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TMI Blog2023 (1) TMI 1377X X X X Extracts X X X X X X X X Extracts X X X X ..... nterprise. 2. Although respondent No. 1 is unrepresented today, I find that an objection on the ground of territorial jurisdiction is taken in the reply filed by respondent No. 1. At my request, Mr. Shashank Garg, learned counsel for the petitioner, has addressed on this aspect, particularly keeping in view the judgment of the Supreme Court in Gujarat State Civil Supplies Corporation Limited vs. Mahakali Foods (P) Ltd. Arising out of SLP(C) No. 12884/2020. 3. The disputes between the parties arise out of a Purchase Order dated 22.05.2010 (at page 63 of the petitioner's list of documents) ["the Purchase Order"]. Clause 8 of the Purchase Order provides as follows:- "All disputes are subject to Delhi Jurisdiction." 4. Although the Pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in FAO(OS)(COMM) 92/2019. In the said judgment, the Division Bench was concerned with a contract which contained an arbitration clause and a jurisdiction clause. The Division Bench found that these clauses constituted New Delhi as the venue of arbitration and also conferred exclusive jurisdiction upon the Courts in New Delhi. The Court held that, by virtue of Section 18(4) of the MSMED Act, the arbitration was, in fact, conducted by a Facilitation Council outside Delhi, but the said provision would have the effect of shifting the venue of the arbitration and not its seat. The observations of the Division Bench in paragraphs 20 and 23 of the aforesaid decision are relevant, and are reproduced below:- "20. In the present case, both the VEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the Appellant, during the course of arguments, that the questions relating to the jurisdiction of the MSME Council to act as an Arbitrator and other similar issues will not be examined by us, as the learned Single Judge has not considered any of those aspects and has decided the objection petition only on the ground of territorial jurisdiction. However, this does not mean that the jurisdiction clause agreed between the parties has to be given a go-by. The overriding effect of the MSME Act, cannot be construed to mean that the terms of the agreement between the parties have also been nullified. Thus, jurisdiction of the MSME Council which is decided on the basis of the location of the supplier, would only determine the ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apter V of the MSMED Act:- "23. Having regard to the purpose, intention and objects as also the scheme of the MSMED Act, 2006 and having regard to the unambiguous expressions used in Chapter-V thereof, following salient features emerge: xxxx xxxx xxxx (vi) The provisions of Arbitration Act, 1996 has been made applicable to the dispute only after the Conciliation initiated under sub-section (2) does not succeed and stands terminated without any settlement between the parties. (vii) Sub-section (1) and sub-section (4) of Section 18 starting with non obstante clauses have an effect overriding the other laws for the time being in force. (viii) As per Section 24, the provisions of Sections 15 to 23 have an effect notwithstanding anythi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. If submission made by the learned counsel for the buyers that the party to a dispute covered under the MSMED Act, 2006 cannot avail the remedy available under Section 18(1) of the MSMED Act, 2006 when an independent arbitration agreement between the parties exists is accepted, the very purpose of enacting the MSMED Act, 2006 would get frustrated. 28. There cannot be any disagreement to the proposition of law laid down in various decisions of this Court, relied upon by the learned counsel for the buyers that the Court has to read the agreement as it is and cannot rewrite or create a new one, and that the parties to an arbitration agreement have an autonomy to decide not only on the procedural law to be followed but also on the subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the party under the said provision. It is therefore held that no party to a dispute covered under Section 17 of the MSMED Act, 2006 would be precluded from making a reference to the Facilitation Council under Section 18(1) thereof, merely because there is an arbitration agreement existing between the parties." 11. Aforesaid being the position of the law laid down by the Supreme Court, in the facts of the present case, I am of the view that the seat of the arbitration, conducted by the Facilitation Council, was in Nagpur and the petition filed before this Court is not maintainable. 12. The petition, alongwith the pending application, is therefore dismissed as not maintainable, with liberty to the petitioner to file a petition on the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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