Bombay High Court
Microvision Technologies Pvt Ltd vs Union Of India on 24 August, 2023
Author: R. I. Chagla
Bench: R.I. Chagla
2023:BHC-OS:8899 rpcdl-36475-2022.doc
Jsn
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
REVIEW PETITION (L) NO.36475 OF 2022
IN
NOTICE OF MOTION NO.3 OF 2021
IN
COMM ARBITRATION PETITION (L) NO.855 OF 2018
Microvision Technologies Pvt. Ltd. ...Petitioner
V/s.
Union of India ...Respondent
Mr. Alankar Kirpekar with Sagar Kasar, Mr. Shekhar Bhagat, Mr.
Ayush Tiwari and Ms. Chaitali Bhogle i/b. Sagar Kasar for
the Petitioner.
Mr. T.J. Pandian with T.C. Subramanian for the Respondent.
CORAM: R.I. CHAGLA, J.
ORDER RESERVED ON 27TH JULY, 2023
ORDER PRONOUNCED ON 24TH AUGUST, 2023
ORDER
1. By this Review Petition, the Petitioner is seeking review of order dated 15th May 2020 passed in Commercial Notice of Motion (L.) No. 2043 of 2019 in Commercial Arbitration Petition (L.) No. 855 of 2018 and for restoration of Commercial Notice of Motion (L.) No. 2043 of 2019 on the file of of this Court. Further, relief is sought for transfer of Commercial Arbitration 1/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc Petition (L.) No. 855 of 2018 to District Court at Nashik as prayed in Commercial Notice of Motion (L.) No. 2043 of 2019.
2. The Petitioner has filed this application under the provisions of Order 47 Rule 1 read with sections 114 and 151 of Code of Civil Procedure, 1908. The Petitioner had upon being advised filed Commercial Appeal (L.) No. 9465 of 2020 assailing the Order dated 15th May 2020 passed by this Court. Thereafter, upon realizing that said Commercial Appeal was not maintainable, the Petitioner has preferred the present Review Petition for review of the said order dated 15th May 2020. The Commercial (L.) 9465 of 2020 was accordingly withdrawn with liberty to file the present Review Petition which was allowed by Division Bench of this Court vide order dated 22nd November, 2022. Copy of the order has been annexed at Exhibit B to the Review Petition.
3. A brief background of facts is necessary.
4. The Petitioner is a supplier within the meaning of the Micro, Small and Medium Enterprises Development Act, 2006 ("MSMED Act"). The Petitioner had contracts awarded by the 2/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc Respondent (through Central Railways) for Electrification of Integrated Security System-Video Surveillance System proposed to be implemented by the Central Railways at certain places. Dispute arose between the parties in connection with the contract and which was referred to conciliation under Section 18 (2) of the MSMED Act. Upon failure of conciliation, the Petitioner applied to the Facilitation Council to act under Section 18(3) of the MSMED Act by referring the dispute to the Arbitrator or Institution as provided under the MSMED Act.
5. The Petitioner states that pending the consideration of the Application, the Petitioner moved a Petition under Section 9 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act") before the District Court at Nashik, seeking interim relief. The Petitioner then moved an application under Section 11(6) of the Arbitration Act before this Court for appointment of an Arbitrator as the Facilitation Council had failed to refer the dispute to an independent Arbitrator or Institution.
6. This Court by an order dated 16th December, 2016 allowed the Application of the Petitioner under Section 11(6) of 3/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc the Arbitration Act and appointed an Arbitrator to whom the disputes of the parties were referred. Annexed at Exhibit C to the Petition is a copy of the said order dated 16th December, 2016.
7. The Petitioner has thereafter stated that upon the appointment of the Arbitrator, the Petitioner withdrew the Application under Section 9 having regard to Section 9(b) of the Arbitration Act inserted by Act 3 of 2016 with retrospective effect from 25th October, 2015.
8. Thereafter, the arbitration proceedings have been conducted in Mumbai and concluded by Award passed by the Sole Arbitrator. There was certain ambiguity and omission in the Award considering certain points which were referred before the Arbitrator for correction and the corrected Award / Order came to be passed.
9. The Award of the Arbitrator came to be challenged in Commercial Petition (L) No.855 of 2018 along with Notice of Motion filed for condonation of delay.
