Heavy Engineering Corporation Ltd. v. State of Jharkhand
2019-10-22
SUJIT NARAYAN PRASAD
body2019
DigiLaw.ai
JUDGMENT : This writ petition is under Article 226 and 227 of the Constitution of India, whereby and whereunder the following prayers have been made:- I. To set aside the impugned order dated 02.06.2018, (Annexure-16, hereto), admitting the Commercial Execution Case No. 03 of 2018 (M/s Pioneer Industries Vs. M/s Heavy Engineering Corporation Limited) of the Court of Sri. Rajeev Anand, the learned Presiding Officer, Commercial Court, Ranchi; II. To quash the summon dated 11.06.2018 and the execution petition enclosed with the summon issued in Commercial Execution Case No: 03 of 2018, (Annexure-15 [Series], hereto); III. To quash the entire proceeding of Commercial Execution Case No: 03 of 2018, as contained in execution petition filed under Order-XXI, Rule-11 of Civil Procedure Code, 1908, to execute the aforesaid Award dated 07.02.2017, pending in the Court of Sri. Rajeev Anand, the learned Presiding Officer, Commercial Court, Ranchi; IV. To set aside the impugned order dated 13.02.2019, (Annexure-20), passed in Commercial Execution Case No: 03 of 2018 by Sri. Rajeev Anand, Presiding Officer, Commercial Court, Ranchi, whereby, it has rejected the prayer made in the petition dated 10.10.2018, a Preliminary Show Cause and subsequent objection of the petitioner dated 23.01.2019 under Order-XXI, Rules-5 & 11 read with Section-151 of the Code of Civil Procedure, 1908. V. The impugned Order/Award dated 07.02.2017 (Annexure-11) passed by the Respondent No.4 in M.S.E.F.C. Case No: 13 of 2015, whereby and whereunder the petitioner was ordered to pay the principal amount of Rs.22,36,386.00 along with the interest amount of Rs.90,46,635.00, calculated up to 31.10.2015 and further compound interest with monthly rest @ three times of the Bank Rate, as notified by the Reserve Bank of India from time to time till realization of the dues; VI. To set aside/quash the impugned order dated 05.12.2018, (annexure-14), passed in M.S.E.F.C. Case No: 13 of 2015, by the Council on the application of the writ petitioner dated 28.03.2017, (Annexure-12, hereto), whereby and whereunder the Council has rejected the prayer of the writ petitioner to correct and recall the order dated 07.02.2017, (Annexure-11). 2. The brief facts of the case of the petitioner as per the pleading made in the writ petition is that the petitioner, Heavy Engineering Corporation Limited, was in need of certain fabricated items and for that purpose, a tender enquiry being Tender Enquiry No: HMBP/CED/PUR/99/04/09/018 OPN-061 dated 13.08.2010 for supply of goods indicated in the said tender enquiry.
2. The brief facts of the case of the petitioner as per the pleading made in the writ petition is that the petitioner, Heavy Engineering Corporation Limited, was in need of certain fabricated items and for that purpose, a tender enquiry being Tender Enquiry No: HMBP/CED/PUR/99/04/09/018 OPN-061 dated 13.08.2010 for supply of goods indicated in the said tender enquiry. The work order has been issued in favour of the respondent no.3 and after performing the work, the bill has been submitted but money has not been paid, therefore, the same has been agitated by the respondent no.2 namely M/s Pioneer Industries, Sundergarh by invoking the jurisdiction of Section 18 to the Micro, Small and Medium Enterprises Development Act, 2006, upon which, an order/award has been passed being registered as M.S.E.F.C. Case No.13 of 2015 on 07.02.2017, wherein the Heavy Engineering Corporation Limited, Ranchi was ordered to pay the principal amount of Rs.22,36,386.00/- along with the interest amount of Rs.90,46,635.00/- calculated up to 31.10.2015 and further compound interest with monthly rest @ three times of the Bank Rate, as notified by the Reserve Bank of India from time to time till realization of the dues. Subsequent to the said award, the same has been modified as on 18.12.2018. The respondent no.2, thereafter has filed execution case, where the Court having jurisdiction at Ranchi on the ground that the Office of the Heavy Engineering Corporation Ltd., is located and situated in the District of Ranchi. The said execution case has subsequently been transferred to the Commercial Court being registered as Commercial Execution Case No.03 of 2018. The petitioner has filed an objection by way of preliminary show cause raising the jurisdictional issue in proceeding with the execution case but according to the petitioner, no cause of action is lying within the territorial jurisdiction of the Ranchi Judgeship and since the agreement was executed in the District situated in the State Odisha but the executing court putting reliance upon the judgment rendered by the Hon’ble Apex Court in the Case Sundaram Finance Ltd. Vs. Abdul Samad and Anr., reported in AIR 2018 SC 965 , whereby and whereunder, it has been laid down that the execution case can be filed anywhere in the country where such decree can be executed and there is no requirement for obtaining transfer of decree from Court which would have jurisdiction of arbitral proceedings.
