Himachal Pradesh High Court
Non vs M/S. Lanco Infratech Ltd Epc Division on 2 August, 2016
Author: Dharam Chand Chaudhary
Bench: Dharam Chand Chaudhary
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
.
Execution Petition No.7 of 2015 & OMP No. 255 of 2015.
Date of Decision: 2nd August, 2016.
____________________________________________________
M/s. Power Exponent
....Non-applicant/Petitioner-DH.
of
Versus
M/s. Lanco Infratech Ltd EPC Division.
rt ....Applicant/Respondent-JD.
Coram
Hon'ble Mr. Justice Dharam Chand Chaudhary, Judge.
Whether approved for reporting?1
For the petitioner-DH : Mr. Parmod Negi, Advocate.
For the applicant-JD : Mr. K.D. Sood, Senior Advocate, with
Mr. Sanjeev Sood and Ms. Ranjana
Chauhan, Advocates.
_______________________________________________________
Dharam Chand Chaudhary, J. (Oral).
Consequent upon the order (Award) Annexure A-1, this petition has been filed against the judgment debtor 1 Whether the reporters of Local Papers may be allowed to see the judgment? Yes.
::: Downloaded on - 15/04/2017 20:56:47 :::HCHP -2-for recovery of the decretal amount i.e. `30,79,474/-
together with interest `23,20,994/- total `54,00,468/- by .
issuance of warrant of attachment of moveable and immovable property of the JD and putting the same to auction. The JD, however, has filed objections to the execution petition and questioned the legality and validity of of the award sought to be executed on the grounds inter-alia that the same being without jurisdiction is nullity.
rt The provisions contained under Section 18 of the Micro, Small and Medium Enterprise Development Act, 2006 (hereinafter referred to as the 'Act' in short) have been pressed into service. Section 18 of the Act read as follows:
"Section 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 Section 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 ::: Downloaded on - 15/04/2017 20:56:47 :::HCHP -3- dispute resolution services by making a reference to such an institution or centre, for conducting .
conciliation and the provisions of Section 65 to 81 of the Arbitration and Conciliation Act, 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-
of section (2) is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for rt arbitration or refer to it any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of the Arbitration and Conciliation Act, 1996 shall ten apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section (1) of Section 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.
::: Downloaded on - 15/04/2017 20:56:47 :::HCHP -4-(5) Every reference made under this section shall be decided within a period of ninety days from .
the date of making such a reference."
2. It is seen that in the event of dispute having arisen between the supplier and buyer, it is the Micro and Small Enterprise Facilitation Council (MSEFC) to resolve the same of by way of trying conciliation between the parties and in the event of no settlement is arrived at, either to take the dispute rt itself for arbitration or refer it to an institution or centre providing alternate dispute resolution services for arbitration.
In the case in hand, the supplier M/s Power Exponent Motor Market, Berri, Tehsil Sadar, District Bilaspur/petitioner-DH herein has brought the dispute qua payment of `39,79,474/-
by the buyer Ms. Lanco Infratech Limited/respondent-JD herein to H.P. Micro and Small Facilitation Council, Udyog Bhawan, Bemloe, Shimla. The Council though forwarded the copy of reference made to it by the petitioner-DH to respondent-JDs on 26.06.2013, however, the notice could be served upon both the petitioner and JDs for 16.07.2013. The appearance, however, was made only on behalf of the ::: Downloaded on - 15/04/2017 20:56:47 :::HCHP -5- petitioner and not on that of JD. The Council taking note of the part payment allegedly made by the JD on 26.09.2013 .
and an e-mail allegedly received by the petitioner from the JD indicating therein the payment schedule, while dropping the conciliation proceedings has passed ex-parte award, Annexure A-1 against the JD with a direction to pay the of balance amount of delayed payment in terms of payment schedule allegedly e-mailed to the petitioner.
rt
3. As a matter of fact, JD in this case did not appear and participated in the proceedings conducted to settle the dispute amicably by way of conciliation. The appropriate course available to the Council, therefore, was to have taken up the reference for arbitration either itself or referred the same to an institution or centre providing alternate dispute resolution services for conducting arbitration. The Council, however, has neither converted itself into an Arbitral Tribunal or referred it to some other institution or centre providing alternate dispute resolution services and rather taking note of the so called payment of `5,00,000/- made by the respondent-JD towards part ::: Downloaded on - 15/04/2017 20:56:47 :::HCHP -6- payment of delayed payments and e-mail allegedly agreeing therein the time schedule for payment of the .
balance amount has passed the order sought to be executed in this petition
4. Such an approach is not only violative of principle of natural justice but against the statutory provisions of also i.e. as contained under Section 18 of the Act. As a matter of fact, on the failure of JD to participate in the rt conciliatory proceedings, the appropriate course available to the Council was to have converted itself either into an Arbitral Tribunal or to have referred the dispute to an institution or centre providing alternate dispute resolution services. It is thereafter the notice should have been issued to the JD and after taking on record its version in the matter to have adjudicated the dispute in accordance with law. In the event of the failure of the JD to put appearance even during the course of arbitral proceedings despite service, the Council or an institution or centre providing alternate dispute resolution services, as the case may be, to have decided the proceedings ex-parte.
::: Downloaded on - 15/04/2017 20:56:47 :::HCHP -7-5. Therefore, the award sought to be executed having been passed in violation of the provisions contained .
under the Act and the principle of natural justice is nullity, hence cannot be executed. The same as such, is quashed and set aside with a direction to the Council either to convert itself into an Arbitral Tribunal or seek assistance of of any institution or centre providing alternate dispute resolution services for conducting the proceedings in terms of the rt Arbitration and Conciliation Act, 1996 and adjudicate the dispute in accordance with law. The parties on both sides are directed to appeal before H.P. Micro and Small Facilitation Council, Directorate of Industries, Udyog Bhawan, Bemloe, Shimla on 27th August, 2016. There shall be a direction to the Council either to take up the dispute for adjudication itself or to seek assistance of any other institution or centre providing alternate dispute resolution services on that day. The Council or the institution/centre providing alternate dispute resolution services shall thereafter proceed in the matter afresh and decide the same after affording the parties due opportunity of being heard. It is ::: Downloaded on - 15/04/2017 20:56:47 :::HCHP -8- expected from the Council or the institution/centre providing alternate dispute resolution services to expedite the .
proceedings at the earliest.
6. The petition as well as application both stand accordingly disposed of.
August 2, 2016 (Dharam Chand Chaudhary)
of
(naveen) Judge.
rt
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