SUPREME COURT OF INDIA
UDAY UMESH LALIT, CJI., BELA M. TRIVEDI, J.
GUJARAT STATE CIVIL SUPPLIES CORPORATION LTD. – APPELLANT
VERSUS
MAHAKALI FOODS PVT. LTD. (UNIT 2) & ANR. – RESPONDENTS
CIVIL APPEAL NO. 8008 OF 2022 (Arising out of SLP (C) No. 12884/2020)
WITH
M/S. RAMKRISHNA ELECTRICALS LTD. – APPELLANT
VERSUS
MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LTD. & ANR. – RESPONDENTS
CIVIL APPEAL NO. 127 OF 2018
WITH
M/S VIDARBHA CERAMICS PVT. LTD. – APPELLANT
VERSUS
M/S STEEL AUTHORITY OF INDIA & ORS – RESPONDENTS
CIVIL APPEAL NO. 6167 OF 2013
WITH
GUJARAT STATE PETRONET LTD. – APPELLANT
VERSUS
KRUNAL ENGINEERING WORKS & ORS. – RESPONDENTS
CIVIL APPEAL NO.OF 2022 (Arising out of SLP (C) NO. 31227 OF 2018)
WITH
BHARAT ELECTRONICS LTD. &ANR. – APPELLANT
VERSUS
IBEX INTEGRATED BUSINESS EXPRESS PRIVATE LTD. & ORS. – RESPONDENTS
CIVIL APPEAL NO.OF 2022 (Arising out of SLP (C) NO. 7375 OF 2020)
WITH
UNION OF INDIA – APPELLANT
VERSUS
M/S SIRUS GLOBAL PVT. LTD. – RESPONDENT
CIVIL APPEAL NO.OF 2022 (Arising out of SLP (C) NO. 2135 OF 2021)
WITH
JITF WATER INFRASTRUCTURE LIMITED – APPELLANT
VERSUS
MSME COMMISSIONERATE & ORS. – RESPONDENTS
CIVIL APPEAL NO.OF 2022 (Arising out of SLP (C) NO. 6166 OF 2021)
Decided On : 31-10-2022
| Table of Content |
|---|
| 1. leave to appeal is granted. (Para 1 , 2) |
| 2. overview of common questions in appeals. (Para 3) |
| 3. substantive legal issues identified. (Para 4 , 5 , 6) |
| 4. arguments presented by buyers and suppliers. (Para 12 , 13 , 14) |
| 5. interpretation of overriding provisions. (Para 16 , 17 , 18) |
| 6. msmed act prevails: context of arbitration. (Para 22 , 23) |
| 7. msmed act’s provisions and their application. (Para 26 , 27 , 28 , 29 , 30 , 31) |
| 8. no preclusion from utilizing the msmed act. (Para 34) |
| 9. final conclusions based on appeals. (Para 35 , 36) |
JUDGMENT
Bela M. Trivedi, J.
1. Leave to appeal is granted in SLP(C) No. 12884/2020, SLP(C) No. 31227/2018, SLP(C) No. 7375/2020, SLP(C) No. 2135/2021 and SLP(C) No. 6166/2021.
2. All these seven appeals though factually different, involve certain common questions of law and therefore were heard together.
3. The broad outline of the impugned orders in each appeal may be stated as under:
(I) C.A. No …… of 2022 (@ SLP (C) No. 12884/2020)
The appellant Gujarat State Civil Supplies Corporation Ltd. (Original Petitioner), has challenged the Order dated 13.11.2019 passed by the Gujarat High Court in the First Appeal No. 3613/2019, whereby the High Court has dismissed the said appeal filed by the appellant under Section 37 of the Arbitration and Conciliation Act, 1996 (Hereinafter referred to as “the Arbitration Act, 1996”). In the said First Appeal, the appellant had challenged the Order dated 20.08.2018 passed by the Commercial Court, Ahmedabad in Commercial Civil Misc. Application No. 54/2016 filed under Section 34 of the Arbitration Act read with Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as “the MSMED Act, 2006”), whereby the commercial court had confirmed the award made by the Madhya Pradesh Micro and Small Enterprises Facilitation Council, Bhopal in Reference No. NSEFC 442/2012, holding that the provisions of MSMED Act, 2006 had an effect overriding the provisions of the Arbitration Act and that the Facilitation Council at Bhopal had the jurisdiction to adjudicate upon the disputes between the parties.
