MADRAS HIGH COURT
N. Kirubakaran, J
Prime Technologies and Others v. Hamsa Watch Glass Pvt. Ltd. Chennai
Original Side Appeal
| Table of Content |
|---|
| 1. award execution under the msme act. (Para 1) |
| 2. mandatory conciliation procedures. (Para 2 , 4) |
| 3. limits of execution court's authority. (Para 3 , 5 , 6) |
| 4. dismissal of the original side appeal. (Para 7) |
1. An award has been passed under the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter called ''the said Act'') dated 29.04.2011. The appellant chose not to file any objections qua the award and it is at the stage of execution that a plea is sought to be raised that the award is not executable being a nullity. The procedure prescribed in respect of the awards passed under S.18 and S.19 of Chapter - V of the said Act reads as under:
"18. Reference to Micro and Small Enterprises Facilitation Council -- (1) Notwithstanding anything contained in any other law for the time being in force, any party to a dispute may, with regard to any amount due under S.17, make a reference to the Micro and Small Enterprises Facilitation Council.
(2) On receipt of a reference under sub-section (1), the Council shall either itself conduct conciliation in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution or centre, for conducting conciliation and the provisions of S.65 to 81 of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to such a dispute as if the conciliation was initiated under Part III of that Act.
(3) Where the conciliation initiated under sub-section (2) is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer it to any institution or centre providing alternate dispute resolution services of such arbitration and the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then apply to the disputes as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section (1) of S.7 of that Act.
(4) Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India.
(5) Every reference made under this section shall be decided within a period of ninety days from the date of making such reference.
19. Application for setting aside decree, award or order - No application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate dispute resolution services to which a reference is made by the Council, shall be entertained by any Court unless the appellant (not being a supplier) has deposited with it seventy - five per cent of the amount in terms of the decree, award or, as the case may be, the other order in the manner directed by such Court:
Provided that pending disposal of the application to set aside the decree, award or order, the Court shall order that such percentage of the amount deposited shall be paid to the supplier, as it considers reasonable under the circumstances of the case, subject to such conditions as it deems necessary to impose.''
2. Learned counsel for the appellant contends that sub-section (1) of S.18 of the said Act only envisages reference and the award has to be made under sub-section (3) and thus, the award which purports to be under sub-section (1) is erroneous.
3. In our view, this is at best, a typographical / technical error as it is quite obvious that an award can only be made under sub-section (3).
4. The real bone of contention is that under sub-section (2), on receipt of reference, conciliation proceedings should be held, the failure of which gives rise to Arbitration proceedings. The allegation is that no conciliation procee
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