Northern Transformers v. Union Territory of Jammu And Kashmir
2022-09-15
SANJEEV KUMAR
body2022
DigiLaw.ai
JUDGMENT 1. The petitioner claims to be an enterprise within the meaning of Section 2(e) of the Micro, Small and Medium Enterprises Development Act, 2006 ['the Act']. The petitioner submits that he supplied certain goods to respondent No.5 vide three different invoices dated 23.03.2019, 30.03.2019 and 30.03.2019. On completion of supplies to the satisfaction of respondent No.5, the petitioner submitted his bills for release of total payment of Rs.90,73,183/. It is claimed that the bills submitted by the petitioner were verified, certified and approved by respondent No.5. Since the payment due to the petitioner was not released within the statutory period of 45 days as stipulated under Section 15 of the Act, as such, the petitioner approached the Micro and Small Enterprises Facilitation Council [MSEFC], Kashmir, for reconciliation in the matter. Couple of notices were issued by MSEFC, Kashmir, to respondent No.5 calling upon the later to make the payment of amount due to the petitioner. The grievance of the petitioner is that thereafter the Council has not proceeded in the matter but the amount remains unpaid. 2. Referring to Sections 15 to 18 of the Act, it is submitted that the statutory mechanism provided under the Act needs to be adhered to by the authorities in letter and spirit. This petition is, therefore, for seeking a direction to respondent No.5 to pay the admitted amount due to the petitioner. However, during the course of argument, Mr. Azhar-ul-Amin, learned counsel appearing for the petitioner restricted his relief only to the extent of directing the adherence to the dispute resolution mechanism provided under Section 18 of the Act. 3. Heard learned counsel for the petitioner and perused the material on record. 4. It seems that when the payment demanded by the petitioner was not released by the respondent No.5, the petitioner approached MSEFC, Kashmir in terms of Section 18 of the Act. The application submitted by the petitioner was registered and the process was initiated by the Council. From the communication dated 8th March, 2021, placed on record by the petitioner, it transpires that the Council advised Executive Engineer, Electric Division, Kupwara (now KPDCL) to pay the amount due to the petitioner within a period of 15 days failing which a formal case would be registered by the Council.
From the communication dated 8th March, 2021, placed on record by the petitioner, it transpires that the Council advised Executive Engineer, Electric Division, Kupwara (now KPDCL) to pay the amount due to the petitioner within a period of 15 days failing which a formal case would be registered by the Council. There is yet another communication on record issued by the Secretary of the Council dated 7th April, 2021, whereby the Executive Engineer, Electric Division, Kupwara, has been once again advised to pay the amount due to the petitioner within a period of 15 days. Thereafter there appears to be no correspondence or order by the Council. 5. From a perusal of the documents appended with this petition, it clearly transpires that the goods/material were requisitioned by and supplied to respondent No.5 and, therefore, the obligation to make the payment also lies on respondent No.5. It is a different matter if respondent No.5 has to get this amount from the Executive Engineer, Electric Division, Kupwara, for whom supplies appear to have been procured. The obligation to make the payment is on the buyer of the goods and the buyer of the goods, in the instant case, is the SICOP though goods were meant for KPDCL. In that view of the matter, it was incumbent upon the petitioner to make a reference of the dispute of nonpayment of amount by the SICOP to the Council. In the instant case, the petitioner has not approached the Council for seeking release of his payment from the SICOP. The material on record reveals that the SICOP is not even a party before the Council. 6. In view of the aforesaid, the relief claimed by the petitioner for seeking disposal of the reference/arbitration by the Council against the Executive Engineer, Electric Division, Kupwara (KPDCL), may not be, per se, maintainable unless the SICOP is also made a party. 7. Be that as it may, having regard to the nature of controversy involved coupled with the arguments made by learned counsel for the petitioner, this petition is disposed of by giving liberty to the petitioner to make a formal reference to the Council for seeking release of his payment, if any, due to him from respondent No.5. There is, admittedly, no privity of contract between petitioner and the Executive Engineer, Electric Division, Kupwara (KPDCL).
There is, admittedly, no privity of contract between petitioner and the Executive Engineer, Electric Division, Kupwara (KPDCL). Needless to say, that in case an appropriate reference of the dispute is made by the petitioner before the Council against the SICOP, same shall be considered, dealt with and decided by the Council within a period of ninety days and if the effort to settle the dispute between the parties amicably fails, there shall be reference of the dispute to arbitration as provided under Section 18 of the Act. The arbitration can be conducted by the Council itself or it can send it for arbitration to any other institution or centre providing alternate dispute resolution for such arbitration. In this regard, the Council shall adhere to Section 18 of the Act in letter and spirit.