(II) C.A. No. 127/2018
The appellant M/s. Ramkrishna Electricals Ltd. (Original Respondent No. 2) has challenged the Order dated 27.06.2017 passed by the High Court of Judicature at Bombay, Nagpur Bench, Nagpur, in W.P. No. 4435/2011, whereby the High Court has allowed the said petition, holding that the Micro, Small Enterprises Facilitation Council, Nagpur, did not have the jurisdiction to decide the Original Application No. 24/2010 filed by the appellant herein. In the impugned order, the High Court followed its earlier decision in case Steel Authority v. MSE Facilitation Council AIR 2012 Bom. 178, in which it was held that the Facilitation Council would not be entitled to proceed under the provisions of Section 18 (3) of MSMED Act, 2006 when there is an independent arbitration agreement between the parties.
(III) C.A. No. 6167/2013
The appellant M/s. Vidarbha Ceramics Pvt. Ltd. (Original Respondent No. 2) has challenged the Order dated 27.08.2010 passed by the High Court of Judicature at Bombay, Nagpur Bench, Nagpur, in W.P. No. 2145/2010 (AIR 2012 Bom. 178) whereby the High Court has allowed the said petition holding that the Facilitation Council, Nagpur, was not entitled to proceed under Section 18 (3) of the MSMED Act, 2006 in view of an arbitration agreement executed between the parties.
(IV) C.A. …… of 2022 (@ SLP (C) No. 31227/2018)
The appellant Gujarat State Petronet Ltd. (Original Petitioner) has challenged the Order dated 06.08.2018 passed by the High Court of Judicature at Bombay, in W.P. No. 5459/2015, whereby the High Court disposed of the Writ Petition by holding that despite independent arbitration agreement between the parties, the respondent Facilitation Council, Thane had the jurisdiction to entertain the reference made by the Respondent No. 1 Krunal Engineering Works (Original Respondent No. 3) under Section 18 of the
Antrix Corporaton Limited v. Devas Multimedia Private Limited (2014) 11 SCC 560 [Para 13]
Bharat Aluminum Company v. Kaiser Aluminum Technical Services (2012) 9 SCC 648 [Para 13]
Bharat Sewa Sansthan v. U.P. Electronics Corporation; AIR 2007 SC 2961 [Para 24]
K. Prabhakaran v. P. Jayarajan (2005) 1 SCC 754 [Para 26]
Kaushalya Rani v. Gopal Singh AIR 1964 SC 260 [Para 19]
Maruti Udyog Ltd. v. Ram Lal & Ors. (2005) 2 SCC 638 [Para 14]
Orissa State Financial Corporation v. Narsingh ch. Nayak and Others (2003) 10 SCC 261 [Para 13]
Principal Chief Engineer v. M/s. Manibhai & Brothers (Sleeper) & Anr. AIR 2016 Guj 151 [Para 35]
Regional Provident Fund Commr. v. Hoogly Mills Co. Ltd. (2012) 2 SCC 489 [Para 15]
SBP & Company v. Patel Engineering Ltd. (2005) 8 SCC 618 [Para 3]
Secur Industries Ltd. v. Godrej & Boyce Mfg. Co. Ltd. And Anr. (2004) 3 SCC 447 [Para 14]
Shin Satellite Public Co. Ltd. v. Jain Studios Ltd. (2006) 2 SCC 628 [Para 13]
Shiv Shakti Cooperative Housing Society
Solidaire India Ltd. v. Fairgrowth Financial Services Ltd. & Ors. (2001) 3 SCC 71 [Para 14]
Union of India v. Prabhakaran Vijaya Kumar and Ors. (2008) 9 SCC 517 [Para 15]
The Micro, Small and Medium Enterprises Development Act has precedence over the Arbitration and Conciliation Act, allowing parties to reference disputes to the MSEFC despite existing arbitration agre....
The main legal point established in the judgment is that the Facilitation Council has the jurisdiction to act as an Arbitrator after the failure of conciliation proceedings under the MSME Act. The ri....
The MSMED Act, 2006 provides a specific dispute resolution mechanism that overrides private arbitration agreements, making writ petitions not maintainable when an alternative remedy exists.
The Micro, Small and Medium Enterprises Development Act, 2006 has overriding effect over the Arbitration and Conciliation Act, 1996 when the jurisdiction of the Council has been invoked, and the Coun....
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