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Showing contexts for: msefc in Ms Shri Mahavir Ferro Alloys Pvt Ltd vs Ms Passary Minerals Ltd on 9 March, 2018Matching Fragments
. The opposite party then, for its claim/recovery of amount due for the goods supplied by it to the petitioner, made a reference to the Micro, Small Enterprises Facilitation Council, Cuttack (for short, 'MSEFC') under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (for short, "MSME Act 2006"). The MSEFC thereafter allowed the claim of the opposite party on 07.02.2017 and directed the petitioner to pay a sum of Rs.35,36,683 along with interest. The said order of the MSEFC has been challenged by the petitioner by filing a writ petition bearing W.P.(C)No.10685 of 2017, wherein an order of stay has been passed. The petitioner thereafter on 19.04.2017 wrote to the opposite party, pointing out that the plant operations of the petitioner-company have been affected due to sub-standard materials supplied by the opposite party and thus raised a demand, clearly stating that if the demand was not met, the petitioner would be constrained to invoke Arbitration clause under the agreement/purchase order dated 09.04.2015.
6. The contention of learned counsel for the petitioner is that though the dispute with regard to non-payment in lieu of the supply may have been raised by the opposite party before the MSEFC under the provisions of the MSME Act, 2006, but the MSEFC could only decide the claim for non-payment of supply made by the opposite party-supplier (which was registered under the MSME Act, 2006) to the purchaser- petitioner. It is contended that the MSEFC would not have the jurisdiction to decide the claim of the petitioner (which was not a unit registered under the MSME Act, 2006) relating to supply of defective materials, for grant of liquidated damages provided under Clause-12 of the Purchase Order, which can only be considered and decided in terms of Clause-19 of the Purchase Order relating to arbitration proceedings. It is submitted by learned counsel for the petitioner (and also categorically stated in paragraph-15 of the arbitration petition) that the petitioner has not raised any counter claim before the MSEFC in MSEFC Case No.14/2016 filed by the opposite party against the petitioner. In the said paragraph, it has also been stated that there is a legal bar for the petitioner for raising any claim before the MSEFC, for which reason, the petitioner can raise its claim only before the arbitrator appointed under Clause-19 of the Purchase Order. Although such specific averments have been made in paragraph-15 of the petition, but in reply to the same, in paragraph-18 of the counter affidavit, there is no denial to the fact that the petitioner had never raised any counter claim or that there was legal bar for the petitioner to raise any such claim before the MSEFC. It is contended by learned counsel for the petitioner that the dispute raised by the petitioner should be directed by this Court to be decided in terms of Clause-19 of the Purchase Order and the provisions of the Arbitration Act, 1996. In support of his submission, learned counsel for the petitioner relied on a Division Bench decision of the Bombay High Court in M/s. Steel Authority of India Ltd. vs. Micro Small Enterprise Facilitation Council, AIR 2012 Bombay
178.
7. Per contra, Shri P.C. Mishra, learned counsel for the opposite party has been persisting in contending that the counter claim was filed by the petitioner before the MSEFC and, in view of the same, once the petitioner had raised its counter claim before the MSEFC, no further proceeding with regard to the claim of the petitioner for damages or otherwise would be maintainable.
8. Learned counsel for the opposite party has further contended that any claim of the parties could be decided by the MSEFC as provided under Section 18 of the MSME Act, 2006, which would include the claim for damages, if any, made by the petitioner, and once a counter claim had been filed by the petitioner before the MSEFC, the question of appointment of arbitrator, for the issue involved in the counter claim, would not arise. In support of his submission that the issue raised by the petitioner could have been adjudicated by the MSEFC, learned counsel for the opposite party has relied on a decision dated 15.04.2010 of the Apex Court rendered in Civil Appeal Nos.3305-3306 of 2010 (M/s. Modern Industries v. M/s. Steel Authority of India Ltd. & Ors).
14. Section 18 of the MSME Act, 2006 under which the case of the opposite party was referred to the MSEFC would make it clear that the said claim could only be with regard to any amount due under Section 17 of the MSME Act, 2006 which relates to recovery of amount due for any goods supplied or services rendered by the supplier for which buyer shall be liable to pay the amount with interest.
15. As such, it is clear that the claim before the MSEFC under Section 18 could only be that of the supplier against the buyer and not the claim of any buyer for liquidated damages or otherwise against the supplier. Such claim, if any, of the buyer would be independent and would thus not be governed by the provisions of the MSME Act, 2006, which is not in dispute by any of the party in the present case. Even otherwise, since it is only the opposite party which is registered under the MSME Act, 2006 and not the petitioner, the petitioner would, in any case, not have a right to get its dispute decided by the MSEFC.