Heavy Engineering Corporation Ltd. v. State of Jharkhand
2022-01-03
RAVI RANJAN, SUJIT NARAYAN PRASAD
body2022
DigiLaw.ai
JUDGMENT : With consent of the parties, hearing of the matter has been done through video conferencing and there is no complaint whatsoever regarding audio and visual quality. 2. The instant intra-court appeal under Clause 10 of the Letters Patent has been preferred against order/judgment dated 22.01.2019 passed by learned Single Judge in W.P. (C) No. 1558 of 2016 whereby and whereunder writ petition was dismissed refusing to interfere with order dated 22.01.2011 passed by the Jharkhand Micro, Small & Medium Enterprises Development Council (hereinafter referred to as ‘Council’), by which writ petitioner was directed to pay the principal outstanding amount of Rs. 35,100/- which remained outstanding on 22.07.2005 along with interest on delayed payment of settled dues of 5,76,610/- as on 15.11.1996 to 01.10.2006 and thereafter further interest at the rate of three times of the Bank in terms of Section 16 of the MSMED Act, 2006 (hereinafter referred to as ‘Act, 2006’); and order dated 08.12.2015 passed by the learned Sub- Judge-I, Ranchi in Arbitration Misc. Case No. 30 of 2011 by which challenge to the award was responded by an observation to fulfill the condition pre-requisites entitled under the MSMED Act, which makes the total claim amounting to Rs. 35,100 + 54,42,162 = Rs. 54,77,162 as also order dated 08.12.2015 directing the petitioner to deposit Rs. 41,07,872/- for maintaining his quest for setting aside order passed by the MSMED Council. 3. The brief facts of the case, which are required to be enumerated herein for proper adjudication of the lis, are as under: The writ petitioner-HEC issued work order No. ACD/HMB/95/96/2925/T/3197/0 dated 06.03.1995 to respondent no. 2 for supply of rack and pinion gates worth Rs. 57.48 lakhs. The respondent no. 2 claimed various bills on writ petitioner-HEC amounting to Rs. 19.53 lakhs however at later stage, respondent no. 2 mutually agreed to settled for Rs. 5,76,610/- as full and final settlement. It is stated that after which the matter would have been settled and the agreement also entailed a condition that respondent no. 2 would furnish an undertaking but respondent no. 2 refrained themselves from furnishing the said undertaking as mentioned in the agreement and filed a Company Petition being Company Petition No. 08 of 1997 which was dismissed vide order dated 08.02.2000. The respondent no. 2 again approached the appropriate authority for realization of the then agreed amount of Rs.
2 would furnish an undertaking but respondent no. 2 refrained themselves from furnishing the said undertaking as mentioned in the agreement and filed a Company Petition being Company Petition No. 08 of 1997 which was dismissed vide order dated 08.02.2000. The respondent no. 2 again approached the appropriate authority for realization of the then agreed amount of Rs. 5,76,610/- showing willingness to furnish an undertaking and vide letter dated 30.04.2005 agreed with the terms and conditions of the petitioner as also to the deduction of Rs. 4,50,000/- as well as Rs. 35,100/- from their bills for expenditure incurred for the parallel action in HMBP and cost incurred for making locking arrangement of rack and pinion gates respectively. Pursuant thereto, the petitioner paid Rs. 3 lakhs on 06.06.2005 and Rs. 2,41,510/- on 22.07.2005 to respondent no. 2 vide letter dated 12.05.2005. It has further been stated that respondent no. 2 after receiving payment from the petitioner without any objection moved the Council under Section 18 of the Act, 2006 for realization of Rs. 35,100/-. The Council took cognizance of the issue and passed an order/award dated 22.01.2011 in Case No. JHSEFC 29/2009 by which the writ petitioner was directed to pay principal outstanding of Rs. 35,100/- which remained outstanding on 22.07.2005 along with interest on delayed payment of settled dues of Rs. 5,76,610/- as on 15.11.1996 at the rate of 1.5 times of SBI Prime Lending Rate from 15.11.1996 to 01.10.2006 and thereafter further interest at the rate of three times of the Bank Rate notified by the Reserve Bank of India in terms of Section 16 of the Act, 2006. The petitioner challenged the award dated 22.01.2011 before learned Court below, Sub-Judge-I, Ranchi in Arbitration Misc. Case No. 30 of 2011, which was disposed of vide order dated 08.12.2015 holding that the petitioner has to deposit 75% of the principal of the award along with interest, which comes to Rs. 41,07,872/-. The order dated 08.12.2015 passed by the learned Sub-Judge I Ranchi as also order 22.01.2011 passed by the Council were challenged before this Court invoking jurisdiction conferred under Article 227 of the Constitution of India by filing writ petition being W.P.(C) No. 1558 of 2016, which was dismissed vide order dated 22.01.2019, which is the subject matter of present intracourt appeal. 4. Mr. Anil Kumar, learned senior counsel assisted by Mr.
