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2015 Supreme(All) 1555

ALLAHABAD HIGH COURT
BEFORE : SUNEET KUMAR, J.
DIRECTOR HEALTH SERVICES AND FAMILY WELFARE ....Petitioner
Versus
U.P. STATE MICRO AND SMALL ENTERPRISES E.F. COUNCIL AND ANOTHER ....Respondent
(Civil Misc. Writ Petition No. 6690 of 2015, decided on 21st December, 2015)

Advocates:
Counsel :
Harsimran Singh Sethi and Ashok Kumar Lal for the Petitioner; Kartikeya Saran for the Respondents.

Headnote:Micro, Small Medium Enterprises Development Act, 2006 – Section 19 – Arbitration and Conciliation Act, 1996 – Section 34 – Contract – Non-payment of dues – Contract for supply of Generators – Court having jurisdiction on subject-matter would be within its competence to decide any questions raised before it – Court was justified in deciding the issue – On ground of limitation, same appealable before the competent Court – Court decline to entertain petition in exercise of supervisory jurisdiction under Article 227 of the Constitution of India. [Paras 23 to 28]

       Result; Petition Dismissed.

JUDGMENT

Hon’ble Suneet Kumar, J.—Heard learned counsel for the parties.

2. The petition is being decided without calling for counter-affidavit, on the request of the learned counsel for the parties, as per the Rules of the Court.

3. The Director Health Services & Family Welfare, Punjab, applicant herein, floated tender inviting offers for supply of Diesel Generators, the second respondent, a Small Scale Industrial Unit, registered with the Directorate of Industries, U.P., engaged in the business of manufacturing Diesel Engine and Generator sets applied pursuant to the tender and was successful, consequently, a contract was entered between the applicant and the second respondent, pursuant thereof, the second respondent supplied Generators to the applicant in 2008 for which 90% payment was released but remaining 10% was with-held. According to the applicant, the supplied goods and their performance was not satisfactory, the second respondent upon non-payment sought a reference before the U.P. State Micro and Small Enterprises Facilitation Council, Kanpur (Council) to initiate proceedings under Section 18 of the Micro, Small Medium Enterprises Development Act, 2006 (Micro, Small Enterprises Act). The Council, consequently initiated conciliation proceedings which came up in the claim petition No. 3 of 2010, however, upon failure due to the non appearance of the applicant, Council initiated Arbitration in term of Section 18(3) of Micro, Small Enterprises Act.

4. The applicant failed to appear despite notice, consequently, Council proceeded ex parte and passed an Award on 11 June 2013 directing the applicant to pay Rs. 63,77,302/ to the second respondent, despite award no payment was received by the second respondent, thereafter, upon expiry of the statutory period, execution proceeding was initiated; upon notice being received from the executing Court, applicant filed an application under Section 34 of the Arbitration and Conciliation Act 1996 (Arbitration Act) on 12 August 2014. Alongwith the said application, the applicant sought exemption of the statutory deposit of 75% of the award under Section 19 of Micro, Small Enterprises Act.

5. The learned District Judge rejected the application being Arbitration Case No. 91/70 of 2014 on two grounds (1) delay under Section 34(3) of the Arbitration Act (ii) under Section 19 of Micro, Small Enterprises Act for not making statutory deposit of 75%.

6. The order passed by the District Judge is being assailed.

7. The submission of the learned counsel for the applicant is that the Court below committed an error in rejecting the arbitration case both on the ground of maintainability in view of Section 19 of Micro, Small Enterprises Act and for delay/laches, under Section 34(3) of Arbitration Act. It is therefore, sought to be urged that since the Court declined to entertain the application for non compliance of the terms of Section 19 of the Micro, Small Enterprises Act, the Court could not have proceeded further in deciding the question of limitation; further, it is contended that the award challenged was an award under Section 18 of Micro, Small Enterprises Act and not an award under Section 31 of Arbitration Act, therefore, remedy available to the applicant is before this Court under Article 227 of the Constitution of India.

8. In rebuttal, learned Senior Counsel appearing for the second respondent would submit that the petition is not maintainable under Article 227 of the Constitution against an order passed under Section 34, the remedy available to the applicant is by way of an appeal under Section 37 of Arbitration Act.

9. Rival submissions call for consideration.

10. The point for determination is as to whether this petition would lie against an order passed under Section 34 of Arbitration Act.

11. The facts are not in dispute between the parties, it is not being disputed by the applicant that 90% of the amount was paid to the second respondent for supply and installation of Generator set

























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