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2017 (2) TMI 1557 - HC - Indian LawsJurisdiction of the West Bengal State Micro Small Enterprises Facilitation Council in purporting to arbitrate in the disputes between the first petitioner and the third respondent - claim of the third respondent is live or not - existence of arbitration agreement between two parties or not. Is the claim of the third respondent live? - HELD THAT - In view of the fact that the security deposit made by the third respondent is still lying with the first petitioner it cannot be said that the claim of the third respondent is barred by the laws of limitation. The petitioners are not claiming forfeiture of the security deposit. In absence of such particulars it is safe to infer that the jural relationship between the first petitioner and the third respondent still exists. The final bill has not been settled. The security deposit is yet to be refunded. The first petitioner is therefore holding on to the security deposit of the third respondent as a trustee of the third respondent. Limitation is a mixed question of fact and law. On the conspectus of the facts narrated above it cannot be said that the claim made by the third respondent is barred even as on date. The claim of the third respondent is therefore live. When there exists an arbitration agreement between two parties and one of such parties to the arbitration agreement is an entity within the meaning of Micro Small and Medium Enterprises Development Act 2006 does the Council established under the provisions of the Act of 2006 have jurisdiction to arbitrate the disputes between such parties on a request being made for such purpose? - HELD THAT - Section 18(4) of the Act of 2006 allows the Council to arbitrate in a dispute between a supplier located within its jurisdiction and a buyer located anywhere in India. The territorial jurisdiction of the first respondent has not been questioned. The third respondent is a supplier within the meaning of the Act of 2006. Therefore in terms of Section 18(4) of the Act of 2006 the first respondent is the authority designated to arbitrate the disputes between the first petitioner and the third respondent. The existence of a live dispute between the first petitioner and the third respondent is established. On the other side of the spectrum is the arbitration agreement between the first petitioner and the third respondent. The arbitration agreement however has not been placed on record by the petitioners - The arbitrator designated by the agreement between the first petitioner and the third respondent is not the same as that designated by Section 18 of the Act of 2006. Therefore there is an inconsistency between the forum for arbitration under the Act of 2006 and the one governed by the Act of 1996. In view of Section 2(4) of the Act of 1996 read with Sections 18(1) 18(4) and 24 of the Act of 2006 the provisions of the Act of 2006 will prevail. The Council established under the Act of 2006 or the institution or centre identified by it will arbitrate the disputes between the buyer and the supplier. The petitioners had approached the Council for arbitration of the disputes. On such request being made the Council by a writing dated June 12 2015 had called upon the first petitioner to attend the conciliation before the Council on June 30 2015. The Council by a writing dated November 6 2015 had made a further request for conciliation to the first petitioner. It is only thereafter that by a writing dated November 9 2015 that the first petitioner claims to have appointed the sole arbitrator. Prior to the first petitioner appointing the arbitrator the Council had assumed jurisdiction and had issued notices for conciliation. Thus when there exists an arbitration agreement between two parties and one of such parties to the arbitration agreement is an entity within the meaning of the Act of 2006 the Council established under the provisions of the Act of 2006 or any institution or centre identified by it has the jurisdiction to arbitrate such disputes on a request being received by such Council for such purpose. The challenge of the petitioners to the writing dated March 17 2016 issued by the Council fails. The petitioners are not entitled to any relief in the present writ petition. Petition dismissed.
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