Madras High Court

Chief Engineer Panipat Thermal ... vs M/S Unicon Engineers on 14 June, 2022

                                                                        C.R.P(PD).No.1223 of 2022

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                               DATED : 14.06.2022

                                                    CORAM :

                                   THE HONOURABLE MS. JUSTICE R.N.MANJULA

                                           C.R.P.(PD).No.1223 of 2022
                                                      and
                                             C.M.P.No.6596 of 2022

                     Chief Engineer Panipat Thermal Power Station,
                     Rep by Er.S.L.Sachdeva
                     Panipet Thermal Power Station,
                     (A unit of Haryana Power Generation Corporation Ltd)
                     Panipat 132 105                                               ... Petitioner

                                                          ..Vs..
                     M/s Unicon Engineers
                     Rep by Sri P.Ponram,
                     Managing Partner
                     M/s Unicon Engineers
                     513-A/6, Bharathi Road,
                     Chinnavedampatty, Coimbatore 641 049.                       ... Respondent


                     Prayer:- Civil Revision Petition is filed under Article 227 of the

                     Constitution of India, against the order of the learned Principal District

                     Judge, Coimbatore passed in I.A.No.1360 of 2017 in AOP No.55 of

                     2017.

                     1/10


https://www.mhc.tn.gov.in/judis
                                                                            C.R.P(PD).No.1223 of 2022

                                        For Petitioner       : Mr.K.Thiruvengadam

                                        For respondent       : Mr.B.Manoharan

                                                          ORDER

This Civil Revision Petition has been preferred, challenging the

order of the learned Principal District Judge, Coimbatore, dated

03.02.2022 made in I.A.No.1360 of 2017 in Arbitration Original Petition

No.55 of 2017.

2.The revision petitioner is the defendant in the suit and the

respondent/plaintiff has filed a petition in I.A.No.1360 of 2017, to reject

the appeal filed by the revision petitioner for non-compliance of Section

19 of MSMED Act, 2006. The same was allowed and a direction was

given to the revision petitioner to deposit a sum of Rs.3,25,44,034/- as

per Section 19 of the MSMED Act, 2006, on or before 21.03.2022.

Aggrieved over that, the revision petitioner/defendant has preferred the

present petition.

https://www.mhc.tn.gov.in/judis C.R.P(PD).No.1223 of 2022

3.The learned counsel for the petitioner submitted that unless the

Award amount is calculated and determined by the counsel and filed

before the Court, it may not be possible for the revision petitioner to make

a deposit in terms of Section 19 of the MSMED Act.

4.In support of his contention, he relied on the judgment of the

Jharkhand High Court in the case of M/s.Bharat Cooking Coal

Limited, Dhanbad Vs. State of Jharkhand reported in (2016) 168 AIC

426 and relevant portion of the judgment reads as under:

22.It would be repetition to say that the Facilitation

Council had to satisfy itself on the necessary ingredients of

the provisions of Sections 15 and 16 etc and render its

finding on each of such claim arising out of such supply

orders such as the date of supply orders, th date on which

the supplies were made, the date on which bills were raised,

the date on which the acceptance of supplies were made or

https://www.mhc.tn.gov.in/judis C.R.P(PD).No.1223 of 2022

refused. In the facts of the case of the applicant, it was

required to render a finding as to from which dates the

liability of the buyer arose to make payment of outstanding

dues. The payments would then became due from those

dates against the buyer in favour of supplier. The liability

of the buyer to pay interest over, the original amount would

then accrue from the due date as adjudicated by the

Facilitation Council. Instead, Facilitation Council in a

summary manner has straightaway held the opposite

party/petitioner herein liable to pay the entire amount claim

of Rs.50,231/- towards principal amount with interest at 3

times of Bank rate. Even if the opposite party/petitioner

herein had failed to file written statement within time, it was

an obligation on the Adjudicatory Body i.e., Facilitation

Council to exercise independent application of mind on the

claim petition in the light of the provisions of Act, 2006 to

satisfy itself whether the ingredients therein are satisfied by

https://www.mhc.tn.gov.in/judis C.R.P(PD).No.1223 of 2022

the claimant to succeed against each of such claims. It is

another matter that the Facilitation Council has also

chosen to bye-pass the first step of undertaking conciliation

on the dispute between the parties.

23.Before parting, therefore, it is felt necessary to

reiterate that the Facilitation Council exercising an

adjudicatory role in the nature of a arbitration proceeding

as conceived under the Arbitration and Conciliation Act,

1996, has an onerous duty to examine such claim petition

and render its finding in accordance with law. Failure to do

so, would amount to abdication of its adjudicatory role as

well as lack of application of mind on its part.

24.In totally of the facts and circumstances and the

discussions made herein above, the impugned Award at

Annexure-4 cannot be upheld in the eye of law. The matter

https://www.mhc.tn.gov.in/judis C.R.P(PD).No.1223 of 2022

is remanded to the Facilitation Council to hear the

reference afresh and take a decision after due opportunity

to the parties within a time frame. Consequently, 75% of the

awarded amount deposited by way of a demand draft

before learned Registrar General of this Court in

pursuance of the interim order dated 15th July, 2013 passed

in the instant case shall be returned to the petitioner”

4.By placing reliance on the above cited judgment, it is claimed by

the learned counsel for the petitioner that the award amount was not

determined. In the case in hand, the Award itself, the award amount has

been determined and further a memo also filed by calculating the interest

portion also. So, there is no failure on the part of any other stake holders

in arriving the award amount as prescribed.

5.Both parties cannot have any disagreement about the mandates

of Section 19 of the MSMED Act and the same reads as under:

https://www.mhc.tn.gov.in/judis C.R.P(PD).No.1223 of 2022

19.Application for setting aside decree, award or order:- No application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate dispute resolution services to which a reference is made by the Council, shall be entertained by any Court unless the appellant (not being a supplier) has deposited with it seventy five percent of the amount in terms of the decree, award or, as the case may be the other order in the manner directed by such Court.

Provided that pending disposal of the application to set aside the decree award or order, the Court shall order that such percentage of the amount deposited shall be paid to the supplier, as it considers reasonable under the circumstances of the case, subject to such conditions as it deems necessary to impose.

The clause seeks to debar any Court or other authority from entertaining an appeal against any decree, award or any other order unless the appellant (not being a supplier) has deposited with it seventy five percent of the

https://www.mhc.tn.gov.in/judis C.R.P(PD).No.1223 of 2022

amount in terms of the decree, award or other order”.

6.As per the above provisions, after the award was passed, if

anyone not being a supplier chooses to file an appeal, 75% of the award

amount in terms of the decree should be deposited. Only when the said

condition is complied, the appellant will get the right to contest the

appeal.

7.In para 17 of the impugned order, the award amount has been

determined as Rs.8,30,91,512/-, out of which, the revision petitioner has

to deposit 75%, which would comes to Rs.6,23,18,634/-. Since the

revision petitioner has deposited only Rs.2,97,74,600/- at the time of

filing of the appeal, a direction has been given to the petitioner to deposit