Telangana High Court M/S. Srirasthu Shopping Mall vs Micro And Small Enterprises on 18 January, 2023 HON'BLE SRI JUSTICE K. LAKSHMAN WRIT PETITION No.38797 OF 2022 ORDER: Heard Mr. G.S. Jagannath, learned counsel for the petitioner and Mr. M. Murthy, learned counsel representing Mr. Sinde Mohan Devidhas, learned counsel for respondent No.2 and Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India appearing on behalf of respondent No.3 2. This writ petition is filed to set aside the award dated 30.04.2022 passed by respondent No.1 in Case No.1346/MSEFC/21. 3. CASE OF THE PETITIONER: i) Respondent No.2, a Micro Enterprise duly registered with Department of Ministry of Micro, Small and Medium Enterprises vide registration No.UDYAMTS020020425, as a Wearing Apparels i.e., Manufacturing Enterprise. It was registered on 10.03.2021. ii) During the course of its business, it has supplied textile garments and clothing accessories to the petitioner Shopping Mall as per the order placed by the petitioner during the year 201920 and raised invoices accordingly. 2 KL,J W.P. No.38797 of 2022 iii) Having received the aforesaid material, the petitioner failed to clear the dues. Therefore, according to respondent No.2, the petitioner is due and liable to pay an amount of Rs.13,74,715/. iv) According to respondent No.2, despite repeated requests and regular persuasion, the petitioner failed to pay the aforesaid amount. Therefore, it had filed a reference in terms of Mircro Small and Medium Enterprises Development Act, 2006 (for short 'Act, 2006') with respondent No.1. v) On receipt of the aforesaid reference, respondent No.1 has passed the impugned award dated 30.04.2022 directing the petitioner to pay the principal amount of Rs.13,74,715/ pertaining to eleven (11) invoices and interest with effect from the appointed day as per Sections 15 and 16 of the Act, 2006. Respondent No.1 also held that compound interest with monthly rests shall be payable @ three (03) times of the Bank rate as notified by the Reserve Bank of India (RBI) from time to time till realization of the dues i.e., till the day of final payment made to respondent No.2 by the petitioner. Respondent No.1 further held that the principal and interest amounts are to be paid by the petitioner to respondent No.2 within one (01) month from the date of receipt of the said award. 3 KL,J W.P. No.38797 of 2022 4. Assailing the said award, the petitioner herein has filed the present writ petition on the following grounds: a) Respondent No.1 Council neither followed the mandatory procedure laid down under Section 18, more particularly 18 (2) and 18 (3) of the Act, 2006, nor conciliation proceedings are conducted. b) Members of respondent No.1 Council cannot conduct both conciliation and arbitration proceedings. c) If conciliation proceedings are failed, respondent No.1 council either conduct arbitration proceedings by itself or refer the matter to an Institution in terms of the Arbitration and Conciliation Act, 1996 (for short 'Act, 1996'). The said procedure was not followed. d) Respondent No.1 council failed to follow the procedure laid down under Sections 65 to 81 of the Act, 1996. e) Respondent No.1 failed to consider the counter claim filed by the petitioner which is mandatory in terms of Section 18 (3) of the Act, 2006. f) No reasons were assigned in the impugned award. Any order passed without reasons is a nullity. 4 KL,J W.P. No.38797 of 2022 g) Therefore, though there is an alternative remedy of filing an application under Section 34 of the Act, 1996, the present writ petition is maintainable. 5. CONTENTION OF RESPONDENT No.2: Respondent No.2 had filed counter opposing the present writ petition on the following grounds: i) The present writ petition is not maintainable in view of availability of an alternative and efficacious remedy of filing an application under Section 34 of the Act, 1996. ii) Respondent No.1 on consideration of the entire material available on record passed the impugned order, and there is no error in it. iii)