TMI Blog2016 (11) TMI 1541X X X X Extracts X X X X X X X X Extracts X X X X ..... d amount has to be made in the manner directed by the court trying that application. In the present case, the award was passed by the Facilitation Council on 12-3-2014, the respondent herein filed application for execution of award on 21-8-2014 and thereafter on 19-2-2015, application under Section 34 of the Act of 1996 was filed by the petitioner for setting aside the award in which the respondent herein objected that compliance of mandatory provision of Section 19 of the Act of 2006 has not been made therefore application u/s 34 of the Act of 1996 cannot be maintained - The trial Court has already held that the petitioner's application u/s 34 of the Act of 1996 is not maintainable for want of prerequisite deposit u/s 19 of the Act of 2006 as such, the award is clearly executable, as the petitioner's application u/s 34 of the Act of 1996 is not duly constituted and not liable to be entertained, and rightly held so by the trial Court and the petitioner's application has rightly been rejected by the trial Court. Whether in view of the objection filed u/s 22(3) of the SIC Act by the petitioner, the executing court has no jurisdiction to execute the award? - Held that: - the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of 1996, execution of the award shall remain suspended automatically. The learned District Judge by its impugned order rejected both the applications feeling aggrieved against which this writ petition under Article 227 of the Constitution of India has been filed by the petitioner. 3. Mr. Raghavendra Pradhan, learned counsel appearing for the petitioner, would submit as under:- 1. The learned District Judge has committed legal error in not properly appreciating the fact that once an application under Section 34 of the Act of 1996 is filed, by virtue of Section 36 of the Act of 1996, proceeding for execution shall stand automatically suspended. 2. The petitioner Company is a sick industry and by virtue of the provisions contained in Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short 'the SIC Act'), execution proceedings cannot proceed against a sick industry/petitioner as held by the Supreme Court in the matter of LML Ltd. v. Union of India and others (2014) 13 SCC 375. 4. Mr. B.P. Sharma, learned counsel appearing on behalf of the respondent decree holder, would submit as under:- 1. The provisions of Section 36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial undertakings as it was a beneficial piece of legislation, tended to expedite timely payment of money owed to Small Scale Industries. The Interest Act of 1993 was repealed by the Act of 2006. 9. The Act of 2006 has been enacted to provide for facilitating the promotion and development and enhancing the competitiveness of micro, small and medium enterprises and for matters connected therewith or incidental thereto. It is a central enactment which came into force on 2-10-2006. The Act of 2006 is intended to provide single legal framework to small and medium enterprises' sector by intending to make further improvements to the Interest Act of 1993 and to ensure timely and smooth flow of credit to small and medium enterprises as well as minimising the incidence of sickness among them. 10. Chapter V of the Act of 2006 provides for the consequences and remedies for delayed payments to Micro and Small Enterprises. Section 15 of the said Act provides for the liability of the buyer to make payment to the supplier within the stipulated period. Section 16 enables the supplier to claim compound interest from the buyer on delayed payment notwithstanding anything contained in any a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id provision would clearly state that no application for setting aside any decree or award or order made by the Council constituted under Section 20 of the Act of 2006 shall be entertained by any court unless the appellant therein has deposited 75% of the amount in terms of the decree or award, as the case may be, or the other order in the manner indicated by the High Court. Thus, the requirement of depositing 75% of the amount is mandatory to entertain the application for setting aside the award. Proviso to Section 19 empowers the court to pass appropriate order with respect to disbursement of the amount to the supplier on the condition as it considers reasonable under the circumstances of the case. Therefore, deposit of 75% of the amount is mandatory and court has the discretion to indicate the manner of depositing 75% of the amount and it can be in installments, if required. 