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10. An Application being Notice of Motion No.2043 of 2019 was preferred by the Petitioner in this Court for transfer of Commercial Arbitration Petition to District Court at Nashik on the ground that the initiation of the Arbitration was not in accordance with the Arbitration Agreement but by way of special provisions of Sections 15 to 24 of the MSMED Act. The Petitioner's contention was that the said provisions of the MSMED Act have overriding effect on any other law including the Arbitration Act. This Court by the said order dated 15th May, 2020 dismissed the Commercial Notice of Motion No.2043 of 2019.
11. The Petitioner had preferred Special Leave Petition in the Supreme Court against the said order passed by this Court. However, the SLP was rejected.
12. The Petitioner has filed the present Review Petition for review of the said Order dated 15th May, 2020.
13. Mr. Kirpekar, learned Counsel appearing for the Petitioner has submitted that there are patent errors of law on the face of the said Order dated 15th May, 2020 for which review has 5/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc been sought. The said order has followed the decision of Division Bench of this Court in M/s. Steel Authority of India Ltd. Vs. The Micro, Small Enterprises Facilitation Council 1 without considering the law laid down by the Division Bench of this Court in Gujarat State Petronet Limited Vs. Micro and Small Enterprises Facilitation Council and Ors.2. He has submitted that this Court in the said Order dated 15th May, 2020 by placing reliance on Steel Authority India Ltd. (Supra) held that an Agreement for Arbitration shall continue to be valid even in the face of the Council's powers under Section 18 of the MSMED Act. This Court has in the said Order held that, the decision of the Allahabad High Court cited on behalf of the Petitioner viz. Paper and Board Converters Vs. UP State Micro and Small Enterprises Facilitation Council, Kanpur 3 which had been followed by the Gujarat High Court in Principal Chief Engineer Vs. Manibhai and Brothers4 and which differed from the view of this Court in Steel Authority India Ltd. (Supra) would not lead to an inference that the decision of this Court in Steel Authority India Ltd. (Supra) has been dissented from or overruled. 1 2010 SCC OnLine Bom 2208.
2 AIR 2018 Bombay 265.
3 2014 (5) AWC 4844.
4 MANU/GJ/1164/2016.
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14. Mr. Kirpekar has submitted that this Court in the said Order dated 15th May, 2020 had lost sight of the decision of the Division Bench of this Court in Gujarat Petronet (Supra). The decision of the Allahabad High Court in Paper and Board Converters (Supra) which had been followed by the Gujarat High Court in Manibhai and Brothers (Supra) has been considered in the said decision. Further, the decision of this Court (Nagpur Bench) in Steel Authority India Ltd.(Supra) has also been considered. The Division Bench had observed that the decision of Principal Chief Engineer (Supra) had been challenged before the Apex Court and the order of the Apex Court dated 5th July, 2017 shows that the Apex Court approved the view of the Gujarat High Court in Manibhai and Brothers (Supra) and the Allahabad High Court in Paper and Board Converters (Supra). The Division Bench of this Court has accordingly rejected the submission of Counsel for Petitioner that reference made to Respondent No.1 MSEFC by Respondent No.3 therein is not maintainable in view of independent arbitration agreement between the parties.
15. Mr. Kirpekar has submitted that in the present case the Petitioner had never requested this Court to appoint an Arbitrator 7/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc on the basis of Arbitration Agreement between the parties. It only by virtue of the MSEFC, Nashik failing to refer the matter to the arbitrator upon the conciliation under Section 18(2) of the MSMED Act having failed, was the Petitioner compelled to approach this Court under Section 11(6), more particularly Section 11(6) (c) of the Arbitration Act read with Section 18(3) of the MSMED Act for appointment of an Arbitrator. The Division Bench of this Court in Gujarat Petronet (Supra) has held that the provisions of the MSMED Act have overriding effect on any other law including Arbitration Act. This Court by failing to consider the said decision in the said order dated 15th May, 2020 erred in law by holding that the Arbitration Agreement would continue to be valid even in the face of the Facilitation Council's powers under Section 18 (3) of the MSMED Act. This particularly when the said provision of the MSMED Act has been invoked by the Petitioner.
