Telangana High Court
M/S India Glycols Limited vs Micro And Small Enterprises on 14 September, 2022
Author: K. Lakshman
Bench: K. Lakshman
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT: HYDERABAD
CORAM:
*HON'BLE SRI JUSTICE K. LAKSHMAN
+WRIT PETITION No.16918 OF 2022
% Delivered on: 14-09-2022
Between:
# M/s. India Glycols Limited & another .. Petitioners
Vs.
$ Micro And Small Enterprises Facilitation
Council, Medchal - Malkajgiri, Telangana & others. .. Respondents
! For Petitioners : Mr. C.V. Mohan Reddy,
Ld.Sr. Counsel rep.Mr. C. Sumon
^ For Respondent No.1 & 3 : ---
For Respondent No.2 : Mr. G.S. Jagannath
< Gist :
> Head Note :
? Cases Referred :
1. AIR 2017 Bom. 242
2. 2015 (153) DRJ 346
3. Appeal (ST) No.30508 of 2019
4. W.P. No.2316 of 2016
5. 2021 (6) ABR 83
6. 2021 (4) CCC 476
7. 2015 SCC OnLine Hyd. 494
8. W.P. No.24112 of 2016, decided on 12.11.2019
9. Civil Appeal No.5934 of 2021, decided on 23.09.2021
10. 2021 SCC OnLine SC 439
11. 2021 SCC OnLine Del.3708
12. (2020) 15 SCC 706
13. SLP to Appeal (Civil) No.8482 of 2020, decided on 21.09.2021
14. (2021) 6 SCC 771
15. (2018) 3 HLT 512
16. (2014) 5 ALT 502
17. MAT No.1345 of 2018 and CAN No.8649 of 2018, decided on 08.01.2019
18. Spl. Appeal Writ No.889 of 2014 in S.B. Civil W.P. No.1815 of 2012, decided on 17.10.2014
19. (2016) 161 AIC 591
20. W.P. No.22577 of 2018, decided on 02.11.2018
21. (2013) 1 MLJ 445
22. AIR 1961 SC 182
2
KL,J
W.P. No.16918 of 2022
HON'BLE SRI JUSTICE K. LAKSHMAN
WRIT PETITION No.16918 OF 2022
ORDER:
Heard Mr. C.V. Mohan Reddy, learned Senior Counsel representing Mr. C. Sumon, learned counsel for the petitioners and Mr. G.S. Jagannath, learned counsel for respondent No.2.
2. This Writ Petition is filed to set aside the Award, dated 28.10.2021 passed by respondent No.1 in Case No.21C/IFC/2015/ 16648.
3. FACTS OF THE CASE:
i) Petitioner No.1 had placed a Purchase Order dated 17.03.2008 with respondent No.2 for supply, installation and commissioning of HVAC System, Doors and Windows, False Ceiling and Partition which includes all prefabricated clean process Air rooms, Doors, Partition, False Ceiling, Doors and Windows etc., for its plant located at Pharma City, Selaqui Industrial Area, Dehradun, Uttarakhand.
ii) As per the terms of the said Purchase Order, respondent No.2 to complete the work on or before 10.06.2008. Respondent No.2 3 KL,J W.P. No.16918 of 2022 completed the mechanical installation by 21.03.2009. There was delay of more than nine (09) months in completion of the work.
iii) In terms of Clause - 5 of the Purchase Order, dated 17.03.2008, the petitioner had paid 80% of the amount along with additional payments. Thus, according to the petitioner, it had paid 90% of aggregate amount.
iv) Meetings were held with regard to the discussion of pending works and defects etc. The petitioner had addressed two e-mails to respondent No.2 with a request to take action on the same. Despite receiving and acknowledging the same, respondent No.2 has not attended the same.
v) A meeting was held on 20.03.2010, wherein it was mutually agreed upon the fact that respondent No.2 would complete all the pending works in accordance with the Minutes of Meetings dated 14.10.2009 and 15.10.2009, and the petitioner would release a sum of Rs.10.00 lakhs in favour of respondent No.2. The petitioner herein had released the said amount on 28.06.2010.
