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2021 Supreme(Telangana) 107

IN THE HIGH COURT OF STATE OF TELANGANA
A. ABHISHEK REDDY, J.
Hamilton Medical AG - Appellant
Versus
The Micro Small Medium Enterprises and Ors. - Respondents
Writ Petition No. 21623 of 2020
Decided On : 20-04-2021

Advocates Appeared:
For the Appellant :Rubaina S. Khatoon, Advocate.
For the Respondents:V. Hari Haran, Advocate.

Point of law: Where the Courts lack the inherent jurisdiction to try a particular case, they cannot act beyond the said powers or at the behest of the party and have to necessarily reject the application at the threshold

Headnote:

Constitution of India,1950 - Article 226 - MSME Act - Section 18(4) - Arbitrator or Conciliator - Petitioner-Company terminated the Consulting Agreement - Impugned Intimation-cum-Notice - Petitioner is a Company registered under the laws of Switzerland, having its office Switzerland and is a manufacturer and supplier of critical care ventilation solutions for a variety of patient segments, applications and environments across the world - Petitioner-Company does not have any factory within India and therefore, is in process of setting up a domestic private limited company - Facilitate the installation of the equipment of the petitioners and undertake related ancillary work - It also supplies the equipment to its distributors who supply to the customers in private and Government sectors No.2 herein, a partnership firm, which provides consultancy services, approached the petitioner-Company and requested to be associated with the Company in implementation of their projects in India - tender by offering its bid through its authorized local agent, M/s. Medelec Health Care Solutions - Eventually, the tender was awarded in favour of Medelec Solutions –

Finding of the court : Where an express power under the statute has been provided, the same has to be read in manner provided and the language employed therein. A plain reading of Section 18(4) of the MSME Act makes it manifestly clear that the respondent No. 1 will have jurisdiction only to try the case "in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India" and not otherwise - notices issued by the said authority do not have any legal sanctity and have to be set aside - Argument of the learned Counsel appearing for respondent No. 2 that the petitioner can raise all questions with regard to jurisdiction aspect before respondent No. 1 cannot be countenanced. The documents filed by the parties reveal that the respondent No. 1 does not have the jurisdiction or the authority to issue notices to petitioner, which is located outside India and respondent No. 1 apparently lacks the inherent jurisdiction to try the case and therefore, on this ground alone –

Result :Writ petition is allowed

ORDER :

A. Abhishek Reddy, J.

1. This writ petition is filed by M/s. Hamilton Medical AG, seeking to set aside the Intimation-cum-Notice, dated 22.10.2020 (received through mail), the Notice, dated 04.11.2020 (received through mail, dated 18.11.2020); and Notice, dated 12.11.2020 (received through email, dated 23.11.2020) having reference No. 1581/MSEFC/2020 issued by the respondent No. 1 with reference to the application being UDYAM-TS-02-0002716/M/00001 filed by the respondent No.1 and to stay all consequential proceedings emanating therefrom.

2. The petitioner is a Company registered under the laws of Switzerland, having its office at Bonaduz, Switzerland and is a manufacturer and supplier of critical care ventilation solutions for a variety of patient segments, applications and environments across the world. The petitioner-Company does not have any factory within India and therefore, is in the process of setting up a domestic private limited company. The Company has its own consultants, engaged in India, who facilitate the installation of the equipment of the petitioners and undertake related ancillary work. It also supplies the equipment to its distributors who supply to the customers in the private and Government sectors. In August-September, 2018, M/s. Vaishno Enterprises, respondent No.2 herein, a partnership firm, which provides consultancy services, approached the petitioner-Company and requested to be associated with the Company in implementation of their projects in India. While so, HLL Infra Tech Services Limited, a Nodal Agency of Government of India, had floated a tender, dated 20.08.2018 to purchase/procure 1186 high end ventilators and other medical equipment to be supplied to various hospitals/medical colleges/departments across India. The petitioner has participated in the said tender by offering its bid through its authorized local agent, M/s. Medelec Health Care Solutions ('Medelec Solutions'). Eventually, the tender was awarded in favour of Medelec Solutions. Upon sudden resignation of Senior Consultants of petitioner-Company, the respondent No.2 contacted the petitioner-Company through email and offered their services. After negotiations, the petitioner and the respondent No.2 entered into a Consulting Agreement on 10.02.2020, with a restricted term of six months, agreeing that the respondent No. 2 would act as a consultant for the petitioner-Company and handle such issues as per the terms and conditions of the agreement, dated 10.02.2020. Immediately thereafter, the respondent No. 2 had raised various invoices, dated 11.02.2020, 11.04.2020 and 15.05.2020 claiming certain amounts. Even though the respondent No. 2 is not eligible to claim those amounts, the petitioner-Company, in good faith, paid the excessive amount as raised in Invoice Nos.1 and 4 on 05.05.2020 and 17.06.2020 respectively, as supply was being maintained and LCs were being opened in a rush due to pandemic crisis. Again, the respondent No.2 raised Invoice No.5 on 22.06.2020 for an amount of USD 7,11,845.00. As there was no basis for raising of invoices, the petitioner through email dated 24.08.2020 informed the respondent No.2 that the invoices will be cleared in due course and asked the firm to perform its obligations and to supply the equipments to meet the huge demand. The Consulting Agreement dated 10.02.2020 expired on 10.08.2020. However, as the petitioner-Company is in need of services of respondent No.2 to meet the demand, a fresh Consulting Agreement was entered with the respondent No.2 on 24.08.2020 for a period of six months. Subsequently, as there was no help and assistance for the transportation, installations, demonstration of ventilators from the respondent No.2, the petitioner-Company had to involve other companies to ensure smooth supply of equipments. The respondent No. 2, thereafter, started to threaten the petitioner-Company in order to extort money and started to send warning emails to various members of the Board and th

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