16. Mr. Kirpekar has further submitted that this Court in the said Order dated 15th May, 2020 failed to consider Section 18(4) read with Section 24 of the MSMED Act which has overriding effect on the Arbitration Act. Under Section 18(4), there is a non obstante clause which provides that the Facilitation 8/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc Council shall have jurisdiction to act as an arbitrator or conciliator under this Section in a dispute between the supplier located within its jurisdiction and the buyer located anywhere in India. Thus, this Court ought to have considered that the Petitioner as supplier being located in Nashik was the relevant factor for jurisdiction and by virtue of which the District Court, Nashik had jurisdiction over the dispute between the Petitioner and the Respondent. Accordingly the Arbitration Petition under Section 34 of the Arbitration and Conciliation Act is only maintainable before the District Court, Nashik. This apart from the provisions of Section 2(1) (e) read with Sections 9 and 42 of the Arbitration Act, in view of the Petitioner having invoked the jurisdiction of that Court by filing Application under Section 9 of the Arbitration and Conciliation Act,1996. He has submitted that any other interpretation will lead to an incongruous result and would not lead to a harmonious construction of the MSMED Act with the Arbitration Act so as to give effect to the objects and reasons of both statutes in its true sense.
17. Mr. Kirpekar has submitted that in a subsequent decision of the Supreme Court in Gujarat State Civil Supplies 9/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc Corporation Limited Vs. Mahakali Foods Private Ltd. 5, decision dated 21st October, 2022, the Supreme Court has set aside the decision of the Division Bench of this Court in Steel Authority of India Ltd. (Supra). This by holding that the Chapter V of the MSMED Act has an overriding effect over the provisions contained in the Arbitration Act and the Facilitation Council would be entitled to proceed further with the reference made by the supplier under Section 18(1) of the MSMED Act, despite an independent arbitration agreement existing between the parties. The Supreme Court has held that a private agreement between the parties cannot obliterate the statutory provisions of MSMED Act. Once the statutory mechanism under sub section (1) of Section 18 is triggered by any party, it would override any other agreement independently entered into between the parties, in view of the non obstante clauses contained in sub Section (1) and sub section (4) of Section 18 of the MSMED Act. The Supreme Court has held that while interpreting a statute, if two interpretations are possible, the one which enhances the object of the Act should be preferred than the one which would frustrate the object of the Act. The Supreme Court has held that if the submission of the counsel for the buyers 5 2022 SCC OnLine SC 1492.
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rpcdl-36475-2022.doc that the party to a dispute covered under the MSMED Act, 2006 cannot avail the remedy available under Section 18(1) of the MSMED Act, when an independent arbitration agreement between the parties exists is accepted, the very purpose of enacting the MSMED Act, would get frustrated.
18. Mr. Kirpekar has also relied upon the decision of the Supreme Court in Silpi Industries Etc. Vs. Kerala State Road Transport Corporation & Anr.6, wherein the Supreme Court has held that if an arbitration agreement between the parties is there, the same is to be ignored in view of the statutory obligations and mechanism provided under the MSMED Act.
19. Mr. Kirpekar has referred to certain decisions on Section 9 read with 42 of the Arbitration Act. This is in view of the fact that the Petitioner had filed the Application under Section 9 of the Arbitration Act before the District Court, Nashik. Although the application was withdrawn by the Applicant, he has submitted that the mere filing of the Application would be a factor to be considered under the mandate of Section 42 of the Arbitration Act. 6 2021 SCC OnLine SC 439.
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rpcdl-36475-2022.doc Further, by virtue of Section 2(1) (e) read with the Section 9 and 42 of the Arbitration Act, the District Court, Nashik will have jurisdiction for entertaining the present challenge to the Award. This Court in the said order dated 15th May, 2020 has relied upon its prior decision in Vachaspati Sharma Vs. India Cements - Capital and Finance Ltd.7 which has held that the proceedings filed under Section 9 of the Act, if not pressed, would not restrict the future jurisdiction over the arbitral proceedings or all subsequent applications arising out of that arbitration agreement to the Section 9 Court.
20. Mr. Kirpekar has submitted that the said decision had not considered the decision of the Supreme Court in Fiza Developers & Inter Trade Pvt. Ltd. Vs. AMCI (India) Pvt. Ltd. & Anr.8, interpreting similar language appearing in Section 36 of the Arbitration Act. Further, Vachaspati Sharma (Supra) has been implidely overruled in State of West Bengal Vs. Associated Contractors9 which makes it clear that the language in Section 42 of the Arbitration Act merely requires an application "made in a 7 MANU/MH/1607/2013.
8 (2009) 17 SCC 796.