4. Mr. Anil Kumar, learned senior counsel assisted by Mr. Anup Kumar Agarwal, learned counsel for the petitioner has assailed the order passed by learned Single Judge, both on merit as well as jurisdiction of the Council. On the jurisdictional issue, learned senior counsel for the petitioner has submitted that the Council which had passed the order was not properly constituted as mandated by law under Section 21 of the Act, 2006 as the Council which passed the order consists of nine members including Chairman whereas Act, 2006 in specific terms says that Council shall consist of not less than three but not more than five members and as such the award passed by the Council is without jurisdiction and hence nullity in the eye of law. Learned senior counsel further submits that although the aforesaid issue was not raised before the Council however the same was raised before the learned Single Judge but it was not appreciated by learned Single Judge. He further submits that since the issue of jurisdiction goes to the root of the lis, as such it being a legal issue can be agitated at any stage. It has further been submitted that since the constitution of Council itself is contrary to the statutory provision as contained under Section 21 of the Act, 2006, the Award dated 22.01.2011 passed by the Council as also the order dated 08.12.2015 passed by learned Sub- Judge-I, Ranchi in Arbitration Misc. Case No. 30 of 2011 are not sustainable in the eyes of law. 5. Mr. Manoj Tandon, learned counsel for respondent no. 2 has submitted that there is no error in the order passed by the learned Single Judge as the writ petitioner had raised all the issues before the Council and after taking into consideration the entire factual aspect, the Council had passed the award in favour of respondent no. 2. The learned Single Judge, after considering the determination of award by the Council based upon the factual aspect, is correct in not interfering with the same and, therefore, the instant appeal also deserves to be dismissed.
2. The learned Single Judge, after considering the determination of award by the Council based upon the factual aspect, is correct in not interfering with the same and, therefore, the instant appeal also deserves to be dismissed. He further submits that the writ petition was filed under Article 227 of the Constitution of India challenging the order passed by the Council, the quasi-judicial body and as such no intra-court appeal will lie before this Court under Clause 10 of the Letters Patent and on this score also, the instant appeal is fit to be dismissed. He has further submitted that even though the constitution of Council was not in consonance with the provision of Section 21 of the Act, 2006, since it was passed by the Council consisting of eight members, while, the statute provides that Coram of Council shall not be less than three and not more than five members, but the Coram was having more than five members and as such it cannot be said that any prejudice was caused to the writ petitioner. Therefore, on this ground also the instant appeal is fit to be dismissed. 6. We have heard learned counsel for the parties and perused the documents available on record as also the findings recorded by learned Single Judge. Admitted facts in the case in hand are that in pursuance to the ‘Notice Inviting Tender’ work order No. ACD/HMB/95/96/2925/T/3197/0 dated 06.03.1995 was issued in favour of respondent no. 2 for supply of rack and pinion gates worth Rs. 57.48 lakhs. In terms thereof, rack and pinion gates were supplied by respondent no. 2, who claimed various bills before writ petitioner-HEC amounting to Rs. 19.53 lakhs but certain dispute arose, which ultimately went before the Council under Section 18 of the Act, 2006. The Council passed an order/award dated 22.01.2011 in Case No. JHSEFC 29/2009, by which the present petitioner was directed to pay principal outstanding of Rs. 35,100/- which remained outstanding on 22.07.2005 along with interest on delayed payment of settled dues of Rs. 5,76,610/- as on 15.11.1996 at the rate of 1.5 times of SBI Prime Lending Rate from 15.11.1996 to 01.10.2006 and thereafter further interest at the rate of three times of the Bank Rate notified by the Reserve Bank of India in terms of Section 16 of the Act, 2006.
