IN THE HIGH COURT OF GAUHATI, ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
THE CHIEF JUSTICE MR. VIJAY BISHNOI, HON’BLE MR. JUSTICE KARDAK ETE, J.
M/s. Siotia Steels Limited, represented by its Director Sri Bhagwati Prasad Siotia – Appellant
Versus
NBCC (India) Limited, (formerly known as National Building Construction Corporation Limited), represented by its Deputy General Manager, HRM and duly authorised Officer and Ors. – Respondents
Writ Appeal No.135 Of 2022
Decided On : 21-06-2024
MSME - Micro, Small and Medium Enterprises Development Act, 2006 - Section 18, Section 19 - The court discussed the provisions of the MSME Act, particularly Section 18, which mandates conciliation proceedings for disputes involving unpaid dues to micro and small enterprises. The court interpreted that the Council lacked jurisdiction to issue payment directions without following the prescribed procedures, leading to the conclusion that the Council's orders were arbitrary and without authority. The court emphasized the necessity of adhering to statutory processes, which influenced its decision to uphold the learned Single Judge's ruling that set aside the Council's directions.
Fact of the Case:
The appellant supplied steel to NBCC (India) Limited but was not paid despite multiple communications. After a failed Money Suit and appeal, the appellant sought relief under the MSME Act, which the Council initially granted. However, NBCC challenged this in a writ petition, leading to the learned Single Judge setting aside the Council's decision.
Finding of the Court:
The court found that the Council did not follow the required conciliation process under Section 18 of the MSME Act and that the appellant's claim was time-barred, as it was not filed within three years of the cause of action. The court upheld the learned Single Judge's decision, stating that the Council's actions were without jurisdiction.
Issues: 1. Whether the Council had jurisdiction to direct payment without following the conciliation process mandated by the MSME Act. 2. Whether the appellant's claim was time-barred due to the failure to file within the statutory period.
Ratio Decidendi: The court held that statutory provisions must be strictly adhered to, and any action taken without following the prescribed procedures is void. The claim for unpaid dues was also found to be time-barred under the Limitation Act, reinforcing the need for timely action in legal claims.
Final Decision: The writ appeal was dismissed, affirming the learned Single Judge's order that set aside the Council's directions for payment due to lack of jurisdiction and the time-barred nature of the appellant's claim.
JUDGMENT :
(Vijay Bishnoi, CJ.)
Heard Mr. S.P. Roy, learned counsel for the appellant. Also heard Mr. A. Thakur, learned counsel appearing for the respondent No.1; Mr. N. Kalita, learned counsel appearing on behalf of Mr. A. Kalita, learned standing counsel, Industries & Commerce Department for respondent Nos.2 & 3 and Ms. L. Devi, learned counsel appearing on behalf of Mr. R.K.D. Choudhury, learned Deputy Solicitor General of India for respondent No.4.
2. This writ appeal is filed by the appellant assailing the judgment & order dated 03.12.2018 passed by the learned Single Judge in WP(C) No.3959/2018, whereby the learned Single Judge, while allowing the writ petition filed on behalf of the respondent NBCC (India) Limited, has set aside the minutes of the meeting dated 12.03.2018 of the Micro & Small Enterprises Facilitation Council (hereinafter to be referred as “Council”).
3. The brief facts of the case are that the Chief Project Manager of the respondent NBCC (India) Limited had invited sealed quotations from manufacturers/suppliers for supply of steel and cement vide Notice Inviting Tender (NIT) dated 29.01.1993. Pursuant to the said NIT, the appellant had submitted its quotation and the said quotation of the appellant was accepted. The NBCC (India) Limited had placed supply orders to the appellant for supply of steel at different worksites on various dates running from 16.02.1993 to 31.03.1993. As per the appellant, the steel was supplied by it to the NBCC (India) Limited, however, it had failed to make payment to the appellant despite repeated communications sent to it.
4. Ultimately, the appellant has filed a Money Suit being Money Suit No.192/2000 in the Court of the learned Civil Judge No.1, Kamrup at Guwahati claiming payment of the unpaid dues and interest on delayed payment from the NBCC (India) Limited. The said Money Suit was dismissed by the learned Civil Judge No.1, Kamrup at Guwahati vide judgment dated 12.07.2007.
5. Being aggrieved with the same, the appellant has preferred an appeal before this Court, which was registered as RFA No.13/2008, however, the same was also dismissed vide judgment & order dated 26.05.2015.
6. Soon thereafter, the appellant has filed an application before the Council under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter to be referred as the “MSME Act, 2006”) for realization of the unpaid dues, which includes the principal amount for material supplied to the NBCC (India) Limited, price escalation, local freight charges and interest on delayed payment. The said claim of the appellant was allowed and the Council has directed the respondent NBCC (India) Limited to make payment of the principal and local freight charges with interest payable to the appellant in its meeting held on 12.03.2018.
7. Being aggrieved with the same, the NBCC (India) Limited has preferred the aforementioned writ petition, which came to be allowed by the learned Single Judge vide the impugned judgment & order dated 03.12.2018. The operative portion of the impugned judgment read as under:-
“13. The letter dated 05.04.2018 and the extract of the meeting minutes dated 12.03.2018, clearly show that no conciliation was affected between the parties, with regard to the dispute raised by the respondent No. 3. Further, the very fact that a direction has been issued by the Council during a meeting in the office chamber of the Commissioner of Industries & Commerce, Assam clearly shows that the issue raised by the respondent No. 3, with regard to non-payment of his alleged dues has not been decided by way of arbitration, under the provisions of the Arbitration & Conciliation Act, 1996. It is settled law that where a power is given to do a certain thing in a certain way, they must be done in that way or not at all. All other methods of performance are forbidden. The facts, as stated above, show that the Council could not have issued the orders/directions to the petitioner, in violatio
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AI
The court established that compliance with statutory procedures is essential for the validity of decisions made by regulatory bodies, and claims under the MSME Act must be filed within the prescribed....
The High Court cannot entertain writ petitions challenging awards of the Micro and Small Enterprises Facilitation Council without the mandatory deposit of 75% of the awarded amount as per Section 19 ....
Point of Law : Court are of the unhesitant view that learned Single Judge fell in error in not only entertaining the writ petition but also in allowing the same by setting aside the award dated 28.10....
The award passed by the Facilitation Council is without jurisdiction and, therefore, a nullity.
Registration as a supplier is not mandatory for invoking the jurisdiction of the Micro and Small Enterprises Facilitation Council.
Judicial review under Article 226 is not maintainable against MSEFC awards without exhausting statutory remedies as per MSMED Act.
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