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Crosslite Infra Private Limited, Cochin v/s Director of Industries & Commerce Haryana Cum Chairman Haryana MSEMSC, Chandigarh & Others

    WP(C). No. 889 of 2022

    Decided On, 02 March 2022

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE P.V. KUNHIKRISHNAN

    For the Petitioner: Johnson Gomez, Sanjay Johnson, S. Sreedevi, John Gomez, Sanjith Johnson, P.D. Dinoop, S. Biju (Kizhakkanela), Mohamed Sheharan, Advocates. For the Respondents: Madhu Radhakrishnan, RESP., Nelson Joseph, M.D. Joseph, Deepak Ashok Kumar, Advocates.



Judgment Text

1. This writ petition is filed mainly challenging Exts.P19 and P20 orders passed by the 1st respondent under Sec.18(3) of the Micro, Small and Medium Enterprises Act, 2006 (for short “MSME Act”). The 1st respondent herein is the Director of Industries and Commerce Haryana cum Chairman, Haryana MSEMSC, Chandigarh.

2. The petitioner is a sub-contractor of M/s.CORRTECH INTERNATIONAL PVT. LTD. M/s. CORRTECH INTERNATIONAL PVT. LTD entered into an agreement with M/s. GIAL (INDIA) Ltd. for RLNG Gas Pipeline Project. The petitioner and the 3rd respondent had entered into an agreement dated 25.3.2018 for project management service in relation to the sub contract that the petitioner had entered into with M/s. CORRTECH INTERNATIONAL PVT. LTD. for laying of RLNG Gas Pipeline Project under KKBMPL Project for short segments. According to the petitioner, the 3rd respondent has failed to perform its part of the contract and deviated from the same resulting in huge loss to the petitioner. Hence, there arose a dispute between the petitioner and the 3rd respondent. As per the agreement, if a dispute, claim or controversy arises out of or in connection with the agreement and is not settled amicably between the parties within 30 days of a written notification of the dispute by any of the party to other party of the agreement, such disputed matter shall be then settled in arbitration. According to the petitioner, by invoking the arbitration clause in the agreement, the petitioner has issued a notice dated 20.8.2020 and 11.11.2020 to the 3rd respondent pointing out the above facts and demanded payment of an interim amount of Rs. 10,00,00,000/- (Rupees Ten Crores).

3. It is the case of the petitioner that the 3rd respondent has not settled the same. But, the 3rd respondent sent a reply denying the allegation and also stated that they have already filed a case before the MSME council at Haryana and hence, not in a position to accept the 'Notice of Dispute' to commence a separate parallel proceedings of Arbitration in Kerala. Meanwhile, the petitioner has initiated AR 61/2021 before this Court for appointment of an arbitrator. The 3rd respondent on the other hand, approached the facilitation Center by filing two applications by Exts.P8 and P9 claiming that Exts.P6 and P7 invoices issued for the services rendered were not paid by the petitioner. According to the petitioner, they disputes the claim in Exts.P8 and P9 as the service were not rendered and accepted by the petitioner. It is the further case of the petitioner that the respondent No.1 without considering and also without complying the principles of natural justice and further without considering the contentions raised by the petitioner in Exts.P17 and P18 proceeded with the matter. In such circumstances, the petitioner approached this Court by filing W.P.(C.) No.24643/2021. This Court disposed the writ petition as per Ext.P21 judgment. Based on the directions of this Court, the respondent No.1 served Exts.P19 and P20 orders. According to the petitioner, Exts.P19 and P20 orders were issued without complying the principles of natural justice and also without following the procedures as contemplated under Sec.18(2) of the MSME Act.

4. It is the further case of the petitioner that respondent No.2 also does not have jurisdiction under Sec.16 of the Act to reverse the order passed by respondent No.1 under Sec.18(3) of the MSME Act. It is the case of the petitioner that, in Exts.P21 and P22, they raised a contention that the registration of the 3rd respondent under the MSME Act does not cover the service rendered by the said respondent to the petitioner as per Ext.P1 agreement. The application made by the 3rd respondent before the respondent No.1 is not maintainable. It is the case of the petitioner that respondent No.2 initiated arbitration proceedings and the petitioner appeared before the arbitrator and submitted an application under Sec.16 of the Arbitration and Conciliation Act, requesting to drop the proceedings as the learned arbitrator does not have the necessary jurisdiction to proceed with the arbitration. According to the petitioner, the 1st respondent has not followed the prescribed procedure under MSME Act and it failed to refer the matter for conciliation in accordance with Sec.18(2) of the Act. According to the petitioner, the proper mode of resolution of the dispute is through arbitration as has been agreed by the parties in Ext.P1 agreement. According to the petitioner, the interest of the petitioner will be seriously prejudiced if the proceedings are continued before the 2nd respondent. Hence, this writ petition is filed with following prayers :

“1. To issue a writ of certiorari, calling for the records leading to Exhibit P19 and P20 issued by the Respondent No. 1 and to quash the same.

