Supreme Court of India Power Machines India Limited vs State Of Mahdya Pradesh & Ors on 17 April, 2017 Equivalent citations: AIR 2017 SUPREME COURT 2567, 2017 (7) SCC 323, AIR 2017 SC (CIVIL) 2091, (2017) 3 JLJR 373, (2017) 4 MPLJ 514, (2017) 4 SCALE 690, (2017) 4 MAD LJ 82, (2017) 3 BANKCAS 281, (2017) 3 ARBILR 419, 2017 (4) KCCR SN 374 (SC) Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.5317 OF 2017 (Arising out of S.L.P.(C) No.29266 of 2016) POWER MACHINES INDIA LIMITED …Appellant(s) VERSUS STATE OF MADHYA PRADESH & ORS. …Respondent(s) J U D G M E N T ARUN MISHRA, J. 1. Leave granted. 2. This appeal has been preferred by the appellant – Power Machines India Ltd., aggrieved by the judgment and order dated 18.7.2016 passed by the High Court of Madhya Pradesh at Jabalpur, thereby dismissing the Writ Petition filed by the appellant for declaring Rule 5 of Madhya Pradesh Micro and Small Enterprises Facilitation Council Rules, 2006 (hereinafter referred to as “the Rules’) ultra vires, which had been framed by the Government of Madhya Pradesh in exercise of the power conferred by section 30 read with section 21(3) of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as “the Act of 2006”). Rule 5 provides for recovery of the amount for which award is passed under section 18(3) of the Act of 2006 as arrears of land revenue thereby providing additional remedy for recovery of the awarded sum than the one provided in section 36(1) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act of 1996”). 3. It is pertinent to mention that the award was passed under the Act of 2006 by which the appellant was directed to pay awarded sum to respondent No.3 i.e. Lakshmi Engineering Industries (Bhopal) Pvt. Ltd. The award was passed by the Madhya Pradesh Facilitation Council for a sum of Rs.1,15,77,630/ along with an amount of Rs.1,04,96,746/ towards interest up to 10.1.2013. Payment of actual amount of interest was @ three times of the bank rate as notified by the Reserve Bank of India to be paid within 30 days of the award. The award was passed on 15.1.2014. 4. The Collector, Noida, initiated recovery of the amount as per letter dated 2.4.2016 issued by the Madhya Pradesh Micro and Small Enterprises Facilitation Council under the Rules. The recovery citation was served upon the appellant on 20.4.2016 purported to be one under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950. Another citation was received by the appellant on 16.5.2016 which was issued on 20.4.2016. Thereafter, appellant filed a writ petition before the Allahabad High Court for quashing the recovery proceedings. However, Tehsildar of Dadri, Gautam Buddha Nagar on 23.5.2016 withdrew an amount of Rs.1,18,78,588.14/ from the appellant’s bank account with ICICI Bank pursuant to the recovery citation. On 24.5.2016, it is averred by the appellant that a further amount of Rs.2,12,33,618.57/ was recovered from the bank account of the appellants with the State Bank of India. The appellant filed Writ Petition [C] No.11824 of 2016 5 as ultra vires. The appellant filed another W.P. [C] No.12127 of 2016 for quashing the recovery proceedings on the ground that the recovery was not in compliance with Rule 5. The said writ petition questioning the rule had been dismissed. Writ Petition [C] No.12127 of 2016 had been allowed by the High Court of Madhya Pradesh and it permitted respondent No. 3 to initiate recovery proceedings under the rule de novo and in accordance with law. The petition filed fact that the aforesaid writ petition had been allowed by the High Court of Madhya Pradesh. 5. The Tehsildar, Dadri issued fresh recovery proceedings under Rule 5 for recovery of Rs.5,29,58,937/ as per the award dated 15.1.2014. Fresh recovery citation was served on the petitioner on 19.9.2016. The High Court of Madhya Pradesh in the impugned judgment and order has held that Rule 5 is not ultra vires and is in strict conformity with the Act of 2006. Aggrieved thereby, the appeal has been preferred. 6. It was submitted by Mr. P. Chidambram and Dr. A.M. Singhvi, learned senior counsel representing the appellant that Rule 5 is ultra vires, arbitrary and violative of Article 14 of the Constitution of India and is r