Madras High Court M/S.Kansai Neolac Paints Limited vs M/S.Prateesh Engineering Enterprises on 8 February, 2017 DATED: 08.02.2017 CORAM The Honourable MR. JUSTICE T.S.SIVAGNANAM Original Petition No.953 of 2016 and A.Nos.743 to 745 of 2017 and 6830 of 2016 M/s.Kansai Neolac Paints Limited, Nerolac House, Ganpatrao Kadam Marg, Lower Parel, Mumbai13 rep. by Mr.Pravin D. Chaudhari, Executive Director ... Petitioner vs. 1. M/s.Prateesh Engineering Enterprises, R.S.No.223, Chidambaram Road, SIPCOT, Cuddalore607 005. 2. The Zonal Officer, MSE Facilitation Council, Regional Joint Director of Industries and Commerce, SIDCO Corporate Building, Chennai32. 3. The Chairman, MSE Facilitation Council, Regional Joint Director of Industries and Commerce, SIDCO Corporate Building, Chennai32. 4. Thiru R.Srinivasan, Regional Manager, Tamil Nadu Industrial Investment Corporation, 692, Anna Salai, Nandanam, Chennai35. 5. Thiru D.Gandhikumar, Vice President, Federation of Indian Micro and Small and Medium Enterprises, B4/161 Safdarjung Enclave, New Delhi110 029. 6. Thiru C.K.Mohan, Vice President, Tamil Nadu Small and Tiny Industries Association, No.10, G.S.T.Road, Guindy, Chennai32. 7. Thiru A.Arunkumar, Lead District Manager, Indian Overseas Bank, 15, Hunters Road, Doveton, Chennai600 112. ... Respondents Original Petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award passed by the 2nd respondent, namely, the Zonal Officer, MSE Facilitation Council, Regional Joint Director of Industries and Commerce, SIDCO Corporate Building, Chennai32, dated 27.07.2016.. For Petitioner : Mr.Allwin Godwin For 1st Respondent : Mr.R.Parthasarathy ORDER Heard Mr.Allwin Godwin, the learned Counsel for the petitioner and Mr.R.Parthasarathy, learned Counsel for the 1st respondent. 2. This petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996, to set aside the award passed by the 2nd respondent, namely, the Zonal Officer, MSE Facilitation Council, Regional Joint Director of Industries and Commerce, SIDCO Corporate Building, Chennai32, dated 27.07.2016. 2. For the purpose of disposal of this petition, it would be relevant to take note of the following facts: (i) The 1st respondent herein filed a reference under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as ''MSME Act'' before the MSE Facilitation Council on 21.12.2014. In the said application, the 1st respondent stated that their services were engaged by the petitioner for fabrication and erection work and in spite of the repeated reminders and personal requests, the petitioner has not paid the amount due and payable to the 1st respondent and therefore, they laid a claim before the Council for payment of a sum of Rs.1,19,91,031/ together with interest. The Council in its meeting held on 19.08.2014 wherein the 1st respondent was represented by their Managing Director and the petitioner herein was represented by one Mr.Gangadharan, an Executive of the petitioner company. The Council directed the petitioner herein to file their counter affidavit within 10 days. Subsequently, a Counsel was engaged by the petitioner who has given his letter to the Council on 22.08.2014. Thereafter, the Council held a meeting on 10.12.2014 wherein the 1st respondent was represented by its Managing Director and the petitioner herein was represented by their Counsel. Once again, the matter was adjourned to 12.01.2015 wherein the parties appeared and there was a direction to the petitioner herein to submit an affidavit to decide on the issue and directed the Zonal Officer of the MSEF Council to meet the Head of the Department of Mechanical Engineering, IIT, Chennai36, who is an independent authority to inspect the plant and to verify the aspects as per the specification given in the drawings and to submit a report. The cost of inspection was to be borne by the petitioner herein. (ii) In the meantime, the Chairman of the MSEF Council instructed to depute a Mechanical Engineer, who can visit the erected site at Hosur and submit an inspection report. Accordingly, a note was put up and a reply was received from the General Manager, District Industries Centre, Krishnagiri on 13.02.2015 mentioning that certain measurements could not be done as there were hot pipelines and if the measurements have to be done fully, the plants need to be shut down, scaffolding at elevation up to 20 metres to be provided, insulations need to be removed and only then, number of welding joints could be counted. Thereafter, the Council held a meeting on 19.02.2015 in which th