VXL Computers (an unit of MS Vexcel Computers Pvt. Ltd. ), through its Authorized Signatory Vinod Behl v. State of Jharkhand through the Secretary, Department of Industries, Ranchi
2019-08-08
SUJIT NARAYAN PRASAD
body2019
DigiLaw.ai
JUDGMENT : Both the writ petitions since are having similar issue and the order common in nature are the subject matter, therefore, both the writ petitions have been heard together and are being disposed of by this Common order. 2. The writ petitions are under Article 226 of the Constitution of India, whereby and whereunder, the order dated 20.01.2017 passed in Case No.JHMSEFC-23/2015 and also order dated 03.07.2017 passed in Review Petition Case No.JHMSEFC-23/2015, are under challenge. 3. The brief facts of the case of the petitioner is that the petitioner is a duly registered SSI Proprietorship Firm was taken over by one registered company viz. Vexcel Computers Pvt. Ltd. Both of them had been independently registered with the industry department as a SSI Unit. The Vexcel Computers was engaged in data processing/printing work, participated in a tender bearing no.448/PR/JSEB/2000 floated by the General Manager cum Chief Engineer, Ranchi Electric Supply Area of Jharkhand State Electricity Board (J.S.E.B.) in September 2000 for Computerized Energy Billing and other statements of Ranchi (Rural), Urban Division No.I & II and Khunti Division under Electric Supply Circle, Ranchi (In W.P.(C) No.7385/2017) and Tender bearing no.174/PR/BSEB/2001 floated by the General Manager cum Chief Engineer, Singhbhum Electric Supply Area of Jharkhand State Electricity Board (J.S.E.B.) in April, 2001 for computerized energy billing and other statements of Jamshedpur and Chaibasa Circle, (In W.P.(C) No.7378/2017) was shortlisted as successful bidder in the tender and was awarded with purchase-cum-work order and in consequence thereto, an agreement was entered into in between the petitioners and respondent no.3 with respect to execution of work allotted in their favour. The work having been completed, thereafter the bills have been submitted but money having not been disbursed, the dispute has been raised by invoking the Jurisdiction as provided under the provision of Micro, Small and Medium Enterprises Development Act, 2006. A regular proceeding was initiated and the other side has been called upon but the council has refused to adjudicate, against which the review has been preferred but the same has also been dismissed, against which, both the writ petitions have been filed. 4. Mr.
A regular proceeding was initiated and the other side has been called upon but the council has refused to adjudicate, against which the review has been preferred but the same has also been dismissed, against which, both the writ petitions have been filed. 4. Mr. Krishna Murari, learned counsel for the petitioner has raised the issue that the council has refused to exercise its jurisdiction by not adjudicating the issue by dropping the proceeding which has also not been appreciated in review and as such, the irregularities have been committed by the council in discharge of its statutory duty. 5. The council has taken into consideration the audit report submitted by the Accountant General that should not have been done, the claim of the petitioner ought to have been adjudicated on the basis of the terms of agreement and the certificate given by the respondent pertaining to completion of the said work. 6. Per contra, learned counsel appearing for the State-Respondent as also the learned counsel appearing for the respondent no.3 have jointly submitted that the authorities after considering the fact that the material irregularities have been committed in executing the work existing to the work of contract and the same has come to surface in an audit conducted by the Office of the Accountant General, therefore, the council has consciously reached to the finding that both the parties have deviated from the terms of contract, therefore, the claim cannot be adjudicated since, according to the council, both the parties are at fault and therefore, according to them, no error has been committee by the council. So far as the order passed in review, the submission has been made that the same has been rejected by considering the fact that there is no substantive material for restoration of the case. Further submission has been made by taking aid of the provision of Section 19 of the Act, 2006 that the writ petitions may not be entertained, since the claim is seriously in dispute and since there is alternative remedy of appeal provided therein, therefore, adjudication of claim since depends upon the appreciation of certain facts and as such the same can properly be adjudicated by the appellate Forum. 7. In response, Mr.
