Madras High Court
Chief Engineer/Ptps-1 (Now Chief ... vs ) M/S.Unicon Engineers on 23 September, 2024
Author: M.Sundar
Bench: M.Sundar
C.M.A No.2480 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 23.09.2024
CORAM
THE HONOURABLE MR.JUSTICE M.SUNDAR
and
THE HONOURABLE MRS.JUSTICE K.GOVINDARAJAN THILAKAVADI
C.M.A No.2480 of 2024
&
C.M.P.No.19690 of 2024
in
C.M.A.No.2480 of 2024
Chief Engineer/PTPS-1 (Now Chief Engineer/PTPS)
Panipat Thermal Power Station
(A Unit of Haryana Power Generation Corporation Ltd.,)
Assandh Road, Panipet- 132 105 ... Appellant
Vs.
1) M/s.Unicon Engineers
No.513-A/6, Bharathi Road
Chinnavedampatty, Coimbatore - 641 049
2. Micro & Small Enterprises Facilitation Council
Coimbatore Region, Coimbatore
through its Chairman ... Respondents
(R2 deleted vide this order)
Civil Miscellaneous Appeal filed under Section 13(1) of the
Commercial Courts, Commercial Division and Commercial Appellate
Page Nos.1/10
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C.M.A No.2480 of 2024
Division of the High Courts Act, 2015 read with Section 37 of Arbitration
and Conciliation Act, 1996 to set aside the order dated 01.11.2023 passed by
the learned Commercial Court, Coimbatore dismissing the application under
Section 34 of the Arbitration and Conciliation Act, 1996 in O.P.No.31 of
2023 of objector petitioner and consequently set aside the Arbitral Award
dated 17.11.2016 passed by the Micro & Small Enterprises Facilitation
Council, Coimbatore Region, Coimbatore in Case No.M &
SEFC/CBER/3/2016.
For Appellants : Mr.R.C.Chugh
For R1 : Mr.B.Manoharan
JUDGMENT
[Order of the Court was made by M.SUNDAR, J.,]
Captioned 'Civil Miscellaneous Appeal' ['CMA' for the sake of
brevity] is directed against an order dated 01.11.2023 made in
Arb.O.P.No.31 of 2023 (CNR No.TNCB22-000165-2023) [Coimbatore
P.D.J.Court Old Arb.O.P.No.55 of 2017] on the file of Commercial Court
(District Judge Cadre), Coimbatore. This '01.11.2023 order' shall be
referred to as 'impugned order' and the Court which made the impugned
order shall be referred to as 'said Commercial Court', both for the sake of
convenience and clarity.
2. The appellant before us shall be referred to as 'PTPS' denoting
'Panipat Thermal Power Station' and such reference is solely for the sake of
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convenience. Likewise, the first respondent before us shall be referred to as
'UE' denoting 'M/s.Unicon Engineers' and this is also solely for the sake of
brevity and convenience.
3. In the hearing today, Mr.Ramesh Chander Chugh, learned counsel
for PTPS-appellant is before us.
4. Short facts are that UE is manufacturing what is known as
'Electrostatic Precipitators' [hereinafter 'said products' for the sake of
convenience]. UE is not only the manufacturer but it is also into the
business of supply, erection and commissioning; that UE had supplied
erected and commissioned said products for PTPS and it is the case of UE
that PTPS has not made payment; that PTPS made a counter claim under
various heads; that the matter went before 'Micro & Small Enterprises
Facilitation Council' [hereinafter 'MSME council' for the sake of
convenience]; that MSME council entered upon arbitration vide 'The Micro,
Small and Medium Enterprises Development Act, 2006 (27 of 2006)'
[hereinafter 'MSME Act' for the sake of brevity]'; that MSME council made
an 'award dated 17.11.2016' [hereinafter 'impugned award' for the sake of
brevity] in favour of UE; that impugned award was assailed by PTPS in said
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Commercial Court vide afore-referred Arb.O.P.No.31 of 2023 which is a
petition under Section 34 of A and C Act; that said Commercial Court, after
contest dismissed the Arb.O.P; that aggrieved by dismissal of Arb.O.P by
said Commercial Court, PTPS is on appeal vide captioned CMA before us.
5. Notwithstanding myriad grounds in the memorandum of grounds
of appeal, Mr.R.C.Chugh, learned counsel contended that the counter claim
of PTPS has not been dealt with at all by MSME council.
6. Admit.
7. Issue notice to R1 i.e., UE.
8. Mr.B.Manoharan, learned counsel on record, who is before us,
having lodged caveat for UE accepted notice for UE.