Abdul Samad and Anr., reported in AIR 2018 SC 965 , whereby and whereunder, it has been laid down that the execution case can be filed anywhere in the country where such decree can be executed and there is no requirement for obtaining transfer of decree from Court which would have jurisdiction of arbitral proceedings. The said order dated 13.02.2019 has been assailed by way of present writ petition under the supervisory jurisdiction as conferred under Article 227 of the Constitution of India, apart from the other parts as reflected hereinabove. 3. Mr. Gulum Mustafa, learned counsel appearing for the petitioner, has not disputed the position of Law after having been settled by the Hon’ble Apex Court in the case of Sundaram Finance Ltd.(supra). He has raised the another issue that the execution case be held to be premature since the same has been filed within the statutory period for filing of an appeal as provided under Section 34, Sub Clause-3 of the Arbitration and Conciliation Act, 1996. 4. Mr. Sanjay Piprawall, learned counsel appearing for the respondent no.2 has submitted so far as the second ground in assailing the execution proceeding as has been agitated by the petitioner that the award as has been passed under Section 18 of the Act, 2006 has never been challenged under the provision as provided under Section 19 of the Act, 2006 and according to him, since the award has attained its finality and therefore, there is no infirmity in the execution proceeding. 5. This Court after having heard the learned counsel for the parties and after appreciating their rival submissions, has found from the argument advanced on their behalf that two issues have been raised in this writ petition while invoking the jurisdiction as conferred under Article 226 and 227 of the Constitution of India but before dealing with the said submission, this Court deem it fit and proper to first deal with the power under which, the present writ petition has been filed, since it has been filed under Article 226 and 227 of the Constitution of India. 6. This Court is first to answer regarding the maintainability of the writ petition under Article 226 and 227 of the Constitution of India. 7.
6. This Court is first to answer regarding the maintainability of the writ petition under Article 226 and 227 of the Constitution of India. 7. It is not in dispute after the law having been settled by the Constitution Bench of the Hon’ble Apex Court in the judgment rendered in the case of Surya Dev Rai Vs. Ram Chander Rai and Ors., reported in (2003) 6 SCC 675 , wherein the scope of Article 226 and 227 of the Constitution of India, has been answered. The Hon’ble Apex Court while dealing with the scope of Article 226 and 227 has settled the legal position with respect to scope of Article 226 and 227 and in the said judgment, Article 227 can only be issued for issuance of writ as has been provided under part-3 of the Constitution of India, wherein the reference of five writs have been provided as the fundamental rights to the citizens of India i.e., the Writ of Habeas Corpus, Writ of Mandamus, Writ of Certiorari, Writ of Prohibition and Writ of Quo-Warranto. Article 227 of the Constitution of India, is not for conferment to fundamental right rather under the Constitution, it is the power of superintendence conferred to the High Court for being the head in the judicial system to exercise the power of superintendence about all the Courts and Tribunals situated within the territorial jurisdiction of the High Courts of the State. Article 227 since has provided with the power of superintendence as the Constitution says by virtue of the order passed by the Hon’ble Apex Court in the case of Sundram Finance Ltd. (supra), the scope of Article 227 apart from power of superintendence has been inserted by the power of the High Court under the supervisory jurisdiction i.e., to look into the legality and propriety of the order passed by the subordinate courts which is by way of judicial order. 8. The judgment rendered in the case Surya Dev Rai (supra) has been considered by the larger Bench in the case of Radhey Shyam and Anr. Vs. Chhabi Nath & Ors., reported in (2015) 5 SCC 423 , wherein the fact about the scope of Article 226 and 227 has expressly been earmarked by holding therein that in Article 227 only the High Court can look into the legality and propriety of the judicial orders and nothing else under its supervisory jurisdiction. 9.
