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2024 DIGILAW 510 (MP)

Gangotri Wires Ropes Pvt. Ltd. v. Micro and Small Enterprises Facilitation Council

2024-07-22

SUBODH ABHYANKAR

body2024
ORDER 1. Heard finally, with the consent of the parties. The issue involved in these petition is that whether the Facilitation Council has the jurisdiction and can enter into a dispute between the directors inter se of the petitioner Company. 2. This order shall also govern the disposal of W.P. Nos.11621, 11623, 11624, 11631, 11633, 11637, 11652, 12203, 12328, 12329, 12330 and 12331 of 2024, regard being had to the commonality of the issue involved. For the sake of convenience, the facts as narrated in W.P. No.10767 of 2024 are being taken into consideration. 3. This petition has been filed under Article 226 of the Constitution of India against the order dated 15.3.2024 passed by the M.P., Micro, Small and Medium Enterprises, Facilitation Council (in short „Facilitation Council?) whereby petitioner?s application filed under Section 18(1) of the Micro, Small and Medium Enterprises Development Act, 2006 (in short „the Act of 2006?) has been rejected. 4. Shorn of details, in brief, the facts of the case are that the aforesaid application has been rejected by the Facilitation Council predominantly on the ground that the other Directors of the petitioner Gangotri Wires Ropes Private Limited have not assented to the filing of the application under section 18 of the Act of 2006. 5. The petitioner is a Private Limited Company, registered under the Companies Act, 1956, having its registered office at 32/33, Industrial Area, Rau, Indore (M.P.) 453331.The Company had sold certain goods to M/s. Parakh Polymers, respondent No.2 herein, and the payment of which was not made by the said firm, which led the petitioner to file the claim before the Facilitation Council wherein a sum of Rs.42,64,724/- was sought to be recovered from the respondent No.2 M/s. Parakh Polymer along with interest, in accordance with law. 6. The aforesaid case was filed on behalf of the Company by Shri Anil Sharma, the authorized signatory of the petitioner company one of the Directors of the petitioner company, who was authorized through a Resolution dated 4.1.2020. In the aforesaid case, which was registered as Case No.MSEFC/1908/2023, objections were filed by the other Directors of the petitioner/company, who are the respondent No.3 Mr. Antim Parekh and Mrs. In the aforesaid case, which was registered as Case No.MSEFC/1908/2023, objections were filed by the other Directors of the petitioner/company, who are the respondent No.3 Mr. Antim Parekh and Mrs. Sapna Antim Parekh, the respondent No.4, contending before the Facilitation Council not to proceed further as the claim has been made after suppressing the material facts, on the ground that they are also the Directors of the petitioner/company and various notices have been issued by the other Director Anil Shrama to various businessmen, but before issuing such notices, their permission has not been taken, hence, it was prayed that no further proceedings be initiated against the respondent No.2 at the instance of the complaint filed by the other Director Anil Sharma. The aforesaid applications/objections were objected to by the present petitioner through its Director Anil Sharma, and after considering the objections raised by the intervenors, the Facilitation Council has passed the final order on 15.3.2024, and being aggrieved, the present petition has been filed. 7. Counsel for the petitioner has submitted that the Facilitation Council has entered into the inter se dispute between the directors of the petitioner company, which was not the subject matter of the application filed under section 18 of the Act of 2006 and thus, the Council has exceeded in its jurisdiction in entertaining the objection raised by the respondent Nos.3 and 4 and holding that the application is not maintainable on account of lack of locus standi of the petitioner to file the claim application. It is submitted that the impugned order deserves to be set aside and the matter needs to be remanded back to the Facilitation Council for its decision on merits. 