Madras High Court
M/S. Super Steam Boilers ... vs The Micro on 7 March, 2022
W.A.No.2655 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 07.03.2022
CORAM :
THE HON'BLE MR.MUNISHWAR NATH BHANDARI, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
W.A.No.2655 of 2021
M/s. Super Steam Boilers Engineers Pvt. Ltd.
Rep. by its Director Nazeer A.Kazi
Plot No.A.402, TTC Industrial Area
MIDC Village, Mahape
Navi Mumbai 400 701. .. Appellant
Vs.
1. The Micro, Small Enterprises Facilitation Council
Coimbatore Region, Rep. by its Chairperson
Office of Industries Commissioner and
Director of Industries and Commerce
Guindy, Chennai 600 032
Tamil Nadu.
2. M/s. Unicon Engineers
Rep. by its Managing Partner P.Ponram
613-A/6, Bharathi Road
Chinnavedampatti Post
Coimbatore 6. .. Respondents
Prayer: Appeal filed under Clause 15 of the Letters Patent against the
order dated 06.10.2021 made in W.P.No.20964 of 2021.
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W.A.No.2655 of 2021
For the Appellant : Mr.R.Bharath Kumar
For the Respondents : Mr.D.Srinivasan
For Mr.B.Manoharan
for respondent-2
JUDGMENT
(Delivered by the Hon'ble Chief Justice)
By this writ appeal, a challenge is made to the order dated
06.10.2021, whereby the writ petition preferred by the appellant
was dismissed.
2. The writ petition was filed to challenge the order dated
10.12.2020 passed by the Micro, Small Enterprises Facilitation
Council. The challenge was made precisely alleging violation of
Section 18(2) and (3) of the Micro, Small and Medium Enterprises
Development Act, 2006. The writ petition was dismissed by the
learned Single Judge mainly on the ground that the petitioner was
given sufficient opportunities and had put forth their defence.
3. The impugned order has been challenged by the appellant
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W.A.No.2655 of 2021
alleging that the procedure under Section 18 of the Act of 2006 has
not been followed by the Council. Therefore, the learned Single
Judge ought to have caused interference with the order of the
Council and remanded the case to the Council.
4. It is submitted that on a claim submitted by M/s. Unicon
Engineers, the matter was taken up for conciliation as per Section
Section 18(2) of the Act of 2006. Initially when the parties failed to
agree to resolve the disputes in the conciliation proceedings, it was
to be taken for arbitration. The conciliation proceedings were
however continued to make an effort for amicable settlement of the
dispute between the parties. When the settlement could not be
arrived at in the conciliation proceedings, the matter was ordered to
be taken up in arbitration as per Section 18(3) of the Act of 2006.
But, without applying the procedure, an award was passed.
5. It is without calling the claim by the respondents herein
and a defence or counter claim by the writ appellant. The procedure
given under the Arbitration and Conciliation Act, 1996 was not
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W.A.No.2655 of 2021
applied. Yet, the writ petition was dismissed. However, the matter is
to be taken by the Council, as has been clarified by the Apex Court
in the case of Jharkhand Urja Vikas Nigam Limited v. The
State of Rajasthan [2021 (4) CCC 476]. The prayer is,
accordingly, to set aside the order of the learned Single Judge and
the order of the Council and to remand the matter for arbitration as
per the provisions of the Act of 1996.
6. The appeal has been opposed by learned counsel appearing
for the side opposite. He submits that after the efforts made by
Council, when no settlement could be arrived at in conciliation, the
matter was taken up for arbitration. It is no doubt that the matter
was posted for arguments and for leading evidence by parties
without calling for a claim and counter claim. The appellant had
been given ample opportunities to defend and to make a counter
claim. Thus, the order passed by the Council may not require
interference. If at all an interference is to be made, it should be
with a liberty to the non appellant to maintain a proper claim and
thereupon, to proceed as per the provisions of the Act of 1996.
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W.A.No.2655 of 2021
7. We have considered the rival submissions and perused the
records.
8. A perusal of the order passed by the Council shows that
initially the matter was taken up for conciliation and was deferred
from time to time to settle the disputes in the interest of the
parties. When the conciliation failed, an order was passed to take up
the matter for arbitration invoking Section 18(3) of the Act of 2006.
While taking a decision to arbitrate the matter, the procedure
required for it has not been followed. The matter was ordered to be
posted directly for arguments and for that, to lead evidence by the
parties. Without realising that, after the failure of conciliation
proceedings, the matter was to be taken up for arbitration as per
the procedure.
9. The Council could have taken up the matter for arbitration
or send it for independent arbitration as given under Section 18 of
the Act of 2006. If at all the matter is taken up for arbitration, it
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W.A.No.2655 of 2021
should have been after calling for the claim and thereupon written
statement from the side opposite with counter claim, if any. The
procedure aforesaid was not followed and in view of the judgment
of the Apex Court in the case of Jharkhand Urja Vikas Nigam
Limited, it becomes clear that the procedure given under Section
18 of the Act of 2006 is mandatory in nature and when conciliation
fails, the Council is empowered either to take up arbitration on its
own or to refer it to any institution providing alternative dispute
resolution services and the provisions of the Arbitration and
Conciliation Act, 1996 to apply therein.
10. As the procedure therein has not been followed by the
Council and it has not been appreciated by the learned Single
Judge, we set aside the order passed by the Council as well as
learned Single Judge and remand the matter to the Council to take
up from the stage of Section 18(3) and thereby, either to take up
the case for arbitration by itself or to refer it to the institution or
centre providing alternative dispute resolution services. The
procedure given under the Act of 1996 would be applied for that.
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W.A.No.2655 of 2021
11. The writ appeal is allowed with the aforesaid directions.
There will be no order as to costs. Consequently, CMP Nos.17275
and 18441 of 2021 are closed.
(M.N.B., CJ.) (D.B.C., J.)
07.03.2022
Index : Yes/No
kpl
To
The Chairperson
Micro, Small Enterprises Facilitation Council
Coimbatore Region,
Office of Industries Commissioner and
Director of Industries and Commerce
Guindy, Chennai 600 032
Tamil Nadu.
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W.A.No.2655 of 2021
THE HON'BLE CHIEF JUSTICE
AND
D.BHARATHA CHAKRAVARTHY, J.
kpl
W.A.No.2655 of 2021
07.03.2022
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