The MSME Act, 2006 prevails over the Arbitration Act, 1996 in disputes already addressed by the MSME Council.

ORDER

R.DEVDAS J., (ORAL):

The petitioner-company has filed this Civil Miscellaneous Petition under Sections 11 (5) and (6) of the Arbitration and Conciliation Act , 1996, with a prayer to appoint any one of the Arbitrators as per the Agreements dated 05.01.2022 and 15.01.2022 at Annexures-B1 and B2.

2. It is contended at the hands of the petitioner that respondent No.1 is a Partnership Firm of which respondent No.2 is the Managing Partner and the respondents approached the petitioner stating that they were appointed as the exclusive representatives of the online and offline publishing entities/individuals etc., and that they are highly capable of successfully executing the marketing projects on social media platforms. It is contended that based upon the representations made by the respondents the petitioner sought approvals from its clients to engage the services of the respondents for marketing, advertising and securing new user registrations for a digital currency platform/website on behalf of the petitioner. The parties entered into an agreement dated 05.01.2022. Under the agreement, the respondents were obligated to amplify a digital currency platform/website of the petitioner’s client on social media platforms by engaging the services of online publishing entities, social media influences etc., during the term of agreement.

3. It is contended that the respondents were obligated to secure 10,000 (Ten Thousand) new user activation via KYC registrations and a minimum deposit of Rs.100/- (Rupees One Hundred only) and a minimum investment of Rs.10/- (Rupees Ten only) per user on the website of a digital currency platform/ website via the weblinks provided at Annexure-A to the agreement. It was agreed that the petitioner shall pay the respondents a sum of Rs.500/- (Rupees Five Hundred Only) plus applicable GST for each activation.

4. It is stated in the memorandum of Civil Miscellaneous Petition that during the subsistence of the agreement dated 05.01.2022, the parties hereto agreed mutually to enhance the scope of work to be performed under agreement to secure an additional 25,000 (Twenty- Five Thousand) activations. It is contended that the parties entered into a subsequent agreement dated 15.01.2022 under the same terms and conditions as agreed upon in the agreement dated 05.01.2022.

5. Learned Counsel for the petitioner submits that the respondents filed an application before the Micro and Small Enterprises Facilitation Council, Zonal MSEFC, Khanpur, Uttar Pradesh in application No.:UDYAM-UP-43- 0032581/M/00002. It was claimed by the respondents that the respondents had raised Invoices No.184, 193, 196, 197, 201 dated 05.01.2022, 05.01.2022, 13.01.2022, 14.01.2022 and 19.01.2022, raising a claim for a sum of Rs.31,50,000/- (Rupees Thirty-one Lakhs Fifty Thousands only). It was contended that the petitioner herein failed to make the payment to the respondents within 45 days from the date of acceptance or the day of deemed acceptance as per the provisions of Section 15 of the Micro, Small and Medium Enterprises Development Act , 2006.

6. Learned counsel for the petitioner contends that the petitioner filed an objection including maintainability of the application on the ground that the respondent could not have approached the MSE Facilitation council; no privity of contract; petitioner is barred under the Partnership Act; relief claimed under unstamped/insufficiently stamped agreement etc. It was also contended that no part of the cause of action arose within the territorial jurisdiction of the Council and in terms of the agreement all disputes were required to be resolved by arbitration at Bangalore and the courts at Bangalore only. Learned coun