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2018 DIGILAW 344 (KAR)

Karnataka Power Transmission Corporation Limited v. Government of Karnataka Represented by Its Principal Secretary

2018-03-09

DINESH MAHESHWARI, S.SUNIL DUTT YADAV

body2018
JUDGMENT : These appeals involving similar issues and arising out of the common order dated 11.12.2017 passed in W.P.No.47725/2012 c/w W.P.Nos.47726/2012 & 47302/2012 have been considered together; and with the consent of the learned counsel for the parties, they are taken up for disposal at this stage itself by this common judgment. 2. By way of these appeals, the appellants have challenged the order dated 11.12.2017 whereby the learned Single Judge, during the pendency of the writ petitions, but in modification of the earlier interim order, has directed them to deposit the entire amount awarded by the respondent No.3 – Rajasthan Micro and Small Enterprises Facilitation Council, while granting liberty to the supplier, respondent No.2, to withdraw the said amount, subject to the final outcome of the petitions. 3. The factual matrix of the case is that the respondent No.2 was a supplier of ‘Weasel and Rabbit ACSR Conductors’ to the appellants pursuant to their successful bid in the tender floated by the appellants. The respondent No.2 lodged a claim for interest on delayed payment under the provisions of the Small Scale and Ancillary Industrial Undertaking Act, 1993 later replaced by the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as ‘MSMED Act’). The claim was referred to the Rajasthan Micro and Small Enterprises Facilitation Council, the designated Arbitrator, which eventually passed an award directing the appellants to pay the amount as under in the three cases which had been referred to it for arbitration:- (i) Rs.46,91,243/- in Case No.1/2009. (ii) Rs.48,45,490/- in Case No.2/2009. (iii) Rs.1,38,10,533/- in Case No.3/2009. The appellants were also directed to make payment within a period of 30 days and in case of delay, they were to pay interest at 18% p.a. 4. The said awards dated 8.1.2010 passed by the respondent No.3 in Case Nos.1 to 3 of 2009 came to be challenged by way of writ petitions before the learned Single Judge. All the writ petitions were connected and considered together. 5. Notices came to be issued to the respondents and an ‘interim order of stay as prayed for’ was granted and extended from time to time. Rule having been issued on 09.07.2014, the matters were finally set down for hearing on 11.12.2017. All the writ petitions were connected and considered together. 5. Notices came to be issued to the respondents and an ‘interim order of stay as prayed for’ was granted and extended from time to time. Rule having been issued on 09.07.2014, the matters were finally set down for hearing on 11.12.2017. After hearing the learned counsel representing the parties, the learned Single Judge, by way of the order impugned, directed the appellant No.1 to deposit the entire amount awarded with the Registry within four weeks while granting liberty to the respondent No.2 to withdraw the deposited amount after furnishing the requisite undertaking and posted the matters for final hearing on 29.01.2018. 6. The primary grievance of the appellants against the order aforesaid is that once rule was issued and the matter was set down for hearing, in the absence of any application seeking further interim directions, there was no occasion to issue the impugned directions, which, in effect, amounts to granting of final relief to the respondents while hearing of the matter was yet to be concluded. 7. The only contention advanced by the respondent No.2 is that the order impugned is an equitable order and in the light of the requirement to deposit 75% of the awarded amount whenever the validity of the award is challenged under Section 19 of the MSMED Act, 2006, there is no case for interference. 8. We have heard learned counsel for the parties and have perused the record. 9. In our view, once the rule was issued and the matter was set down for ‘final hearing’, the learned Single Judge ought to have finally disposed of the petitions after hearing the parties. In the absence of any application filed by the respondent No.2 seeking further direction or vacation of the interim order with no additional facts being brought to the notice of the Court, in our view, no relief was required to be granted to the respondents by way of an interim order. 10. As regards, the submission made on behalf of the respondents about depositing of 75% of the award amount, Section 19 of MSMED Act may be examined, which is extracted hereinbelow:- “19. 10. As regards, the submission made on behalf of the respondents about depositing of 75% of the award amount, Section 19 of MSMED Act may be examined, which is extracted hereinbelow:- “19. Application for setting aside decree, award order.- No application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate dispute resolution service to which a reference is made by the Council, shall be entertained by any court unless the appellant (not being a supplier) has deposited with it seventy-five per cent of the amount in terms of the decree, award or, as the case may be, the other order in the manner directed by such court: Provided that pending disposal of the application to set aside the decree, award or order, the court shall order that such percentage of the amount deposited shall be paid to the supplier, as it considers reasonable under the circumstances of the case subject to such conditions as it deems necessary to impose.” 11. It is clear that the pre-deposit as envisaged under Section 19 is applicable only as regards the invoking of the statutory remedy, which is inapplicable in the present case, as the awards are sought to be set aside by invoking the remedy under Article 226 of the Constitution which admits of no fetters. As noticed, there had been interim relief granted in the matter while issuing the rule on 09.07.2014. Thereafter, when the matter was set down for final hearing, in our view, there was no reason for passing any other interim order at the given stage. Thus, we find it difficult to approve the order impugned. 12. Without any other observations, in our view, the interests of justice would be met if the impugned order is set aside relegating the parties to the learned Single Judge to obtain an order on the merits of the petitions, after hearing. It is also observed that the observations made herein being limited to the disposal of the present appeals, will have no bearing in the proceedings pending before the learned Single Judge. 13. In terms of the above, the writ appeals are allowed. In view of the disposal of the appeals, the pending applications stand disposed of as redundant.