7. In response, Mr. Krishna Murari, learned counsel for the petitioner, has submitted that the Forum of appeal as provided under Section 19 of the Act, 2006 is not made for supplier as would appear from the aforesaid provision and as such, it is incorrect to say that there is alternative remedy of appeal provided under the provision of the Act, 2006 and hence, these writ petitions are well maintainable. 8. Having heard the learned counsel for the parties and on appreciation of their rival submissions, it has been gathered by this Court that a money claim has been agitated by the petitioner in lieu of the performance of work by virtue of being success in the process of tender and after completion of the work, the bills have been submitted but having not paid, the same has been sought to be adjudicated by filing an application under the provision of Section 18(3) of the Act, 2006, wherein on the basis of the audit conducted by the Accountant General, the claim has been found to be disputed, since according to the report of the Accountant General, both the parties have not followed the terms and conditions of the contract as stipulated in the agreement signed in between the parties and in consequence thereof, proceeding has been dropped by the council, against which, both the writ petitions have been filed. 9. It is evident that the petitioner is seeking a direction by way of adjudication by this Court under Article 226 of the Constitution of India for disbursement of money claim after being un-success before the council. It further appears that the dispute regarding entitlement of the claim of the petitioner has been raised by the Accountant General in its audit report and as such, the very claim of the petitioner is now in dispute. Therefore, this Court before examining the issues on fact, deem it fit and proper to answer the issue pertaining to alternative remedy as provided under the provision of the Act, 2006. 10.
Therefore, this Court before examining the issues on fact, deem it fit and proper to answer the issue pertaining to alternative remedy as provided under the provision of the Act, 2006. 10. It is not in dispute that the Act, 2006 has been enacted with the sole object to facilitate the promotion and development and enhancing the competitiveness of micro, small and medium enterprises and seeks to- (a) provide for statutory definitions of “small enterprise” and “medium enterprise”; (b) provide for the establishment of a National Board for Micro, Small and Medium Enterprises, a high-level forum consisting of stakeholders for participative review of and making recommendations on the policies and programmes for the development of small and medium enterprises; (c) provide for classification of micro, small and medium enterprises on the basis of investment in plant and machinery, or equipment and establishment of an Advisory Committee to recommend on the related matter; (d) empower the Central Government to notify programmes, guidelines or instructions for facilitating the promotion and development and enhancing the competitiveness of small and medium enterprises; (e) make provisions for ensuring timely and smooth flow of credit to small and medium enterprises to minimize the incidence of sickness among and enhancing the competitiveness of such enterprises, in accordance with the guidelines or instruction of the Reserve Bank of India; (f) empower the Central and State Governments to notify preference policies in respect of procurement of goods and servives, produced and provided by small enterprises, by the Ministries, departments and public sector enterprises; (g) empowering the Central Government to create a Fund or Funds for facilitating promotion and development and enhancing the competitiveness of small enterprises and medium enterprises; (h) make further improvements in the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertaking Act, 1993 and making that enactment a part of the proposed legislation and to repeal that enactment. The “medium enterprise” has been defined under Section 2(g) which means an enterprise classified as such under sub-clause (iii) of clause (a) or sub-clause (iii) of clause (b) of sub-section (1) of section 7. “Micro enterprise” means an enterprise classified as such under sub-clause (i) of clause (a) or sub-clause (i) of clause (b) of sub-section (1) of section 7.
The “medium enterprise” has been defined under Section 2(g) which means an enterprise classified as such under sub-clause (iii) of clause (a) or sub-clause (iii) of clause (b) of sub-section (1) of section 7. “Micro enterprise” means an enterprise classified as such under sub-clause (i) of clause (a) or sub-clause (i) of clause (b) of sub-section (1) of section 7. “Supplier” has been defined under Section 2(n) which means a micro or small enterprise, which has filed a memorandum with the authority referred to in sub-section (1) of section 8, and includes- (i) The National Small Industries Development Corporation, being a company, registered under the Companies Act, 1956 (1 of 1956); (ii) The small Industries Development Corporation of a State or a Union territory, by whatever name called, being a company registered under the Companies Act, 1956 (1 of 1956); (iii) Any company, co-operative society, trust or a body, by whatever name called, registered or constituted under any law for the time being in force and engaged in selling goods produced by micro or small enterprises and rendering services which are provided by such enterprises. Section 17 provides a provision of recovery of amount due which reads as hereunder:- “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.” This clause seeks to make the buyer liable to pay the amount with interest thereon as provided under section 16 for goods supplied or services rendered by the supplier.” Section 18 contains a provision of reference to micro and small enterprises facilitation council which reads as hereunder:- “18. Reference to Micro and Small Enterprises 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.
Reference to Micro and Small Enterprises 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 (26 of 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 upon the dispute for arbitration of refer it to any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then apply to the disputes as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section (1) of Section 7 of that Act. (4) Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this Section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India.
(4) Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this Section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India. (5) Every reference made under this section shall be decided within a period of ninety days from the date of making such a reference.” It is evident from the provision as contained under Section 18 which is non-substante clause conferring power upon the 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 and 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 and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer it to 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 disputes as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section (1) of section 7 of that Act. Further Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this Section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India. Section 19 contains a provision for setting aside decree, award or order which reads as hereunder:- “19.