8. Counsel for the petitioner has also submitted that the respondent No.2, the purchaser of the goods had never objected to the quality of the goods supplied to it by the petitioner company, and in such circumstances, it was not open for the Facilitation Council to come to a conclusion only on the basis of the admission made by the other Directors of the petitioner company that the goods were not up to the mark. Counsel has also referred to the FAQs of the Government?s website regarding the MSME in which the question No.22 reads as under:-- “Q.22 Whether Council should decide on breach of contract between buyer and supplier, such as rejection of goods for quality deficiencies by buyer as a ground for refusal of dues to supplier? Ans: Breach of contract is not within scope of MSMED Act, 2006. Rejection of goods should be genuine within 15 days of the receipt of goods and its immediate communication to supplier.” 9. Thus, it is submitted that since no objection was ever raised by the respondent No.2 regarding the quality of the goods, it was not open for the Facilitation Council to decide upon the quality of the goods, which was not even objected to by the respondent No.2. 10. Shri Rajat Sondhi, leaned counsel appearing for the respondents has vehemently opposed the prayer and it is submitted that no case for interference is made out as the Facilitation Council has not only rejected the claim of the petitioner on the ground of locus of the authorized Director Anil Sharma to file the same, but also on merits, and in such circumstances, since an alternative remedy under section 19 of the Act of 2006 is also available to the petitioner. Hence, no case for interference is made out. 11. Heard. Hence, no case for interference is made out. 11. Heard. Having considered the rival submissions and on perusal of the documents filed on record, this Court finds that so far as the conclusions arrived at by the Facilitation Council are concerned, the same read as under:- ^fo'ys"k.k ,oa fu.kZ; 10- vkosnd daiuh d¢ lacaèk esa Òkjr ljdkj] daiuh dk;Z ea=ky; dh osclkÃV esa miyCèk tkudkjh vuqlkj ;g vfookfnr gS fd Jh vafre ikjs[k fnukad 1-5-2014 ls vkosnd daiuh esa Mk;jsDVj fu;qä gSaA okn mRifr fnukad d¨ daiuh esa ek= ¼1½ Jh vfuy 'kekZ ,oa ¼2½ Jh vafre ikjs[k gh Mk;jsDVj dh gSfl;r esa fu;qä½ FksA ;g Òh vfookfnr gS fd n¨u¨a Mk;jsDVj yxÒx 50 ks;j g¨YM djrs FksA 11- i{kdkj¨a }kjk of.kZr dFku vuqlkj fnukad ifj"kn esa okn çLrqfr fnukad 30-6-2023 d¨ Jherh liuk ikjs[k Òh daiuh esa ,fM'kuy Mk;jsDVj fu;qä FkÈA 12- ,slh fLFkfr tc daiuh d¢ vU; Mk;jsDVj ifj"kn d¢ le{k Lo;a mifLFkr g¨dj ;g dFku dj jgs gSa fd vkosnd daiuh }kjk ifj"kn esa çdj.k lafLFkr fd, tkus esa mud¢ lgefr ugÈ Fkh] rFkk os çdj.k d¨ [kkfjt fd;k tkuk pkgrs gSaA ifj"kn d¨ bl fu"d"kZ ij igq¡pus d¢ i;kZIr ;¨X; cukrh gS fd ifj"kn esa lanÒZ çLrqr djus dh fnukad 30-6-2023 d¨ Jh vfuy 'kekZ }kjk vU; Mk;jsDVj Jh vafre ikjs[k ,oa ,fM'kuy Mk;jsDVj Jherh liuk ikjs[k dh lgefr ugÈ dh xà Fkh 'kekZ }kjk Qkby fd, tkus rd gh lhfer fd;k tkuk ekU; fd;k tkrk gSA pw¡fd daiuh ,d Ñf=e O;fDrRo gS rFkk Mk;jsDVj O;fäxr {kerk esa okn çLrqr djus ;¨X; ugÈ gSA vr,o {kerk (Locus standi) d¢ vÒko esa okn ifj"kn esa i¨"k.kh; ugÈ gSA 13- fofèk dk lqLFkkfir fl)kar gS fd fdlh daiuh esa daiuh ,oa Mk;jsDVj dk lacaèk ekfyd ,oa ,tsaV dk g¨rk gSA lafonk fofèk vuqlkj daiuh d¢ dkedkt esa ,tsaV }kjk fd;k x;k laO;ogkj ekfyd ij ckè;dkjh g¨xkA ;fn xq.kn¨"k d¢ vkèkkj ij Òh okn dk fo'ys"k.k fd;k tk, r¨ vkosnd daiuh d¢ ,d Mk;jsDVj }kjk vukosnd d¨ lkexzh dh larqf"Viw.kZ vkiwfrZ dk leFkZu ugÈ fd;k tkdj ;g Lohdkj¨fä dh xà gS fd eky dh xq.koÙkk [kjkc Fkh] rFkk daiuh }kjk eky okfil ugÈ mBk;k x;k FkkA daiuh dh v¨j ls vU; Mk;jsDVj d¢ mä dFku d¨ daiuh d¢ fo#) oSèk Lohdkj¨fä d¢ :i esa fy;k tkuk mfpr g¨xkA vr% Øsrk d¨ eky dh larqf"Viw.kZ vkiwfrZ çekf.kr ugÈ g¨us ls xq.kn¨"k d¢ vkèkkj ij Òh okn [kkfjt fd, tkus ;¨X; gSA 14- tgk¡ rd vkosnd }kjk daiuh d¢ vU; Mk;jsDVj d¢ daiuh d¢ fgr d¢ fo#) dk;Z fd, tkus d¢ dkj.k daiuh ,DV] 2013 dh èkkjk 166 d¢ rgr dk;Zokgh fd, tkus d¢ rdZ dk lacaèk gS] vkosnd bl gsrq vU; Mk;jsDVj d¢ fo#) l{ke U;k;ky; esa vko';dokn lafLFkr djus gsrq l{ke gSaA fdUrq pw¡fd okn vkt fnukad dh fLFkfr esa Òh Jh vafre ikjs[k daiuh esa Mk;jsDVj dh Òwfedk esa gS] vr% vkosnd }kjk mud¢ fo#) dk;Zokgh dh ea'kk ek=] Jh ikjs[k d¨ mud¢ }kjk ifj"kn esa çLrqr vfÒopu djus d¢ v;¨X;k ugÈ cukrh gSA 15- vr% mä of.kZr fcanqv¨a esa mYysf[kr fu"d"kZ d¢ vkèkkj ij ifj"kn lw{e yÄq ,oa eè;e m|e fodkl 2006 dh èkkjk 18¼3½ d¢ varxZr çnr~ 'kfä;¨a dk ç;¨x djrs gq, vkosnd esllZ xax¨=h ok;j j¨Il çkbosV fyfeVsM }kjk ifj"kn esa çLrqr çdj.k [kkfjt fd;k tkuk fu.kÊr djrh gSA 