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2017 Supreme(Cal) 139

IN THE HIGH COURT OF CALCUTTA
Shivakant Prasad, J.
Union of India - Petitioner
Versus
H.M.R. Construction Pvt. Ltd. & anr. - Respondents
C.O. 3853 of 2016
Decided On : 12-04-2017

Advocates:
Advocate Appeared:
For the Petitioner: Mr. A. Banerjee
For the Respondents: Mr. Mohit Gupta

The main legal point established in the judgment is the inapplicability of the provisions of Delayed Payment and Small Scale and Ancillary Undertaking Act, 1993 and the Micro, Small and Medium Enterprises Development Act, 2006 in the application for setting aside the award under Section 34 of the Arbitration and Conciliation Act, 1996.

Headnote:

Arbitration and Conciliation Act - Application of Delayed Payment and Small Scale and Ancillary Undertaking Act, 1993 and Micro, Small and Medium Enterprises Development Act, 2006 - Section 34 of Arbitration and Conciliation Act, 1996 - [Arbitration and Conciliation Act] - [Delayed Payment and Small Scale and Ancillary Undertaking Act, 1993, Micro, Small and Medium Enterprises Development Act, 2006] - The court discussed the applicability of the provisions of Delayed Payment and Small Scale and Ancillary Undertaking Act, 1993 and the Micro, Small and Medium Enterprises Development Act, 2006 in an application for setting aside the award under Section 34 of the Arbitration and Conciliation Act, 1996. The court interpreted the relevant sections of the Acts and concluded that the provisions of the Delayed Payment and Small Scale and Ancillary Undertaking Act, 1993 and the Micro, Small and Medium Enterprises Development Act, 2006 were not applicable in the given case, and therefore, set aside the order directing deposit of 75% of the awarded amount.

Fact of the Case:

The petitioner filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the award published by the learned Arbitrator. The opposite party filed an application for directions upon the petitioner to deposit 75% of the awarded amount, which was allowed by the court. The main issue was the applicability of the provisions of Delayed Payment and Small Scale and Ancillary Undertaking Act, 1993 and the Micro, Small and Medium Enterprises Development Act, 2006 in the application for setting aside the award under Section 34 of the Arbitration and Conciliation Act, 1996. The court analyzed the relevant sections of the Acts and concluded that the provisions were not applicable in the given case.

Finding of the Court:

The court found that the provisions of the Delayed Payment and Small Scale and Ancillary Undertaking Act, 1993 and the Micro, Small and Medium Enterprises Development Act, 2006 were not applicable in the application for setting aside the award under Section 34 of the Arbitration and Conciliation Act, 1996. The court set aside the order directing deposit of 75% of the awarded amount.

Issues: The main issue was the applicability of the provisions of Delayed Payment and Small Scale and Ancillary Undertaking Act, 1993 and the Micro, Small and Medium Enterprises Development Act, 2006 in the application for setting aside the award under Section 34 of the Arbitration and Conciliation Act, 1996.

Ratio Decidendi: The court's decision was based on the interpretation of the relevant sections of the Acts and the conclusion that the provisions were not applicable in the given case.

Final Decision: The court set aside the order directing deposit of 75% of the awarded amount.

JUDGMENT :

Shivakant Prasad, J.

Orders dated 19.4.2016 and 11.9.2014 passed in Misc. case no. 82 of 2009 by the learned Additional District Judge, 2nd Court, Barasat challenging the purported award dated 02.3.2009 passed by the learned Arbitrator Mr. S. C. Padhi is under challenge by the petitioner.

2. Brief facts leading to this case is that the petitioner filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the award published by the learned Arbitrator which was registered as Misc. case in which the opposite party filed an application dated 21.6.2014 for directions upon the petitioner to deposit 75% of the awarded amount which was allowed by order dated 11.9.2014.

3. Moot question which falls for consideration is whether provisions of Delayed Payment and Small Scale and Ancillary Undertaking Act, 1993 Act and the Micro, Small and Medium Enterprises Development Act, 2006 apply in an application for setting aside the award under Section 34 of the Arbitration and Conciliation Act, 1996.

4. The opposite party is undoubtedly a small scale unit within the meaning of Micro, Small and Medium Enterprises Development Act, 2006. It is submitted on behalf of the petitioner that application under Section 34 was filed prior to coming into force of the amendment which came in to effect in the month of October, 2015 and that the Micro, Small and Medium Enterprises Act, 2006 does not apply in the present case and when the award is under challenge.

5. Learned Advocate for the petitioner submitted that reference to the arbitrator was made on 10.8.2006 and award was published on 23.12.2008.

6. The moot question before this Court for decision as to whether the Micro, Small and Medium Enterprises Development Act, 2006 would apply in the given case of the petitioner. The said Act come into force with effect from 02.10.2006. The arbitrator entered upon reference on 10.8.2006 that is to say, prior to the said Act, 2006 coming into effect. My attention is invited to the provision of Section 18 relating to reference to Micro and Small Enterprises Facilitation Council and the provision of Section 19 relating to application for setting aside decree, award or order of the said Act. The said provisions may be reproduced hereunder for profitable consideration as to whether the Micro, Small and Medium Enterprises Development Act, 2006 would be applicable in the instant case as admittedly the arbitrator had entered reference on 10.8.2006 prior to the said Act coming into effect.

"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 sub-section (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 Enterprise





















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