Case Note & Summary
The Petitioner, Kirloskar Brothers Limited, filed a Writ Petition under Article 226 of the Constitution of India challenging the jurisdiction of the Micro and Small Enterprises Facilitation Council, Pune, to adjudicate a dispute under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006. The Respondent No.3, M/s. Fusion Control, had filed a Reference Petition before the Council seeking recovery of dues. The Petitioner failed to participate in conciliation proceedings, which failed on 09.02.2013, and subsequently did not appear before the Council on multiple dates. The Petitioner filed an Arbitration Petition No.48/2013, which was dismissed as not maintainable on 06.08.2014. The Petitioner then filed applications for appointment of an arbitrator under Section 18 of the Act, which were not decided. The Court noted that the Petitioner had not challenged the Council's jurisdiction earlier and had not participated in the proceedings. The Court held that the Council has jurisdiction under Section 18, and the writ petition was not maintainable due to the availability of alternative remedies and the Petitioner's conduct. The petition was dismissed with costs of Rs. 25,000.
Headnote
A) Micro, Small and Medium Enterprises - Jurisdiction of Facilitation Council - Section 18 of Micro, Small and Medium Enterprises Development Act, 2006 - The Court held that the Council has jurisdiction to adjudicate disputes under Section 18, and the petitioner's challenge to jurisdiction was without merit. The petitioner failed to participate in conciliation and adjudication proceedings, and the writ petition was dismissed with costs. (Paras 1-8)
B) Constitutional Law - Writ Jurisdiction - Article 226 of Constitution of India - The Court held that the writ petition was not maintainable as the petitioner had alternative remedies and had not exhausted them. The petitioner's conduct of non-participation and delay disentitled it to any relief. (Paras 1-8)
Issue of Consideration
Whether the Micro and Small Enterprises Facilitation Council has jurisdiction to adjudicate disputes under Section 18 of the MSMED Act, 2006, and whether the writ petition challenging the same is maintainable.
Final Decision
Writ Petition dismissed with costs of Rs. 25,000.
Law Points
- Jurisdiction of Facilitation Council under Section 18 of MSMED Act
- 2006
- Maintainability of writ petition under Article 226
- Failure to exhaust alternative remedies
- Delay and laches
- Conduct of party
Case Details
2016 LawText (BOM) (12) 74
WRIT PETITION NO. 2202 OF 2015
Anoop V. Mohta, A. S. Gadkari
Mr. Tejas Dande with Krupanshu Nandu i/by Tejas Dande & Associates for the petitioner, Mr. V.N. Sagare, AGP for respondent No.2, Mr. Suresh Dhole with Anuja Dhole for respondent No.3
Kirloskar Brothers Limited
The Micro and Small Enterprises Facilitation Council at Pune, The State of Maharashtra, M/s. Fusion Control
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Nature of Litigation
Writ Petition under Article 226 challenging jurisdiction of Micro and Small Enterprises Facilitation Council under Section 18 of MSMED Act, 2006.
Remedy Sought
Direction to decide applications for appointment of arbitrator and challenge to jurisdiction of the Council.
Filing Reason
Petitioner disputed the jurisdiction of the Council to adjudicate the dispute and sought appointment of an arbitrator.
Previous Decisions
Arbitration Petition No.48/2013 filed by petitioner was dismissed as not maintainable on 06.08.2014.
Issues
Whether the Micro and Small Enterprises Facilitation Council has jurisdiction under Section 18 of MSMED Act, 2006?
Whether the writ petition under Article 226 is maintainable?
Submissions/Arguments
Petitioner argued that the Council lacks jurisdiction and that an arbitrator should be appointed under Section 18.
Respondents argued that the Council has jurisdiction and the petition is not maintainable due to alternative remedies and petitioner's conduct.
Ratio Decidendi
The Micro and Small Enterprises Facilitation Council has jurisdiction under Section 18 of the MSMED Act, 2006. A writ petition under Article 226 challenging such jurisdiction is not maintainable when the petitioner has alternative remedies and has not exhausted them, and the petitioner's conduct of non-participation and delay disentitles it to relief.
Judgment Excerpts
The Petitioner has filed the present Petition on 23 February 2015 thereby invoked Article 226 of the Constitution of India and prayed for a direction to decide Applications dated 1.9.2014 and 29.01.2015 for an appointment of Arbitrator under Section 18 of The Micro, Small and Medium Enterprises Development Act, 2006.
The basic background of the litigation is as under: On 29.09.2011, Respondent No.3 filed the Reference Petition No. 18/2011 before the Council to secure the due amount from the Petitioner/buyer.
Procedural History
On 29.09.2011, Respondent No.3 filed Reference Petition No. 18/2011 before the Council. Conciliation failed on 09.02.2013. On 19.07.2014, notice under Section 18(3) was issued. On 01.08.2014, parties appeared. On 06.08.2014, Arbitration Petition No.48/2013 filed by petitioner was dismissed as not maintainable. Petitioner filed applications on 1.9.2014 and 29.01.2015 for appointment of arbitrator. Writ Petition filed on 23.02.2015.
Acts & Sections
- Micro, Small and Medium Enterprises Development Act, 2006: Section 18
- Constitution of India: Article 226