16- çdj.k esa ikfjr vkns'k dh çfr mÒ;i{k¨a d¨ fu%'kqYd çnku dh tk,xhA vfÒçekf.kr çfr d¢ fy, fu;ekuqlkj lfpo e-ç- lw{e v©j yÄq m|e QSflfyVs'ku dkmafly Ò¨iky d¨ vkosnu dj çfr i{k gsrq #i;s 2@& d¢ eku ls ys[kk 'kk[kk esa jkf'k tek djuk vko';d g¨xkA mÒ;i{k viuk viuk okn O;; Lo;a ogu djsaxsA (Emphasis supplied) 12. A perusal of the same clearly reveals that the Facilitation Council has held that Anil Sharma, the Director of the company is not competent to file the claim. It is also found that even on merits of the case, which is reflected in para 13 of the aforesaid order, the Facilitation Council has referred to the fact that one of the Directors of the petitioner company has admitted that the goods supplied by them were not up to the standard, and also that the company did not take the goods back, and the statement given by one of the Directors of the company has to be considered as an admission on the part of the company. Hence, it has been held that since the goods supplied to the respondent No.2/purchaser were not to his satisfaction, hence, also the claim is liable to be rejected. 13. So far as the aforesaid finding is concerned, this Court finds that although the objections have been raised by the respondent No.2 to whom the goods were supplied that they were of inferior quality, and also that the respondent No.2?s director Shr Avi Parekh happens to be the son of one of the directors of the petitioner company viz., Antim Parekh and whose permission was also required to file the application before the Facilitation Council, but this Court finds that the Facilitation Council has only taken into account the admissions made by the other directors of the petitioner Company and has not reflected upon the issue of inferior quality of goods. 14. In such circumstances, in the absence of any tangible material on record to support such contention regarding the inferior quality of goods supplied by the petitioner company, it cannot be held that merely because the other Directors of the petitioner company have admitted that the goods were of inferior quality, they can be presumed to be of inferior quality. 14. In such circumstances, in the absence of any tangible material on record to support such contention regarding the inferior quality of goods supplied by the petitioner company, it cannot be held that merely because the other Directors of the petitioner company have admitted that the goods were of inferior quality, they can be presumed to be of inferior quality. Apart from that, this Court also finds that the learned Members of the Facilitation Council have also lost sight of the provisions of section 2(b)(ii) of the Act of 2006, which defines the day of deemed acceptance, which reads as under:- “xxxxxxxx (ii) “the day of deemed acceptance” means, where no objection is made in writing by the buyer regarding acceptance of goods or services within fifteen days from the day of the delivery of goods or the rendering of services, the day of the actual delivery of goods or the rendering of services.” 15. In the considered opinion of this Court, the inter se dispute between the Directors of the petitioner company cannot be decided by the Facilitation Council in its jurisdiction as conferred under the Act of 2006, and such disputes between the owners of such enterprise cannot have any bearing on decision of the Facilitation Council u/s.18 of the Act of 2006. Thus, the Facilitation Council has apparently exceeded in its jurisdiction in dwelling upon the said dispute of the directors of the petitioner company, and to reject the claim of the petitioner company which has been filed by one of the authorized directors. 16. On merits also, the decision of the Facilitation Council appears to have been influenced by the bare admissions made by the other directors of the petitioner company rather than the pleadings of the respondent No.2. In view of the same, the order dated 15.3.2024 is hereby set aside and the matter is remanded back to the Facilitation Council for its decision on merits of the case, without being influenced by the admissions made by the other directors of the petitioner Company, in accordance with law. 17. With the aforesaid, petition stand allowed and disposed of. 18. It is made clear that this Court has not reflected upon the merits of the case. 19. Let a copy of this order be placed in the record of other connected matters.