5,76,610/- as on 15.11.1996 at the rate of 1.5 times of SBI Prime Lending Rate from 15.11.1996 to 01.10.2006 and thereafter further interest at the rate of three times of the Bank Rate notified by the Reserve Bank of India in terms of Section 16 of the Act, 2006. The petitioner challenged the award dated 22.01.2011 before Sub-Judge-I, Ranchi in Arbitration Misc. Case No. 30 of 2011, which was disposed of vide order dated 08.12.2015 directing the petitioner to deposit 75% of the principal of the award along with interest. The writ petitioner, challenging the order dated 08.12.2015 passed by the learned Sub-Judge I Ranchi as also order 22.01.2011 passed by the Council, invoked the writ jurisdiction of this Court under Article 227 of the Constitution of India by filing writ petition being W.P.(C) No. 1558 of 2016, which was dismissed vide order dated 22.01.2019, which is the subject matter of present intracourt appeal. 7. Learned senior counsel for the writ petitioner-HEC has challenged the very constitution of Council by taking the plea that the constitution of council was not in terms of the provisions of Section 21 of the Act, 2006. He has further taken the plea that since the issue of jurisdiction goes to the root and as such it can be raised at any stage of the proceeding and by following the said proposition of law the jurisdictional issue of the Council due to incorrect composition is required to be dealt with first. 8. While on the other hand, Mr. Manoj Tandon, learned counsel for respondent no. 2 has submitted that writ petitioner cannot be allowed to agitate the issue of jurisdiction since he had consciously participated in the proceeding before the Council without raising the jurisdictional issue. It has further been contended that writ petition was filed under Article 227 of the Constitution of India also against an order passed by Sub-Judge-I Ranchi in Arbitration Misc. Case No. 30 of 2011 which having been a judicial order can only be assailed under Article 227 of the Constitution of India against which Letters Patent Appeal will not lie. 9. This Court, after considering the rival submissions advanced by learned counsel for the parties, deems it fit and proper to answer following issues: (i).Whether the issue of jurisdiction can be allowed to be raised by the writ petitioner at the stage of intra-court appeal?
9. This Court, after considering the rival submissions advanced by learned counsel for the parties, deems it fit and proper to answer following issues: (i).Whether the issue of jurisdiction can be allowed to be raised by the writ petitioner at the stage of intra-court appeal? (ii).Whether on the ground of jurisdiction the order passed by the Council as also by the writ Court can be said to be justified? (iii).Whether in the facts of the case the instant intracourt appeal is maintainable against the order passed under Article 227 of the Constitution of India? 10. Since the issues are inter-connected, they are taken up simultaneously to be answered. There is no dispute about the settled position of law that the issue of jurisdiction can be raised at any stage of proceeding since the jurisdiction goes to the root of the lis. Reference in this regard is made to the judgment rendered by Hon’ble Supreme Court in Balvant N. Viswamitra & Ors Vs. Yadav Sadashiv Mule (Dead) through LRs [(2007) 8 SCC 706], in particular paragraph 9, which reads as under: 9. The main question which arises for our consideration is whether the decree passed by the trial court can be said to be “null” and “void”. In our opinion, the law on the point is well settled. The distinction between a decree which is void and a decree which is wrong, incorrect, irregular or not in accordance with law cannot be overlooked or ignored. Where a court lacks inherent jurisdiction in passing a decree or making an order, a decree or order passed by such court would be without jurisdiction, non est and void ab initio. A defect of jurisdiction of the court goes to the root of the matter and strikes at the very authority of the court to pass a decree or make an order. Such defect has always been treated as basic and fundamental and a decree or order passed by a court or an authority having no jurisdiction is a nullity. Validity of such decree or order can be challenged at any stage, even in execution or collateral proceedings.” (emphasis supplied) It is further settled position of law that even right decision by a wrong forum is no decision as has been held by Hon’ble in Pandurang & Ors Vs. State of Maharashtra [ (1986)4 SCC 436 ].
