IN THE HIGH COURT OF JHARKHAND AT RANCHI
SHREE CHANDRASHEKHAR, ANUBHA RAWAT CHOUDHARY, JJ.
The State Project Director, through Umashankar Singh & Ors. - Appellants
Versus
M/s National Printers, proprietor Apex Products Private Limited, Represented through its Director Sri Krishan Kant Kedia & Ors. - Respondents
LPA No. 505 of 2019
Decided On : 11-09-2023
| Table of Content |
|---|
| 1. writ petition details and history. (Para 1 , 2 , 3 , 4) |
| 2. arguments from appellants and respondent. (Para 5 , 6) |
| 3. consideration of maintainability of the petition. (Para 7 , 8 , 9 , 10 , 11) |
| 4. court's review on alternative remedy. (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19) |
| 5. liberty to approach alternative forum. (Para 20 , 21 , 22 , 23 , 24) |
| 6. findings on maintainability of interest application. (Para 25 , 26 , 27 , 28 , 29 , 30) |
| 7. legal basis for claim of interest. (Para 31 , 32 , 33 , 34 , 35 , 36) |
| 8. final directives and conclusion. (Para 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44) |
JUDGMENT :
Anubha Rawat Choudhary, J.
This Letters Patent Appeal has been filed against the judgment dated 16th May 2019 passed by the learned writ Court whereby the writ petition being W.P.(C) No. 3649 of 2016 has been disposed of and the matter has been remanded to the Jharkhand Micro, Small and Medium Enterprises Facilitation Council, Ranchi (hereinafter referred to as the “Facilitation Council”) for adjudication of the claim relating to interest on delayed payment of bills raised by the writ petitioner.
2. In W.P.(C) No. 3649 of 2016, the following prayer had been made :
II. For issuance of an appropriate writ or a writ in the nature of declaration that under Section 15 to 18 of the Micro Small and Medium Enterprises Development Act (MSMED Act) 2006, the petitioner is entitled to make a reference to the Council, under Section 18 (1) of the MSMED Act, to claim interest alone.
III. For issuance of an appropriate writ or a writ in the nature of mandamus to the respondents to make payment of interest amount to the petitioner on the principal amount of Rs.3,80,05,000/- in terms of section 16 of the MSMED Act 2006.”
3. By an order dated 04th March 2016 which was impugned in the writ petition the Facilitation Council dismissed the application made by the writ petitioner under section 18 of the Micro Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as “MSMED Act, 2006”), holding it as non-maintainable by observing that a claim only on account of interest on delayed payment of bills is not maintainable.
4. Foundational facts.
II. After completion of work, the bill was submitted by the writ petitioner but an amount of Rs.3,80,05,000/- remained unpaid. The writ petitioner made various representations to the appellants for payment of outstanding amount of Rs.3,80,05,000/- towards supplies made by the writ petitioner which was not paid and ultimately filed a Writ Petition being W.P.(C) No. 1702 of 2014 seeking a direction upon the appellants to make the payment of the outstanding dues.
III. On 13th January 2015 the principal amount of Rs.3,80,05,000/- was paid by the appellant no. 1 to the writ petitioner, but no payment was made on account of interest on delayed payment.
IV. Under the aforesaid circumstances, the writ petitioner filed an interlocutory application being I.A. N
SBP & Co. Vs. Patel Engineering Ltd. and another
Indian Farmers Fertilizer Cooperative Limited Vs. Bhadra Products
Raj Kumar Shivhare vs. Assistant Director, Directorate of Enforcement
Shanti Conductors Private Limited Vs. Assam State Electricity Board & Others
Gujarat State Civil Supplies Corporation Limited Vs. Mahakali Foods Private Limited and another
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 court ruled that a party to a dispute cannot waive the mandatory conciliation requirement under Section 18(2) of the MSMED Act, validating subsequent arbitration proceedings.
The award passed by the Facilitation Council is without jurisdiction and, therefore, a nullity.
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 MSMED Act, 2006 provides a specific dispute resolution mechanism that overrides private arbitration agreements, making writ petitions not maintainable when an alternative remedy exists.
The lack of conciliation does not undermine the statutory obligation to make payment under the MSMED Act, emphasizing the importance of adherence to payment timelines by the buyer.
Judicial review under Article 226 is not maintainable against MSEFC awards without exhausting statutory remedies as per MSMED Act.
The Limitation Act, 1963 is not applicable to conciliation proceedings under the MSMED Act; however, it applies to arbitration proceedings, preventing stale claims from being raised under the Act.
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