Bangalore District Court North West Karnataka Road vs M/S.Rachana Rubbers Pvt.Ltd on 6 June, 2020 IN THE COURT OF THE VI ADDL.CITY CIVIL & SESSIONS JUDGE BENGALURU CITY CCCH. 11 Dated this the 6th day of June, 2020 PRESENT: Sri.Rama Naik, B.Com., LL.B., VI Addl.City Civil & Sessions Judge, Bengaluru City. A.S.NO:10/2013 PLAINTIFF NORTH WEST KARNATAKA ROAD TRANSPORT CORPORATION Central Offices, Gokul Road, Hubli 580 030. Reptd.by its Managing Director through its Chief Law Officer. [By Pleader Sri.P.D.Surana] /Vs/ DEFENDANT M/S.RACHANA RUBBERS PVT.LTD., No.65B, 12th Cross, 5th Main, M.C.layout, Vijayanagar, Bengaluru 560 040. and Work Place at : No.82, P1, KIADB Industrial Area, Nanjangud 571 302. Reptd.by its Managing Director. [By Pleader by Sri.Suhaas.G.B.S] AS.10/2013 2 JUDGMENT This suit is filed under Section 34 of the Arbitration and Conciliation Act, 1996, by the Plaintiff to set aside the award in Case No.20/2008 passed by the Micro and Small Enterprises Facilitation Council, Bangalore [for brevity 'Facilitation Council']. 2) Facts as stated by Plaintiff, in brief, are that, Plaintiff is the buyer and Defendant is the supplier. Plaintiff called for tender for supply of Precured Tread Rubber [PCTR], Bonding Gum and Black Vulcanizing Solution. Defendant, being the successful bidder, was issued the work orders for supply of PCTR, