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2019 Supreme(All) 1925

IN THE HIGH COURT OF ALLAHABAD
SIDDHARTHA VARMA, J.
M/S Kritika Auto Product Ltd - Appellant
Versus
U.P. State Micro and Small Enterprises And Another - Respondent
Writ C No. 543 of 2017
Decided on : 21-10-2019

Advocates:
Advocate Appeared:
Pramod Kumar Singh Paliwa, Adv., Kandarp Srivastava, Adv., Kaustubh Srivastava, Adv., Ranjit Saxena, Adv.

The enforcement of an award through its execution can be filed anywhere in the country where such a decree can be executed, and there is no requirement for obtaining a transfer of the decree from the court which would have jurisdiction over the arbitral proceedings.

Headnote:

Arbitration and Conciliation Act - Execution of Award - Sections 36, 42 - Micro Small and Medium Enterprises Development Act, 2006 - Sections 18(2), 18(3), 35, 36

Fact of the Case:

A dispute arose between the petitioner and respondent no. 2 regarding payment for goods supplied. An award was drawn in favor of respondent no. 2, but the petitioner refused to pay. The respondent filed an application for executing the award under Section 36 of the Arbitration and Conciliation Act, 1996. The petitioner argued that the provisions of Section 36 were not applicable due to the Micro Small and Medium Enterprises Development Act, 2006.

Finding of the Court:

The court found that the award could be put into execution by the court where the execution was filed, in line with the judgment reported in AIR 2018 SC 965. The writ petition lacked merit and was dismissed.

Issues: Dispute over payment for goods supplied, applicability of Section 36 of the Arbitration and Conciliation Act, 1996, in light of the Micro Small and Medium Enterprises Development Act, 2006.

Ratio Decidendi: The court held that the award could be executed anywhere in the country where such a decree could be executed, and there was no requirement for obtaining a transfer of the decree from the court which would have jurisdiction over the arbitral proceedings.

Final Decision: The writ petition lacked merit and was dismissed.

JUDGMENT :

SIDDHARTHA VARMA, J.

1. Learned counsel for the parties have filed their written arguments.

2. A dispute arose between the petitioner and the respondent no. 2 regarding payment for some goods supplied by the respondent no. 2 to the petitioner. From the record of the case it appears that the respondent no. 1 that is the U.P. State Micro and Small Enterprises Facilitation Council, U.P. Kanpur entertained the dispute between the petitioner and the respondent no. 2 and ultimately an award was drawn on 11.5.2015 which was signed on 21.6.2015 and as per the award the respondent no. 2, (the petitioner before the U.P. State Micro and Small Enterprises Facilitation Facilitation Council) was entitled to get an amount of Rs. 19,86,951/- alongwith interest. The amount payable to the respondent no. 2 on the date of the award was Rs. 36,04,777/-. It was further provided that interest would be leviable till the entire payment was made. When this amount, it appears, was not being paid by the petitioner, the respondent no. 2 filed an application for executing the award before the District Judge, Faridabad. This application was filed under Section 36 of the Arbitration and Conciliation Act, 1996. The petitioner who was the Judgment Debtor had appeared before the executing court and the execution proceedings had started. This writ petition, thereafter, during the continuation of the execution proceedings, was filed saying that as only the provisions of Sections 65 to 81 of the Arbitration and Conciliation Act 1996 had been made applicable by Section 18 (2) of the Micro Small and Medium Enterprises Development Act, 2006, the provisions of Section 36 were not applicable and the Execution Case was not maintainable. Since the learned counsel for the petitioner readout Section 18 (2) of the Micro Small and Medium Enterprises Development Act, the same is being reproduced here as under:-

    "18. Reference to Micro and Small Enterprises Facilitation Council:-(2) On receipt of a reference under sub-section (1), the Council shall either itself conduct conciliation in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution or centre, for conducting conciliation and the provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996, shall apply to such a dispute as if the conciliation was initiated under Part III of that Act "

3. Further learned counsel for the petitioner stated that even if the Arbitration and Conciliation Act 1996 was applicable then as per Section 42 of that Act the Court which had jurisdiction over the Arbitration proceedings alone would have the jurisdiction to deal with the execution etc. of the award.

4. Learned counsel for the petitioner still further argued that under no circumstances would the award which was in the shape of a decree be executed by the Court at Faridabad. In this regard, learned counsel for the petitioner relied upon (Computer Sciences Corporation India Pvt. Ltd. v. Harishchandra Lodwal and Anr., (2006) AIR M.P. 34) and stated that it would have been proper had the execution been filed at Kanpur and thereafter it would have been transferred to some other Court. But, he stated, it could not have been filed at Faridabad.

5. Learned counsel for the respondents, in reply, however, submitted that though Section 18 (2) of the Micro Small and Medium Enterprises Development Act, 2006, had applied Sections 65 to 81 for the purposes of conciliation, arbitration had to take place as per the Section 18 (3) of the Micro Small and Medium Enterprises, Development Act. The council under the Act could either itself settle the dispute by arbitration or could refer a given dispute to any institution or centre for arbitration. For arbitration the provisions of the Arbitration and Conciliation Act 1996 had to apply as if the Arbitration was in pursuance of an arbitration agreement referred to under Section 7(1) of the Ar

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