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IN THE HIGH COURT OF ORISSA AT CUTTACK
SANJEEB K PANIGRAHI
Indian Oil Corporation Ltd. – Appellant
Versus
Adarsh Nobel Corporation Ltd. – Respondent
| Table of Content |
|---|
| 1. facts of the case and parties involved. (Para 2 , 3) |
| 2. arguments related to jurisdiction and applicability of the msmed act. (Para 4 , 5 , 6) |
| 3. interpretation of jurisdiction based on the msmed act's provisions. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16) |
| 4. legal characterization and treatment of works contracts under msmed act. (Para 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 30 , 31 , 32 , 33) |
| 5. distinction between inherent jurisdiction and procedural impropriety in writ petitions. (Para 37 , 38 , 39 , 40 , 41) |
| 6. conclusion to set aside the impugned award. (Para 43 , 44 , 45) |
JUDGMENT :
1. The present Writ Petition has been preferred seeking setting aside of the award dated 10.07.2023, passed by the Facilitation Council, Cuttack in MSEFC Case No. 56 of 2022.
2. The brief facts of the case are as follows:
(j) The Petitioner awarded the work of "Provision of Additional VR Tank at Paradip Refinery” to the Opposite Party vide Letter of Award(LOA) dated 29.11.2017 for a contract value of Rs.20,86,26,058.50/-, which was to be completed within a period of 18 months from the date of the LOA.
(l) A word order was issued to another contractor on 9.4.2019 for co
The MSEFC lacks jurisdiction to adjudicate disputes arising from works contracts, which necessitate arbitration under traditional frameworks, not the MSMED Act.
Works contracts cannot invoke the jurisdiction of MSEFC under the MSMED Act, necessitating arbitration under the Arbitration and Conciliation Act, thereby rendering MSEFC proceedings void.
The Facilitation Council lacks jurisdiction over disputes arising from works contracts under the MSME Act, and principles of natural justice must be adhered to in adjudicatory processes.
The court upheld that statutory remedies under the MSMED Act take precedence over private arbitration agreements, affirming the Facilitation Council’s jurisdiction in disputes involving MSMEs.
The MSMED Act operates as a special beneficial legislation, overriding the Arbitration Act in cases involving registered MSMEs, emphasizing exclusive jurisdiction of MSEFC for dispute resolution.
The Act does not apply to works contracts with an element of supply and not mere supply and service contracts. The contractors must file the memorandum under section 8 of the Act to claim the benefit....
The Council has jurisdiction to adjudicate disputes in cases of works contracts, even if there is an arbitration clause in the contract.
Orders by MSEFC failing to follow arbitration procedures under the MSMED Act are not valid awards, allowing for writ petitions under Article 226 due to natural justice violations.
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