IN THE HIGH COURT OF MADHYA PRADESH
Sheel Nagu, Maninder S. Bhatti, JJ.
M/s.Ujas Associates – Appellant
Versus
M/s. Kjs Cement (India) Limited – Respondent
Arbitration Appeal No. 18 of 2021
Decided On : 20-06-2022
Arbitration and Conciliation Act - Construction Contract - 2(e) of the Act of 1996, 5, 9 - The court discussed the applicability of the Arbitration and Conciliation Act, 1996 and the Micro, Small and Medium Enterprises Development Act, 2006. It highlighted the provisions of Section 9 of the Act of 1996 and its relation to the stage of applicability as per Section 18(3) of the MS & ME Act. The court concluded that the application filed under Section 9 was premature and not maintainable at the current stage.
Fact of the Case:
The case involved a dispute between the appellant and respondent regarding a construction contract for a Cement Mill/Grinding Unit. The appellant, a supplier under the Micro, Small and Medium Enterprises Development Act, 2006, filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim measures for the return of machinery and equipment from the respondent's premises.
Finding of the Court:
The court found that the application filed under Section 9 was premature and not maintainable at the current stage as the conciliation proceedings under Section 18(2) of the MS & ME Act were still pending. The court refrained from interfering with the order passed by the lower court and dismissed the appeal.
Issues: The main issue was the applicability of Section 9 of the Act of 1996 and its relation to the stage of applicability as per Section 18(3) of the MS & ME Act.
Ratio Decidendi: The court held that the application filed under Section 9 was premature and not maintainable at the current stage as the stage of applicability of the Act of 1996, including Section 9, had not been reached.
Final Decision: The court dismissed the appeal, upholding the lower court's decision that the application filed under Section 9 was premature and there existed an alternative remedy for redressal of the appellant's grievance.
ORDER
1. In the instant appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act of 1996 for the sake of brevity), the appellant challenges the order dated 08/04/2021 (Annexure P/1) passed by the IXth Additional District Judge, Rewa in MJC/AV 31/2021 wherein the application moved by the present appellant under Section 9 of the Act of 1996 has been rejected.
2. The factual matrix of the case setforth the relation-ship between the appellant and respondent in respect of contract pertaining to construction of Cement Mill/Grinding Unit. The appellant having its registration with Ministry of Micro, Small and Medium Enterprises, Government of India vide Udgyo Adhar No.MP 40 D 0005844 carrying the business in the name of Ujas Associates. The respondent is a company duly registered under the provisions of Companies Act, 1956, and its factory is located at village Amiliya, District Satna.
2.1 The petitioner and respondent were in transaction with regard to construction of Cement Mill Unit/Grinding Unit on the oral instructions of Vice Chairman cum Managing Director of the respondent's company. The petitioner by claiming itself to be a supplier within the meaning of Micro, Small and Medium Enterprises Development Act, 2006 since there was non payment of dues, approached the Council constituted under the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as MS & ME Act for the sake of brevity). The petitioner submits that he was issued a purchase order on 29/02/2020, but no agreement was executed containing terms and conditions for carrying out the construction work of Cement Mill Unit/Grinding Unit. However the petitioner submits that there are ample documents on the record to show the performance of work by the petitioner and the measurement by the respondents of the work carried out by the petitioner and also the documents pertaining to the non payment of the running bill. Thus, petitioner submits that without there being any written agreement, there was a contract for construction of Cement Mill Unit/Grinding Unit which the petitioner carried out and the petitioner claimed payment arising out of the said work which was executed by the present petitioner. However, certain disputes crept in between the appellant and respondent and resultantly, initially the appellant approached Facilitation Council constituted under the MS & ME Act, 2006 by initiating the proceedings of conciliation.
2.2 During the pendency of conciliation proceedings, the present appellant filed an application under Section 9 of the Act of 1996 before the Court below, with a prayer that during the course of execution of work, his machineries and other equipments which were detailed in document No.10 appended to the aforesaid application, lying in the premises of the respondent be handed over to the present appellant. Alternatively, it was prayed that the said articles be delivered to the appellant after appointment of a Commissioner.
3. Respondent opposed the application which was moved by the present petitioner while submitting inter alia that there was a purchase order dated 29/02/2020, which lost its efficacy inasmuch as the same was not accepted by the present petitioner. It is further stated in the reply of the respondent that the respondent did not restrain the petitioner from taking back any of the machinery or equipments which were brought within the premises of the respondents. The respondent further submit in the reply that since there is no agreement between the petitioner and respondent, the application under Section 9 of the Act of 1996 being misconceived was not maintainable.
4. The Court below after hearing the rival parties, vide order impugned dated 08/04/2021 has dismissed the application.
5. The order dated 08/04/2021 is being assailed in the instant appeal which has been moved under Section 37 of the Act of 1996. Learned counsel for the appellant submits that the commercial
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