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Madhya Pradesh High Court

Tamil Nadu Medical Services ... vs Madhya Pradesh Micro Small And Medium ... on 23 August, 2018

                                              1                             WP-19391-2018
               The High Court Of Madhya Pradesh
                          WP-19391-2018
    (TAMIL NADU MEDICAL SERVICES CORPORATION LTD. Vs MADHYA PRADESH MICRO SMALL AND MEDIUM
                               ENTERPRISES FACILITATION COUNCIL)

1
Jabalpur, Dated : 23-08-2018
       Mr.Kishore Shrivastava, learned senior counsel with Mr.Kunal Thakre,
learned counsel for the petitioner.
       Heard.
       Issue notice to the respondents on payment of process fee within seven days,

failing which this petition shall stand dismissed without reference to the Court.

Also heard on interim relief.

Learned senior counsel submits that by order dated 28th Feburary 2013, the Controller Food and Drugs Administration, Madhya Pradesh in exercise of power under Rule 85(2) of Drugs and Cosmetic Rules, 1945 withdrew the license of the respondent no.2. The respondent no.2 by suppressing the aforesaid aspect filed an application before the respondent no.1 pursuant to which conciliation proceedings were initiated by the Council. The petitioner sent a letter dated 26/04/2016(Annexure-P-19) and contended that there exists an arbitration clause and therefore the matter before Council is not maintainable. In addition, the legal jurisdiction is at Chennai and therefore the proceeding before facilitation Council is not tenable. Learned senior counsel submits that without deciding the said objection the counsel has passed the impugned order dated 27/12/2017 (Annexure-P-20).

By taking this Court to Section 18 of an Act of 2006 it is urged that the Council had to initiate the conciliation proceedings. If conciliation fails the Council had two options. Firstly Council itself can act as an arbitrator and decide the matter on merits. Secondly Council can appoint an arbitrator, who inturn resolve the dispute as per the Arbitration and Conciliation Act, 1996. By taking this Court to page 9 of the impugned order it is argued that Council on 27/12/2017 itself decided that conciliation failed and therefore conciliation proceedings comes to an end. Thereafter, without informing the petitioner about closure of conciliation proceeding the respondent no.1 appointed itself as an arbitrator, and decided the dispute on the very same date. This procedure is not totally unknown to law, it runs contrary to statutory mandate ingrained in Section 18 of the Act of 2006. Learned senior counsel further submits that petitioner belatedly came to know about the impugned order dated 27/12/2017 upon receiving the notices issued by National Company Law Tribunal.

Considering the aforesaid, subject to hearing the other side, till next date of 2 WP-19391-2018 hearing, the effect and operation of order dated 27/12/2017 and consequential action shall remain stayed.

Certified copy as per rules.

(SUJOY PAUL) JUDGE S /-