Rajasthan High Court - Jodhpur

Jodhpur Vidhyut Vitaran Nigam ... vs M/S. Anamika Conductors Limited on 25 January, 2022

Bench: Pushpendra Singh Bhati

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 5373/2019

Jodhpur Vidhyut Vitaran Nigam Limited, Through Executive Engineer, Jd.v.v.n.l. New Power House, Industrial Area, Jodhpur (Rajasthan).

----Petitioner Versus

1. M/s. Anamika Conductors Limited, B-70, Upasana House, 2Nd Floor, Rajendra Marg, Bapu Nagar, Jaipur (Rajasthan).

2. Rajasthan Micro And Small Enterprises Facilitation Council, Jaipur.

                                                                  ----Respondents


For Petitioner(s)          :     Mr. Kuldeep Mathur, Sr. Advocate
                                 Mr. Pradeep Sharma, on VC
For Respondent(s)          :     Mr. Sunil Nath &
                                 Mr. Akash Shrivastava, on VC

HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

Order

25/01/2022

In wake of instant surge in COVID-19 cases and spread of its

highly infectious Omicron variant, the lawyers have been advised

to refrain from coming to the Courts.

Counsel for the respondent while raising preliminary

objection as regards maintainability of writ petition and has

referred to the judgment passed by Hon`ble Division Bench of this

Court (Jaipur Bench) in Sanghi Industries Limited & Anr. Vs. Micro

Small Enterprises Facilitation Council & Anr., (D.B. Special Appeal

Writ No.591/2018) vide order dated 26.04.2018, which reads as

follows :-

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"1. By way of this appeal, the appellant has assailed the judgment and

order of the learned Single Judge whereby learned Single Judge while

considering the application under Article 226 (3) of the Constitution of

India for vacating the ex-parte stay order granted on 16.1.2018 has rejected

the writ petition being not maintainable.

2. Counsel for the appellant has taken us to the provisions of Section 18 of

the Micro, Small and Medium Enterprises Development Act, 2006 which

reads as under:-

18. Reference to Micro and Small Enterprises Facilitation Council.--

(1) Notwithstanding anything contained in any other law for the time being in force, any party to a dispute may, with regard to any amount due under section 17, make a reference to the Micro and Small Enterprises Facilitation Council..

(2) On receipt of a reference under sub-section (1), the Council shall either itself conduct conciliation in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution or centre, for conducting conciliation and the provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to such a dispute as if the conciliation was initiated under Part III of that Act.

(3) Where the conciliation initiated under subsection (2) is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer to it any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in subsection (1) of section 7 of that Act.

(4) Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an

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Arbitrator or Conciliator under this section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India.

(5) Every reference made under this section shall be decided within a period of ninety days from the date of making such a reference.

3. He contended that Council has not followed the procedure and stated that in fact they

have challenged the order by paying 75% of the amount as a pre-deposit.

4. He also contended that the judgment referred by the learned Single Judge reported in the

case of Authorized Officer, State Bank of Travancore and anr. vs. Mathew K.C. (2018) 3

SCC 85 is an exception and the case of the appellant is falling under exception. 5.

However, no such contention was raised before the learned Single Judge and the learned

Single Judge while considering the case observed as under:-

7. From the perusal of the aforesaid provisions, it is apparent that the Act of 2006 is a special Act which has been notified with effect from 16.06.2006 and has come into force on 02.10.2006, the same has been introduced with the purpose of facilitating the promotion and development of micro, small and medium enterprises as well as ensuring their competitiveness. It empowers the Central government to notify programmes, guidelines and instructions for the promotion and growth of micro, small and medium enterprises. It also aims at ensuring timely and smooth flow of credit to such enterprises as well as minimising instances of sickness among them. Under the Act, the Central Government and the State Government may construct preference policies in respect of procurement of goods and services provided by such enterprises. In brief, the basis objective is to ensure overall development of micro, small and medium enterprises. One of the objects as mentioned in the Statement of Objects and Reasons is to make provisions for ensuring timely and smooth flow of credit to small and medium enterprises to minimise the incidence of sickness among and enhancing the competitiveness of such enterprises, in accordance with the guidelines or instructions of the Reserve Bank of India.

8. The provisions contained therein as noted above show that Micro, Small and Enterprises Facilitation Council shall pass orders which would be in the nature of an award in

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terms of the Act of 1996. As per the Section 18(2) before the concerned council, proceeds with an arbitration, it has to first make attempts for conciliation in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services.

9. In the present case, the council has attempted to make conciliation between the parties as has been noted in the order dated 26.10.2017. However, since the same was unsuccessful, they proceeded to pass an award holding the claim of the respondent as against the petitioners. The council has also noted that the petitioners have filed a suit for seeking damages also against the respondents and noting the same, and also taking into consideration that there was no counter claim filed by the petitioners, it has proceeded to pass the award.

10. In view of Section 19, 75% of the amount has to be made as a pre-deposit before filing of an appeal or application for setting aside the award. Thus, it is the contention of the learned counsel for the respondent that in order to save themselves from depositing the said amount the present petition has been filed which of course the petitioner denies. A look at Section 9 of the Act of 1996 shows that even after making of an award, an interim application can be moved before the competent Court with regard to securing the amount in dispute or for any interim injunction. However, this Court would refrain from making any observation as to the council to which the petitioner may adopt in terms of Section 9 or otherwise but suffices to note that under Section 34, the petitioner has all the remedies available which they have taken before this Court as regards not following the procedure laid down under Sections 23 and 24 of the Act of 1996. Section 34 allows the concerned competent court to examine all the aspects relating to the award and it is a competent statutory appellate body, the Apex Court in the case of Authorized Officer, State Bank of Travancore And Another versus Mathew K.C., (2018) 3) SCC 85 has held as under:- "15. It is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly discussed after

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noticing the relevant law. In financial matters grant of exparte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from public money generated at the tax payers expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. The caution required, as expressed in Satyawati Tandon (supra), has also not been kept in mind before passing the impugned interim order:- "46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, Whirlpool Corpn. v. Registrar of Trade Marks and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order.

16. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having

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subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference."

11. In view of the above and taking into consideration that there is a statutory alternative remedy available to the petitioner, this Court is of firm view that the present writ petition would not lie in view of the provisions as noted above.

12. In the circumstances, the writ petition is held to be not maintainable on account of the alternative efficacious remedy available to the petitioner. The question of interim order can also be looked into by the concerned court. It is noted that the period in filing the present writ petition may be excluded for the purpose of the limitation under Section 34 for filing of an appeal. The appeal, if any, filed by the petitioners within 15 days from receipt of a certified copy of this order, the petitioners shall be heard on merits as well as on interim prayer if so made.

6. We are in complete agreement with the view taken by the learned Single

Judge.

7. In that view of the matter, the appeal stands dismissed.

8. However, the period referred by the learned Single Judge in para no.12 as

reproduced above is further extended for a period of five days i.e. upto

30.4.2018. "

Mr. Kuldeep Mathur, Sr. Advocate submits that order of

30.10.2018 could be remanded back on preliminary issue that the

payment of interest, to which, the defence of petitioner was that

there was a delayed supply which resulted into the late payment

and the question of fact which has been raised in reply

elaborately has not been dealt with by the impugned order.