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2024 Supreme(Telangana) 1173
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
P. SAM KOSHY, J.
K12 Techno Services Pvt. Ltd. - Appellant
Versus
Brahma Teja Paper Products - Respondent
CRP Nos.3136 and 3162 of 2024
Decided on : 18-10-2024
For the Appellant : P. Gautham Rao
Issues of maintainability, especially regarding limitation, must be resolved before proceeding to merits in arbitration processes.
Headnote:(A) Constitution of India - Article 227 - Arbitration and Conciliation Act, 1996 - Micro, Small and Medium Enterprises Development Act, 2006 - Limitation - The petitioner challenges an order by the MSEFC allowing determination of limitation issues alongside merits, despite objections regarding jurisdiction affecting the claimant’s claim. (Paras 3, 5, 8, 10)
(B) Limitation Issues - The court emphasizes that any procedural objections, including those related to limitation, must be resolved prior to merit-based determinations. (Paras 10, 11)
Facts of the case:
The petitioner filed Civil Revision Petitions against the MSEFC's order that allowed a claim of limitation to be decided while deciding the merits of the case, which the petitioner argued should have been addressed first.
Findings of Court:
The court confirmed that whilst the MSEFC could address the issue of limitation in relation to the merits, it should prioritize such issues when raised.
Issues: The main issue is whether the MSEFC should have decided the limitation objection before proceeding to consider the merits of the claim.
Ratio Decidendi: The court held that issues of maintainability, particularly those regarding limitation, should be determined first before any merit-based analysis takes place.
Result: Civil Revision Petitions stand disposed of.
| Table of Content |
|---|
| 1. review of the msefc's order regarding limitation. (Para 3 , 4 , 5 , 6) |
| 2. petitioner's argument on applicability of limitation act. (Para 7 , 8) |
| 3. court's assessment of msefc's decision-making process. (Para 9 , 10) |
| 4. mandate to prioritize limitation issues. (Para 11) |
| 5. disposal of civil revision petitions with directive. (Para 12 , 13) |
ORDER :
P. SAM KOSHY, J.
Since the issue in the Revisions is one and the same, they are being disposed of by this Common Order.
2. Heard Mr.Vikram Pooserla, learned Senior Counsel appearing on behalf of Mr. P. Gautham Rao, learned counsel for the petitioner.
3. The instant Civil Revision Petitions are filed by the petitioner under Article 227 of the Constitution of India challenging the Common Order dated 15.06.2024 in Case No.Ref.No.235/MSEFC/2019 & Ref.No.237/MSEFC/2019 passed by the Micro and Small Enterprises Facilitation Council (for short, ‘the MSEFC’) under Section 16 of the Arbitration and Conciliation Act, 1996 (for short, ‘the impugned order’).
4. For convenience, the facts in Civil Revision Petition No.3136 of 2024 are discussed hereunder.
5. The challenge in the instant Revision is primarily to the order that was passed on 15.06.2024 to the extent that the MSEFC has, on a petition raised by the petitioner, so far as the claim of the claimant being barred by limitation was ordered to be decided while deciding the claim on merits.
6. For ready reference, the relevant portion of the order passed by the MSEFC is reproduced as under :
“… … …
3. The Facilitation Council shall continue Arbitration Proceedings and give Final Award on Merits as per provisions of MSMED Act, 2006. Jurisdictional issues raised by parties will be determined based on facts established during Arbitration and will be part of Final Award.”
7. Learned Senior Counsel appearing on behalf of the petitioner submitted that in view of the decision of the Hon’ble Apex Court in the case of Silpi Industries and others vs. Kerala State Road Transport Corporation and another, the provisions of Limitation Act, 1963 applies on the Micro, Small and Medium Enterprises Development Act, 2006 as well. According to him, in terms of the revised Rules of the TELANGANA STATE MICRO AND SMALL ENTERPRISES FACILITATION COUNCIL RULES , 2017, Rule 10(3) thereof prescribes that the Council shall not enter upon the merits of the subject matter in dispute till it has decided on any challenge to jurisdiction or any challenge to any of its members. According to him, since the petitioner has already raised categorical objection in respect of the claimant’s claim being barred by limitation, the Council ought to have decided the said issue at the threshold, and only in the event of the said issue being decided against the petitioner, would there be a necessity for entering into the merits of the case and decide the issue.
8. In support of his contentions, learned Senior Counsel for the petitioner relied on the decisions of the Hon’ble Apex Court in the case of Kvaerner Cementation India Limited vs. Bajrangalal Agarwal and another ,
9. In the teeth of the observations made in the various catena of decisions referred supra and taking into consideration the impugned decision by the MSEFC, this Court does not find illegality on the part of the said MSEFC in holding that the issue on limitation raised by the respondent to be also decided while deciding the claimant’s claim on merits.
10. However, this Court, at this juncture, would like to make an observation that when issues touching the sustainability or maintainability of the claim is raised and even if the Council decides the said issue
