The High Court cannot exercise its writ jurisdiction under Article 226 or 227 of the Constitution against the awards or orders passed by the Arbitral Tribunals as it would defeat the object of minimizing the judicial intervention in the arbitration process.

ORDER:

The petitioner challenges the award dated 14.07.2021 in Case No.21C/IFC/2018/5318 passed by the Andhra Pradesh Micro and Small Enterprises Facilitation Council / 2nd respondent directing the petitioner to pay principal amount of Rs.84,45,275/- with interest to 7th respondent herein on the ground that principles of natural justice are violated inasmuch as the 2nd respondent Council declined to receive the statement of defence of the writ petitioner and thereby the petitioner is severely prejudiced.

2. The petitioner’s case succinctly is thus :

The petitioner Corporation is a nodal agency working under the aegis of Education, Minorities, B.C. Welfare and Social Welfare Department and engaged in construction and procurement of infrastructure etc., for its user departments. In that process, the petitioner short-listed the 7th respondent for supply of furniture items to various Government Polytechnic Colleges in the State of Andhra Pradesh. Agreements were entered into by the petitioner with 7th respondent. While so, the 7th respondent approached the 2nd respondent Council under the Micro, Small and Medium Enterprises Development Act, 2006 (for short ‘MSMED Act’) for conciliation and arbitration in respect of the payment of its dues. Conciliation proceedings failed and arbitration proceedings were taken up and held before the 2nd respondent on 29.09.2020, 23.03.2021 and 22.06.2021. As per Section 18 of the MSMED Act, the petitioner received notices both in conciliation as well as arbitration proceedings. However, due to bona fide mistake, it could not make appearance in the conciliation proceedings, but appeared in the arbitration proceedings on aforesaid three dates, the arbitration proceedings were listed before the 2nd respondent for filing defence statement. The petitioner entered appearance on 07.06.2021 through its Standing Council Sri G.V.S. Kishore Kumar and filed memo seeking time for submitting the defence statement. When the matter came up for hearing on 22.06.2021, the petitioner filed its defence statement before the 2nd respondent. However, the 7th respondent as well as 2nd respondent refused to receive the defence statement without any plausible reason and ultimately the impugned award came to be passed on 14.07.2021. The petitioner has strong case inasmuch as, the amounts claimed in claim statement by the 7th respondent are not owed by the petitioner. The 2nd respondent ought to have perused the defence statement for better appreciation of the facts.

Hence, the writ petition.

3. The 7th respondent filed counter opposing the writ petition. Its main contention is that despite the supply of furniture as ordered, the writ petitioner did not make payments. Hence, the 7th respondent filed claim on 14.11.2018 before 2nd respondent for realization of the due amount with interest. While things stood thus, the Chief Engineer, APEWIDC given completion certificate dated 14.12.2018 stating that the supplies were completed and bills of Rs.3,36,26,880/- have to be paid. The 2nd respondent has taken up the claim of 7th respondent for conciliation after giving notices to both parties on 10.01.2020, 31.01.2020 and 28.02.2020. However, the petitioner failed to attend meetings despite receiving notices. On the aforesaid dates of meetings, the 2nd respondent directed the petitioner to file defence statement and also to pay its share of arbitration fee. However, there was no response from the petitioner and therefore, the 2nd respondent was constrained to note that the conciliation failed and posted the matter for arbitration under Section 18(3) of the MSMED Act.

(a) Arbitration was held on 29.09.2020. On that day, the petitioner remained absent and did not file the statement either. After that notices were issued to both the parties, the matter was again taken on 18.02.2021 and on that day also the petitioner was absent. The 7th respondent filed details of the payment received from the petitioner and meeting was postponed to 23.02.2021