9 (2015) 1 SCC 32.
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21. Mr. Kirpekar has accordingly submitted that mere filing of the application would constitute an application having been "made in a Court" for the purpose of Section 42. Thus, under Section 42 of the Arbitration Act, the Court alone having jurisdiction over the arbitral proceedings is the Court where an application under part 1 has been made (including Application under Section 9) and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court. He has submitted that in view of the application being made under Section 9 of the Arbitration and Conciliation Act in the District Court, Nashik, that Court will have jurisdiction over the arbitral proceedings including Petition under Section 34 of the Arbitration Act challenging the Award passed.
22. Mr. Kirpekar has submitted that this Court has overlooked the said provisions of the Arbitration Act in holding that the District Court, Nashik does not have jurisdiction in the 13/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc matter, not being a 'Court' within a meaning of Section 2(1) (e) of the Act. This is in view of the finding that under the Arbitration Agreement, the seat of the arbitration is Mumbai. He has submitted that this Court has further erred in holding that the filing of the Application under Section 9 of the Arbitration and Conciliation Act does not have effect of restricting the future jurisdiction over arbitral proceedings in the matter to that Court and that the present Arbitration Petition and companion Notice of Motion cannot be transferred to that Court.
23. Mr. Pandian, the learned Counsel appearing for the Respondent, has supported the said order of this Court dated 15th May, 2020. He has submitted that the Application was made by the Petitioner under Section 11 of the Arbitration and Conciliation Act and not under Section 18(3) of the MSMED Act. He has submitted that this Court in allowing the Application under Section 11 of the Arbitration Act had noted that there was an Arbitration Agreement between the parties in terms of Clauses 63 and 64 of the contract. The Petitioner having chosen to refer the disputes between the Petitioner and Respondent under the said clauses of the Arbitration Agreement cannot now contend that the Application for 14/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc appointment of Arbitrator was initiated under the MSMED Act and / or that the provisions of the MSMED Act namely Section 18 will apply to the appointment of the Arbitrator and the Arbitral Proceedings as well as the challenge to the award.
24. Mr Pandian has further submitted that if the Petitioner was aggrieved by the decision of the Facilitation Council under the MSMED Act not to take up the dispute for arbitration or refer the dispute to an institution or centre for arbitration, the remedy available to the Petitioner was to file a Writ Petition directing the Facilitation Council to proceed with arbitration.
25. Mr Pandian has submitted that this Court in the said Order has correctly referred to the decision of the Division Bench of this Court in Steel Authority of India (Supra) in finding that the agreement of arbitration continues to be valid even in the face of Council's powers under Section 18 of the MSMED Act. This Court has considered the decisions of the Allahabad High Court in Paper and Board Converters (Supra) and the Gujarat High Court in Manibhai and Brothers (Supra) and held that in those decisions the Court was considering whether the Facilitation Council may 15/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc still have jurisdiction to take up a dispute for arbitration or refer it to an institution or Centre for arbitration notwithstanding anything contained in the arbitration agreement. He has submitted that in the present case, this Court is considering the position that the Petitioner had made an application for referring this dispute for arbitration under Section 11 of the Arbitration and Conciliation Act and not under Section 18(3) of the MSMED Act.
26. Mr. Pandian has further placed reliance upon the order of the learned Single Judge of this Court dated 4th July, 2017 passed in Writ Petition No.1328 of 2016, wherein the Single Judge has considered that the Facilitation Council by order dated 21st October, 2015 rejected the Petitioner's Petition No.57 of 2015 for conciliation under the MSMED Act. The Facilitation Council had referred to Clauses 63 and 64 of the Contract between the Petitioner and the Respondent to direct the Petitioner to resort to the remedy of arbitration thereunder. This was challenged by the Petitioner before the District Court and which Petition was dismissed on ground of want of jurisdiction to entertain the proceedings. The Petitioner was directed to approach the competent forum after which the Petitioner filed the Petition which 16/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc was being considered by the learned Single Judge of this Court. The Petitioner had not disputed the finding that the District Court had no jurisdiction to entertain the challenge to the order passed by the Facilitation Council. He has accordingly submitted that the Petitioner has accepted the jurisdiction of this Court in the arbitral proceedings.
