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IN THE HIGH COURT OF MADHYA PRADESH
Sujoy Paul, J.
Sasan Power Limited, Singrauli v. Madhya Pradesh Micro
and Small Enterprise Facilitation Council & Another
Writ Petition No. 8963 of 2020 (Jabalpur); Decided on 31.12.2020
(1) Constitution of India -- Arts. 226 and 227 -- scope -- orders impugned suffer from patent lack of inherent jurisdiction or manifest procedural impropriety or palpable perversity -- interference can be made -- another view possible -- not ground for interference -- Court not required to sit in appeal and reweigh/reappreciate entire material at this stage. (2010) 8 SCC 329 followed. [Para 28]
(2) Micro, Small and Medium Enterprises Development Act, 2006 -- Ss. 17 and 18 -- M.P. Micro and Small Enterprises Facilitation Council Rules, 2017 -- R. 7 -- reference to Council -- jurisdiction of Council -- Act is a beneficent legislation -- statute of this nature must be given liberal and wide construction -- use of words "any party"in S. 18 (1) -- makes it very wide -- any affected party "in relation to any amount due" may make reference to Council -- Act does not intend to deprive small enterprise from benefit of filing reference -- "any party" means party in whose favour amount based on goods supplied or services rendered is due -- "any party" is relatable to said dues -- cannot be restricted to party who has filed memorandum u/s. 8 - text and context,both are equally important. (1977) 2 SCC 256 and (2013) 3 SCC 489 followed. [Para 31]
(3) Interpretation of Statute -- interpretation of statute depends on text and context -- first it must be ascertained as to why statute was enacted -- statute should be read as whole, in its context and scheme, to discover what each section, each clause, each phrase and each word is meant and designed to say,so as to fit into scheme of entire Act. (1987) 1 SCC 424 followed. [Para 31]
(4) Micro, Small and Medium Enterprises Development Act, 2006 -- S. 18 -- interpretation -- S. 18 is a remedial provision - general principle in construing remedial statute -- Courts ought to give to it "widest operation which its language will permit". (12th Ed. 2010) by on. [Para 31]
(5) Micro, Small and Medium Enterprises Development Act, 2006 -- Ss. 18 and 8 -- requirement of memorandum u/s. 8 -- scheme of Act does not preclude enterprisefrom redressal forum merely because said enterprise has not filed memorandum u/s. 8. W.P. No. 35872 of 2012 (AP) relied on. 2018 SCC Online Bom. 4542 referred to. [Para 32]
(6) Constitution of India -- Arts. 226 and 227 -- Micro, Small and Medium Enterprises Development Act, 2006 -- S. 18 -- scope of writ jurisdiction -- view taken by MPMSE Facilitation Council in consonance with view taken by certain High Courts -- cannot be treated as view not plausible -- such plausible view cannot be subject matter of challenge under Art. 226/227. (2003) 6 SCC 564, (2005) 8 SCC 618, (2014) 7 SCC 255, 2019 SCC Online SC 1154, SLP (Civil) No. 8482 of 2020, 2019 SCC Online SC 1602, 2005 SCC Online Jhar. 66, 2017 (2) MPLJ 77 and 2017 (3) MPLJ 600 discussed. [Paras 33 & 42]
(7) Micro, Small and Medium Enterprises Development Act, 2006 -- S.18 (3) -- conciliation conducted by Council itself -- challenged -- it will be open for Council to proceed with arbitration proceedings by excluding Government Member as member of arbitral body or to refer matter to any other institute orcentre providing alternative dispute resolution service. 2018 SCC Online SC 3147, 2018 SCC Online Bom. 11003, W.P. No. 9485 of 2017 (Karn.) and 2019 SCC Online Guj. 2474 discussed. (1998) 8 SCC 1, 2019 SCC Online SC 1602, AIR 1962 SC 1999, (2005) 7 SCC 791 and W.P. (Civil) No. 5004 of 2017 & C.M. No. 21615 of 2017 (Delhi) referred to. [Para 42]