2. To issue a writ of mandamus or any other appropriate writ order of direction compelling and commanding the Respondent No. 1 to consider Exhibit P21 representation submitted by the petitioner against Exhibit P19 order, in accordance with law with a time frame that this Hon'ble Court may consider reasonable.

3. To issue a writ of mandamus or any other appropriate writ order of direction compelling and commanding the Respondent No. 1 to consider Exhibit P22 representation submitted by the petitioner against Exhibit P20 order, in accordance with law with a time frame that this Hon'ble Court may consider reasonable.

4. To allow such other relief that this Hon'ble Court may deem appropriate in the interests of justice.” [SIC]

5. Heard the learned counsel for the petitioner and the learned counsel appearing for respondent Nos.3 and 4.

6. The learned counsel for the petitioner reiterated his contentions in the writ petition. The counsel submitted that the 1st respondent has no jurisdiction to issue Exts.P19 and P20 and the 2nd respondent has no authority to proceed with the matter based on Exts.P19 and P20 orders. The counsel for the 3rd and 4th respondents submitted that the impugned orders in this writ petition are the orders passed by the 1st respondent, which is an authority at Haryana and this Court has no territorial jurisdiction to entertain this writ petition and to issue direction to the 1st and 2nd respondents. The learned counsel submitted that the petitioner is challenging the jurisdiction of the 1st respondent to issue Exts.P19 and P20 orders in this writ petition. The counsel also submitted that the lis in this case is the jurisdiction of the 1st respondent to pass Exts.P19 and P20 orders. In such circumstances, this Court has no jurisdiction to entertain the same. The counsel also takes me through Ext.P21 judgment. The counsel submitted that in Ext.P21 judgment, this Court allowed the petitioner to raise the contention based on his application under Sec.16 of the Arbitration and Conciliation Act before the 2nd respondent and also the petitioner is allowed to raise the jurisdiction of the 1st respondent to invoke the powers under Sec.18 of the MSME Act. After getting Ext.P21 judgment from this Court, the petitioner is coming before this Court again to re-agitate the ccontentions is the contention of the 2nd and 3rd respondents.

7. On the other hand, regarding the question of jurisdiction, the counsel for the petitioner submitted that the work in dispute was within the jurisdiction of this Court. The counsel also submitted that Ext.P1 agreement is an agreement executed between the petitioner and the 3rd respondent. The dispute is in connection with the work mentioned in Ext.P1 agreement. In such circumstances, the counsel submitted that this Court has got jurisdiction to entertain this writ petition in the light of Article 226(2) of the constitution. The counsel for the petitioner relied the judgment of this Court in Lakshmanan K. v.Union of India & Others [2021 (1) KHC 405], National Textiles Corporation Limited and Others v. Haribox Swalram and Others [2004 KHC 926] and Kusum Ingots and Alloys Ltd. v. Union of India and anr. [2004 KHC 1435]. The counsel for the contesting respondents relied the judgment of the Apex Court in Nawal Kishore Sharma v. Union of India [AIR 2014 SC 3607].

8. This Court considered the contentions of the petitioner and the respondents. It is an admitted fact that the petitioner filed a writ petition before this Court earlier, which resulted in Ext.P21 judgment. The prayers in the writ petition which resulted in Ext.P21 judgment are extracted hereunder :

“i. To declare that Respondent No. 1 does not have the jurisdiction to entertain Exhibit P6 petition filed by the Respondent No. 3 for delayed payment, in view of the objections raised by the petitioner as there is no acceptance of service or deemed acceptance of service and consequently the reference to arbitration under the MSME Act, 2006 to the Respondent No. 2 is illegal.

ii. To declare that the reference made by the Respondent No.1 to arbitration under section 18 to Respondent No.2, without passing a speaking order and without serving a copy of the order upon the petitioner and without complying with the principles of natural justice is illegal.

iii. To issue a writ of certiorari or any other appropriate writ order or direction calling for records leading to Exhibits P15 and P16 arbitration hearing notices issued by the Respondent No. 2 and to quash the same.

iv. To allow such other relief that this Hon'ble court may deem appropriate in the interest of justice.”[SIC]

9. After hearing both sides, this Court disposed of the above judgment in the following manner :

1. “The 1st respondent is directed to issue a copy of the order passed under Section 18(3) of the the Micro, Small and Medium Enterprises Development Act referring the issue for arbitration, to the petitioner, as expeditiously as possible, at any rate, within one week from the date of receipt of a copy of this judgment.

