TMI Blog2017 (2) TMI 1533X X X X Extracts X X X X X X X X Extracts X X X X ..... he intention of the legislature as is evident from the Statement of Objects and Reasons of the MSMED Act. The case on hand falls in the third category where a supplier is already in existence at the time of commencement of the Act but has not obtained any registration till then. It is registered as a supplier beyond 180 days from the date of the commencement of the Act i.e., after 180 days from 2nd October, 2006. Clearly, such a unit can also seek registration as a supplier. That is precisely what has happened in the present case. The certificate issued to the REPM is dated 4th April, 2012, but importantly, it notifies that the date of commencement of the activities as 1st February, 2009. Whether having been registered on 4th April, 2012, can REPM take advantage of the MSMED Act? - HELD THAT:- The supplies made by REPM to Alstom in terms of the PO dated 8th September, 2009 continued even after REPM's registration as supplier as is evident from the two MoMs dated 1st May, 2013 and 28th December, 2013. The result is that REPM can seek the application of the beneficial provisions of MSMED Act as far as its claims against Alstom arising from the said First PO are concerned. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it initially for a period of six months and kept renewed during the pendency of the petition. The hearing of the main petition will be subject to compliance with the above direction. Application disposed off. - O.M.P. (COMM) 76/2016 - - - Dated:- 15-2-2017 - Justice S. Muralidhar For the Petitioner : Mr. Tejas Karia, Mr. Surjendu Sankar Das and Mr. Siddharth Kochhar, Advocates For the Respondent : Dr. Amit George, Advocate/Amicus Curiae. IA No. 4177/2016 (Seeking waiver of deposit) 1. GE T D India Limited [earlier known as Alstom T D India Limited (hereafter 'Alstom')] has filed this petition under Section 34 of the Arbitration and Conciliation Act, 1996 ( Act ) challenging an Award dated 22nd November, 2015 passed by the Facilitation Council, Facilitation Cell, Kanpur ( hereinafter FC ) in the disputes between Alstom and the Respondent, Reliable Engineering Projects and Marketing ( REPM ). 2. It is pointed out at the outset by the Petitioner that the impugned Award comprises of two awards passed by the FC, one pursuant to the order dated 29th June, 2015 (Award Part-I) and the other pursuant to the order dated 13th August, 2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bitrator mutually agreed by the parties. The arbitration shall be conducted as per the Arbitration and Conciliation Act 1996, as may be amended from time to time. The venue of the arbitration shall be Delhi and the courts in Delhi shall have exclusive jurisdiction. 7. A meeting took place between the parties on 1st May, 2013 for sorting out the issues concerning the aforementioned PO. The Minutes of the Meeting ( MoM ) dated 1st May, 2013, a copy of which has been placed on record, states in para 6 that claim for overrun charges shall be submitted jointly by REPM and Alstom to NTPC after completion of the work. Annexure-1 to the said MoM listed out the documents required to be submitted by REPM. According to Alstom, the additional works of the value of Rs. 3,30,000 were agreed upon thereafter. The Second PO was amended to incorporate the said additional works on 31st May, 2013 wherein Line Item No. 20 was added. According to Alstom, on 4th June, 2013, the Second PO was further amended to delete certain Line Items and a single Line was added for the same value. 8. A second meeting took place between the parties on 28th December, 2013. The said MoM has also been placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... REPM by its letter dated 14th July, 2015. Another submission was presented by Alstom before the FC on 25th August, 2015 placing on record certain documents. The impugned Award was thereafter passed on 22nd November, 2015 requiring Alstom to pay to REPM Rs. 2,24,23,454/- towards interest. 15. The findings as far as Issue No. 1 were that the FC was competent to act as an Arbitral Tribunal (AT) notwithstanding the arbitration clause in the contract between the parties. It was noted that Alstom had till then not invoked the arbitration clause. 16. Issue No. 2 was regarding the liability of Alstom to pay REPM Rs.1,38,52,500/-. The FC noted that Annexure -2 and Annexure-3 (i.e., the MoMs dated 1st May, 2013 and 28th December, 2013 respectively) were the backbone of the dispute and that a representative of Alstom was present at the meeting on 28th December, 2013 when the MoMs were executed. In that view of the matter, the said claim was allowed. 17. Issue No. 3 concerned the payment of interest and the FC held that Alstom was liable to pay interest under Section 16 of the MSMED Act. Proceedings in this Court 18. When the present petition was filed by Alst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause title of the Petitioner to GE T D India Limited . On that date, the Court further noted that the Respondent, Mr. Vijender Kumar Verma, who was appearing in person required the assistance of a lawyer. Accordingly, Dr. Amit George, Advocate was requested to appear as amicus curiae on the side of the Respondent and assist Mr. Verma in presenting the case before the Court. 22. The Court has heard detailed arguments of Mr. Tejas Karia, counsel appearing for the Petitioner and Dr. Amit George, amicus curiae , for REPM. Both the parties have also filed their respective notes of written arguments. 