¼1½ Hkkjr dk lafo/kku & vuqPNsn 226 rFkk 227 & O;kfIr & vkf{kIr vkns'k varfuZfgr vf/kdkfjrk ds ÁR;{k vHkko vFkok ÁdV ÁfØ;k laca/kh vukSfpR; vFkok Li"Vxkspj foi;ZLrrk ls xzLr & gLr{ksi fd;k tk ldrk gS & ,d vU; n`f"Vdks.k laHko & gLr{ksi dk vk/kkj ugha & bl ÁØe ij U;k;ky; dk vihy esa cSBuk vkSj laiw.kZ lkexzh ij iqufoZpkj@iquewZY;kadu djuk vis{kr ughaA ¼2010½ 8 ,l lh lh 329 vuqlfjrA ¼iSjk 28½
¼2½ lw{e] y?kq vkSj e/;e m|e fodkl vf/kfu;e] 2006 & /kkjk 17 rFkk 18 & e/; Áns'k lw{e vkSj y?kq m|e lqfo/kk ifj"kn~ fu;e] 2017 & fuŒ 7 ifj"kn~ dks funsZ'k & ifj"kn~ dh vf/kdkfjrk & vf/kfu;e midkjh fo/kku gS & bl ÁÑfr ds dkuwu dk mnkj vkSj foLr`r vFkkZUo;u fd;k gh tkuk pkfg, & /kkjk 18¼1½ esa 'kCn ^^dksbZ i{kdkj** dk mi;ksx & mls cgqr foLr`r cukrk gS & dksbZ Hkh ÁHkkfor i{kdkj ^^ns; fdlh jde ds laca/k esa** ifj"kn~ dks funsZ'k dj ldrk gS & vf/kfu;e dk vk'k; y?kq m|e dks funsZ'k Qkby djus ds Qk;ns ls oafpr djus dk ugha & ^^dksbZ i{kdkj** ls og i{kdkj rkRif;Zr gS ftlds i{k esa Ánk; fd, x, eky ;k nh xbZ lsok ds vk/kkj ij jde ns; gS & ^^dksbZ i{kdkj** mDr ns; ls laca/kuh; gS & ml i{kdkj rd lhfer ugha fd;k tk ldrk ftlus èkkjk 8 ds v/khu Kkiu Qkby fd;k gS & ikB vkSj lanHkZ] nksuksa lekur% egRoiw.kZ gSaA ¼1977½ 2 ,l lh lh 256 rFkk ¼2013½ 3 ,l lh lh 489 vuqlfjrA ¼iSjk 31½
¼3½ fof/k dk fuoZpu & dkuwu dk fuoZpu mlds ikB rFkk lanHkZ ij fuHkZj djrk gS & ÁFker% ;g vfHkfuf'pr fd;k tkuk vko';d gS fd dkuwu D;ksa vfèkfu;fer fd;k x;k & ;g irk yxkus ds fy, fd ÁR;sd /kkjk] ÁR;sd [kaM] ÁR;sd okD;ka'k rFkk ÁR;sd 'kCn }kjk D;k dgk tkuk vk'kf;r vkSj vfHkdfYir gS] dkuwu dk iBu lexz :i ls] mlds lanHkZ vkSj ;kstuk dh i`"BHkwfe esa] fd;k tkuk pkfg, rkfd og laiw.kZ vf/kfu;e dh ;kstuk ds vuq:i gksA ¼1987½ 1 ,l lh lh 424 vuqlfjrA ¼iSjk 31½
¼4½ lw{e] y?kq vkSj e/;e m|e fodkl vf/kfu;e] 2006 & /kkjk 18 & fuoZpu & /kkjk 18 & mipkjh mica/k gS & mipkjh dkuwu dk vFkkZUo;u djus dk lkèkkj.k fl)kar & U;k;ky; dks mls ^^og O;kidre ÁorZu nsuk pkfg, ftldh vuqefr mldh Hkk"kk nsrh gks**A U;kŒ thŒihŒ flag Ñr fÁfUliy vkWQ LVSP;qVjh bUVjfÁVs'ku ¼}kn'k laLdj.k 2020½ voyafcrA ¼iSjk 31½
¼5½ lw{e] y?kq vkSj e/;e m|e fodkl vf/kfu;e] 2006 & /kkjk 18 rFkk 8 & /kkjk 8 ds v/khu Kkiu dh vis{kk & vf/kfu;e dh ;kstuk m|e dks Áfrrks"k.k Qksje ls ek= blfy, Áokfjr ugha djrh fd mDr m|e us /kkjk 8 ds v/khu Kkiu Qkby ugha fd;kA fjV ;kfpdk Øekad 35872 lu~ 2012 ¼vka/k Áns'k½ voyafcrA 2018 ,l lh lh vkWuykbu cacbZ 4542 fufnZ"VA ¼iSjk 32½
¼6½ Hkkjr dk lafo/kku & vuqPNsn 226 rFkk 227 & lw{e] y?kq vkSj e/;e m|e fodkl vf/kfu;e] 2006 & /kkjk 18 & fjV vf/kdkfjrk dh O;kfIr & ,eŒihŒ,eŒ,lŒbZŒ lqfo/kk ifj"kn~ }kjk viuk;k x;k n`f"Vdks.k dqN mPp U;k;ky;ksa }kjk viuk, x, n`f"Vdks.k ds vuq:i & ,slk n`f"Vdks.k ugha ekuk tk ldrk tks laHkkO; ugha & ,slk laHkkO; n`f"Vdks.k vuqPNsn 226@227 ds v/khu vk{ksi dk fo"k; ugha gks ldrkA ¼2003½ 6 ,l lh lh 564] ¼2005½ 8 ,l lh lh 618] ¼2014½ 7 ,l lh lh 255] 2019 ,l lh lh vkWuykbu ,l lh 1154] fo'ks"k btktr ;kfpdk flfoy½ Øekad 8482 lu~ 2020] 2019 ,l lh lh vkWuykbu ,l lh 1602] 2005 ,l lh lh vkWuykbu >kjŒ 66 2017 ¼2½ ,e ih ,y ts 77 rFkk 2017 ¼3½ ,e ih ,y ts 600 foosfprA ¼iSjk 33 ,oa 42½
¼7½ lw{e] y?kq vkSj e/;e m|e fodkl vf/kfu;e] 2006 & /kkjk 18¼3½ & lqyg Lo;a ifj"kn~ }kjk djkbZ xbZ & vk{ksfir & ifj"kn~ ek/;LFke~ fudk; ds lnL; ds :i esa ljdkjh lnL; dks vioftZr djrs gq, e/;LFkrk dk;Zokgh vkxs c<+k ldsxh vFkok vkuqdfYid fookn Áfrrks"k.k lsok Ánku djus okys fdlh vU; laLFkku ;k dsUæ dks ekeyk fufnZ"V dj ldsxhA 2018 ,l lh lh vkWuykbu ,l lh 3147] 2018 ,l lh lh vkWuykbu cacbZ 11003] fjV ;kfpdk Øekad 9485 lu~ 2017 ¼dukZVd½ rFkk 2019 ,l lh lh vkWuykbu xqtjkr 2474 foosfprA ¼1998½ 8 ,l lh lh 1] 2019 ,l lh lh vkWuykbu ,l lh 1602] , vkb vkj 1962 ,l lh 1999] ¼2005½ 7 ,l lh lh 791 rFkk fjV ;kfpdk ¼flfoy½ Øekad 5004 lu~ 2017 ,oa lhŒ,eŒ Øekad 21615 lu~ 2017 ¼fnYyh½ fufnZ"VA ¼iSjk 42½
ORDER
1. This petition filed under Article 226 of the Constitution assails the order dated 17.5.2019 Annexure P/3A, order dated 9.6.2020 (Annexure P/14) and other subsequent order passed by Respondent No.1.