vi) The petitioner has sent mails on different dates to respondent No.2 with a request to complete all the pending 4 KL,J W.P. No.16918 of 2022 mechanical works and not to raise any demand for payment. Instead of completing the same, in terms of purchase order dated 17.03.2008, vide letter dated 26.10.2015, respondent No.2 made a reference to respondent No.1 under Section - 18 of the Mircro Small and Medium Enterprises Development Act, 2006 (for short 'Act, 2006') for adjudication of the dispute and filed a statement of claim.
vii) The petitioner herein had also filed its defence statement before respondent No.1. Respondent No.2 had filed a rejoinder and the petitioner herein had also filed surrejoinder to the same. Respondent No.1 had passed an Award dated 20.02.2016. Aggrieved by the same, the petitioner had filed a writ petition vide W.P.No.15230 of 2016, and this Court disposed of the said writ petition vide order dated 16.06.2016 setting aside the said award dated 20.02.2016, remanded the matter back to respondent No.1 Company with a direction to pass proper award in accordance with law by recording the reasons as envisaged under Section - 31 of the Arbitration and Conciliation Act, 1996 (for short 'Act, 1996'). Respondent No.1 was further directed to consider / deal with the counter claims of the petitioner in accordance with law while passing an Award.
5
KL,J W.P. No.16918 of 2022
viii) The petitioner herein had also filed defence statement alleging two counter claims towards financial loss and loss of business opportunities as well as loss of reputation along with interest @ 18% per annum.
ix) The petitioner had filed applications under Order - VI, Rule 17 of the CPC for amendment of the statement of defence and counter claims. The petitioner had also requested respondent No.1 to give an opportunity to lead evidence and to submit oral submissions. Without considering the same, respondent No.1 had passed an award dated 28.10.2021.
x) The petitioner herein vide e-mail dated 09.11.2021 received an automatic generated e-mail from respondent No.1 which only mentioned that the matter has been decided.
xi) The petitioner came to know of passing of award when respondent No.2 made demand vide letter dated 07.12.2021. The petitioner received a copy of the award dated 28.10.2021. Challenging the same, the present writ petition is filed. 6
KL,J W.P. No.16918 of 2022
4. SUBMISSIONS ON BEHALF OF THE PETITIONERS:
The submissions of Mr. C.V. Mohan Reddy, learned Senior Counsel representing Mr. C. Sumon, learned counsel for the petitioner, are six (06) fold and the same are as follows:
i) The subject contract is a works contract and, therefore, respondent No.1 does not have any jurisdiction over works contract;
ii) Respondent No.1 has not followed the mandatory procedure laid down under the provisions of the Act, 2006 and also the procedure laid down under Sections -
65 to 81 of the Act, 1996;
iii) Conciliation is mandatory under the Act, 2006 and award passed by respondent No.1 Council without following the said procedure is illegal;
iv) Provisions of the Limitation Act are applicable to respondent No.1 Council and counter claim can be filed in the proceedings under the Act, 2006;
v) Respondent No.1 failed to take up the counter claims of the petitioner into account and the same is in violation of 7 KL,J W.P. No.16918 of 2022 the order dated 16.06.2016 passed by this Court in W.P.No.15230 of 2016;
vi) Though there is an alternative remedy, but it is not an efficacious remedy, writ petition is maintainable since respondent No.1 has not followed the mandatory procedure laid down under the Act, 2006; and
vii) He has placed reliance on the judgments of the Apex Court and other High Courts in i) Sterling and Wilson Private Limited v. Union of India1; ii) Shree Gee Enterprises v. Union of India2; iii) PL Adke v. Wardha Municipal Corporation / Council3; iv) Rahul Singh v. Union of India4; and v) Maharashtra State Electricity Transmission Company Ltd., v. Lustre Engineering Corporation5.
