Bombay High Court
Ntpc Bhel Power Projects Private Ltd vs Shree Electricals Limited on 7 October, 2022
Author: C.V. Bhadang
Bench: C.V. Bhadang
4-wp-9317-2021.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.9317 OF 2021
NTPC Bhel Power Projects Pvt. Ltd. ...Petitioner
V/s.
Shree Electricals Ltd. ...Respondent
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Digitally signed by
Mr.Vishal Talsania a/w Mr.Jigar B. Kamdar for the Petitioner.
NILAM
SANTOSH
NILAM SANTOSH
KAMBLE
Date: 2022.10.10
Mr.Akshay Petkar a/w Mr.Pranav Shah for the Respondent.
KAMBLE 17:06:34 +0530
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CORAM : C.V. BHADANG, J.
DATE : 07 OCTOBER 2022
P.C.
. I have heard the learned counsel for the parties.
2. The challenge in the Petition is to the award dated 5 February 2020 passed by the Facilitation Council (Council) under the Micro, Small and Medium Enterprises Development Act, 2006 ('MSME 'Act). The operative part of the award is as under:-
"1) The Reference Petition No.167/2015 is partly allowed in terms of prayer.
2) The Petitioner is entitled to receive the principal amount of Rupees.3,99,54,066/- (Rupees Three Crore Ninety Nine Lacks Fifty Four Thousand Sixty Six Only) from the final work completed on 27/03/2015 as mutually agreed by both the parties.
N.S. Kamble page 1 of 6
4-wp-9317-2021.doc
3) Respondent is required to pay the principal
amount to the Petitioner along with the interest under provisions of Section 15 and 16 of Micro, Small and Medium Enterprise Development Act, 2006 till the payment is finally made to the Petitioner, subtracting the payment made by respondent during pendency of present petition with Council.
4) The principal and interest amount are to be paid by the respondent to the Petitioner within the period of one month from the date of receipt of this order.
5) No order as to cost."
3. It transpires during the course of the hearing that the Council had initially taken up the matter for conciliation in which the parties had filed consent terms by which the parties had mutually agreed for payment of the principal amount of Rs.3.99 Crores by the Petitioner to the Respondent, subject to TDS. The said amount was agreed to be paid in four installments.
4. It is undisputed that the total amount as agreed has been paid by the Petitioner and received by the Respondent, although there is a certain delay in payment of some of the installments/part thereof.
5. The Facilitation Council thereafter took up the matter for Arbitration in which the impugned award is passed.
N.S. Kamble page 2 of 6
4-wp-9317-2021.doc
6. The learned counsel for the Petitioner has submitted that once having entertained the matter in conciliation it was not permissible for the Facilitation Council to take up the matter for arbitration for which reliance is placed on the decision of this Court in Gujarat State Petronet Ltd V/s. Micro and Mine Enterprises Facilitation Council in Writ Petition No.5449 of 2015 decided on 6 August 2018.
7. Secondly, it is submitted that the entire amount having been paid and received by the Respondent it was not open for the Facilitation Council to again direct payment of the principal amount along with interest as contemplated under the MSME Act.
8. The learned counsel for Respondent has submitted that the consent terms, cannot be relied upon as there was a delay in payment of certain installments. He therefore, submitted that the matter would now govern itself by the arbitral award which is also contemplated as per the consent terms. He submits that the Petitioner had a remedy of filing a Petition under Section 34 of the Arbitration and Conciliation Act, 1996 before the District Court at Pune after complying with all the statutory pre deposit, which the Petitioner has not availed of. He therefore, submit that the Petition as framed and filed is not maintainable.
N.S. Kamble page 3 of 6
4-wp-9317-2021.doc
9. The learned counsel for the Respondent has placed reliance on the decision of the Supreme Court in Jharkhad Urja Vikas Nigam Limited V/s. State of Rajasthan and Others 1, in order to submit that the Supreme Court has held that it is open to the Facilitation Council to take up the Arbitration proceedings after failure of the conciliation.
10. I have considered the submissions made. The details of the installments agreed, the amount paid and the dealy can be set out as under:-
Installment Amount to To be paid Amount Paid on Delay (if be paid by (Date) Paid (Date) any) days) 1 5000000 30.05.2016 5000000 26.05.2016 0 2 11630000 28.06.2016 11630000 24.06.2016 0 3 11630000 28.07.2016 4822383 01.08.2016 4 days 6807617 10.08.2016 13 days 4 11418757 28.08.2016 10104764 26.08.2016 0 1149948 16.11.2016 80 days 164045 11.10.2017 409 days
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39678757 =======
11. It can thus be seen that there is no delay insofar as the 1st and 2nd installments are concerned. In the 3rd installment there is a delay of 4 days and 13 days. Insofar as the installment No.4 is concerned in respect of substantial amount of Rs.1,01,04,764/- there is no delay and for payment of Rs.11,49,948/-, there is a delay of 80days. Lastly, sofar as amount of Rs.1,64,045/- is 1 2021 SCC Online SC 1257 N.S. Kamble page 4 of 6 4-wp-9317-2021.doc concerned there is a delay of 409 days. The learned counsel for the Petitioner states that the amount of Rs.1,64,045/- was as retained as the contractors of the Respondents were pestering for payment. However, that amount is also paid to the Respondent.
12. The parties were directed to produce their respective computation of the amount which is payable under the award. The Petitioner was directed to compute the amount by calculation of the interest for the delayed period at the rate as provided for under the MSME Act. According to the Petitioner the amount payable is Rs.4,52,249/-. On the contrary according to the Respondents, the amount payable is Rs.4,16,54,731.50/-.
13. In my considered view, an arguable case arises in this Petition which needs consideration. This Court in Gujarat State Petronet Ltd. (Supra), had entertained the Petition against an arbitral award under the MSME Act. However, the rival contentions of the parties are left open.
14. Stand over to 18 November 2022 'for final disposal' at the stage of admission, subject to constraints of time.
Considering the fact that admittedly, the amount as agreed as per the consent terms has already been paid by the Petitioner and received by the Respondent, there shall be interim stay of the impugned award till next date, subject to the Petitioner N.S. Kamble page 5 of 6 4-wp-9317-2021.doc depositing the amount of Rs.4,52,250/- before this Court by next date.
C.V. BHADANG, J.
N.S. Kamble page 6 of 6