Validity of such decree or order can be challenged at any stage, even in execution or collateral proceedings.” (emphasis supplied) It is further settled position of law that even right decision by a wrong forum is no decision as has been held by Hon’ble in Pandurang & Ors Vs. State of Maharashtra [ (1986)4 SCC 436 ]. For ready reference, relevant paragraph 4 thereof is quoted as under: “4. When a matter required to be decided by a Division Bench of the High Court is decided by a learned Single Judge, the judgment would be a nullity, the matter having been heard by a court which had no competence to hear the matter, it being a matter of total lack of jurisdiction. The accused was entitled to be heard by at least two learned Judges constituting a Division Bench and had a right to claim a verdict as regards his guilt or innocence at the hands of the two learned Judges. This right cannot be taken away except by amending the rules. So long as the rules are in operation it would be arbitrary and discriminatory to deny him this right regardless of whether it is done by reason of negligence or otherwise. Deliberately, it cannot be done. Negligence can neither be invoked as an alibi, nor can cure the infirmity or illegality, so as to rob the accused of his right under the rules. What can be done only by at least two learned Judges cannot be done by one learned Judge. Even if the decision is right on merits, it is by a forum which is lacking in competence with regard to the subject-matter. Even a “right” decision by a “wrong” forum is no decision. It is non-existent in the eye of law. And hence a nullity. The judgment under appeal is therefore no judgment in the eye of law. This Court in State of M.P. v. Dewadas [ (1982) 1 SCC 552 : 1982 SCC (Cri) 275 : AIR 1982 SC 800 : (1982) 3 SCR 81 ] has taken a view which reinforces our view.
And hence a nullity. The judgment under appeal is therefore no judgment in the eye of law. This Court in State of M.P. v. Dewadas [ (1982) 1 SCC 552 : 1982 SCC (Cri) 275 : AIR 1982 SC 800 : (1982) 3 SCR 81 ] has taken a view which reinforces our view. We, therefore, allow the appeal, set aside the order passed by the learned Single Judge, and send the matter back to the High Court for being placed before a Division Bench of the High Court, which will afford reasonable opportunity of hearing to both the sides and dispose it of in accordance with law, expeditiously. We wish to add that the Registry of the High Court was expected to have realized the true position and ought not to have created a situation which resulted in waste of court time, once for hearing the appeal, and next time, to consider the effect of the rules. No court can afford this luxury with the mountain of arrears which every court is carrying these days.” The Hon’ble Apex Court further in the judgment rendered in A. Mohammad Yunus (Dead) by LRs Vs. Food Corporation of India & Anr. [(2000) 0 Supreme (SC)192] has held that if arbitrator has not been appointed as per agreement, the award would be said to be a quorum-non-judis. Thus, it is evident that where a Court lacks inherent jurisdiction in passing a decree or making an order, a decree or order passed by such court would be without jurisdiction, non est and void ab initio. A defect of jurisdiction of the court goes to the root of the matter and strikes at the very authority of the Court to pass a decree or make an order. Such defect has always been treated as basic and fundamental and a decree or order passed by a Court or an authority having no jurisdiction is a nullity. Validity of such decree or order can be challenged at any stage, even in execution or collateral proceedings. 11. This Court, taking into consideration the aforesaid settled position, is of the view that the objection which has been raised by respondent no. 2 for not allowing the writ petitioner to raise the issue of jurisdiction cannot be said to be substantial argument. Accordingly, the same is rejected. 12.