5. SUBMISSIONS ON BEHALF OF RESPONDENT No.2:
On the other hand, Mr. G.S. Jagannath, learned counsel appearing for respondent No.2, would submit that; 1 . AIR 2017 Bom. 242 2 . 2015 (153) DRJ 346 3 . Appeal (ST) No.30508 of 2019 4 . W.P. No.2316 of 2016 5 . 2021 (6) ABR 83 8 KL,J W.P. No.16918 of 2022
i) the present writ petition is not maintainable in view of alternative and efficacious remedy under Section - 34 of the Arbitration and Conciliation Act, 1996 (for short 'Act, 1996');
ii) the petitioner herein had not deposited 75% of the amount in terms of Section - 19 of the Act, 2006;
iii) Respondent No.1 has passed the impugned award by following the procedure laid down under the Act, 2006, and it is a reasoned order;
iv) It is a supply contract and it is not a works contract and, therefore, the reference made by respondent No.2 before respondent No.1 is maintainable;
v) Though there is an alternative efficacious remedy by filing an application under Section - 34 of the Act, 1996, the petitioner herein had filed the present writ petition;
6. Learned counsel on either side has placed reliance on various judgments of Hon'ble Supreme Court and this Court and the same will be considered contextually.
9
KL,J W.P. No.16918 of 2022
7. ANALYSIS AND FINDING OF THE COURT:
i) To decide the lis involved in the present writ petition, it is relevant to extract certain provisions of the Act, 2006 as well as Act, 1996 and the same are as under:
Micro Small and Medium Enterprises Development Act, 2006 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 dispute resolution services by making a reference to such an institution or centre, for conducting conciliation and the provisions of sections 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 for such arbitration and the provisions of the Arbitration and 10 KL,J W.P. No.16918 of 2022 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.
(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 a reference.
THE ARBITRATION AND CONCILIATION ACT, 1996
65. Submission of statements to conciliator.--(1) The conciliator, upon his appointment, may request each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall send a copy of such statement to the other party. (2) The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The party shall send a copy of such statement, documents and other evidence to the other party. 11
KL,J W.P. No.16918 of 2022 (3) At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information as he deems appropriate.
Explanation.--In this section and all the following sections of this Part, the term "conciliator" applies to a sole conciliator, two or three conciliators, as the case may be.
66. Conciliator not bound by certain enactments.--The conciliator is not bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).
67. Role of conciliator.--(1) The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute. (2) The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to, among other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties. (3) The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the conciliator hear oral statements, and the need for a speedy settlement of the dispute.
(4) The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the 12 KL,J W.P. No.16918 of 2022 dispute. Such proposals need not be in writing and need not be accompanied by a statement of the reasons therefor.
68. Administrative assistance.--In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.
69. Communication between conciliator and parties.-- (1) The conciliator may invite the parties to meet him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately.
(2) Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place shall be determined by the conciliator, after consultation with the parties, having regard to the circumstances of the conciliation proceedings.
70. Disclosure of information.--When the conciliator receives factual information concerning the dispute from a party, he shall disclose the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which he considers appropriate:
Provided that when a party gives any information to the conciliator subject to a specific condition that it be kept confidential, the conciliator shall not disclose that information to the other party.13
KL,J W.P. No.16918 of 2022
71. Co-operation of parties with conciliator.--The parties shall in good faith co-operate with the conciliator and, in particular, shall endeavour to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings.
ii) According to the petitioners, the special contract is a works contract from the ambit of Act, 2006.
iii) Petitioner No.1 had placed the purchase order dated 17.03.2008 with respondent No.2 for supply, installation and commissioning of HVAC System, Doors and Windows, False Ceiling and Partition, which interim alia, included all prefabricated clean process air rooms, doors, partitions, false ceiling, doors and windows etc., for its Plant located at Dehradun, Uttarakhand.
iv) In the purchase order, dated 17.03.2008, in the subject portion, it is specifically mentioned that the same is purchase order for supply of HVAC, Doors & Windows, False Ceiling etc., for Dehradun Project of petitioner No.1. Clause - 2.0 of the said purchase order deals with 'scope of supply'. It says that respondent No.2 shall design, manufacture and supply HVAC System, Doors, Windows and False Ceiling and partitions and other accessories etc., as per enclosed Annexure - I, II, III and IV.
