PRIVATE LTD
A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE COMPANIES ACT, 1956,
Digitally signed HAVING ITS REGISTERED OFFICE AT
by VANDANA S ND
NO. C304, 2 FLOOR, BLOCK 3,
Location: HIGH KSSIDC COMPLEX,
COURT OF ELECTRONIC CITY, PHASE-1,
KARNATAKA BENGALURU-560100,
REPRESENTED BY ITS DIRECTOR.
2. THE MICRO AND SMALL ENTERPRISES
FACILITATION COUNCIL,
DEPARTMENT OF INDUSTRIES AND COMMERCE,
NO.49, FIRST FLOOR, SOUTH BLOCK,
KHANIJA BHAVAN, RACE COURSE ROAD,
BENGALURU-560 001,
REPRESENTED BY
ITS MEMBER SECRETARY.
...RESPONDENTS
(BY SRI. ANIRUDH.,ADVOCATE FOR R-1
R-2 SERVED BUT UNREPRESENTED)
-2-
NC: 2024:KHC:17701
WP No. 11109 of 2023
THIS WRIT PETITION FILED UNDER ARTICLES 226 AND 227 OF THE
CONSTITUTION OF INDIA PRAYING TO QUASH THE AWARD DATED 13.04.2023
(ANNEXURE-A) PASSED BY THE RESPONDENT NO.2 IN CASE NO. 04/2021 AND
ETC.,
THIS PETITION, COMING ON FOR ORDERS, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
In this petition, the petitioner seeks quashing of the
impugned award dated 13.04.2023 at Annexure-A passed by
respondent No.2-MSME facilitation council in Case No.04/2021
and for other reliefs.
2. Heard learned counsel for the petitioner and learned counsel
for respondent No.1 and perused the material on record.
3. Learned counsel for the petitioner submits that respondent
No.1-Company entered into an Agreement with the petitioner on
22.06.2017, subsequent to which respondent No.2 got itself
registered under the Micro Small and Medium Enterprises
Development Act, 2006 ('MSMED Act' for short) on 04.09.2017.
It is submitted that in view of the subsequent registration of
respondent No.1-company on 04.09.2017, respondent No.1 was
not entitled to invoke the provisions related to resolution of dispute
by way of arbitration under MSME Act and as such the instant
NC: 2024:KHC:17701
proceedings which culminated in the impugned award passed by
the respondent No.2-Council, was without jurisdiction or authority
of law and the same deserves to be set-aside. It is also submitted
that due to bonafide reasons, unavoidable circumstances and
sufficient cause, petitioner could not enter appearance in the
proceedings in Case No.04/2021 before the respondent No.2-
Council nor raise objections as regards maintainability and
jurisdiction and consequently, it is necessary to set-aside the
impugned award and remit the matter back to respondent No.2-
Council for reconsideration afresh, in accordance with law by
providing one more opportunity in favour of the petitioner. In
support of his contentions, learned counsel for the petitioner relied
upon the following judgments:
1. Vaishno Enterprises Vs. Hamilton Medical AG and
Another - 2022 SCC OnLine SC 355.
2. M/s.Nitesh Estates Ltd., Vs. Micro and Small
Enterprises Facilitation Council of Haryana and Others
- Special Leave Petition (C) No.26682/2018.
4. Per contra, learned counsel for respondent No.1 submits that
notwithstanding the fact that the MSME registration of respondent
No.1 on 04.09.2017 was subsequent to the Agreement dated
NC: 2024:KHC:17701
22.06.2017 executed between the petitioner and respondent No.1,
since invoices pursuant to the said Agreement were raised by
respondent No.1 against the petitioner subsequent to MSME
registration, the proceedings before the respondent No.2-Council
and the impugned award are perfectly legal and proper and do not
suffer from any jurisdictional error or infirmity warranting
interference by this court in the present petition particularly in the
light of availability of equally efficacious and alternative remedy by
way of challenge under Section 34 of the Arbitration and
Conciliation Act, 1996. It is therefore submitted that there is no
merit in the petition and the same is liable to be dismissed.
In support of his contentions, he placed reliance on the following
judgments:
1. Rahul S.Shah Vs. Jinendra Kumar Gandhi and Others
- (2021) 6 SCC 418.
2. Vaishno Enterprises Vs. Hamilton Medical AG and
Another - W.A.No.201/2021 (Delhi High Court).
3. Vaishno Enterprises Vs. Hamilton Medical AG and
Another - 2022 SCC OnLine SC 355.
4. GE T&D India Limited Vs. Reliable Engineering
Projects and Marketing - 2017 SCC OnLine Del 6978.
NC: 2024:KHC:17701
5. Silpi Industries etc., Vs.Kerala State Road Transport
Corporation and Another - 2021 SCC OnLine SC 439.
6. M/s. India Glycols Limited and Another Vs. Micro and
Small Enterprises Facilitation Council and others -
SLP (C) No.9899/2023.
7. State Trading Corporation of India Ltd. Vs. Micro and
Small Enterprises Facilitation Council, Delhi and
Another - LPA No.91/2024 and CM Application
No.6199/2024.
5. A perusal of the material on record including the impugned
award would indicate that though several contentions have been
urged by learned counsel on both sides in support of their
respective claims including applicability of the MSME Act as well as
the jurisdiction of respondent No.2-Council to entertain and
adjudicate upon the proceedings initiated by respondent No.1,
in the light of the undisputed fact that the petitioner herein did not
appear before the respondent No.2-Council and the impugned
award being violative of principles of natural justice, I deem it just
and appropriate to set-aside the impugned award and remit the
matter back to the respondent No.2-Council for reconsideration
afresh, in accordance with law by leaving open all contentions
NC: 2024:KHC:17701
including the contentions regarding maintainability and jurisdiction
urged by both sides to be considered by respondent No.2-Council,
in accordance with law.
6. In the result, I pass the following:
ORDER
(i) Petition is allowed;
(ii) Impugned award dated 13.04.2023 in Case
No.04/2021 at Annexure-A is set-aside;
(iii) The matter is remitted back to the respondent No.2-
Council for reconsideration afresh, in accordance with
law;
(iv) Both petitioner and respondent No.1 undertake to
appear before respondent No.2-Council on 24.06.2024
without awaiting further notice from respondent No.2;
(v) All rival contentions on all aspects of the matter
including the issues regarding maintainability and
jurisdiction are kept open and to be decided by the
respondent No.2-Council and no opinion is expressed
on the same;
(vi) Liberty is reserved in favour of the petitioner to submit
pleadings, documents, etc., and the same shall be
NC: 2024:KHC:17701
considered by respondent No.2-Council, in accordance
with law after providing an opportunity to respondent
No.1 to file reply/rejoinder, if any;
(vii) Respondent No.2-Council is directed to conclude the
proceedings within a period of three months from
24.06.2024; and
(viii) All rival contentions of parties including issues
regarding maintainability, jurisdiction, etc., as well as
right of respondent No.1 to claim alleged principal
amount, interest, etc., are kept open and no opinion is
expressed on the same.
Sd/-
JUDGE
AV