11. This Court, taking into consideration the aforesaid settled position, is of the view that the objection which has been raised by respondent no. 2 for not allowing the writ petitioner to raise the issue of jurisdiction cannot be said to be substantial argument. Accordingly, the same is rejected. 12. This Court is now proceeding to examine that how the award passed by the Council is without jurisdiction. It is not in dispute that when a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other manner. Reference in this regard be made to the judgment rendered by the Hon'ble Apex Court in State of Uttar Pradesh vs. Singhara Singh and Ors., [AIR (1964) SC 358], wherein at paragraph 8 it has been held as under: “....its result is that if a statute has conferred a power to do an act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been 12 prescribed. The principle behind the rule is that if this were not so, the statutory provision might as well not have been enacted....” Further the Hon'ble Apex Court in Babu Verghese and Ors. vs. Bar Council of Kerala and Ors., [ (1999) 3 SCC 422 ], at paragraphs 31 & 32 held as under: “31.It is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in that manner or not at all. The origin of this rule is traceable to the decision in Taylor v. Taylor which was followed by Lord Roche in Nazir Ahmad v. King Emperor who stated as under: “[W]here a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all.” 32. This rule has since been approved by this Court in Rao Shiv Bahadur Singh v. State of U.P. and again in Deep Chand v. State of Rajasthan. These cases were considered by a three-judge bench of this Court in State of U.P. v. Singhara Singh and the rule laid down in Nazir Ahmad case was again upheld.
This rule has since been approved by this Court in Rao Shiv Bahadur Singh v. State of U.P. and again in Deep Chand v. State of Rajasthan. These cases were considered by a three-judge bench of this Court in State of U.P. v. Singhara Singh and the rule laid down in Nazir Ahmad case was again upheld. This rule has since been applied to the exercise of jurisdiction by courts and has also been recognized as a statutory principle of administrative law.” The Hon'ble Apex Court further in Commissioner of Income Tax, Mumbai vs. Anjum M.H. Ghaswala & Ors., [ (2002) 1 SCC 633 ], at paragraph 27 as under: “..... it is a normal rule of consideration that when a statute vests certain power in an authority to be exercised in a particular manner then the said authority has to exercise it only in the manner provided in the statute itself....” Reference in this regard also be made to the judgment rendered by the Hon'ble Apex Court in State of Jharkhand & Ors. vs. Ambay Cements & Anr., [ (2005) 1 SCC 368 ], wherein at paragraph 26 it has been held as under: “....it is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. It is also settled rule of interpretation that where a statute is penal in character, it must be strictly construed and followed.....” Reference is also made to the judgment rendered by the Hon'ble Apex Court in Zuari Cement Ltd. vs. Regional Director ESIC Hyderabad & Ors. [ (2015) 7 SCC 690 ], wherein at paragraph 14 it has been held as under: “14. As per the scheme of the Act, the appropriate Government alone could grant or refuse exemption. When the statute prescribed the procedure for grant or refusal of exemption from the operation of the Act, it is to be done in that manner and not in any other manner. In State of Jharkhand v. Ambay Cements, it was held that: (SCC p. 378, para 26) 26.... it is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way.” 13.
In State of Jharkhand v. Ambay Cements, it was held that: (SCC p. 378, para 26) 26.... it is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way.” 13. Admittedly, Section of 21 of the Act, 2006 provides constitution of Council consisting of members not less than three but not more than five, as would appear from aforesaid provision, which reads as under: 21. Composition of Micro and Small Enterprises Facilitation Council. (1) The Micro and Small Enterprise Facilitation Council shall consist of not less than three but not more than five members to be appointed from amongst the following categories, namely:-- (i) Director of Industries, by whatever name called, or any other officer not below the rank of such Director, in the Department of the State Government having administrative control of the small scale industries or, as the case may be, micro, small and medium enterprises; and (ii) one or more office-bearers or representatives of associations of micro or small industry or enterprises in the State; and (iii) one or more representatives of banks and financial institutions lending to micro or small enterprises; or (iv) one or more persons having special knowledge in the field of industry, finance, law, trade or commerce. (2) The person appointed under clause (i) of subsection (1) shall be the Chairperson of the Micro and Small Enterprises Facilitation Council. (3) The composition of the Micro and Small Enterprises Facilitation Council, the manner of filling vacancies of its members and the procedure to be followed in the discharge of their functions by the members shall be such as may be prescribed by the State Government. Thus, it is evident that the provision of Section 21 of the Act, 2006 provides composition of the Council cannot be less than three or more than five members and if the Council has been constituted of members having less than three or more than five, it will be said to be contrary to the statutory provision and the thing which is contrary to the statutory provision will be said to suffer from a jurisdictional error. 14. In the case in hand, order which was passed by the Council during the relevant time consists of eight members.
