United Electrical Industries Ltd v. Micro and Small Enterprises & Ors

RAJIV SAHAI ENDLAW, J. DECEMBER 14, 2015 Bs.. (Corrected and released on 4th February, 2016)

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 14th December, 2015 + W.P.(C) No.7072/2015 & CM No.12960/2015 (for stay) UNITED ELECTRICAL INDUSTRIES LTD. ..... Petitioner Through: Mr. G. Prakash, Adv. Versus MICRO AND SMALL ENTERPRISES FACILITATION COUNCIL & ORS ..... Respondents Through: Mr. Manish Sharma, Adv. for R-2. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW 1. The petition impugns (i) the orders dated 17th June, 2013 and 1st October, 2013 of the respondent No.1 Micro and Small Enterprises Facilitation Council (MSEFC); and, (ii) the order dated 15th May, 2015 of the Arbitrator in Case Reference No.DAC/498/10-13 on the file of Delhi International Arbitration Centre (DIAC). 2. Notice of the petition was issued, though no ad-interim stay sought of the arbitration proceedings aforesaid granted. 3. The respondent No.2 Eppleton Engineers Pvt. Ltd. (EEPL) filed CM No.13601/2015 in this petition seeking a direction that evidence shall be recorded in the arbitration proceedings and that the petitioner shall not seek an adjournment on the ground of pendency of this petition. The said application was dismissed on 4th August, 2015 with the observation that the prayer therein was beyond the purview of the present petition. Only the respondent No.2 EEPL filed a counter affidavit and to which a rejoinder has been filed by the petitioner. None appeared for the respondent No.1 MSEFC inspite of service. Though the counsel for respondent no.3 Govt. of NCT of Delhi (GNCTD) had appeared earlier, does not appear today. The counsel for the petitioner and the counsel for the respondent No.2 EEPL have been heard. 4. The factual matrix is as under: (i) The respondent No.2 EEPL, claiming to be a small enterprises within the meaning of Section 2(m) of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) and further claiming that the petitioner owed a sum of Rs.9,22,71,848/- to it against the supplies made by the respondent No.2 EEPL to the petitioner within the meaning of Sections 15 to 17 of the MSMED Act, on 29th November, 2012 submitted a reference to the respondent No.1 MSEFC under Section 18 of the MSMED Act to either conduct conciliation in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services qua the dispute which had so arisen between the respondent No.2 EEPL and the petitioner. (ii) Contending that the respondent No.1 MSEFC did not act on the said reference, the respondent No.2 EEPL in or about March, 2013 filed W.P.(C) No.1535/2013 before this Court impleading MSEFC and GNCTD only as parties thereto and seeking a mandamus to the MSEFC to initiate action on the reference submitted by the respondent No.2 EEPL. (iii) The said writ petition came up before this Court first on 8th March, 2013 when the counsel for MSEFC and GNCTD appeared on advance notice and stated that they will examine the reference of the respondent No.2 EEPL and act thereon in accordance with the provisions of the MSMED Act. Accordingly, the petition was disposed of with a direction to the MSEFC to within four weeks thereof examine the request of the respondent No.2 EEPL, if necessary after issuing notice to the petitioner, and do the needful thereon. (iv) The respondent No.1 MSEFC in compliance of the aforesaid order of this Court sent a notice dated 12th April, 2013 to the petitioner and the petitioner though sought time to file reply but did not file reply. (v) In the circumstances, the respondent No.1 MSEFC vide order dated 17th June, 2013 supra decided that the reference under Section 18 of the MSMED Act of the respondent No.2 EEPL be referred to the Delhi Dispute Resolution Society for conciliation and in the event of the conciliation proceedings remaining unsuccessful, the matter be referred for arbitration to DIAC. (vi) The petitioner and the respondent No.2 EEPL were unable to reach an amicable solution and the conciliation proceedings were closed. (vii) The respondent N