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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
VIPUL M. PANCHOLI, J.
M/s JITF Water Infrastructure Limited – Respondent
Versus
M/s Aquafil Polymers Company Private Limited – Respondent
R/Special Civil Application No.1107 of 2021
Decided on : 12-03-2021
Micro, Small and Medium Enterprises Development Act, 2006 - Section 18(1) - Constitution of India, 1950 - Articles 141, 142 and 227 - Companies Act, 1956 - Joint venture - Termination of contract - Maintainability of petition - Case of petitioner that petitioner is a Company incorporated under provision of Act, 1956, which entered into an agreement with M/s. Aquafil – Wintech JV ( “JV”), a joint venture of Aquafil Polymers Co. Pvt. Ltd - It is stated that the work order was executed on turnkey basis - Said work was related to procurement of Design, Supply, Installation and Commissioning of Intake Facilities, Transmission Mains, Water Treatment Plant and Reservoir for North Zone including 5 years of operation and maintenance of JICA funded Guwahati Water Supply Project.
Finding of the Court: It is also pertinent to note that in additional affidavit filed by petitioner before Arbitral Tribunal and even in the application filed before Arbitral Tribunal petitioner has failed to point out sufficient cause - Court view that each of cause set out by petitioner is a consequence of conscious decision taken by petitioner, which is contrary to the express order passed by Arbitral Tribunal. At this stage, it is required to be noted that in impugned order, learned Arbitrator has discussed in detail on this aspect - Court view that no error is committed by the learned Arbitrator while rejecting application filed by petitioner, which requires any interference while exercising power under Article 227 of Constitution of India. Even petitioner has failed to point out any patent lack of jurisdiction on the part of learned Arbitrator while passing impugned order, which requires any interference under Article 227 of the Constitution of India.
Result: Petition dismissed.
JUDGMENT :
1. This petition, which is filed under Articles 226 and 227 of the Constitution of India, is directed against the order dated 29.11.2020 passed by the learned Arbitrator in arbitration proceeding between the petitioner and the respondent pending before the Gujarat Chamber of Commerce Industries (hereinafter referred to as “GCCI” for short) bearing Reference No.GCCI/ADRC/A042.
2. The factual matrix of the present case is as under,
2.2 It is stated that on 08.01.2018, the petitioner sent notice through email and thereby exercised its rights available under the contract to terminate the contract as envisaged under the contract vide Clause No.19.2 and in pursuance to the termination, the petitioner exercised its right as per mandate of Clause No.19 in order to safeguard its interest. Thereafter JV itself vide its letter dated 08.02.2018 invoked Arbitration Clause being Clause No.20.3 of the contract and proposed the name of sole arbitrator to adjudicate the dispute. The petitioner, thereafter, sent communication on 14.02.2018 and refuted the contentions raised in the letter of JV and pointed out that the petitioner has the authority to appoint the Arbitrator and not the JV. The petitioner, therefore, nominated another learned sole Arbitrator to adjudicate the dispute. The said learned Arbitrator vide notice dated 12.03.2018 entered into the reference and directed the parties to appear before him on 30.03.2018 for preliminary hearing. Thereafter on 24.03.2018, the JV informed the petitioner that it would be approaching the MSME Commissionerate with its claims as per the mandate Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as ”MSME Act”). The petitioner, therefore, refuted the contentions of JV on various grounds including the ground that the JV is not registered as Micro or Small or Medium enterprise and, therefore, same cannot invoke the provision of MSME Act.
2.3 It is stated that MSME Commissionerate issued notice dated 10.04.2018 intimating to the petitioner that the application from the respondent has been filed against the petitioner under Section 18(1) of the MSME Act and thereby seeking recovery of delayed payment of Rs.12,34,11,703.68. The petitioner, thereafter, filed reply on 23.04.2018 and contested the maintainability of the said Reference under MSME Act. Inspite of that, MSME Commissionerate vide its notice dated 29.05.2018, intimated the petitioner to attend the preliminary meeting, which was scheduled on 31.05.2018 and in pursuance thereto, the petitioner attended the said meeting and requested for time to file reply of the application and the documents were provided to the petitioner. Thereafter, the Council terminated conciliation proceeding and passed an order dated 30.06.2018 and referred the matter to GCCI for arbitration.
2.4 The petitioner, therefore, filed writ petition being Special Civil Application No.11169/2018 challenging the order dated 30.06.2018 before this Court. It is stated that this Court vide order dated 09.09.2019 dismissed the said petition
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