14. In the case in hand, order which was passed by the Council during the relevant time consists of eight members. Therefore, according to our considered view, the constitution of Council consisting of eight members is contrary to the provision of Section 21 of the Act, 2006. 15. It requires to refer herein that under the parent Act rule was formulated in the year 2007, known as “Jharkhand Micro, Small & Medium Enterprises Facilitation Council Rules, 2007, wherein it was provided, as would be evident from Rule 4 (repeal rule) that the constitution of Council will not be less than five and not more than nine members. Subsequent to the aforesaid rule, an amended rule has come in the year 2017 by which the provision as contained under Rule 4 about composition of the Council by making it strictly in terms of the provision of Section 21 of the Act, 2006, wherein it has been provided that maximum number of members in the Council shall not be more than five. 16. Issue regarding constitution of Council fell for consideration before Co-ordinate Bench of this Court wherein award passed by the Council was questioned. The Co-ordinate Division Bench of this Court in W.P. (C) No. 3699 of 2015 and analogous case vide order dated 05.03.2020 has held constitution of coram of the Council being in the teeth of provision of Section 21 of the Act, 2006 to be invalid by taking into consideration the subsequent amendment by way of Rules, 2017. In the aforesaid writ petition, the issue of availability of alternative remedy as under Section 34 of the Arbitration Act was also one of the issue of adjudication and after considering the facts in entirety the Co-ordinate Division Bench came to conclusion that writ application of the petitioner cannot be thrown away on the ground of availability of alternative remedy under Section 34 of the Arbitration Act. 17.
17. This Court, after considering the order passed by Co-ordinate Division Bench of this Court on the validity of the provision, more particularly regarding the Constitution of Coram of the Council which was held to be invalid being found to be in the teeth of Section 21 of the Act, 2006, so far it relates to Rules, 2007 is concerned, is of the view that the order passed by the Council is declared to be illegal since is passed contrary to the parent Act, which provides a provision as under Section 21 of the Act, 2006 and the Rule of the year 2007, which has been held to be invalid. Admittedly, the State Government has amended the provision of Rules, 2007 by bringing the amended Rules, 2017 but the impugned order which is the subject matter of the lis herein has been passed during the period when the provision of Rules, 2007 was in vogue and that is the reason, Mr. Manoj Tandon, learned counsel for respondent no. 2 has taken an additional ground that the Constitution of Council which was consisting of eight members cannot be said to be invalid since was constituted in terms of provision of Rules, 2007. However, the Co-ordinate Division Bench of this Court has considered Rules, 2007 to be invalid more so in the meanwhile amended Rule, 2017 has come as also even the parent Act, 2006 under Section 21, the composition of Coram of Council has been provided but admittedly the constitution of Coram was not in terms of Section 21 of the Act, 2006 and even then it was in terms of Rules, 2007 but the constitution of Council in terms of provision of Section 21 of the Act, 2006 cannot be said to be in consonance with the statutory provision as contained under the Act, 2006 as per the provision made under Section 21 thereof. Therefore, according to our considered view, the constitution of Coram which admittedly was constituted of eight members cannot be said to be in terms of Section 21 of the Act, 2006 and as such the very constitution of Coram since it is in the teeth of Section 21 of the Act, 2006, cannot be said to be a proper constitution of Council, is held to be in the teeth of Section 21 of the Act, 2006.