27. Mr. Pandian has also referred to the decision of the learned Single Judge of this Court in Sanjay Ramchandra Shendkar and Ors. Vs. Narayan Antu Zende10, wherein the learned Single Judge of this Court has held that a review is by no means an Appeal in disguise, whereby an erroneous decision is corrected, but it lies only for patent error, without any elaborate argument that one could point to the error and therefore before exercising the power of review, error apparent on the face of the record must be established. The error should be so striking that on a mere looking it is spotted and it would not require any long drawn process of reasoning. The learned Single Judge of this Court in the said order had considered the decision of the Supreme Court in Beghar 10 Review Petition No.70 of 2022 in WP No.10975 of 2018 dated 12th April, 2023.
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rpcdl-36475-2022.doc Foundation, thru its Secretary V. Justice K.S. Puttaswamy 11, wherein it was held that the Review Petition cannot be entertained on the ground of "change in the law" by the subsequent decision / judgment of larger Bench. He has accordingly submitted that the subsequent decisions relied upon on behalf of the Petitioner including the decision in Gujarat State Civil Supplies Corporation Ltd. (Supra) which has set aside the decision of this Court in Steel Authority of India Ltd. (Supra) cannot be a ground for review.
28. Mr. Pandian has also placed reliance upon the decision of the Single Judge of this Court in Microvision Technologies Thru its Proprietor Atul Nemichand Dhadiwal Vs. Dhule Municipal Corporation Thru its Commissioner12, wherein this Court has also held that the power of review can be exercised provided there is an error of law apparent on the face of the record or the misconception of fact or law by the Court while rendering the judgment under review.
11 (2021) 3 SCC 1.
12 2022 SCC OnLine Bom 6068.
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29. Mr. Pandian has accordingly submitted that there is no merit in the Review Petition and that the Review Petition be rejected.
30. Having considered the rival submissions, this Court in the said Order dated 15th May, 2020 has not considered the decision of the Division Bench of this Court in Gujarat State Petronet Limited (Supra). In the said decision, the Division Bench of this Court has considered Steel Authority of India (Supra) on which this Court had placed reliance in the said order in holding that the agreement for arbitration shall continue to be valid even in the face of Facilitation Council's power under Section 18 of the MSMED Act. The Division Bench has held that a reference made by the Petitioner under the MSMED Act is maintainable inspite of the independent arbitration agreement between the parties. The Division Bench of this Court has referred to the order dated 5th July, 2017 of the Supreme Court which rejected the challenge to the decision of the Division Bench of the Gujarat High Court in Manibhai and Brothers (Supra) which in turn had expressed its inability to agree with the decision of the Single Judge of this Court (Nagpur Bench) in Steel Authority of India Ltd. (Supra). 19/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 :::
rpcdl-36475-2022.doc The Division Bench of the Gujarat High Court in the said decision has held that once the Facilitation Council has jurisdiction to act as an arbitrator and conciliator in a dispute between the parties, the Council has only one of the two courses of action open to it, "either conduct arbitration itself or refer to the parties or Centre or institution providing alternate dispute resolution services stipulated in sub section 3 of Section 18 of the MSMED Act". The Division Bench of the Gujarat High Court in that case did not find any error in the decision of the Facilitation Council in not entertaining the buyers application under Section 8 of the Arbitration Act.
31. Thus, in my view this Court in the said order dated 15th May, 2020 has committed a patent error of law in not considering the decision of the Division Bench of this Court in Gujarat State Petronet Limited (Supra).
32. Another factor to be considered is that the Application made by the Petitioner was under Section 11(6) (c) of the Arbitration Act for referring the dispute to arbitration. This provision specifically provides as under:-
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rpcdl-36475-2022.doc "a person, including an institution, fails to perform any function entrusted to him or it under that procedure, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment".
33. Thus, an Application under Section 11(6) is made when the institution as in the present case, the Facilitation Council fails to perform any function entrusted to it under the procedure contemplated in Section 18(3) of the (MSMED Act) and pursuant to which appointment is made for referring the disputes to arbitration. This Court in the said Order dated 15th May, 2020 has treated the application as if it was made under Section 11(5) and not under Section 11(6) of the Arbitration Act. Thus, this Court in the said Order has overlooked the relevant provision of law.
34. Under Section 18(3) of the MSMED Act, the following is provided:-
"(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 to it any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of the Arbitration 21/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc and Conciliation Act, 1996 (26 of 1996) shall then 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".