14
KL,J W.P. No.16918 of 2022
v) Referring to Clauses - 2, 9 and 10 of the purchase order, Mr. C. V. Mohan Reddy, learned senior counsel, would submit that it is a composite contract including supply and works contract. According to him, the said contract involves supply of goods as well as submission of drawings / plans, installation, commissioning and maintenance for a guaranteed period of twenty four (24) months from the date of commissioning.
vi) Perusal of the said Annexures also would reveal that petitioner No.1 had explained the said supply in item-wise. Therefore, it cannot be termed as works contract and it is only a supply contract. Thus, the contention of the petitioners that it is a works contract and, therefore, respondent No.1 has no jurisdiction is untenable. Therefore, according to this Court, the same will not include any works and it is a supply contract. Therefore, the contention of the learned senior counsel that it is a works contract and that respondent No.1 lacks jurisdiction to entertain the reference made by respondent No.2 is unsustainable.
vii) It is also relevant to note that the petitioners herein had filed counter claims and having filed counter claims before respondent No.1, the petitioners cannot claim that respondent No.1 lacks 15 KL,J W.P. No.16918 of 2022 jurisdiction since it is a works contract. Thus, viewed from any angle, the said contention of the learned senior counsel is unsustainable.
viii) Mr. C.V. Mohan Reddy, learned senior counsel, would further submit that respondent No.1 has not followed the mandatory procedure laid down under the Act, 1996, much less the procedure laid down under Sections - 65 to 81. Conducting of conciliation is mandatory under the Act, 1996, which respondent No.1 has not conducted.
ix) It is relevant to note that as per sub-section (2) of Section 18 of the Act, 2006, 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 Sections - 65 to 81 of the Act, 1996 shall apply to such a dispute as if the conciliation was initiated under Part III of that Act. In view of the said provision, conducting conciliation is mandatory. The word 'shall' is used in the said provision and, therefore, Council 'shall' either itself conduct conciliation in the matter or seek the assistance of 16 KL,J W.P. No.16918 of 2022 any institution or centre providing alternate dispute resolution services.
x) Perusal of the impugned award and the record of respondent No.1 in the impugned award would reveal that respondent No.1 has not conducted any conciliation in terms of Section - 18 (2) of the Act, 2006, which is mandatory. It is also relevant to note that prior to adjudicating the matter, respondent No.1 has to refer the matter to conciliation mandatorily as prescribed by the Statute. If the conciliation is failed, respondent No.1 will adjudicate upon the matter on merits. As discussed above, in the present case, respondent No.1 failed to conduct conciliation proceedings before adjudicating the reference. Thus, there is violation of the mandatory procedure laid down under the Act, 2006. Contrary to the same, respondent No.1 in the impugned award mentioned that conciliation is failed. The said finding of respondent No.1 in the impugned award is contrary to the record and not supported by any documentary evidence.
xi) It is also relevant to note that as per the procedure laid down under the Act, 1996, Conciliator cannot act as an Arbitrator in the same dispute. In the impugned award, it is stated that Members of 17 KL,J W.P. No.16918 of 2022 respondent No.1 Council have conducted conciliation and arbitration proceedings on their own. The same is impermissible. Viewed from any angle, the impugned award is contrary to the procedure laid down under the Act, 2006, more particularly, Section 18 (2).
