9911796707
TMI Blog2023 (6) TMI 1447X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent was to arrange for transportation of 50,000 MT of coal required by the petitioner from Magadh to the petitioner's plant at Jhargram for a total consideration of Rs. 2,15,35,000/-. Disputes arose between the parties which included the petitioner serving a legal notice on the respondent on 17.11.2022 for the amount due and the respondent raising a demand under section 8 of the Insolvency and Bankruptcy Code (IBC), 2016 on the petitioner alleging that the petitioner had failed to make full and complete payment of the invoices raised in connection with the Service Order. Learned counsel appearing for the parties, however, have raised certain preliminary questions on points of law which are required to be dealt with and answered. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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." "17. Recovery of amount due. - For any goods supplied or services rendered by the supplier, the buyer shall be liable to pay the amount with interest thereon as provided under section 16." 5. Sections 18 and 17 - necessarily in reverse order - makes it clear that the reference made by any party to the Council must be with regard to any amount due under section 17 which is for goods supplied or services rendered by a supplier. Section 17 also mandates that the buyer shall be liable to pay the amount with interest thereon as provided under section 16 of the MSMED Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 24 of the Act which provides for sections 15-23 to have overriding effect will only apply where a reference has been made to the Council under section 18(1) of the Act. Section 24 does not contemplate automatic application of the provisions of sections 15-23, including section 18 - where the jurisdiction of the Council has not been invoked by a party who seeks recovery of an amount due under section 17 of the Act. 9. The case law cited on behalf of the parties do not strictly apply to the facts of the present case. The Bombay High Court decision in Porwal Sales vs. Flame Control Industries; MANU/MH/2299/2019 was on the issue whether the court under section 11 of the 1996 Act would be deprived of its jurisdiction where the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Facilitation Council and the stage had already progressed through conciliation to arbitration under section 18(3) of the MSME Act. 11. The second objection raised on behalf of the respondent is the absence of an arbitration agreement as contemplated by section 7(2) of the 1996 Act. 12. This objection is belied from the material on record. The Service Order dated 9.12.2021 contains the arbitration clause that refers to a S.O No. C321364073. The S.O number finds specific mention/reference in the notice issued by the petitioner to the respondent on 8.4.2023 under section 21 of the 1996 Act. The Invocation Letter also sets out the arbitration clause in the Service Order. 13. The communications earlier exchanged by the parties in the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as envisaged by the arbitration clause is against the statutory mandate of section 10(1) of the 1996 Act which provides that the parties are free to determine the number of arbitrators subject to the number not being an even number. The other point with regard to the arbitration agreement not being a stamped or a signed document is also without substance as the Service Order which contains the arbitration agreement was executed between the parties and the respondent gave effect to it as would be evident from its reply in July, 2022. It is also arguable whether the Service Order is required to be stamped. Even if it was, the respondent has not been able to disprove the case of the petitioner of a stamp of 12 annas under The Indian Stamp Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