12. The Supreme Court in the matter of Snehadeep Structures Private Limited v. Maharashtra Small-Scale Industries Development Corporation Limited (2010) 3 SCC 34 while dealing with the Interest Act of 1993 also considered Section 19 of the Act of 2006 and held in paragraph 58 that Section 19 of the Act re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt has considered the nature and effect of non obstante clause by holding it as a legislative device and observed as under:- A non obstante clause is a legislative device which is usually employed to give overriding effect to certain provisions over some contrary provisions that may be found either in the same enactment or some other enactment, that is to say, to avoid the operation and effect of all contrary provisions. 17. Similar is the proposition laid down in the matter of State of Bihar and others v. Bihar Rajya M.S.E.S.K.K. Mahasangh and others (2005) 9 SCC 129 in which the Supreme Court has held in paragraphs 45 to 47 as under:- 45. A non obstante clause is generally appended to a section with a view to give the enacting part of the section, in case of conflict, an overriding effect over the provision in the same or other Act mentioned in the non obstante clause. It is equivalent to saying that in spite of the provisions of the Act mentioned in the non obstante clause, the provision following it will have its full operation or the provisions embraced in the non obstante clause will not be an impediment for the operation of the enactment or the provision in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idden by the process but this device of judicial surrender did not last long. Under the scheme of the modern legislation, non obstante clause has a contextual and limited application. The impact of a non obstante clause on the Act concerned must be kept measured by the legislative policy and it has to be limited to the extent it is intended by Parliament and not beyond that. 19. Nature and effect of non obstante clause as held in G.M. Kokil's case (supra) has been followed with approval by the Supreme Court very recently in the matters of State (NCT of Delhi) v. Sanjay (2014) 9 SCC 772 and Laxmi Devi v. State of Bihar (2015) 10 SCC 241. 20. The Act of 2006 is a Special Act and as per the provisions of Section 24 of the said Act, the provisions of Sections 15 to 23 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Therefore, Section 18/19 of the Act of 2006 would have overriding effect on any other law for the time being in force including the Act of 1996 and therefore if there is any dispute between the parties governed by the Act of 2006, the said dispute is to be resolved only through the procedur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Supreme Court have relied upon Snehadeep Structures Private Limited (supra) and did not approve the order of the High Court and held that predeposit of 75% under the Act of 1996 is the condition precedent for maintaining application to set aside the award under Section 34 of the Act of 1996, only the Court has no discretion to either waive or reduce the amount of 75% of the award as a predeposit for filing of application or appeal. Thus, legal view in this regard is clearly crystallised that the application under Section 34 of the Act of 1996 would be maintainable for setting aside the award passed by the Micro and Small Enterprises Facilitation Council constituted under Section 20 of the Act of 2006 but while filing an application, the appellant has to deposit 75% of the amount in terms of the award in the manner indicated by such court and as such, the application under Section 34 of the Act of 1996 challenging the award passed by the Facilitation Council has to be read along with Section 19 of the Act of 2006 and in order to make the application under Section 34 of the Act of 1996 maintainable and duly constituted, a mandatory deposit of 75% of awarded amount has to be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained in Section 22(3) of the SIC Act, the award is not executable and the execution proceeding deserves to be dropped. The award of the Facilitation Council being an award deemed to have been made under the Act of 1996, is executable under Section 36 of the said Act. 29. The Supreme Court in the matter of Jay Engineering Works Ltd. v. Industry Facilitation Council and another (2006) 8 SCC 677 has held that once the awarded amount is included in the scheme approved by the Board, Section 22 of the SIC Act would apply. 30. Very recently, in the matter of Ghanshyam Sarda v. Shiv Shankar Trading Company and others (2015) 1 SCC 298, the Supreme Court has held that the SIC Act is a self-contained code and has conferred upon BIFR complete supervisory control over a sick industrial company to adopt such methodology as provided in Chapter III for detecting, reviving or winding up such sick company. The authority to determine the existence and extent of sickness of such company and to adopt methodology for its revival are, in the exclusive domain of BIFR and by virtue of Section 26 there is an express exclusion of the jurisdiction of the civil court in that behalf. The Supreme Court fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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