xii) In Jharkhand Urja Vikas Nigam Limited v. The State of Rajashtan6, the Apex Court referring to Section 18 (2) of the Act, 2006, held that there is a fundamental difference between conciliation and arbitration. In conciliation, the conciliator assists the parties to arrive at an amicable settlement, in an impartial and independent manner. In arbitration, the Arbitral Tribunal/ Arbitrator adjudicates the disputes between the parties. The claim has to be proved before the arbitrator, if necessary, by adducing evidence, even though the rules of the Civil Procedure Code or the Indian Evidence Act may not apply. Unless otherwise agreed, oral hearings are to be held. In the absence of the said procedure of conducting conciliation, the award passed by respondent No.1 Council is nullity.
xiii) In Indur District Cooperative Marketing Society Ltd., Nizamabad v. M/s. Microplex (India), Hyderabad7, M/s. Indu 6 . 2021 (4) CCC 476 7 . 2015 SCC OnLine Hyd. 494 18 KL,J W.P. No.16918 of 2022 Projects Limited v. Telangana Micro & Small Enterprises Facilitation Council8 and Vijeta Construction v. Indus Smelters Ltd.9, the Apex Court reiterated the said principle.
xiv) In Vijeta Construction9, the Apex Court referring to the provisions of the Act, 2006, more particularly Section 18 (2) and 18 (3), and also Sections 65 to 81 of the Act, 1996, held that in light of the statutory provisions under the Act, 1996, the Council shall follow the said procedure mandatorily. As per sub-section (3) of Section 18 of the Act, 2006 after conciliation fails under sub-section (2) of Section - 18 of the Act, 2006 and conciliation initiated under sub- section (2) is not successful, conciliation 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 Alternative Dispute Resolution (ADR) Services for such arbitration and the provisions of the Act, 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. Therefore, only after the procedure under sub-section (2) of Section - 18 is followed and the conciliation fails and then and then only the 8 . W.P. No.24112 of 2016, decided on 12.11.2019 9 . Civil Appeal No.5934 of 2021, decided on 23.09.2021 19 KL,J W.P. No.16918 of 2022 arbitration proceedings commences and thereafter the provisions of the Act, 1996 shall then apply.
xv) As discussed above, perusal of the original record in the impugned award and the impugned award would reveal that respondent No.1 has not followed the said mandatory procedure under Sections - 18 (2) and 18 (3) of the Act, 2006 and also Sections - 65 to 81 of the Act, 1996. Thus, in the absence of the same, the impugned award is a nullity.
xvi) Section - 43 of the Act, 1996 deals with 'limitation'. As per sub-section (1) of Section 43, the Limitation Act, 1963 shall apply to arbitrations as it applies to proceedings in Court. Article - 137 of the Limitation Act deals with any other application for which no period of limitation is provided elsewhere in the Division. Therefore, the present proceedings i.e., subject reference falls under the said Article and, therefore, the limitation prescribed is three (03) years.
xvii) As stated above, respondent No.1 had placed the subject purchase order dated 17.03.2008 for supply of the aforesaid items. Clause - 12 of the said Purchase Order deals with 'arbitration', and it says that all disputes or differences whatsoever arising between the 20 KL,J W.P. No.16918 of 2022 parties out of or relating to the wordings, meaning and effect of this Purchase Order or breach thereof shall be settled by arbitration in accordance with the Rules of Arbitration 1996 or its amendment thereof, within the framework of Indian Arbitration Act. The venue of the arbitration shall be in Dehradun, Uttarakhand.
xviii) Clause - 7 of the said Purchase Order deals with 'delivery schedule', and it says that ducting shall be completed by 20th April 2008. Delivery of the all the HVAC systems, Doors & Windows & False ceiling & partitions shall be completed and commissioned at site by 10th June 2008. Clause - 9 deals with warranty period, and it says the minimum period of 24 months from the date of commissioning. Clause - 5 deals with 'terms of payment' and as per which, petitioner No.2 has to pay entire amount within 24 months from the date of successful commissioning at petitioner No.1's side.
