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2022 Supreme(Guj) 1535

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A.P. THAKER, J.
Anupam Industries Ltd. – Petitioner
Versus
The State Level Industry Facilitation Council – Respondent
R/Special Civil Application No. 2825 of 2020
Decided On : 16-12-2022

Advocates Appeared:
For the Petitioner: Mr. Naveen Pahwa with Mr. Kamlesh P. Vaidankar, Nilu K. Vaidankar.
For the Respondent: Mr. Dhaval Dave with Rohan A. Shah, Rushabh H. Shah.

Headnote:

Constitution of India, 1950 – Article 227 – Micro, Small and Medium Enterprises Development Act, 2006 – Section 18 – Companies Act, 2013 –Arbitration and Conciliation Act, 1996 – Claim of respondent – Arbitral proceedings – Facts of present petition is that petitioner is a Company incorporated under provisions of Companies Act engaged in business of manufacturing Gantry and EOT Cranes and is one of largest Company in field of design, engineering and manufacturing of heavy duty cranes – Held, Now, admittedly, in present case, exercise of jurisdiction of Arbitral Tribunal under the MSMED Act is under challenge and, therefore, present petition is maintainable –Therefore, considering facts and circumstances of case, it is crystal clear that exercise of jurisdiction by Arbitrator under MSMED Act, 2006 was without jurisdiction and, therefore, impugned award is not sustainable in eyes of law and same deserves to be set aside and present petition is liable to be allowed – Petition allowed.

JUDGMENT :

1. The present petition is filed under Article 227 of the Constitution of India to quash and set aside the impugned award dated 3.5.2019 passed by the Learned Sole Arbitrator in Arbitration Matter titled M/s. Vishal Carriers v. Anupam Industries Ltd.

2. The brief facts of present petition is that the petitioner is a Company incorporated under the provisions of the Companies Act engaged in the business of manufacturing Gantry and EOT Cranes and is one of the largest Company in the field of design, engineering and manufacturing of heavy duty cranes.

2.1 It is contended that as per the claim of respondent No.3, it has filed before MSME Facilitation Council and it is a proprietorship concern engaged in the business of providing transport services. It is the claim of the respondent No.3 that it has provided transport service to the petitioner pursuant to different Purchase Orders, for which the Respondent No.3 had raised separate distinct invoices during the period from 17.5.2013 to 15.7.2015, which fell due from 15.8.2013 to 13.10.2015. Respondent No.3 approached the Micro, Small and Medium Enterprises Facilitation Council (respondent No.1) for invoking the provisions of Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as "the MSMED Act") somewhere in the month of July- August, 2017.

2.2 It is contended that as per record produced by the respondent No.3 before the respondent No.1, respondent No.3 Firm was registered in “E" category i.e. "Small" enterprise category incorporated with effect from 31.12.2016, which is reflected from the Certificate of Registration issued by the concerned District Industries Centre, Anand. It is contended that respondent No.3 was registered under the MSMED Act, subsequent to the dates of alleged transactions and had apparently got itself registered under the MSMED Act only with a view to get the benefit of all the provisions relating to Delayed Payment under the MSMED Act.

2.3 It is contended that conciliation efforts exerted by the learned MSME Facilitation Council, Gandhinagar did not yield the result and, therefore, the matter was referred to GCCI for conducting the Arbitral proceedings as per the provisions of Arbitration and Conciliation Act, 1996. it is contended that since the petitioner was not even informed about having of the alleged Arbitration, it was impossible for him to know about actual pendency of the arbitral proceedings and to attend it. That due to that eventuality, the entire arbitral proceedings were conducted ex-facie in absence of the petitioner and the impugned award came to be passed by the sole Arbitrator.

2.4 The same has been challenged by the petitioner by way of filing the petition on the grounds that the claim filed by the respondent No.3 is not maintainable as it was not registered under the MSMED Act at the time of transaction. It is also contended that Arbitrator has also not appreciated the true and correct facts in absence of the petitioner and, therefore, it has prayed to quash and set aside the impugned award of the sole arbitrator.

3. Respondent No.3 has filed its affidavit-in-reply and has raised many contentions. By way of relevant facts, it has contended that on 7.7.2017, respondent filed application under Section 18 of the MSMED Act, 2006 before the Facilitation Council along with all necessary documents. It is contended that on such application the Counsel on 29.9.2017 issued notice to the petitioner, which was served upon the petitioner through email on 3.10.2017. It is contended that pursuant to such notice, the petitioner did not appear, therefore, the Council on 3-6/11/2017 issued a reminder notice to the petitioner informing them to submit all the relevant details within 7 days.

3.1 It is contended that the Council under Section 18(2) undertook conciliation proceedings and conducted meeting on 24.1.2018, 14.2.2018, 14.3.2018 and 25.4.2018 and intimation to that meetings were made to the petitioner. It is conten

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