35. The said provision expressly provides for the Facilitation Council in the event conciliation is not successful and stands terminated without any settlement between the parties to refer to any institution or centre providing alternate dispute resolution services for such arbitration and then the provisions of Arbitration Act shall apply to the disputes as if the arbitration was in pursuance of an arbitration agreement referred to in Sub Section 1 of Section 7 of that Act. Upon the failure on the part of the Facilitation Council to refer the dispute to arbitration, an Application may be made under Section 11(6) (c) and accordingly in the present case the application was made for appointment of an Arbitrator. Thus, Section 18 of the MSMED Act has to be read harmoniously with Section 11 of the Arbitration Act.
36. I find no merit in the submission on behalf of the Respondent that in the event the Facilitation Council failed to refer the dispute to arbitration, the only remedy available to the Applicant was to file a Writ Petition seeking such direction against 22/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc the Facilitation Council. This submission overlooks the fact that there is an in built provision under the Arbitration Act, viz. Section 11(6) (c), which provides for appointment of an Arbitrator in such cases. Thus, there is a patent error of law on the face of the record in that Section 11(6) (c) of the Arbitration Act has been completely given a go by to in the said order of this Court.
37. Further, Section 18(4) of the MSMED Act has not even been considered in the said Order. Section 18(4) reads as under:-
"(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".
38. Thus, under this provision of MSMED Act, the jurisdiction to act as an Arbitrator or Conciliator is determined according to where the supplier is located. In the present case, the Petitioner being the supplier is located at Nashik. Accordingly, the District Court, Nashik will have jurisdiction with respect to the arbitral proceedings and any challenge to the Award by way of 23/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc Petition under Section 34 of the Arbitration Act is to be filed before that Court. This material provision was required to be considered in the said Order dated 15th May, 2020. By overlooking this provision, there is an error apparent on the face of the said Order.
39. The said order by placing reliance upon Clause 64 of the General Condition of Contract, where the venue for arbitration is Mumbai and not Nashik Court has clearly overlooked Section Section 18(4) of the MSMED Act which is a non-obstante provision.
40. There are submissions made with regard to the issue of the Application made under Section 9 of the Arbitration Act and upon its withdrawal whether the Application would be a factor to be considered under Section 42 of the Arbitration and Conciliation Act read with Section 2(1) (e) of the Arbitration Act. However, this issue is not required to be determined, in view of the non-obstante provision i.e. Section 18(4) of MSMED Act being applicable and provides for jurisdiction to act as inter alia Arbitrator is determined according to where the Petitioner as supplier is located i.e. at Nashik. There is an error apparent on the face of the said order as 24/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc it relies upon Clauses 63 and 64 of the arbitration agreement, thereby obliterating the non-obstante statutory provision i.e. Section 18 of the MSMED Act.
41. It is necessary to note that the decision of this Court in Steel Authority of India Ltd. (Supra) has been set aside by the Supreme Court in Gujarat State Civil Supplies Corporation Limited (Supra), subsequent to the passing of the said Order. Although, Mr. Pandian has placed reliance upon the decision of the learned Single Judge of this Court in Sanjay Shendkar (Supra). However, the learned Single Judge of this Court has in the said decision considered the divergent opinions of two Judges of the Supreme Court on the issue as to whether a Review Petition can be entertained on the ground of subsequent overruling of a decision of the Court and has made a request to the Chief Justice of India to refer the divergent opinion to a larger Bench.
42. In view of the above finding of patent error apparent on the face of the said Order and its requiring to be reviewed, it is not necessary to place reliance on Gujarat State 25/26 ::: Uploaded on - 25/08/2023 ::: Downloaded on - 26/08/2023 03:36:18 ::: rpcdl-36475-2022.doc Civil Supplies Corporation Limited (Supra) for arriving at such a finding.
43. Hence, the following order is passed:-
(i) The said order dated 15th May, 2020 passed in Commercial Notice of Motion (L) No.2043 of 2019 in Commercial Arbitration Petition (L) No.855 of 2018 is reviewed.
(ii) The Commercial Notice of Motion (L) No.2043 of 2019 is forthwith restored to the file of this Court.
(iii) The Commercial Arbitration Petition (L) No.855 of 2018 is transferred to the District Court at Nashik by allowing Commercial Notice of Motion (L) No.2043 of 2019.
(iv) The Review Petition is accordingly disposed of.
(v) There shall be no order as to costs.
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