IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN WEDNESDAY, THE 26TH NOVEMBER 2008 / 5TH AGRAHAYANA 1930 WP(C).No.34825 of 2008(U) --------------------------------- OP(ARB).258/2007 of PRINCIPAL DISTRICT COURT,TRIVANDRUM .................... PETITIONER: --------------- M/S.TOSHMA RUBBER PRODUCTS REPRESENTED BY ITS PROPRIETOR, KANJOOR, KALADY - 683575 BY ADV. SRI.KURIAN GEORGE KANNANTHANAM (SR.) SRI.TONY GEORGE KANNANTHANAM RESPONDENTS: ------------------ 1. THE KERALA STATE ROAD TRANSPORT CORPORATION, REPRESENTED BY ITS MANAGING DIRECTOR, TRIVANDRUM. 2. THE STATE OF KERALA, REPRESENTED BY ITS SECRETARY, LAW DEPARTMENT, GOVT. SECRETARIAT, TRIVANDRUM. BY SRI.JOHNSON P. JOHN, SC, KSRTC GOVT. PLEADER SMT. R. BINDU. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26/11/2008 ALONG WITH W.P.C. NO.34824/08, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.P.BALACHANDRAN, J. ------------------------------------------------ W. P. C Nos.34824 & 34825 of 2008 ------------------------------------------------ Dated this the 26th day of November, 2008 JUDGMENT Heard the counsel for the petitioners as also the Standing Counsel for K.S.R.T.C who has entered appearance to oppose these Writ Petitions as also the Government Pleader for the second respondent. 2. The petitioners submit that they are small scale industries falling within the definition of “Small Enterprises” under Section 2(m) of the Micro Small and Medium Enterprises Development Act, 2006 (hereinafter referred to for the sake of convenience as “M.S.M.E.D Act”); that they were suppliers of tread rubber and bonding gum produced by them to the first respondent/K.S.R.T.C for consideration and therefore, the first respondent was a “buyer” under Section 2(d) of the Act; that for reason of nonpayment of W. P. C Nos.34824 & 34825 of 2008 -2- amounts due to the petitioners concerned as provided under Section 15 of the Act, for recovery of amounts due from the first respondent, reference was made to the Micro and Small Enterprises Facilitation Council under Section 18 of the Act and the Council passed Ext.P1 award and the first respondent filed O.P (Arbitration) Nos.258 and 259 of 2007 before the Principal District Court, Thiruvananthapuram under Section 34 of the Arbitration and Conciliation Act as enabled by the provisions of the M.S.M.E.D Act; that the petitioners filed Ext.P3 preliminary objection wherein it was also prayed that the maintainability of an application to set aside an award unless 75% of the amount awarded is deposited with the court in view of Section 19 of the said Act be heard as a preliminary objection; that the District Judge has vide Ext.P4 order refused to have it heard as a W. P. C Nos.34824 & 34825 of 2008 -3- preliminary objection and insisted for hearing of the Arbitration O.P. itself observing that the maintainability also can be decided in the said O.P and posted the O.P for final hearing; that Ext.P4 order makes it clear that the District Judge is not inclined to hear the preliminary objection and pass orders before disposal of the O.P.(Arbitration) and that consequently he has bypassed the bar provided under Section 19 of the Act which prohibits any application for setting aside the award being entertained before deposit of 75% of the award amount and further that the valid right of the petitioners under proviso to Section 19 of the Act to receive the said amount so deposited or such percentage of the amount as is ordered by the court before the correctness of the award is adjudged in the main O.P. is deprived of to them and therefore, a direction be given to the District Judge, Thiruvananthapuram to take W. P. C Nos.34824 & 34825 of 2008 -4- a decision on the preliminary objections raised in Ext.P3 before proceeding further with Ext.P2 original petition. 3. Counsel for the first respondent/KSRTC submits that K.S.R.T.C is prepared to deposit 50% of the award amount. They may do so, if so advised. However, the provisions in Section 19 is a mandatory provision and no concession is required to be made by a party liable under the award in the matter of deposit being made as provided thereunder. 4. Having considered the submissions made in the light of the provisions in M.S.M.E.D Act, I am of the view that the District Judge has approached the issue in an angle which is not warranted in view of Section 19 of the said Act and proviso thereto. 5. In the result, I direct the District Judge, Thiruvananthapuram to consider and pass appropriate orders on the preliminary W. P. C Nos.34824 & 34825 of 2008 -5- objection raised by the petitioners who are respondents in O.P.(Arbitration) Nos.258 and 259 of 2007 respectively as expeditiously as possible without waiting for consideration of the Arbitration O.P. itself in view of the mandate in Section 19 of the M.S.M.E.D Act, 2006. 6. These Writ Petitions are disposed of with the above directions. K.P.BALACHANDRAN, JUDGE kns/-