IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE A.M.SHAFFIQUE MONDAY, THE 21ST NOVEMBER 2011 / 30TH KARTHIKA 1933 WP(C).No. 22282 of 2011(I) ------------------------------------ PETITIONER(S): ---------------------- THE TRAVANCORE DEVASOWM BOARD, REPRESENTED BY ITS SECRETARY, NANTHANCODE, THIRUVANANTHAPURAM-695 003. BY ADV. SRI.V.V.NANDAGOPAL NAMBIAR,SC,TDB ADV.SRI.K.JAYAKUMAR (SENIOR ADVOCATE) RESPONDENT(S): ------------------------- M/S.PANCHAMY PACK(P) LTD. REPRESENTED BY ITS MANAGING DIRECTOR, S.KRISHNA KUMAR, GROUND FLOOR, TOUCH STONE, MANOR, VANCHIYOOR, THIRUVANANTHAPURAM-695 035. BY SRI.P.B.SURESH KUMAR, SENIOR ADVOCATE SRI.D.SAJEEV THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21/11/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC NO.22282 OF 2011-I PETITIONER'S EXHIBITS: EXT.P1. TRUE COPY OF THE AWARD PASSED BY THE MICRO AND SMALL ENTERPRISES FACILITATION COUNCIL, THIRUVANANTHAPURAM IN O.A.NO.21 OF 2008 DATED 24.3.2011. EXT.P2.TRUE COPY OF PETITION FILED BY THE PETITIONER BEFORE THE DISTRICT COURT, THIRUVANANTHAPURAM DATED 12.7.2011. EXT.P3.TRUE COPY OF APPLICATION I.A.NO.1681 OF 2001 IN OP (ARB) FILED BY THE PETITIONER BEFORE THE DISTRICT COURT, THIRUVANANTHAPURAM DATED 12.7.2011. EXT.P4.TRUE COPY OF ORDER I.A.NO.1681 OF 2001 IN OP (ARB) PASSED BY THE DISITRICT JUDGE, THIRUVANANTHAPURAM DATED 9.8.2011. RESPONDENT'S EXHIBITS: EXT.R1A.TRUE COPY OF THE PERMANENT REGISTRATION CERTIFICATE DATED 21.1.2000. EXT.R1B. TRUE COPY OF THE AGREEMENT DATED 13.4.1999. EXT.R1C.TRUE COPY OF CERTIFICATE AND RELEVANT PAGES OF ARTICLES OF ASSOCIATION. EXT.R1D.TRUE COPY OF THE JUDGMENT IN TDB NO.3 OF 1999. EXT.R1E. TRUE COPY OF THE LETTER DATED 22.5.1999. EXT.R1F.TRUE COPY OF THE PROVISIONAL CERTIFICATE. EXT.R1G.TRUE COPY OF THE ORDERS DATED 6.7.1999 AND 16.8.1999. EXT.R1H. TRUE COPIES OF THE CERTIFICATES OF REGISTRATION. EXT.R1I. TRUE COPY OF THE ENGINEER'S CERTIFICATE. EXT.R1J. TRUE COPY OF THE MAHAZAR. EXT.R1K.TRUE COPY OF THE RELEVANT PAGES OF ASSESSMENT ORDER. EXT.R1L. TRUE COPY OF THE LETTER NO.ROC NO.4904/2002/SAB DATED 5.11.2002. EXT.R1M. TRUE COPY OF PROCEEDINGS OF THE GENERAL MANAGER, DIC, PATHANANTHITTA DATED5.7.2004. EXT.R1N. TRUE COPY OF THE CERTIFICATE DATED 22.11/2006. EXT.R1O. TRUE COPY OF VARIOUS REMITTANCES BY THE BOARD. EXT.R1P. TRUE COPY OF THE ORDER OF THE DEPUTY COMMISSIONER OF CENTRAL EXCISE, CUSTOMS. EXT.R1Q. TRUE COPY OF THE NOTICE DATED 10.1.2006. K.M.JOSEPH & A. M. SHAFFIQUE, JJ. ------------------------------------------------------- W.P.(C) No.22282 of 2011-I ----------------------------------------- Dated, this the 21st day of November, 2011 J U D G M E N T K.M.Joseph, J. Petitioner has filed this petition under Article 226 of the Constitution calling in question Ext.P4 order passed by the District Judge, Thiruvananthapuram. The order reads as under: “ This is a petition praying for exempting the petitioner from depositing the award amount in terms of section 19 of the Micro and Small Enterprises Development Act 2006. Heard. As per section 19 of the Micro Small and Medium Enterprises Development Act 2006, no application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate dispute resolution services to which a reference is made by the Council, shall be entertained by any Court unless the appellant has deposited with it seventy five percent of the amount in terms of the decree, award or, as the case may be. However, there is no provision under the Act empowering this Court to exempt the petitioner from depositing the amount in terms of section 19 of the Act. For the said reason, this petition stands dismissed. The petitioner is directed to deposit before the court seventy five percent of the amount in terms of the decree either by cash or by cheque or WPC 22282/2011 -2- by Demand Draft in favour of the District Court, Thiruvananthapuram. In the case of cheque, the OP will be numbered only after encashing the cheque. Since no deposit has been made, the OP stands returned for being re-presented within 7 days after curing the defect.” 2. The case of the petitioner inter alia is as follows: Petitioner Devaswom Board entered into an agreement with the respondent for modernising the existing method of preparation of Aravana Prasadam. The period of contract expired on 13.4.2007. The amounts were paid and no further amount remained to be paid to the respondent. Long after the contract is over and after the respondent received all payments due to it respondent filed application before the Micro and Small Enterprises Facilitation Council against the petitioner Board under Sections 16, 17 and 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as 'the Act'). According to the petitioner, respondent has filed the application suppressing the material facts. The Council proceeded with the arbitration and proceeded to pass Ext.P1 award. Petitioner filed Ext.P2 application to set aside the award under Section 34 of the Arbitration and Conciliation Act, 1996. Section 19 of the Act reads as under: “19. Applications for setting aside decree, award WPC 22282/2011 -3- or order.