Madras High Court
The Thiruvalluvar University vs The Micro And Small Enterprises ... on 7 September, 2022
W.P.No.10375 of 2022
and W.M.P.Nos.10097 & 10102 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 07.09.2022
CORAM
THE HONOURABLE MR.JUSTICE S.S.SUNDAR
W.P.No.10375 of 2022
and W.M.P.Nos.10097 & 10102 of 2022
The Thiruvalluvar University
represented by its Registrar,
Serkkadu, Vellore – 632 115 ... Petitioner
Vs.
1.The Micro and Small Enterprises Facilitation Council,
Office of the Regional Joint Director of Industries and Commerce,
A30, T.I.VI.KA Industrial Estate,
Guindy, Chennai – 600 032.
2.M/s.Abacus Logistics Solutions (P) Ltd.,
14, Third Floor, Baba Towers
No.1, Sterling Avenue,
Nungambakkam, Chennai – 600 034.
3.The Finance Officer,
representing Thiruvalluvar University,
Serkkadu, Vellore – 632 115.
4.Prof.Dr.Thamarai Selvi Somasundaram,
VC of Thiruvalluvar University,
Serkkadu, Vellore – 632 115.
5.Dr.R.Vijayaragavan
Former Controller of Examination,
Thiruvalluvar University,
Serkkadu, Vellore – 632 115.
https://www.mhc.tn.gov.in/judis
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W.P.No.10375 of 2022
and W.M.P.Nos.10097 & 10102 of 2022
6.Dr.D.Thirumalai
Assistant. Professor, (Former Finance Officer),
Thiruvalluvar University,
Serkkadu, Vellore – 632 115. ... Respondents
PRAYER: This Writ Petition has been filed under Article 226 of the
Constitution of India, praying for the issuance of a Writ of Certiorarified
Mandamus to call for the records of the proceedings of the first respondent
in MSEFC/CR/396/2021 pending before the MSME Council and to quash
the same and forbear the respondents 1 and 2 from taking any further
actions under the MSMED Act, 2006.
For Petitioner : Mr.M.C.Swamy
For R1 : Mr.G.Ameedius
Government Advocate
ORDER
This Writ Petition has been filed to quash the proceedings of the
first respondent in MSEFC/CR/396/2021 pending before the MSME
Council and to forbear the respondents 1 and 2 from taking any further
actions under the Micro, Small and Medium Enterprises Development Act,
2006, herein after referred to as MSMED Act, 2006.
https://www.mhc.tn.gov.in/judis
W.P.No.10375 of 2022
and W.M.P.Nos.10097 & 10102 of 2022
2.The brief facts that are necessary for disposal of the writ petition
as follows:
The petitioner is a University created under statute represented by
its Registrar. The petitioner floated a notification dated 23.08.2018, inviting
tender applications to supply answer booklet with OMR front sheets and to
carry out all the examinations related works as detailed in the scope of work.
Even though four companies participated in the tender process, the contract
was awarded to the second respondent and the work order was also issued to
the second respondent. After signing the contract, the second respondent
has raised their first invoice on 26.12.2018. The petitioner disbursed a sum
of Rs.1,96,31,120.74p., and a further sum of Rs.54, 96,713/- after deducting
2% TDS of the sum of Rs.56,08,891/- had also been paid by the petitioner.
The petitioner had to retain 10% of the value of the contract as the second
respondent did not provide certain data due to which declaration of results
for 272 number of students for the examination which was conducted during
November/December 2018 could not be done. It was due to non payment of
10% of the value of the contract, which was retained by the petitioner, it
appears that the second respondent, filed a petition before the first
respondent to direct the writ petitioner to pay a sum of Rs.4,30,401.75/-
https://www.mhc.tn.gov.in/judis
W.P.No.10375 of 2022
and W.M.P.Nos.10097 & 10102 of 2022
with interest from the date of 01.06.2019 till date of payment. Since the
petition filed by the second respondent before the council is pending for
consideration, the petitioner has approached this Court to quash the
impugned proceedings on the ground that the council has no jurisdiction to
entertain the application for raising a claim in respect of contract which was
executed prior to registration. The learned counsel appearing for the
petitioner relied upon the judgment of Hon'ble Supreme Court, wherein,
similar issue arose for consideration. In the case of M/s.Silpi Industries Vs.
