IN THE HIGH COURT OF DELHI AT NEW DELHI
Subramonium Prasad, J.
M/s Columbia Petro Chem Pvt. Ltd. - Appellant
Versus
Micro And Small Enterprises Facilitation Council & Ors. - Respondents
W.P.(C) 2177 of 2023 & CM APPL. 8279 of 2023
Decided On : 16-10-2023
MSMED Act - Dispute regarding MSME registration date - Section 18 of MSMED Act - Section 16 of Arbitration and Conciliation Act, 1996 - [MSMED Act, Section 18; Arbitration and Conciliation Act, 1996, Section 16]
Fact of the Case:
The Petitioner challenges the Reference Order and the Arbitral Tribunal's Order rejecting the application under Section 16 of the Arbitration and Conciliation Act, 1996. The dispute revolves around the date of registration of the Respondent No.2 as an MSME and whether the matter could be referred to arbitration under Section 18 of the MSMED Act.
Finding of the Court:
The Court finds that the Respondent No.2 was registered as an MSME before the arrival of the consignment, and the Arbitrator was within his jurisdiction to decide the registration date after the parties led evidence. The Court declines to interfere under Article 226 of the Constitution of India.
Issues: Dispute over MSME registration date, challenge to arbitration referral under MSMED Act, jurisdiction of the Arbitrator
Ratio Decidendi: The Court's decision is based on the finding that the Respondent No.2 was registered as an MSME before the arrival of the consignment, and the Arbitrator had the jurisdiction to decide the registration date after the parties led evidence.
Final Decision: The writ petition is dismissed, and no interference is made under Article 226 of the Constitution of India.
JUDGMENT (Oral)
1. The instant writ petition has been filed by the Petitioner challenging the Reference Order dated 15.03.2022 being Reference No.F.184/DM(S)/Ref.u/s-18/SRD/MSEFC/1534-36 in the matter of `Mack Insurance Surveyors & Loss Assessors Pvt. Ltd v. Columbia Petrochem Pvt. Ltd.' passed by the Micro & Small Enterprises Facilitation Council (MSEFC)-Cum-District Magistrate, Saket, New Delhi. The Petitioner, by way of the present writ petition, has also challenged the Order dated 06.01.2023 passed by the Arbitral Tribunal comprising of sole arbitrator in the said reference rejecting the application under Section 16 of the Arbitration and Conciliation Act, 1996.
2. Shorn of unnecessary details, facts leading to the filing of the instant writ petition are as under:
a) It is the case of the Respondent No.2 that the Petitioner herein approached the Respondent No.2 to engage the Respondent No.2 for its services as the Marine Surveyor for import of cargo at Taloja/Silvassu/Kherdi. It is stated that invoices were raised by the Respondent No.2 from October, 2018 to March, 2019 for services rendered by it.
b) It is stated that dispute arose between the parties and payments were not received by Respondent No.2 from the Petitioner for the services rendered by it. It is stated that Respondent No.2, approached the Micro & Small Enterprises Facilitation Council (MSEFC) regarding the claims made by Respondent No.2 and the said Council referred the dispute to Arbitration under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as 'MSMED Act').
c) It is stated by the Petitioner that Respondent No.2 got itself registered under the MSME only on 31.08.2020 which is after the last invoice raised by the Respondent No.2, and therefore, the Respondent No.2 is not entitled to take the benefit of MSMED Act.
d) The Petitioner filed an application under Section 16 of the Arbitration and Conciliation Act, 1996 claiming that Respondent No.2 was registered under the MSMED Act only on 31.08.2020 and, therefore, the referral to arbitration cannot be sustained. The Arbitrator vide Order dated 06.01.2023 rejected the application of the Petitioner stating that the issue as to whether matter could be referred to arbitration or not and whether the claimant can take the benefit under the MSMED Act has to be adjudicated after the parties have been afforded an opportunity to lead evidence in support of their claims and that the issues will be decided in the Arbitration.
3. Pursuant to the Order dated 06.01.2023 passed by the Arbitrator, the Petitioner has approached this Court by filing the instant writ petition with the following prayers:
"A. Set aside the Impugned Reference Order dated 15.03.2022 in the matter of `Mack Insurance Surveyors & Loss Assessors Pvt. Ltd v. Columbia Petrochem Pvt. Ltd.' being Reference No. F. 184/DM(S)/Ref.u/s-18/SRD/MSEFC/1534-36 passed by the Micro & Small Enterprises Facilitation Council (MSEFC)-Cum-District Magistrate, in Saket, New Delhi.
B. Set aside the Impugned Order dated 06.01.2023 in the matter of `Mack Insurance Surveyors & Loss Assessors Pvt. Ltd v. Columbia Petrochem Pvt. Ltd.' being Arbitration Case No. DIAC/3844D/03-2022 passed by the Ld. Tribunal comprising of sole arbitrator Ms. Radhika Bishwajit Dubey, Delhi International Arbitration Centre;
C. Quash the proceedings initiated against the Petitioner before the Respondent No. 1 as well as the Ld. Arbitral Tribunal under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006;
D. Pass such further direction(s) and other order(s) as this Hon'ble court may deem fit and proper in the facts and circumstances of the case and in the interest of justice."
4. Learned Counsel for the Petitioner has drawn attention of this Court to the MSME registration certificate to state that the Respondent No.2 registered as an MSME only on 04.05.2019 which was after the last invoice issued in the month of March, 2019 and, therefore,
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