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2024 Supreme(Online)(MP) 13968
HIGH COURT OF MADHYA PRADESH
JUSTICE VIVEK RUSIA, JUSTICE BINOD KUMAR DWIVEDI, JJ
Gannon Dunkerley And Co. Limited Through Authorized Signatory Ramesh Mishra – Appellant
Versus
Micro And Small Enterprises Facilitation Council – Respondent
WA 478/2024
(Dr.) Manohar Lal Dalal,
The MSME Act applies to both goods and services, and a writ petition is not maintainable when an alternative statutory remedy exists.
Headnote:(A) Micro, Small and Medium Enterprises Development Act, 2006 - Sections 17 and 19 - Arbitration and Conciliation Act, 1996 - Section 34 - Jurisdiction of Facilitation Council - Writ petition dismissed for lack of maintainability as the appellant had an alternative remedy under the MSME Act and Arbitration Act - The provisions of the MSME Act apply to both goods supplied and services rendered, ensuring timely payment to small enterprises. (Paras 9, 11, 12, 13)
(B) Jurisdiction - The High Court ruled that the appellant could not pursue a writ petition after opting for a remedy under the MSME Act, emphasizing the need to follow statutory procedures. (Paras 12, 13)
Facts of the case:
The appellant, a Public Limited Company, challenged the dismissal of its writ petition regarding a claim made by a subcontractor under the MSME Act for non-payment of dues. The Facilitation Council had awarded the subcontractor Rs.4,30,31,721/- which the appellant contested.
Findings of Court:
The court upheld the dismissal of the writ petition, affirming that the appellant had an adequate remedy under the MSME Act and could not bypass it by seeking relief through a writ.
Issues: The main issues were whether the appellant's contract fell under the MSME Act and the maintainability of the writ petition given the existence of alternative remedies.
Ratio Decidendi: The court concluded that the MSME Act applies to services rendered, and the appellant's failure to pursue the statutory remedy under the MSME Act rendered the writ petition non-maintainable.
Result: Appeals dismissed.
| Table of Content |
|---|
| 1. appellant is a public limited company (Para 3) |
| 2. work awarded for construction (Para 4) |
| 3. sub-contract awarded to respondent (Para 5) |
| 4. claim made by respondent under msme (Para 6) |
| 5. reliance on previous judgments (Para 7 , 8) |
| 6. provisions of msme act explained (Para 9 , 10) |
| 7. discussion on remedy under msme (Para 11) |
| 8. court agrees with high court (Para 12) |
| 9. both appeals dismissed (Para 13 , 14) |
ORDER
Per: Justice Vivek Rusia
Since the controversy involved in these cases is identical in nature, therefore, with the joint request of the parties, these appeals are finally heard and decided by this common order. For the sake of convenience, facts of Writ Appeal No.478 of 2024 are being taken for disposal of both these writ appeals.
02. Appellant/petitioner has filed this writ appeal challenging the order dated 09.01.2024, whereby the Writ Court has dismissed the Writ Petition No.30511 of 2023.
03. The writ petitioner/appellant is a Public Limited Company registered under the Companies Act engaged in the business of civil construction, mechanical and electrical work in all the major industries, building sector, infrastructure, sector in highways, railways, bridges/flyovers, water treatment etc.
04. The petitioner/appellant was awarded the work of construction of formation, bridges, buildings, two level crossings on existing tracks, supply of ballast along with associated signaling and general electrical works for the 3rd BG Railway Line between Barkheda (excluding) and Budhni (excluding) stations on Bhopal – Itarsi section in Bhopal Division of West Central Railway by Rail Vikas Nigam Limited. The work order for execution of the aforesaid construction was issued on 11.07.2018. Respondent No.2 is also a construction company engaged in the erection of Pre-engineered buildings, civil construction, false ceilings, fireproofing, hot and cold insulation and roads. Respondent No.2, is a registered enterprise under the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as “MSME Act”)
05. The petitioner/ appellant awarded a sub-contract to respondent No.2 in relation to the work of Midghat to Choka. The petitioner/appellant issued a letter of intent dated 21.12.2018 to respondent No.2 and thereafter, a contract dated 21.12.2018 was executed.
06. Respondent No.2 approached the Facilitation Council established under the MSME Act claiming inter alia sum of Rs.4,30,31,721/- along with interest under the head of non-payment of RA Bills, non-payment of retention money and interest from the petitioner/appellant. The petitioner/appellant appeared before the Facilitation Council objecting to the aforesaid claim on the ground that the contract in question is a work contract which does not clarify the contract for the sale and purchase or supply of goods or supply service, therefore, the provisions of the MSME Act do not attract. Learned Facilitation Council rejected the aforesaid objection and passed an award dated 07.07.2023 in favour of respondent No.2.
05. Being aggrieved by the aforesaid order, the appellant/writ petitioner preferred a writ petition before this Court. Respondent No.2 appeared in the writ petition objecting to the maintainability of the writ petition. Vide order dated 09.01.2024, the Writ Court dismissed the writ petition as not maintainable for want of remedy under Section 19 of the MSME Act read with Section 34 of the Arbitration and Conciliation Act, 1996 . Hence, this writ appeal before the Court.
06. Shri Amit Agrawal, learned senior counsel appearing for the appellant has argued at length to satisfy us that the MSME lacks jurisdiction to entertain another claim in respect of the works contract. Shri Agrawal learned senior counsel has pointed out certain conditions of the sub-contract awarded to respondent No.2 according to which no goods were supplied to appellant. Therefore, the petitioner does not come under the definition of a buyer.
07. Shri Agrawal learned senior counsel fur