xix) There is no dispute that respondent No.2 had filed the reference on 26.10.2015. There is no mention with regard to the limitation in the reference filed by respondent No.2. It is also relevant to note that the petitioners have not taken the said contention that the reference made by respondent No.2 before respondent No.1 was barred by limitation. Therefore, there is no finding with regard to the 21 KL,J W.P. No.16918 of 2022 said limitation by respondent No.1 Council in the impugned award. However, it is a legal ground, and at any time and at any stage, the petitioners can raise such legal ground.
xx) It is trite to note that the Apex Court in Silpi Industries v. Kerala State Road Transport Corporation10 held that the provisions of the Limitation Act, 1963 are applicable to the proceedings initiated under Section - 18 (3) of the Act, 2006. Therefore, according to this Court, the petitioners herein are at liberty to take the said ground of limitation even in the present proceedings.
xxi) As discussed above, subject reference falls under Article - 137 of the Limitation Act, 1963, and limitation prescribed is three (03) years. In the case on hand, respondent No.2 has not filed the present reference within prescribed period of three (03) years under the Limitation Act and, therefore, it is also barred by limitation.
xxii) The scope of interference with the Award by this Court by invoking its inherent powers under Article - 226 of the Constitution of India and also with regard to the maintainability of writ petition, it is relevant to note that the Apex Court in i) Surender Kumar Singhal 10 . 2021 SCC OnLine SC 439 22 KL,J W.P. No.16918 of 2022 v. Arum Kumar Bhalotia11, ii) Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd.12; iii) Punjab State Power Corporation Ltd. v. Emta Coal Ltd13 and iv) Radha Krishnan Industries v. State of Himachal Pradesh14, held that if the mandatory procedure laid down under Sections - 18 (2) and 18 (3) of the Act, 2006 and Sections - 65 to 81 of the Act, 1996 is not followed by the Council while adjudicating the subject reference filed by any party, if there is violation of the said procedure, this Court can interfere with the Award by invoking its inherent jurisdiction under Article - 226 of the Constitution of India. It was further held that the writ petition is maintainable and Section - 34 of the Act, 1996 is not an alternative and efficacious remedy.
xxiii) In view of the above said principle laid down by the Apex Court in the aforesaid judgments and in view of the above discussion, this Court is of the considered view that respondent No.1 has not followed the procedure prescribed under Section - 18 (2) of the Act, 2006 and also Sections - 65 to 81 of the Act, 1996 which is mandatory, this Court can interfere with the impugned award and the 11 . 2021 SCC OnLine Del.3708 12 . (2020) 15 SCC 706 13 . SLP to Appeal (Civil) No.8482 of 2020, decided on 21.09.2021 14 . (2021) 6 SCC 771 23 KL,J W.P. No.16918 of 2022 present writ petition is maintainable. The impugned award is contrary to the mandatory procedure laid down under the Act, 2006 as well as Act, 1996.
xxiv) Mr. G.S. Jagannath, learned counsel for respondent No.2, placing reliance on the following judgments to contend that the present writ petition is not maintainable on the ground that there is an alternative and efficacious remedy under Section - 34 of the Act, 1996 and that the petitioners have not deposited 75% of the award amount in terms of Section - 19 of the Act, 2006, viz.,
a) Bruhat Bangalore Mahanagara Palika v. Telangana State Micro and Small Enterprises Facilitation15 and Ballarpur Industries Limited v. A.P. Micro, Small Enterprises Facilitation Council16 of the High Court of Judicature at Hyderabad for the States of Telangana and Andhra Pradesh;
15 . (2018) 3 HLT 512 16 . (2014) 5 ALT 502 17 . MAT No.1345 of 2018 and CAN No.8649 of 2018, decided on 08.01.2019 24 KL,J W.P. No.16918 of 2022
c) Narmada Transmission Pvt. Ltd., v. Rajasthan Rajya Vidyut Prasaran Nigam Limited18 of the Rajasthan High Court at Jaipur Bench;
d) M/s. GPT Infra Projects Limited, Salt Lake City, Kolkata v. State of Jharkhand19 of the Jharkhand High Court;
e) Fives Stein India Project Pvt. Ltd., Kolkata v. State of M.P.20 of the Madhya Pradesh High Court; and Eden Exports Company v. Union of India21 of the Madras High Court.
