M/S R. V. Industries vs Micro And Small Enterprises ...
2023 Latest Caselaw 11479 P&H

                                                   Neutral Citation No:=2023:PHHC:111904




CWP-9507-2022(O&M)                      1                     2023:PHHC:111904


        IN THE HIGH COURT OF PUNJAB AND HARYANA
                          AT CHANDIGARH
225
                                                   Reserved on:12.05.2023
                                                 Date of Decision:01.08.2023



M/S R.V. INDUSTRIES                                          .....PETITIONER

VERSUS

MICRO AND SMALL ENTERPRISES
FACILITATION COUNCIL,
HARYANA AND OTHERS                                        .....RESPONDENTS



CORAM: HON'BLE MR. JUSTICE VINOD S. BHARDWAJ.


Present:    Mr. R.S. Randhawa, Advocate,
            for the petitioner.

            Mr. Vivek Chauhan, Addl. A.G., Haryana.

            Mr. Prateek Aggarwal, Advocate,
            for respondent No.3.

            ****

VINOD S. BHARDWAJ , J.

Challenge in the instant petition is to the ex parte award dated

12.01.2019 (Annexure P-1) passed by the District & Sessions Judge (Retd.)

as a Sole Arbitrator in arbitration case No.666/2018 arising out of reference

made under Section 18 of the MSMED Act, 2006 and respondent No.3 was

held entitled to recover the amount of Rs.2,24,47,273/- along with

compound interest @ 18.75% w.e.f. 21.07.2017 with yearly interest till its

realization. It was submitted that respondent No.2 is registered as a Small

Scale Manufacturer under the MSMED Act, 2006 and the claim in question

1 of 4

Neutral Citation No:=2023:PHHC:111904

CWP-9507-2022(O&M) 2 2023:PHHC:111904

had been filed before the Facilitation Council alleging that there were

financial/trade relations between the respondent-firm as well as the

petitioner. The bills w.e.f. 22.03.2016 upto 20.07.2017 were claimed for a

sum of Rs.1,65,25,127/- against which an ex parte award was passed on

12.01.2019 and the execution proceedings had thereafter been instituted

before the Executing Court. It was alleged that respondent No.3 i.e. M/s

Tirupati Steel had been registered as an MSME unit on 22.08.2017 and the

invoices in question pertained to the period much prior to the date of

registration of respondent No.3 as an MSME unit i.e. for the period from

22.03.2016 to 20.07.2017. Hence, the benefit is being claimed for the period

during which respondent No.3 was not registered under the MSMED Act,

2006.

Reply on behalf of respondent No.3 had also been filed wherein

it was alleged that the petitioner has not approached with clean hands and

attempted to mislead the Court by incorrect facts and false averments. It

was averred that respondent No.3 had filed the claim petition before the

Facilitation Council and notices were issued to the petitioner. However,

despite service, he failed to appear before the council whereupon the claim

was referred to the Arbitrator to adjudicate the dispute between the parties.

An ex parte award was thus passed due to non-appearance of the petitioner

before the Arbitrator. It was also stated that during pendency of the

arbitration proceedings, the petitioner also issued four post-dated cheques

for a sum of Rs.20,00,000/- which is specifically mentioned in the arbitral

award as well. The cheques were dishonoured for which proceedings under

Section 138 of The Negotiable Instruments Act were initiated. It was further

stated that the notice of the appointment of the Arbitrator as well as the

2 of 4

Neutral Citation No:=2023:PHHC:111904

CWP-9507-2022(O&M) 3 2023:PHHC:111904

arbitration proceedings was duly served upon the petitioner through

registered post and the same finds mention in the arbitral award as well. The

petitioner chose not to appear on the dates despite service. The original

proofs of services are maintained by the Sole Arbitrator. An execution

petition was duly filed before the Commercial Court, at Gurugram wherein

the petitioner entered appearance on 13.03.2019. He was proceeded against

ex parte even before the Executing Court on 17.07.2019 and numerous

orders have been passed against him during the execution proceedings. An

ex parte order dated 17.07.2019 was thereafter set aside subject to cost vide

order dated 19.09.2019. The petitioner has been delaying the execution on

one frivolous pretext or the other and no objections under Section 34 of the

Arbitration and Conciliation Act had been filed. Simple imprisonment of

one of the partners of the petitioner-firm was also ordered by the

Commercial Court on 21.12.2021 and that even the said order became final.

It was alleged that the petitioner did not raise any challenge to the

proceedings and/or the claim either before the Facilitation Council and/or

before the Arbitrator. Besides, the execution proceedings are going on and

various orders passed therein had also attained finality. Thus, the petitioner

having lost his right to raise a challenge to the award cannot be permitted to

re-agitate and challenge the award.

Replication to the abovesaid written statement was also filed by

the petitioner reiterating its averments already made in the writ petition.

It is relevant to mention here that the controversy in the present

writ petition has already been considered in CWP-12338-2019.

In view of the above, the present writ petition is allowed, in

terms of the judgment of even date passed in CWP-12338-2019, titled as

3 of 4

Neutral Citation No:=2023:PHHC:111904

CWP-9507-2022(O&M) 4 2023:PHHC:111904

"Indian Oil Corporation Limited Versus Haryana Micro and Small

Enterprise Facilitation Council, Chandigarh, Haryana and another".

August 01, 2023                                  (VINOD S. BHARDWAJ)
seema                                                 JUDGE

                   Whether speaking/reasoned: Yes/No
                   Whether Reportable:                  Yes/No




                                                 Neutral Citation No:=2023:PHHC:111904

                             4 of 4