Vs. Chhabi Nath & Ors., reported in (2015) 5 SCC 423 , wherein the fact about the scope of Article 226 and 227 has expressly been earmarked by holding therein that in Article 227 only the High Court can look into the legality and propriety of the judicial orders and nothing else under its supervisory jurisdiction. 9. This writ petition has been filed both under Article 226 and 227 of the Constitution of India assailing the order passed by the executing court which is the judicial order and therefore, the ratio laid down by the Hon’ble Apex Court rendered in the case of Radhey Shyam and Anr. Vs. Chhabi Nath & Ors. (supra), wherein the provision which has been inserted in invoking the jurisdiction of this Court also under Article 226 of the Constitution of India, according to the considered view of this Court, is unwarranted. 10. So far as the legality and propriety of the order passed by the executing court on 13.02.2019 assailed on the jurisdictional ground has been rejected by putting reliance by the judgment rendered in the case of Sundram Finance Ltd. (supra) and the learned counsel for the petitioner has fairly admitted that there is no scope of making further argument after the issue has been decided by the Hon’ble Apex Court which is binding upon the parties being the Rule of Law under Article 141 of the Constitution of India. But he has raised another issue regarding the proceeding of the execution case which according to the petitioner should not have been allowed to be proceeded since the execution case has been filed before expiry of the period of limitation as provided under Section 35 of the Arbitration and Conciliation Act, 1996. 11. It is admitted position herein is that the provision of Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 has been invoked by the respondent no.2, therefore, provision of Sections 18 and 19 along with object and scope, are required to be reflected herein before answering the said issue as has been agitated by the petitioner. The objects and reasons and enactment of the Act, is to provide for facilitating the promotion and development and enhancing the competitiveness of Micro, Small and Medium Enterprises and for matters connected therewith is incidental thereto.
The objects and reasons and enactment of the Act, is to provide for facilitating the promotion and development and enhancing the competitiveness of Micro, Small and Medium Enterprises and for matters connected therewith is incidental thereto. This is for the reason that this object has came to be considered taking into consideration the predicament of the small industries to provide for statutory definitions of “small enterprise” and “medium enterprise” to take concern of the entire small and medium enterprises sector for providing expeditious remedy for disposal of their grievance. Chapter-V speaks about the delayed payments to micro and small enterprises, under which, the provision has been made under Sections 16 to 19 to deal with such situation which is to be invoked by the micro, small and medium enterprises, if coming under the fold of the Act, 2006. The provision of Sections 16 to 19 are refereed for ready reference which reads as hereunder:- “16. Date from which and rate at which interest is payable.-Where any buyer fails to make payment of the amount to the supplier, as required under section 15, the buyer shall, notwithstanding anything contained in any agreement between the buyer and the supplier or in any law for the time being in force, be liable to pay compound interest with monthly rests to the supplier on that amount from the appointed day or, as the case may be, from the date immediately following the date agreed upon, at three times of the bank rate notified by the Reserve Bank. 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. 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.
