MSME Council Could Adjudicate on the Matter Between MSME and Supplier Post Termination of Conciliation Proceedings | HC

Case Details: Anupam Industries Ltd. v. West Bengal Micro Small Enterprise Facilitation Council - [2023] 153 taxmann.com 508 (HC-Calcutta)

Judiciary and Counsel Details

• • Moushumi Bhattacharya, J.
  • Dr Kamlesh Vaidankar, Arnab Dutta, Ms Prerana Choudhary, Moinak Bose, Debkumar Sen & Soumitra Mukherjee, Advs. for the Appearing Parties.

Facts of the Case

In the instant case, the petitioner was the respondent in ongoing arbitration proceedings pending before the West Bengal Micro Small Enterprise Facilitation Council (Council). The said proceedings were initiated by respondent No. 2 as the supplier/claimant.

The petitioner filed a writ petition for a direction to quash the said arbitration case on the ground that the Council could not act both as a conciliator as well as an arbitrator. The said claim of respondent no. 2 as a supplier was not maintainable since its registration under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 was subsequent to the date of the transaction.

It was observed that since the letters of the Council would show that the Council proceeded to initiate the arbitration under Section 18(3) of the MSMED Act only after the termination of conciliation proceedings under the said provision, the contention of the petitioner that the Council did not have jurisdiction to entertain the dispute was belied by statutory as well as factual position.

Further, it was noted that since the record showed that respondent no. 2 applied for an MSME unit before the District Industries Center, which was long before the transaction between the parties, respondent No. 2 was statutorily entitled to make a reference to the Council for adjudication of disputes.

High Court Held

The High Court held that since the alternative remedy available to the petitioner under the 1996 Act was not only sufficient and effective but also multi-layered, the writ petition filed by him could not be entertained.

List of Cases Referred to

• • Bhaven Construction v. Executive Engineer, Sardar Sarovar Narmada Nigam Ltd. [2022] 1 SCC 75 (para 10)
  • Deep Industries Ltd. v. ONGC Ltd. [2020] 15 SCC 706 (para 10)
  • Silpi Industries v. Kerala State Road Transport Corporation [2021] 129 taxmann.com 228/167 SCL 536 (SC) (para 11)
  • Nik San Engineering Co. Ltd. v. Easun Reyroller Ltd. [R/Letters Patent Appeal No. 619 of 2019, dated 3-4-2019] (para 11)
  • JSW Steel Ltd. v. Kamlakar V. Salvi [Writ Petition No. 12897 of 2016, dated 4-10-2021] (para 11)
  • Anupam Industries Ltd. v. State Level Industry Facilitation Council; [R/Special Civil Application No. 2825 of 2020, dated 16-12-2022] (para 11)
  • Marine Craft Engineers (P.) Ltd. v. Garden Reach Ship Builders and Engineers Ltd. [A.P. No. 831 of 2018, dated 5-4-2023] (para 14)
  • Whirlpool Corporation v. Registrar of Trademarks [1998] 8 SCC 1 (para 16).