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2019 Supreme(Kar) 133

IN THE HIGH COURT OF KARNATAKA
S. SUJATHA, J.
Karnataka Power Transmission Corporation Limited - Appellant
Versus
Government of Karnataka Rep By Its Principal Secretary, Bangalore - Respondent
Writ Petition No. 47302, 47725, 47726 of 2012
Decided On : 26-02-2019

Advocates Appeared:
Naganand, Adv., Jyothi M, Adv., M.A. Humayun, Adv.

Headnote:

Constitution of India,1950 - Article 226 - Schedule to the Limitation Act - Article 113 - Awards - Sought to be set aside by invoking the remedy - Arbitration and Conciliation Act, 1996 - Sections 18. 34, 19 and 18 [4] - Micro, Small and Medium Enterprises Development Act, 2006 - Claim/award - notices - Alleging the delay in payment by the petitioners and demanded interest at the rate of 24% per annum - Respondent No.2 lodged their claim before the petitioners and same being disallowed, despite issuance of two legal notices had filed writ petition before this Court for consideration of their claim, as no Industrial Facilitation Council - Petitioners floated a tender the purpose of procuring conductors and bare aluminum wires of different quality, quantity and varieties through out the State of Karnataka - Second respondent in all the petitions (referred to as respondent No.2) submitted their bid and the same was accepted by the respondents No.2 by placing a purchaser order supplies were made by the respondent No.2 commencing allegation of the respondent No.2 that the petitioners wilfully delayed release of payments within 60 days – Held, High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction - Alternative remedy has been consistently held by this Court not to operate as a bar in atleast three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged - Respondent No.2. Government of Karnataka is not a necessary or proper party to the proceedings - Writ petitions are allowed

JUDGMENT :

S. SUJATHA, J.

1. These petitions involving similar and akin issues, have been considered together and are disposed of by this common order.

2. These petitions are directed against the award passed by the respondent No.3 in case Nos.1, 2 and 3/2009 inter alia seeking a declaration that the provisions of The Micro, Small and Medium Enterprises Development Act, 2006 ['Act' for short] are not applicable to the transaction in question in the facts of the case and for such other reliefs.

3. The facts in a nutshell are that the petitioners floated a tender for the purpose of procuring conductors and bare aluminum wires of different quality, quantity and varieties through out the State of Karnataka. The second respondent in all the petitions (referred to as respondent No.2) submitted their bid on 01.05.2001 and the same was accepted by the respondents No.2 by placing a purchaser order on 01.12.2001. The supplies were made by the respondent No.2 commencing from January 2002. It is the allegation of the respondent No.2 that the petitioners wilfully delayed release of payments within 60 days.

4. It transpires that the respondent No.2 got issued a legal notice alleging the delay in payment by the petitioners and demanded interest at the rate of 24% per annum. The respondent No.2 lodged their claim before the petitioners and the same being disallowed, despite issuance of two legal notices had filed writ petition before this Court for consideration of their claim, as no Industrial Facilitation Council ['Council' for short] was functioning under the provisions of the Act. However on establishment of the Council during the pendency of the writ petition proceedings, the writ petition was disposed of as having rendered infructuous. On 09.02.2009, claim petitions were filed by the respondents No.2 under Section 18 of the Act before the Council at Bengaluru. The same came to be disposed of on 16.12.2008 with liberty to the respondents No.2 to approach the Council at Rajasthan for appropriate redressal under Section 18 [4] of the Act. The respondent No.4 Council passed orders decreeing the claim/award made by the respondents No.2.

5. Being aggrieved, the petitioners filed a Arbitration Suit under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the said award. In the meantime, respondent No.2 had initiated Execution proceedings upon the transfer decree from City Civil and Sessions Court at Jaipur before the City Civil Court at Bengaluru wherein a prohibitory order under Order XXI Rule 52 for attaching the Bank Account of the petitioner was issued. On application filed by the petitioners to recall the said order, the same was recalled. Aggrieved by the same, respondent No.2 filed Writ Petition Nos.40138-141/2011 whereas Writ Petition Nos.22370-371/2010 and allied matters were filed by the petitioners challenging the Constitutional validity of the provisions of the Act.

6. The Cognate Bench of this Court allowed the writ petitions filed by the respondent No.2 and dismissed the writ petitions filed by the petitioners upholding the provisions of Section 19 of the Act. In the said proceedings, it was observed that the Arbitration and Conciliation Act is not applicable to the present proceedings. In view of the same, the petitioners withdrew the suits filed under the provisions of the Arbitration and Conciliation Act with liberty to initiate appropriate proceedings challenging the impugned award. Hence, these writ petitions.

7. The learned Senior counsel Sri. Naganand with the learned counsel Sri.S. Sriranga for the petitioner placing reliance on the judgment of the Hon'ble Apex Court in the case of M/s Shanti Conductors (P) Limited & another Vs. Assam State Electricity Board & others passed in Civil Appeal No.8422-8443 [D.D. 23.01.2019] submitted that the provisions of the Act applies only to the supplies made subsequent to the enforcement of the Act. The Act cannot be made applicable to the sale agreements which were entered in






























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