Further Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this Section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India. Section 19 contains a provision for setting aside decree, award or order which reads as hereunder:- “19. Application for setting aside decree, award or 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 services 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.” The provision as contained under Section 19 provides that no application for setting aside any decree, award or other orders made either by the Council itself or by any institution or centre providing alternate dispute resolution services 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. 11.
11. It is evident from the provision of Section 19 that against a decree, award or other order, an appeal will lie and if the appellant is the establishment against whom, the money is being claimed, it will be incumbent upon it to file the appeal only after depositing 75 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 but if supplier intends to file an appeal against any decree, award or other order, it will not be required for such supplier who is claiming the money to deposit 75 per cent of the amount in terms of the decree or award or as the case may be, the other order but without depositing any amount, he will have a right to approach before the appellate Forum. 12. This Court, therefore, is of the view that the petitioners herein are the service providers and as such it cannot be accepted as has been argued by the learned counsel for the petitioner that the service providers/suppliers cannot prefer an appeal rather they can also prefer an appeal but depositing of an amount will not be applicable in such circumstances, meaning thereby, any order, decree or award, if the establishment or the suppliers/service providers are aggrieved by way of an appeal, the order passed by the Court of first instance i.e., the Council can be agitated before appellate Forum. 13. Mr. Krishna Murari, at this juncture, has submitted that the order impugned in this case cannot be termed as a decree or award and as such, appeal as provided under Section 19 will not be applicable by considering the nature of the order passed by the Council but this Court after going through the contents of the order impugned, is of the view that the Council has dropped the proceeding after taking into consideration the report submitted by the Accountant General, wherein the reference of deviation of terms of contract made by both the parties has been referred and in such a situation, proceeding has been dropped and as such, it cannot be said that it is not an order. 14.
14. It is equally settled that merely on the ground of availability of alternative remedy, the High Court will be precluded from entertaining the writ petitions rather there is no embargo in entertaining the writ petitions even in case of availability of alternative remedy but however, in a case where there is violation of principle of nature justice or the order is contrary to the statutory provision or there is infringement of fundamental right but no such ground has been made out by the petitioner in entertaining these writ petitions even on the ground of availability of appeal and furthermore as would be evident from the impugned orders and the material available on record that the claim of the petitioner has seriously been disputed in an audit conducted by the Accountant General. As such herein, there is dispute in the money claim as has been agitated by the petitioner and therefore, the same would be proper to be agitated before the appellate Forum by raising the various factual aspects. Reference in this regard may be made to the judgment rendered by the Hon’ble Apex Court in the case of Maharashtra Chess Association Vs. Union of India and Ors., reported in (2019) SCC Online SC 932 at paragraph nos.24 and 25 which reads as hereunder:- “24. The principle that the writ jurisdiction of a High Court can be exercised where no adequate alternative remedies exist can be traced even further back to the decision of the Constitution Bench of this Court in State of Uttar Pradesh Vrs. Mohammad Nooh, where justice Vivian Bose observed: “10. In the next place it must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute. (Halsbury’s Laws of England, 3rd Ed., Vol. 11, P. 130 and the cases cited there).
It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute. (Halsbury’s Laws of England, 3rd Ed., Vol. 11, P. 130 and the cases cited there). The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if any. But his rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instance are numerous where a writ of certiorari has been issued in spite of the fact that aggrieved party had other adequate legal remedies.” 25. The mere existence of alternate forums where the aggrieved party may secure relief does not create a legal bar on a High Court to exercise its writ jurisdiction. It is a factor to be taken into consideration by the High Court amongst several factors. Thus, the mere fact that the High Court at Madras in capable of granting adequate relief to the Appellant does not create a legal bar on the Bombay High Court exercising its writ jurisdiction in the present matter.” 15. In that view of the matter and on the basis of the judgment referred hereinabove, this Court is of the view that since the claim of the petitioner is seriously in dispute depends upon its adjudication on various factual aspect and since the appellate Forum is available under the statute, it will not be proper for this Court to entertain these writ petitions. 16. In view thereof, this Court is of the view that the writ petitions are not maintainable on the ground of availability of alternative remedy of appeal. 17. Accordingly, both the writ petitions fail and hence, dismissed. 18. However, it is open for the petitioner to approach before the appellate Forum, if he so wishes by agitating all the facts available to him. 19. With these observations, both the writ petitions stand disposed of.