FACTUAL BACKGROUND :-
2. Briefly stated, the petitioner is a Company incorporated under the provisions of the Companies Act 1956. The petitioner has set up a 3,960 MW Ultra Micro Power Project (UMPP) alongwith an Integrated Captive Coal Mines to meet the coal requirement of the said UMPP in District Singrauli, Madhya Pradesh. The project is generating and supplying electricity to various distribution companies of various States.
3. Respondent No.1 is a statutory body constituted under the provisions of Micro Small and Medium Enterprises Development Act, 2006 (Act of 2006) and the respondent No. 2 is a Company incorporated under the provisions of Companies Act. As per petitioner’s case, respondent No. 2 is having its registered office at Raipur, Chhattisgarh. This Company is primarily involved in the business of manufacturing and supplying industrial explosives.
4. The petitioner awarded certain rate contracts since November, 2011 till 2018 to respondent No. 2 for supply of explosives and accessories to carry out blasting activities to extract coal from its captive coal mines which is used for generation of electricity at its power plant. The petitioner’s case is that at the time of registration of respondent as Wander, the petitioner was intimated by it that respondent No. 2 is neither registered as a Micro Small and Medium Enterprises (MSME) nor as a Small Scale Industry (SSI).
5. The respondent No. 2 sent a legal notice dated 19.12.2018 Annexure P/1 demanding an amount of Rs. 9,77,07,857/-. Petitioner was called upon to clear the said amount alongwith penal interest. The petitioner contends that while sending this legal notice, the respondent No.2 did not inform the petitioner that it is registered as a small enterprise. Had it been registered under the Act of 2006, it would not have agreed for 90 days payment terms and contractual arbitration alongwith other terms of contract with the petitioner.
6. The petitioner, in turn, replied the legal notice on 31.12.2018 Annexure P/2. The petitioner stated that respondent No.2 had committed fraud in supply of material.
7. The respondent No.1 sent a notice dated 17.5.2019 to the petitioner intimating him that a Reference Petition under section 18 of the Act of 2006 has been preferred by respondent No. 2 for recovery of an outstanding amount of Rs. 32,65,71,556/- and Rs. 8,28,56,525/- as interest; total amounting to Rs. 40,94,28,081/-. The allegation of respondent No.2 in his claim submitted before respondent No.1 in statutory form was that he had supplied goods (explosives) to petitioner but petitioner has not made the payments.
8. Upon receiving the said notice dated 17.5.2019 from respondent No.1, petitioner entered appearance before respondent No.1 and took preliminary objection dated 30.5.2019 Annexure P/4. The petitioner raised objection regarding jurisdiction of respondent No.1.
PETITIONER’S CONTENTIONS:-
9. Shri Naman Nagrath, learned senior counsel assisted by Shri Alok Hoonka, Advocate urged that the respondent No.1 ignoring the fact that Reference Petition was not maintainable, passed the order dated 5.7.2019 Annexure P/5 wherein it was held that parties have failed to settle their dispute amicably, therefore, conciliation proceedings are closed and matter is now referred for arbitration. The respondent No.1 itself decided to act as an Arbitrator. The petitioner again submitted an objection before respondent No.1 on 10.7.2019 Annexure P/6 reiterating its stand that Reference Petition was not maintainable for want of jurisdiction. The Reference deserves to be dismissed under rule 7 of MP Micro & Small Enterprises Rules, 2017 (Rules of 2017). The claim of respondent No.2 on merits was also disputed by contending that it was not covered under Chapter V of the Act of 2006.
10.
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