Kerala State Road Transport reported in 2021 SCC Online 439 at
paragraph No.26, the Hon'ble Supreme Court has held as follows:
“In our view, to seek the benefit of provisions under
MSMED Act, the seller should have registered under the
provisions of the Act, as on the date of entering into the
contract. In any event, for the supplies pursuant to the contract
made before the registration of the unit under provisions of the
MSMED Act, no benefit can be sought by such entity, as
contemplated under MSMED Act. While interpreting the
provisions of Interest on Delayed Payments 2017 SCC OnLine
Del 6978 C.A.Nos.1570-1578 of 2021 etc. Small Scale and
Ancillary Industrial Undertakings Act, 1993, this Court, in the
judgment in the case of Shanthi Conductors Pvt. Ltd. & Anr.
etc. V. Assam State Electricity Board & Ors. etc.6 has held that
https://www.mhc.tn.gov.in/judis
W.P.No.10375 of 2022
and W.M.P.Nos.10097 & 10102 of 2022
date of supply of goods/services can be taken as the relevant
date, as opposed to date on which contract for supply was
entered, for applicability of the aforesaid Act. Even applying
the said ratio also, the appellant is not entitled to seek the
benefit of the Act. There is no acceptable material to show
that, supply of goods has taken place or any services were
rendered, subsequent to registration of appellant as the unit
under MSMED Act, 2006. By taking recourse to filing
memorandum under Sub-Section (1) of Section 8 of the Act,
subsequent to entering into contract and supply of goods and
services, one cannot assume that legal status of being
classified under MSMED Act, 2006, as an enterprise, to claim
the benefit retrospectively from the date on which appellant
entered into contract with the respondent. The appellant
cannot become micro or small enterprise or supplier, to claim
the benefits within the meaning of MSMED Act 2006, by
submitting a memorandum (2019) 19 SCC 529 C.A.Nos.1570-
1578 of 2021 etc. to obtain registration subsequent to entering
into the contract and supply of goods and services. If any
registration is obtained, same will be prospective and applies
for supply of goods and services subsequent to registration but
cannot operate retrospectively. Any other interpretation of the
provision would lead to absurdity and confer unwarranted
benefit in favour of a party not intended by legislation.”
https://www.mhc.tn.gov.in/judis
W.P.No.10375 of 2022
and W.M.P.Nos.10097 & 10102 of 2022
4.If the above judgment of the Hon'ble Supreme Court is
understood properly, an enterprise to claim the benefits as per MSMED Act,
2006, ought to have entered into contract or supplied goods or services
subsequent to registration. It is admitted that the second respondent has
registered itself under the MSMED Act only on 16.06.2021. Therefore, the
petitioner's claim cannot be considered under the MSMED Act. This Court
is bound by the judgment of the Hon'ble Supreme Court. Therefore, this
Court is inclined to quash the proceedings by way of reference entertained
by the first respondent in MSEFC/CR/396/2021 and pending before the
MSME Council.
5.Accordingly, this Writ Petition stands allowed and the impugned
proceedings in MSEFC/CE/396/2021 pending before the first respondent is
quashed. No costs. Consequently, connected miscellaneous petitions are
closed.
07.09.2022
Dua
Internet:Yes
https://www.mhc.tn.gov.in/judis
W.P.No.10375 of 2022
and W.M.P.Nos.10097 & 10102 of 2022
To
1.The Micro and Small Enterprises Facilitation Council,
Office of the Regional Joint Director of Industries and Commerce,
A30, T.I.VI.KA Industrial Estate,
Guindy, Chennai – 600 032.
2.M/s.Abacus Logistics Solutions (P) Ltd.,
14, Third Floor, Baba Towers
No.1, Sterling Avenue,
Nungambakkam, Chennai – 600 034.
3.The Finance Officer,
Thiruvalluvar University,
Serkkadu, Vellore – 632 115.
4.Prof.Dr.Thamarai Selvi Somasundaram,
VC of Thiruvalluvar University,
Serkkadu, Vellore – 632 115.
5.Dr.R.Vijayaragavan
Former Controller of Examination,
Thiruvalluvar University,
Serkkadu, Vellore – 632 115.
6.Dr.D.Thirumalai
Assistant. Professor, (Former Finance Officer),
Thiruvalluvar University,
Serkkadu, Vellore – 632 115.
https://www.mhc.tn.gov.in/judis
W.P.No.10375 of 2022
and W.M.P.Nos.10097 & 10102 of 2022
S.S.SUNDAR, J.
Dua
W.P.No.10375 of 2022
and W.M.P.Nos.10097 & 10102 of 2022
07.09.2022
https://www.mhc.tn.gov.in/judis