2. The petitioner is free to raise the contention based on his application under Section 16 of the Arbitration and Conciliation Act before the 2nd respondent and the 2nd respondent will do the needful after hearing the parties, in accordance to law.

3. The petitioner is also free to raise the jurisdiction of the 1st respondent to invoke the powers under Section 18 of the the Micro, Small and Medium Enterprises Development Act and the 1st respondent will consider the same, if it has jurisdiction to consider the same and will pass appropriate orders in accordance to law.”

10. The contention regarding the jurisdiction of the 1st and 2nd respondents to pass Ext P19 and P20 were raised and argued in detail in the earlier writ petition, even though those orders were not produced in that case. A perusal of Ext P21 judgment, it is clear that this Court allowed the petitioner to raise the contention based on his application under Sec.16 of the Arbitration and Conciliation Act before the 2nd respondent and it is also observed that the 2nd respondent will do the needful, after hearing the parties, in accordance to law. This Court also observed that the petitioner is also free to raise the jurisdiction of the 1st respondent to invoke the powers under Sec. 18 of the MSME Act before that authority itself and it is also observed that the 1st respondent will consider the same, if it has the jurisdiction to consider the same and pass appropriate orders, in accordance to law. The 1st direction in Ext.P21 judgment is to issue a copy of the order to the petitioner, which was passed under Sec.18(3) of the MSME Act referring the issue for arbitration. It seems that the 1st respondent obeyed the direction and issued the orders, which is produced as Exts.P19 and P20. No liberty is granted in Exhibit P 21 judgement to challenge Exts.P19 and P20 before this court again when those orders are received from the 1st respondent. This Court allowed the petitioner to raise their contentions before the 1st and 2nd respondent as evident by the direction Nos. 2 and 3 in Ext.P21 judgment. In other words the challenge against Ext P19 and P20 were not entertained in the earlier case and the petitioner was allowed to raise it before the 1st and 2nd respondents. Admittedly, Ext.P21 judgment became final. In such circumstances, I am of the opinion that the petitioner cannot approach this Court again with almost similar prayers, especially when there is no such liberty granted to the petitioner to challenge the orders again. Therefore the first prayer in this writ petition cannot be entertained.

11. The 2nd prayer in the present writ petition is to consider Ext.P22 (wrongly mentioned as Ext.P21 in the prayer portion) by the 1st respondent which was filed in Ext P19 proceedings. Similarly, Ext.P23 representation is also filed in Ext.P20 proceedings and the 3rd prayer in the writ petition is to consider Ext.P23 (wrongly mentioned as Ext.P22 in the prayer portion) by the first respondent. A perusal of direction No.3 in Ext.P21 judgment will show that this Court allowed the petitioner to raise the jurisdiction of the 1st respondent to invoke the powers under Sec.18 of the MSME Act and it is also observed that the 1st respondent will consider the same, if it has the jurisdiction to consider the same. Therefore, no further direction is necessary as far as the 2nd and 3rd prayer

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s in this writ petition is concerned. 12. Therefore, the prayers in this writ petition need not be entertained in the light of Ext.P21 judgment. This Court allowed the petitioner to raise maintainability question before the 1st and 2nd respondent as evident by direction Nos. 2 and 3 in Ext.P21 judgment. As directed by this Court, the petitioner submitted Exts.P22 and P23 representations. Now, the petitioner prays for a direction to the 1st respondent to consider Exts.P22 and P23. Such a direction is not necessary in the light of Ext P21 judgment. Moreover, this Court was not inclined to entertain the challenge against the orders passed by the 1st respondent under Sec.18(3) of the MSME Act, when W.P.(C.) No. 24643/2021 came up for consideration. That is why this Court directed the petitioner to raise the question of maintainability before the 1st and 2nd respondents itself. In such circumstances, the petitioner cannot challenge Exts.P19 and P20 before this Court again by filing another writ petition. In the light of the above finding, this writ petition is not maintainable. The question of the territorial jurisdiction of this Court to consider the legality of Exts.P19 and P20 orders need not be considered in this case, in the light of Ext.P21 judgment, which admittedly became final. That question is left open. Therefore, the petitioner is not entitled any reliefs in this writ petition. Accordingly, this writ petition is devoid of merit and hence dismissed.
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