IN THE HIGH COURT OF JHARKHAND AT RANCHI
Ravi Ranjan, Sujit Narayan Prasad, JJ.
The Jharkhand Bijli Vitran Nigam Ltd. – Petitioner
Versus
Vexcel Upkram Private Limited - Respondent
L.P.A. No. 242 of 2022 With I.A. No. 4921 of 2022 With I.A. No. 5383 of 2022
Decided On : 17-11-2022
Constitution of India, 1950 – Article 226 – Micro, Small and Medium Enterprises Development Act, 2006 – Section 16, 21 – Jharkhand Micro and Small Enterprises Facilitation Council Rules, 2007 – Appeal under Clause 10 of Letters Patent has been preferred against order/judgment passed by learned Single Judge of this Court in W.P. (C) whereby and whereunder writ petition was dismissed refusing to interfere with order passed by Jharkhand Micro, Small & Medium Enterprises Facilitation Council, holding writ petition not maintainable on ground of availability of statutory remedy as provided under provisions of Micro, Small and Medium Enterprises Development Act, 2006 – Held, It also requires to refer herein that issue of jurisdiction of Facilitation Council however was not agitated before learned Single Judge and as such said issue has not fell for consideration and in that view of matter, learned Single Judge has taken the ground to hold the writ petition not maintainable on the ground of statutory remedy available under law which cannot be said to suffer from patent illegality – But issue of jurisdiction based upon quorum-non-judis is thrust of argument in instant intra-court appeal, which we have already considered in L.P.A., based upon judgment passed by Co-ordinate Division Bench in W.P. (C) & Analogous Cases, this Court has got no option but to interfere with impugned order – Appeal allowed.
JUDGMENT :
Sujit Narayan Prasad, J.
The instant intra-court appeal under Clause 10 of the Letters Patent has been preferred against order/judgment dated 6th December, 2021 passed by learned Single Judge of this Court in W.P. (C) No. 5957 of 2014 whereby and whereunder the writ petition was dismissed refusing to interfere with order dated 14th July, 2014 passed by the Jharkhand Micro, Small & Medium Enterprises Facilitation Council (hereinafter referred to as ‘Council’), holding the writ petition not maintainable on the ground of availability of statutory remedy as provided under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as ‘MSMED Act, 2006’).
2. The brief facts of the case, which are required to be enumerated, read as under:
The respondent was engaged in the work of meter reading/surveillance, computerized data logging, and preparation of consumer bill of erstwhile Jharkhand State Electricity Board vide work Order No. 61 dated 30.09.2002 for the period from 01.10.2002 to 30.09.2004, which was extended by the competent authority from time to time up-to 31.12.2010. The respondent after execution of the said work submitted claim before the Council for principal outstanding amount of Rs. 1,13,29,630/- and interest amounting to Rs. 1,09,03,255/- against the petitioner-company under the provisions of MSMED Act, 2006. The proceeding commenced and finally the Council, after hearing the parties, passed the award dated 14th July, 2014 in Case No. JHMSEFC 03 of 2012, by which, the petitioner was directed to pay alleged principal outstanding amount inclusive of security deposit/performance guarantee/ incentive claim and due amount of Service Tax along with interest at the rate of three times of bank rate of Reserve Bank of India and further to pay compound interest with monthly interest from the date of amount due for payment to the appellant till final payment is made under Section 16 of the MSMED Act, 2006.
The writ petitioner being aggrieved with the award preferred the writ petition being W.P. (C) No. 5957 of 2014. The learned Single Judge, taking into consideration the fact of availability of statutory remedy, dismissed the writ petition with liberty to the petitioner to avail the legal remedies as available to it in law, which is the subject matter of present intra-court appeal.
3. The petitioner has preferred the instant intra court appeal mainly on the ground of declaration of award to be void ab initio which cannot be said to be an award as per the provisions of MSMED Act, 2006 reason being that the composition of Jharkhand Micro, Small & Medium Enterprises Facilitation Council was not in accordance with the statutory provisions as contained under Section 21 of the MSMED Act, 2006 since the award/order was signed by altogether eight members including Chairman.
4. Serious objection has been raised on behalf of respondent raising preliminary objection by filing Interlocutory Application being I.A. No. 5383 of 2022 taking the ground that the issue which is now being raised for declaration of the award to be void ab initio has never been raised before the learned Single Judge and as such the same is not available to the writ petitioner to raise before the intra-court appeal.
5. In response to the averment made in the Interlocutory Application learned counsel for the writ petitioner-appellant has submitted that since the issue of jurisdiction is the thrust to declare the award to be void ab initio as such the same being a legal issue that can well be raised at this stage also.
It has further been submitted that such issue has got relevance since the very issue of coram of constitution of Council has been delved upon by the Division Bench of this Court in W.P. (C) No. 3699 of 2015, wherein this Court has declared the constitution of the Council constituted in pursuance to the provisions of Rule 4 of Rules, 2007 to be not in consonance with the provision of Section 21 of the MSMED
A. Mohammad Yunus (Dead) by LRs Vs. Food Corporation of India & Anr. (2000) 0 Supreme(SC)192
Babu Verghese and Ors. vs. Bar Council of Kerala and Ors.
Balvant N. Viswamitra & Ors Vs. Yadav Sadashiv Mule (Dead) through LRs & Ors. (2004) 8 SCC 706
Commissioner of Income Tax, Mumbai vs. Anjum M.H. Ghaswala & Ors.
Pandurang & Ors Vs. State of Maharashtra (1986)4 SCC 436
State of Jharkhand & Ors. vs. Ambay Cements & Anr.
State of M.P. v. Dewadas (1982) 1 SCC 552 : 1982 SCC (Cri) 275 : AIR 1982 SC 800 : (1982) 3 SCR 81
Zuari Cement Ltd. vs. Regional Director ESIC Hyderabad & Ors. (2015) 7 SCC 690
SupremeToday
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 ....
The Facilitation Council must adhere to the procedural requirements of both the MSMED Act and the Arbitration Act, and failure to do so renders any award issued a nullity, which can be challenged out....
The award passed by the Facilitation Council is without jurisdiction and, therefore, a nullity.
Important Point : The court established that statutory remedies must be exhausted before invoking writ jurisdiction against awards under the MSMED Act.
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....
Judicial review under Article 226 is not maintainable against MSEFC awards without exhausting statutory remedies as per MSMED Act.
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