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2015 Supreme(AP) 444

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
SANJAY KUMAR, J.
The Indur District Co-operative Marketing Society Ltd. - Appellant
Versus
M/s. Microplex (India) & Another - Respondent
Writ Petition Nos. 35872, 35879, 39497 & 39504 of 2012
Decided on : 27-10-2015

Advocates:
Advocate Appeared:
For the Petitioners:Vedula Srinivas, Advocate.
For the Respondents:R1, Ashok Anand Kumar, Advocate, R2, Govt. Pleader for Industries & Commerce.

Headnote:

Enterprises Development Act, 2006 – Arbitration and Conciliation Act, 1996 – Section 7, 2(h), 8(3), 18 – Arbitration Agreement – District Cooperative Marketing Society Limited is petitioner in District Cooperative Marketing Society Limited is the petitioner in is the first respondent in Chemicals Private Limited, Hyderabad, is the first respondent in second respondent in all the writ petitions is the Andhra Pradesh Micro & Small Enterprises Facilitation Council, Hyderabad, were filed challenging the individual orders passed by the Council in Case respectively and seeking writs of certiorari to quash the same as illegal and without jurisdiction.. W.P.Nos.38497 and 39504 of 2012 were filed seeking writs of prohibition directing the Council to forebear from proceeding with Case respectively by declaring that the claims therein did not fall within the ambit of the Micro, Small and Medium Enterprises Development Act, 2006 By individual interim orders passed in this Court granted stay of operation of the orders impugned in these writ petitions. Similarly, by interim orders passed in this Court granted stay of further proceedings in the two cases pending on the file of the Council –Held, preponderance of judicial thought is also inclined towards holding the procedure prescribed to be mandatory. It was therefore not open to the Council to deviate from the said statutory procedure and take recourse to arbitration directly without first initiating conciliation between the parties object of the Act and its scheme clearly indicate that the thrust thereof is to promote facilitation between the parties rather than force adjudication upon them. Council therefore transgressed its jurisdiction in adopting its own procedure in violation of the prescribed procedure orders under challenge in being in violation of the prescribed procedure, are therefore without jurisdiction and are accordingly set aside are allowed. In the light of the finding rendered by this Court to the effect that the first respondent companies in also fall within the definition of a ‘supplier’ prayer of the petitioner societies therein for writs of prohibition interdicting the Council from proceeding with their cases must necessarily fail – Pending miscellaneous petitions in all the cases shall stand closed in the light of this final order

Judgment

1. The Indur District Cooperative Marketing Society Limited, Nizamabad, is the petitioner in W.P.Nos.35872 and 35879 of 2012 while the Karimnagar District Cooperative Marketing Society Limited, Karimnagar, is the petitioner in W.P.Nos.39497 and 39504 of 2012. M/s. Microplex (India) Limited, Hyderabad, is the first respondent in W.P.Nos.35872, 35879 and 39497 of 2012, and M/s. Nagarjuna Agroo Chemicals Private Limited, Hyderabad, is the first respondent in W.P.No.39504 of 2012. The second respondent in all the writ petitions is the Andhra Pradesh Micro & Small Enterprises Facilitation Council, Hyderabad, (for brevity, ‘the Council’).

2. W.P.Nos.35872 and 35879 of 2012 were filed challenging the individual orders dated 25.08.2012 passed by the Council in Case Nos.13/IFC/2011/126 and 13/IFC/2011/125 respectively and seeking writs of certiorari to quash the same as illegal and without jurisdiction.

3. W.P.Nos.38497 and 39504 of 2012 were filed seeking writs of prohibition directing the Council to forebear from proceeding with Case Nos.13/EFC/2011/120 and 13/EFC/2011/119 respectively by declaring that the claims therein did not fall within the ambit of the Micro, Small and Medium Enterprises Development Act, 2006 (for brevity, ‘the Act of 2006’). By individual interim orders dated 21.11.2012 passed in W.P.Nos.35872 and 35879 of 2012, this Court granted stay of operation of the orders dated 25.08.2012 impugned in these writ petitions. Similarly, by interim orders dated 24.12.2012 passed in W.P.Nos.39497 and 39504 of 2012, this Court granted stay of further proceedings in the two cases pending on the file of the Council.

4. Vacate stay petitions were filed by the first respondent company in each of these writ petitions and the matters were listed before this Court for hearing of these interlocutory petitions. However, as comprehensive arguments covering the merits of the main cases were advanced by Sri Vedula Srinivas, learned counsel for the petitioner societies, and Sri Ashok Anand Kumar, learned counsel appearing for the first respondent company in each of these cases, the writ petitions are taken up for final disposal. The admitted position in all these cases is that the petitioner societies purchased bio-pesticides from the first respondent in these cases. There was thus a clear transaction of sale between them. In so far as W.P.Nos.35872, 35879 and 39497 of 2012 are concerned, the first respondent therein, M/s. Microplex (India), Hyderabad, is stated to have its manufacturing unit at Rotha in Wardha District, Maharashtra and its registered office is also situated there. It only has an administrative office at Begumpet in Hyderabad and did not carry on any manufacturing activity within the State of Andhra Pradesh, as it then was. While so, it filed separate claims before the Council alleging that it was due and payable certain amounts of money for the material supplied by it to the petitioner society in each of these cases. The stand of the petitioner societies was that the first respondent company would not fall within the definition of ‘supplier’ in the context of the Act of 2006, as it got registered with the Department of Industries, State of Andhra Pradesh, as a marketing, distribution and service organization under application dated 26.03.2011 and as on the date of supply of the material by it to the petitioner societies, it was not a ‘supplier’ as it did not enjoy such registration. The petitioner societies asserted that the Act of 2006 made it clear that registration with the authority as notified by the State was obligatory for invoking the provisions thereof and thus, registration within the State of Andhra Pradesh, as it then was, was a must for the first respondent to invoke the provisions of the Act of 2006. As such registration took place only in March, 2011, the petitioner societies alleged that transactions prior to the said date could not be made the subject matter of claims before the Council under the Act




















































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