xxv) In the aforesaid judgments, there is no consideration of the principle laid down by Apex Court in Surender Kumar Singhal11, Deep Industries Ltd12, Emta Coal Ltd13 and Radha Krishnan Industries14. The said judgments are later judgments of the Apex court and the same are on consideration of the provisions of the Act, 2006 and 1996.
xxvi) In Radha Krishnan Industries14, there is a finding that since the award passed by the Council is contrary to the mandatory 18 . Spl.Appeal Writ No.889 of 2014 in S.B. Civil W.P. No.1815 of 2012, decided on 17.10.2014 19 . (2016) 161 AIC 591 20 . W.P. No.22577 of 2018, decided on 02.11.2018 21 . (2013) 1 MLJ 445 25 KL,J W.P. No.16918 of 2022 provisions laid down under Section - 18 (2) of the Act, 2006 and Sections - 65 to 81 of the Act, 1996, there is no need to deposit 75% of the amount. Thus, in view of the said principle laid down by the Apex Court, the contention of the learned counsel for respondent No.2 that the writ petition is not maintainable is unsustainable.
xxvii) It is also relevant to note that, respondent No.2 herein had filed a writ petition vide W.P. No.15230 of 2016 challenging the award dated 20.02.2016 passed by respondent No.1. This Court considering the fact that the impugned award is not a reasoned award and reasons were not recorded in terms of Section - 31 of the Act, 1996, without going into the merits of the case, vide order dated 16.06.2016, set aside the said award dated 20.02.2016 and the matter was remanded to respondent No.1 for passing appropriate award in accordance with law by recording reasons as envisaged under Section
- 31 of the Act, 1996. This Court also directed respondent No.1 to deal with the counter claims in accordance with law while passing award.
xxviii) Perusal of the impugned award would reveal that there is no consideration of the counter claims by respondent No.1 Council. It failed to take into account of all the aspects while passing the award 26 KL,J W.P. No.16918 of 2022 with regard to the counter claim filed by petitioner No.1. Thus, the impugned award is contrary to the directions given by this Court in the order dated 16.06.2016 in W.P. No.15230 of 2016.
xxix) In Bhopal Sugar Industries v. Income Tax Officer, Bhopal22, the Constitutional Bench of the Apex Court considering the fact that the Judicial Commissioner has not followed the directions given to it, held that the impugned order therein passed by the respondent failed to carry out a legal duty imposed on him and such failure was destructive of a basic principle of justice, a writ of mandamus should issue ex debito justiciae to compel the respondent therein to carry out the directions given to him by the Income-Tax Appellate Tribunal, Bombay.
8. CONCLUSION:
i) In view of the aforesaid discussion, the present writ petition is maintainable and this Court can interfere with the impugned award by invoking its inherent power under Article - 226 of the Constitution of India. The impugned award is in violation of Section - 18 (2) of the Act, 2006 and also Sections - 65 to 81 of the Act, 1996. Viewed from any angle, the impugned award is liable to be set aside. 22
. AIR 1961 SC 182 27 KL,J W.P. No.16918 of 2022
ii) The present Writ Petition is accordingly allowed setting aside the impugned Award, dated 28.10.2021 passed by respondent No.1 in Case No.21C/IFC/2015/ 16648.
iii) However, in the circumstances of the case, there shall be no order as to costs.
As a sequel, the miscellaneous petitions, if any, pending in the writ petition shall stand closed.
_________________ K. LAKSHMAN, J 14th September, 2022 Note:
1. The Registrar (Judicial-I) is directed to return the original file to respondent No.1 under due acknowledgment.
2. L.R. Copy to be marked.
(B/O.) Mgr