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IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Rakesh Kumar Jain, J.
Nitesh Estates Ltd - Appellant
Versus
Micro And Small Enterprises Facilitation Council Of Haryana And Others - Respondent
Civil Writ Petition No. 21088 of 2018
Decided On : 07-09-2018
certiorari - Real Estate Dispute - Companies Act, 1956, Micro, Small and Medium Enterprises Development Act, 2006 - Section 433(2) & (f), Section 8, Section 18, Section 24 - The court discussed the applicability of the Micro, Small and Medium Enterprises Development Act, 2006 to the dispute, the interpretation of the definition of 'supplier' under Section 2(n), and the interaction between arbitration clauses in agreements and the jurisdiction of the Micro and Small Enterprises Facilitation Council.
Fact of the Case:
The petitioner, a real estate company, sought to challenge notices and orders issued by the Micro and Small Enterprises Facilitation Council and an appointed Arbitrator in response to a claim made by a real estate broker. The petitioner raised objections related to the applicability of the Micro, Small and Medium Enterprises Development Act, 2006, the arbitration clause in the agreement, and the issue of limitation.
Finding of the Court:
The court found that the complaint filed by the respondent before the Council was maintainable, the proceedings under Section 18(3) of the Act could proceed despite the arbitration clause in the agreement, and the issue of limitation was a mixed question of law and fact to be decided by the Arbitrator appointed by the Council.
Issues: The issues involved the applicability of the Micro, Small and Medium Enterprises Development Act, 2006, the interaction between arbitration clauses in agreements and the jurisdiction of the Micro and Small Enterprises Facilitation Council, and the question of limitation.
Ratio Decidendi: The court relied on various decisions to interpret the provisions of the Micro, Small and Medium Enterprises Development Act, 2006, the definition of 'supplier' under Section 2(n), and the jurisdiction of the Micro and Small Enterprises Facilitation Council in relation to arbitration clauses in agreements.
Final Decision: The petition was dismissed by the court.
JUDGMENT
Rakesh Kumar Jain, J. - The prayers made in this petition are for the issuance of a writ in the nature of certiorari for quashing the notice dated 13.3.2018 and the order dated 7.6.2018 of the Micro and Small Enterprises Facilitation Council of Haryana/respondent No.1 [hereinafter referred to as 'the Council] and the notice dated 24.7.2018 issued by the Arbitrator (Respondent No.3) appointed by the Council.
2. In brief, the petitioner is a limited company engaged in the business of real estate whereas respondent No.2 is a real estate broker based in Gurugram. The petitioner and respondent No.2 entered into an agreement called "Channel Partner Agreement" on 23.7.2014 for a period of 8 months as per which respondent No.2 was entitled to a brokerage for arranging and negotiating the sale of flats in the projects of the petitioner in Bengaluru. The said agreement was terminated on 11.12.2014. Respondents No.2 sent a letter dated 3.01.2015 asking the petitioner to pay Rs. 12,74,847/- towards brokerage and Rs. 6,00,00,000/- towards damages. Respondent No.2 applied for registration on 17.3.2016 as a micro enterprise under Section 8 of the Micro, Small and Medium Enterprises Development Act, 2006 [hereinafter referred to as 'the Act'] and was accordingly registered. Respondent No.2 filed a petition under Section 433(2) & (f) of the Companies Act, 1956 [for short 'the Act'] before the National Company Law Tribunal, Bengaluru [for short 'the NCLT'] in September, 2017 against the petitioner for winding up, which is pending. Respondent No.2 also raised a claim with registration No.SEBIP/MH17/0005372/1 on 28.12.2017 with the Securities and Exchange Board of India [SEBI] against the petitioner-company which has been dismissed. Respondent No.2 filed a petition bearing Claim Application No.460 of 2018 under the Act before respondent No.1 in which impugned notice was issued on 13.3.2018 to the petitioner to which reply was filed on 2.4.2018 but on 06.06.2018, respondent No.1 passed the impugned order and referred the claim of respondent No.2 to respondent No.3, empanelled Arbitrator notified by the Government. The petitioner received a notice dated 24.7.2018 for appearance before respondent No.3 on 7.8.2018.
3. This petition is filed on 13.8.2018 to challenge the impugned notice dated 13.3.2018 and order dated 7.6.2018 issued/passed by respondent No.1 and notice dated 24.7.2018 issued by respondent No.3, inter alia, on the ground that respondent No.2 was got registered vide registration certificate on 17.3.2016 as a micro enterprise and as such the benefits of the provisions of the Act cannot be availed by respondent No.2 for the services rendered prior to its registration under the Act, respondent No.1 was not entitled to proceed in terms of the provisions of Section 18(3) of the Act in view of the Arbitration clause in the agreement, the claim is otherwise time barred because the agreement was terminated on 11.12.2014 and the claim petition No.460 of 2018 was filed on 11.01.2018.
4. Learned counsel for the petitioner has referred to a decision rendered by this Court in the case of "Gats Financial Reconstructions Ltd. Vs. Director of Industries Director of Industries- Director of Industries-cum-Chairman, Industrial Facilitation Council and Chairman, Industrial Facilitation Council and Others, 2016 183 PLR 776" others" and a decision rendered by the Bombay High Court in the case of "M/s Faridabad Metal Udyog Pvt. Ltd. "M/s Faridabad Metal Udyog Pvt. Ltd. Udyog Pvt. Ltd. Vs. Mr. Anurag Mr. Anurag Deepak and M/s Bharat Petroleum Corporation Ltd." 2 Deepak and M/s Bharat Petroleum Corporation Ltd. , (2013) 7 BomCR 631".
5. In support of his second submission about the arbitration clause in the agreement, reference is made to a decision of the Bombay High Court in the case of "M/s. Steel Authority of India Ltd. and another Vs. " M/s. Steel Authority of India Ltd. and another Micro, Small Enterprise Facilitation Council, through Joint Direc
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