23. The arguments centred around the applicability of the MSMED Act since that in turn would decide the fate of the IA No. 4177/2016 filed by the Petitioner seeking waiver of the deposit. This judgment, therefore, is confined to the issue of applicability of the MSMED Act. Submissions on behalf of the Respondent 24. The submissions of Mr. Tejas Karia, learned counsel appearing for the Petitioner, were as under: (i) Under Section 15 of the MSMED Act, the requirement that the buyer should make payment by the appointed date was only where any supplier, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed v. R. Suresh 2013 SCC OnLine Bom 547; Steel Authority of India Ltd. v. The Micro, Small Enterprises Facilitation Council through Joint Director [ Writ Petition No. 2145/2010]. (vii) The First PO dated 8th September, 2009 did not contain the arbitration clause but the subsequent PO dated 27th November, 2012 did contain such a clause and, therefore, was in fact in continuation of the earlier PO. The said arbitration clause would govern the parties and, therefore, resort to the MSMED Act was legal for that purpose. The Act was a Special Act and took precedence over the MSMED Act. Reliance was placed on the decision of Bombay High Court in M/S. Girnar Traders v. State Of Maharashtra (2011) 3 SCC 1 to urge that in light of the Act, the claim had to be made only before the Arbitrator appointed under the agreement as it was to take precedence over the remedy under the MSMED Act. Submissions on behalf of the Respondent 25. Countering the above submissions, Dr. Amit George, amicus curiae , appearing on behalf of the Respondent referred to Section 1 (2) of the MSMED Act which makes it explicit that it came into force on the date appointed by the Central Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Council ILR 2008 (2) Kerala 281 ; Bharat Heavy Electricals Ltd. v State of Uttar Pradesh 2014 (4) AWC 3543 ; Paper Board Convertors, Agra v Uttar Pradesh State Micro Small Enterprises Facilitation Council, Kanpur 2014 (5) AWC 4844 ; Principal Chief Engineer v Manibhai Brothers (Sleeper) AIR 2016 Gujarat 151 ; Central Electricity Supply Utility of Odisha v Union of India. [W.P.(C) No.1213/2016 decided on 23rd March, 2016) and Welspun Corp. Ltd. v The Micro Small, Medium Enterprises Facilitation Council, Punjab (2012) 166 PLR 195 to urge that Section 18 of the MSMED Act would have an overriding effect. He also placed reliance on the decision in Waman Shriniwas Kini v. Ratilal Bhagwandas Co. AIR 1959 SC 689 to urge that a statute would override the contract. Relying on the decision in Life Insurance Corporation of India v D.J. Bahadur (1981) 1 SCC 315 , he submitted that being a special statute it is the MSMED Act which should apply. In this context he also relied upon the decisions in Snehadeep Structures Pvt. Ltd. v Maharashtra Small Scale Industries Development Corporation Ltd. (2010) 3 SCC 34 and Edukanti Kistamma (Dead) through LRs. v. S. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prises 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 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 to it any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of the Arbitration and Conciliation Act, 1996 shall then apply to the dispute as if the arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture or production of goods pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951, having investment in plant and machinery of more than one crore rupees but not exceeding ten crore rupees and, in pursuance of the notification of the Government of India in the erstwhile Ministry of Industry (Department of Industrial Development) number S.O. 477(E) dated the 25th July, 1991 filed an Industrial Entrepreneur's Memorandum, shall within one hundred and eighty days from the commencement of this Act, file the memorandum, in accordance with the provisions of this Act. 33. Section 8 of the MSMED Act envisages two possible situations; one is where a unit which has not yet come into existence, and the second is where the unit is in existence. Where a unit is yet to be established, Section 8(1) requires filing of the memorandum in the manner specified by the State or the Central Government, as the case may be. Where a unit has already been established prior to the commencement of the MSMED Act, then the proviso applies and the memorandum has to be applied within 180 days from the date of commencement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a general one not specific to the service conditions of the employees of the LIC. This explains the following observation of the Supreme Court that even if both statutes were to be construed as special enactments, it is the ID Act which should be given preference since that was specific to the dispute on hand: 53. What are we confronted with in the present case, so that I may determine as between the two enactments which is the special? The only subject which has led to this litigation and which is the bone of contention between the parties is an industrial dispute between the Corporation and its workmen qua workmen . If we refuse to be obfuscated by legal abracadabra and see plainly what is so obvious, the conclusion that flows, in the wake of the study I have made, is that vis-a-vis industrial disputes at the termination of the settlement as between the workmen and the Corporation the ID Act is a special legislation and the LIC Act a general legislation. Likewise, when compensation on nationalisation is the question, the LIC Act is the special statute. An application of the generalia maxim as expounded by English textbooks and decisions leaves us in no doubt that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier and not where it continued after registration of the supplier under the MSMED Act. Likewise, the decisions in M/s Frick India Ltd. v. Madhya Pradesh Micro and Small Enterprises Facilitation Council ( supra ) and Faridabad Metal Udyog Pvt. Ltd. v. Anurag Deepak ( supra ) are distinguishable on facts. To reiterate, here, the supply has continued beyond the registration of the supplier. Therefore, the benefit of the MSMED Act cannot be denied to such supplier. 41. The decisions in Goodyear India Ltd. v. Norton Intech Rubbers Pvt. Ltd. ( supra ); Asiatic Rubro Complex v. Kerala Micro Small Enterprises Facilitation Council ( supra ); Bharat Heavy Electricals Ltd. v. State of Uttar Pradesh ( supra ); Principal Chief Engineer v. Manibhai Brothers ( supra ); Welspun Corp. Ltd. v. The Micro Small, Medium Enterprises Facilitation Council, Punjab ( supra ) support the case of the REPM in relation to the applicability of the MSMED Act to the transactions in question. 42. For the above reasons, the Court negates the plea of the Petitioner that the MSMED Act does not apply. Consequently, the question of the Petitioner seeking a waiver of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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