Since the Hon’ble Apex Court in Balvant N. Viswamitra & Ors Vs. Yadav Sadashiv Mule (Dead) through LRs (supra) has held that where a Court lacks inherent jurisdiction in passing a decree or making an order, a decree or order passed by such court would be without jurisdiction, non est and void ab initio. A defect of jurisdiction of the court goes to the root of the matter and strikes at the very authority of the Court to pass a decree or make an order. Such defect has always been treated as basic and fundamental and a decree or order passed by a Court or an authority having no jurisdiction is a nullity. Therefore, according to our considered view the order passed by the Council is held to be nullity in the eyes of law. 18. Mr. Tandon, learned counsel for respondent no. 2 has raised another issue that the present intra-court appeal is not maintainable against the order passed by the learned Single Judge in a petition filed under Article 227 of the Constitution of India 19. We, before answering this issue, require to refer herein the prayer made by the petitioner in the writ petition, which is in two folds, as under: “(i). For issuance of direction particularly of nature of certiorari so as to set aside the order dated 22.01.2011 (Annexure-4) passed by the Micro, Small 21 & Medium Enterprises Development Council in case No. JHSEFC29/2009. In the impugned order the present petitioner was directed to pay principal outstanding amount of Rs. 35,100/- which remained outstanding on 22.07.2005 along with the interest on delayed payment of settled dues of Rs. 5,76,610/- as on 15.11.1996 to 01.10.2006 and thereafter further interest @ 3 times of the Bank in terms of Section 16 of the MSMED Act, 2006 and; (ii). For quashing order dated 08.12.2015 passed by the learned Court of Sri S.B. Ojha, Sub-Judge-1, Ranchi in Arbitration Misc. Case No. 30/2011 (Annexure-5), by which the Challenge to the Award was responded by an observation to fulfil the condition pre-requisites entailed under the MSMED Act, which makes the total claim amount to be Rs. 35,100/- (+) Rs. 54,42,162/-= Rs. 54,77,162/- and the order dated 08.12.2015 directed the petitioner to deposit Rs. 41,07,872/- for maintaining his quest for setting aside the order passed by the MSMED Council.
35,100/- (+) Rs. 54,42,162/-= Rs. 54,77,162/- and the order dated 08.12.2015 directed the petitioner to deposit Rs. 41,07,872/- for maintaining his quest for setting aside the order passed by the MSMED Council. Thus, it is evident that the first prayer is against the order passed by the Council whereas the second prayer is against the order passed by Sub-Judge-I, Ranchi. So far first prayer, which pertains to quashing of order passed by Council is concerned the same since was passed by quasi judicial body and as such the writ petition under Article 226 of the Constitution will lie. But, so far as the order passed under Section 34 of the Arbitration and Conciliation Act, 1996 is concerned which having been passed by Sub-Judge-I, Ranchi in Arbitration Misc. Case No. 30 of 2011, the same admittedly has been passed in the judicial side and, therefore, the same can be questioned before this Court under Article 227 of the Constitution of India. But herein in the given facts of the case along with the order passed by Sub-Judge I in Arbitration Misc. Case No. 30 of 2011, the award passed by the Council, which is a quasi judicial body has been assailed. Although the writ petition has been filed under Article 227 of the Constitution of India, but as has been held by Hon’ble Apex Court in Jogendrasinhji Vijaysinghji v. State of Gujarat & ors [ (2015) 9 SCC 1 ], the writ petition is maintainable. The relevant paragraph 30 is quoted as under: “30. From the aforesaid pronouncements, it is graphically clear that maintainability of a letters patent appeal would depend upon the pleadings in the writ petition, the nature and character of the order passed by the learned Single Judge, the type of directions issued regard being had to the jurisdictional perspectives in the constitutional context. Barring the civil court, from which order as held by the three-Judge Bench in Radhey Shyam [ (2015) 5 SCC 423 : (2015) 3 SCC (Civ) 67 : (2015) 3 Scale 88 ] that a writ petition can lie only under Article 227 of the Constitution, orders from tribunals cannot always be regarded for all purposes to be under Article 227 of the Constitution.