9. As regards R2, the MSME council, which has been arrayed as R2
as it is the entity which had made the impugned award, by applying Vinay
Heavy Equipments principle [Zonal. Gen.Manager, Ircon Inter. Natnl.
Ltd., vs. Vinay Heavy Equipments reported in 2007 SCC OnLine SC 4 and
Zonal General Manager, Ircon International Limited Vs. Vinay Heavy
Equipments reported in (2015) 13 SCC 680], we delete R2. This means
that UE becomes the sole respondent.
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10. Considering the narrow scope of the captioned CMA and the short
point on which it now turns, both learned counsel agreed to have the main
CMA taken up and disposed of.
11. It comes to light that MSME council has not dealt with the
counter claim and therefore, both parties agreed for re-arbitration by an
independent arbitrator to be appointed by this Court.
12. Therefore, by consent of both sides, the following order is made:
i) Impugned order dated 01.11.2023 made by said
Commercial Court, Coimbatore in Arb.O.P.No.31 of 2023 and
impugned award dated 17.11.2016 made in Case
No.M&SEFC/CBER/3/2016 made by MSME council are set
aside. The impugned order of said Commercial Court and
impugned award of MSME Council are set aside solely for the
purpose of facilitating re-arbitration and this means that this
'Commercial Appellate Division' ['CAD' for the sake of brevity]
has not expressed any view or opinion on the merits of the
matter;
ii) The sequitur is, all questions, all rights and
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contentions of both sides are left open to be raised before the
'Arbitral Tribunal' ['AT' for the sake of brevity] i.e., learned
Arbitrator to be appointed infra by this Court;
iii) Before we appoint the independent Arbitrator, we
make it clear that the parties have agreed for re-arbitration by an
independent Arbitrator de hors the statutory scheme under
MSME Act but this will not preclude UE from claiming that it
is an MSME and it is entitled to interest as per MSME Act but
this will be subject to UE establishing before independent
Arbitrator that it is an MSME;
iv) Mr.T.Mohan, learned Senior Advocate, having office
at Flat No.2, People Glade Apartments, 64 Beach Road,
Kalashetra Colony, Besant Nagar, Chennai 600 090
(Mob:8056100357) is appointed as the sole Arbitrator;
v) Learned Arbitrator is requested to enter upon
reference, adjudicate all arbitrable disputes between UE and
PTPS and render an award as expeditiously as possible;
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vi) Both parties shall cooperate and assist the learned
Arbitrator in rendering an award expeditiously;
vii) Learned Arbitrator shall conduct arbitration in
accordance with Madras High Court Arbitration Proceedings
Rules 2017 and fee of Hon'ble sole Arbitrator shall be in
accordance with the Madras High Court Arbitration Centre
(MHCAC) (Administrative Cost and Arbitrator's Fees) Rules
2017;
viii) The fee and expenses of the learned Arbitrator shall
be borne in equal moieties by both sides i.e., by UE and PTPS;
ix) To be noted, though obvious as it is a consent order,
parties have agreed for arbitration in Chennai, which means
'seat of arbitration' will be 'Chennai';
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x) We are informed that PTPS has deposited
Rs.6,23,18,634/- [Rupees Six Crores Twenty Three Lakhs,
Eighteen Thousand Six Hundred and Thirty Four only] in said
Commercial Court and it is lying to the credit of Arb.O.P.No.31
of 2023 in that Court. Let this sum lying to the Credit of
Commercial Court be transferred to the credit of arbitration
proceedings to ensue, pursuant to this order, let the same be
kept in a interest yielding Fixed Deposit, in Madras High Court
branch of Indian Bank and original Fixed Deposit receipt shall
be handed over the learned Arbitrator. It is open to the learned
Arbitrator to pass suitable orders regarding the Fixed Deposit
receipt when the award is rendered. In the unlikely event of
need arising deposit shall be renewed;
xi) Both learned counsel have made endorsements in the
case file agreeing for the aforementioned consent order and
scanned reproduction of the same is as follows:
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Captioned CMA and CMP are disposed of in the aforesaid manner.
There shall be no order as to costs.
(M.S.,J.) (K.G.T.,J.)
23.09.2024
Index : Yes
Neutral Citation : Yes
gpa
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M.SUNDAR, J.,
and
K.GOVINDARAJAN THILAKAVADI, J.,
gpa
23.09.2024
https://www.mhc.tn.gov.in/judis
