Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
G. ROHINI & SANGITA DHINGRA SEHGAL, JJ.
UNITED ELECTRICAL INDUSTRIES LTD. – Appellant
Versus
MICRO AND SMALL ENTERPRISES & ORS. – Respondents
LPA 138 OF 2016
Decided On : 06-02-2017
Arbitration - Micro and Small Enterprises Facilitation Council - MSMED Act - Section 18 - Section 34 of the Arbitration Act - Writ Petition
Fact of the Case:
The appellant company and the respondent No.2 entered into transactions for the supply of electricity meters. The respondent No.2 submitted a reference to the Micro and Small Enterprises Facilitation Council (MSEFC) under Section 18 of the MSMED Act for adjudication of the dispute. The appellant challenged the orders of the MSEFC and the decision of the Arbitrator through writ petitions.
Finding of the Court:
The court held that the challenge to the orders of the MSEFC and the decision of the Arbitrator through writ petitions was not maintainable. The court emphasized the minimal judicial intervention in arbitration proceedings and stated that the proper recourse against the arbitral award is to invoke Section 34 of the Arbitration and Conciliation Act, 1996.
Issues: The issues involved the jurisdiction of the MSEFC, the status of the respondent No.2 as a small scale unit under the MSMED Act, and the maintainability of the writ petitions challenging the arbitration proceedings.
Ratio Decidendi: The court emphasized the minimal judicial intervention in arbitration proceedings and held that the challenge to the arbitration award through writ petitions was not tenable.
Final Decision: The appeal was dismissed.
SANGITA DHINGRA SEHGAL, J.
1. The unsuccessful petitioner in W.P. (C) No. 7072/2015 is the appellant before us.
2. The learned Single Judge dismissed the W.P(C).No. 7072/2015 vide order dated 14.12.2015 and observed as under:
“20. I find merit in the contention of the petitioner that upon the petitioner controverting that the respondent No.2 EEPL is a small enterprise as claimed by it, the respondent No.1 MSEFC was required to adjudicate the same and since there does not appear to be any remedy available against the decision of the respondent No.1 MSEFC in this regard, a writ petition would be maintainable there against. It has been so held by the High Court of Hyderabad in The Indur District Cooperative Marketing Society Ltd. Vs. Microplex (India), Hyderabad MANU/AP/0785/2015 and by the High Court of Madhya Pradesh in judgment dated 24th July, 2015 in W.P.(C) No.19319/2014 titled M/s Frick India Ltd. Vs. Madhya Pradesh Micro and Small Enterprises Facilitation Council. It was held to be a jurisdictional issue.
21. However, I find that the orders dated 17th June, 2013 and 1st October, 2013 of the respondent No.1 MSEFC which the petitioner is challenging in this petition were also the subject matter of challenge in W.P.(C) No.350/2015 earlier filed by the petitioner and which ended in the order dated 13th March, 2015 which the petitioner allowed to attain finality. As per the said order, the said question was left open to be decided by the Arbitrator. Even though I am of the opinion that the decision in this regard was required to/ought to have been taken by the respondent No.1 MSEFC and the dispute would fall into the lap of the Arbitrator, only upon the respondent No.1 MSEFC being satisfied regarding applicability of Section 18 of the MSMED Act, but the fact of the matter is that the order dated 13th March, 2015 in W.P.(C) No.350/2015 earlier filed by the petitioner cannot be re-visited by me and has attained finality. Moreover, the order dated 13th March, 2015 is in the nature of a consent order.
22. As far as the challenge to the conclusion so reached now by the Arbitrator in this regard is concerned, the said conclusion having been reached in exercise of power under Section 16 of the Arbitration Act, the challenge thereto can only be in accordance with Section 34 of the Arbitration Act and not by way of a writ petition. I have recently in Evolve Marketing Services Pvt. Ltd. Vs. Aircel Ltd. MANU/DE/3851/2015, referring to the caselaw in this regard, held that the petitions under Articles 226 & 227 of the Constitution of India are not maintainable with respect to arbitration proceedings. Reference in this context can also be made to the judgments of the Division Bench of this Court in ATV Projects India Ltd Vs. Indian Oil Corporation Ltd. 200 (2013) DLT 553 and to Awasthi Construction Co. Vs. Govt. of NCT of Delhi MANU/DE/5926/2012.
23. Thus, the petition insofar as challenging the orders dated 17th June, 2013 and 1st October, 2013 of the respondent No.1 MSEFC is held to be not maintainable, being by way of re-litigation and the petition insofar as impugning the order dated 15th May, 2015 of the Learned Arbitrator is held to be not maintainable, the remedy of the petitioner being under Section 34 of the Arbitration Act.
24. Dismissed.
No costs.”
3. Feeling aggrieved by the aforesaid order, the appellant has preferred the present appeal.
4. We have heard the learned counsel for the parties and perused the material available on record.
5. Mr. G. Prakash, learned counsel for the appellant company contended that the order passed by the Arbitrator can be challenged by way of filing a writ petition invoking the jurisdiction of the High Court under Article 226 of the Constitution of India. It was further contended that the order passed by the Arbitrator pertaining to jurisdiction of the Micro and Small Enterprises Facilitation Council (hereinafter referred to as ‘MSEFC’) in entertaining the application of the respondents is illegal w
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