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. (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 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 (26 of 1996) shall then apply to the dispute 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. (5) Every reference made under this section shall be decided within a period of ninety days from the date of making such a reference. 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.” 12. It is evident from the provision of Section 16 which speaks about the date from which and rate at which interest is payable. Section 17 speaks about the recovery of amount due. Section 18 speaks about the reference to micro and small enterprises facilitation council which is to be decided keeping the provision of Arbitration and Conciliation Act, 1996 into consideration, meaning thereby, the reference is to be made and before adjudication of conciliation, is required to be made and in case of failure of the conciliation, the issue is to be adjudicated as per the provision as contained under Section 18(3). Section 19 speaks about the power of appeal which contains a condition that if the parties being aggrieved with any decree, award or 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 appellate (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 other, 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.
Provided that pending disposal of the application to set aside the decree, award or other, 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 said provision contains two parts, first part regarding applicability of seventy five per cent is upon the establishment if aggrieved with the award but if the award would be challenged by the supplier, in case of any adverse order passed by the Council, in that situation, the requirement to deposit of seventy five percent is not necessary, that can be gathered from the word shall be entertained by any Court unless the appellant (not being a supplier) has deposited with it seventy five per cent, meaning thereby, the appellant, if not supplier, seventy five per cent of the amount is required to be deposited, if supplier not required to deposit seventy five per cent of the amount. 13. It is the further settled position of Law if there is any self-contained code in the nature of special statute, the general provision will not be applicable as has been held by the Hon’ble Apex Court in the case of Kandla Export Corporation and Anr. Vs. OCI Corporation and Anr., reported in (2018) 14 SCC 715 wherein at para17 which is being quoted hereinbelow:- “17. To answer this question, it is necessary to advert to the judgment in Fuerst Day Lawson. The common question that arose for consideration in the batch of cases before the Court was whether an order, though not appealable under Section 50 of the Arbitration Act would, nevertheless be subject to appeal under the Letters Patent of the High Court. In answering this question, this Court exhaustively reviewed the authorities and then stated, in para 36, that the decisions noticed so far lay down certain broad principles. We are directly concerned with the principle laid down in the sub-section (vii), which reads as under. (SCC p. 350, para 36) “36. …’’(vii) The exception to the aforementioned rule is where the special Act sets out a self-contained code and in that event the applicability of the general law procedure would be impliedly excluded.
We are directly concerned with the principle laid down in the sub-section (vii), which reads as under. (SCC p. 350, para 36) “36. …’’(vii) The exception to the aforementioned rule is where the special Act sets out a self-contained code and in that event the applicability of the general law procedure would be impliedly excluded. The express provision need not refer to or use the words “letters patent” but if on a reading of the provision it is clear that all further appeals are barred then even a letters patent appeal would be barred.” 14. The contention as has been raised by the learned counsel for the petitioner that within the period to file an appeal as provided under Section 35 of the Arbitration and Conciliation Act, 1996, the execution case has been filed herein is that when specific provision has been provided under Section 19 of the Act, 2006, there is no question to prefer an appeal under Section 35, in view of the fact that section 35 of the Act, 1996 being a Law general in nature and when the specific provision has been provided under Section 19 of the Act, 2006, then the appeal is to be filed by the parties if aggrieved with the award passed under Section 18 of the Act, 2006 by invoking the jurisdiction conferred under Section 19 of the Act, 2006, since the appellant herein who is the petitioner in the present writ petition, is the Heavy Engineering Corporation Ltd. who is not the supplier, therefore, as per the provision of Section 19 of the Act, seventy five per cent of the amount of compensation as awarded by the Council was required to be deposited, in case of filing an appeal as per the provision of Section 19 of the Act, 2006. Admittedly, as yet no such appeal has been preferred under Section 19 of the Act, 2006 as has been submitted by the learned counsel for the petitioner at Bar. 15. In view of such factual aspects and the discussion made hereinabove, the second ground as has been agitated by the petitioner is being answered against the petitioner. 16. In view thereof, the writ petition fails, hence it is dismissed. 17. I.A.No.6536 of 2019 stands disposed of.