--No application for setting aside any decree, award or other order made either by the Council itself or by any institution or centre providing alternate dispute resolution services to which a reference is made by the Council, shall be entertained by any Court unless the appellant (not being a supplier) has deposited with it seventy-five per cent of the amount in terms of the decree, award or as the case may be, the other order in the manner directed by such Court: Provided that pending disposal of the application to set aside the decree, award or order, the Court shall order that such percentage of the amount deposited shall be paid to the supplier, as it considers reasonable under the circumstances of the case subject to such conditions as it deems necessary to impose.” In view of the same, petitioner filed Ext.P3 application claiming exemption from pre-deposit stipulated in Section 19. According to the petitioner, this is done as the award is against a public institution and the amount involved is substantially large. The said application came to be disposed of by the impugned order Ext.P4. 3. We heard the learned senior counsel for the petitioner Sri.K.Jayakumar and learned senior counsel for the respondent Sri.P.B.Suresh Kumar. 4. The learned senior counsel for the petitioner Sri.K.Jayakumar would submit that there is power with the District WPC 22282/2011 -4- Court under Section 19 to exempt the petitioner from making pre- deposit. He would submit that, in the facts of this case, in particular, having regard to the fact that the original petitioner is a public institution and the amounts involved are very substantial this is a case where the Court should have granted exemption or in the alternative allowed the petitioner to produce Bank guarantee instead of directing the petitioner to make the actual deposit in cash. However, learned senior counsel for the petitioner fairly brought to our notice the decision of the Apex Court in Snehadeep Structures Private Limited v. Maharashtra Small-Scale Industries Development Corporation Limited (2010 (3) SCC 34). That was a case which arose under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. There is no dispute that, of course, the said Act has been replaced by the Act. In paragraph 59 of the said judgment the Court has in fact referred Section 19 of the Act and thereafter held as follows: “This provision, no doubt, requires the deposit to be made before an application under Section 34 of the Arbitration Act is filed. However, we are not inclined to read this provision of a subsequent legislation into the provision in question.” 5. In the light of the said pronouncement and also WPC 22282/2011 -5- having regard to the express language used in Section 19 we are of the view that petitioner has not succeeded in impugning the order. Petitioner has not established a case against overturning the impugned order. It is clear on perusal of the phraseology of Section 19 that the petitioner must indeed make the deposit. It is a pre-condition without which application under Section 34 cannot be entertained. 6. Learned senior counsel for the petitioner voiced a further apprehension in his submissions. He reiterated that petitioner is a public institution and that the amount ordered as per Ext.P1 award is Rs.18 crores. He would pose the question that if the application filed under Section 34 by the petitioner is ultimately allowed and if the deposit is made and if the amount is directed to be disbursed to the respondent having regard to the financial condition of the respondent it will be impossible for the petitioner to recover the amount. He reminds the Court that the amount is being paid essentially out of public funds. 7. We would think that the apprehension of the petitioner appears to be rather misplaced. The terms of the proviso to Section 19 provides for adequate safeguards subject to which alone the court would order disbursement of any sum out of the amount deposited under Section 19. Necessarily, the WPC 22282/2011 -6- petitioner would also have to be heard before any order is passed for disbursement of any sum by the court. Subject to the observations, the writ petition is dismissed. However, we enlarge the time for curing the defect by one month from today. (K.M.JOSEPH) JUDGE. (A. M. SHAFFIQUE) JUDGE. MS