Whether the learned Single Judge has exercised the jurisdiction under Article 226 or under Article 227 or both, needless to emphasise, would depend upon various aspects that have been emphasised in the aforestated authorities of this Court. There can be orders passed by the learned Single Judge which can be construed as an order under both the articles in a composite manner, for they can co-exist, coincide and imbricate. We reiterate it would depend upon the nature, contour and character of the order and it will be the obligation of the Division Bench hearing the letters patent appeal to discern and decide whether the order has been passed by the learned Single Judge in exercise of jurisdiction under Article 226 or 227 of the Constitution or both. The Division Bench would also be required to scrutinise whether the facts of the case justify the assertions made in the petition to invoke the jurisdiction under both the articles and the relief prayed on that foundation. Be it stated, one of the conclusions recorded by the High Court in the impugned judgment pertains to demand and payment of court fees. We do not intend to comment on the same as that would depend upon the rules framed by the High Court.” 20. It is evident from the aforesaid proposition that nomenclature under which litigation has been filed is not of worth consideration rather the entire pleading is to be looked into. Herein, the facts of the given case is not that only order passed by Sub-Judge I, Ranchi in Arbitration Misc. Case No. 30 of 2011 has only been assailed but along with the same the award passed by the Council has also been assailed. Meaning thereby, both the order passed by quasi judicial authority as also judicial authority have been assailed by invoking the jurisdiction conferred under Article 227 of the Constitution of India. Since, it has been held by Hon’ble Apex Court in Jogendrasinhji Vijaysinghji v. State of Gujarat & ors (supra) that pleading is required to be looked into and not the provision of law under which the writ petition was filed and as such herein also as per the pleading made in the writ petition it would be evident therefrom that since the writ petition is against the quasi judicial body as also judicial authority, the argument which has been advanced by learned counsel for respondent no.
2 that the instant intra-court appeal is not maintainable, according to our considered view is not worth to be accepted since apart from the judicial order, order passed by quasi judicial authority has also been assailed and as such writ petition is also construed to be under Article 226 of the Constitution of India and taking it into consideration the instant intra-court appeal will be said to be maintainable. 21. Moreover, we are mainly concerned herein about jurisdictional issue of the Council on the basis of its constitution of members and when the very foundation will be said to suffer from inherent jurisdiction the subsequent order will also be said to be nullity in the eyes of law. Since the issue of jurisdiction is of paramount consideration and if the order passed by an authority/Court of law having no jurisdiction it is not available to raise the issue of prejudice, as has been raised, for the reason when the order itself is bad in law due to lack of inherent jurisdiction there is no question of causing any prejudice as the order is said to be void ab initio. 22. Considering the aforesaid aspect of the matter, according to our considered view since the order passed by the Council in the award dated 22.01.2011 has been held to be without jurisdiction and as such the subsequent order passed by Sub-Judge I Ranchi in Arbitration Misc. Case No. 30 of 2011 will also be held to be passed without any foundation as when the original order itself has been held to be without jurisdiction it impliedly become nullity in the eyes of law and, therefore, any order passed under Section 34 of the Arbitration and Conciliation Act, 1996 will also be said to be null and void. 23. This Court having discussed the fact in entirety as above is of the view that the instant intra-court appeal is worth to be allowed. 24. Accordingly, the instant intra-court appeal is allowed. 25. In consequence thereof, the order passed by the learned Single Judge dated 22.01.2019 in W.P. (C) No. 1558 of 2016 is quashed and set aside. Resultantly, the order passed by the Council dated 22.01.2011 in case No. JHSEFC-29/2009 as also the order passed by Sub-Judge I, Ranchi dated 08.12.2015 in Arbitration Misc. Case No. 30 of 2011 are quashed and set aside.
Resultantly, the order passed by the Council dated 22.01.2011 in case No. JHSEFC-29/2009 as also the order passed by Sub-Judge I, Ranchi dated 08.12.2015 in Arbitration Misc. Case No. 30 of 2011 are quashed and set aside. The matter is remitted before the Council to adjudicate the issue afresh in accordance with law. 26. Pending Interlocutory Applications, being I.A. No. 2899 of 2019 and 5505 of 2020, stand disposed of.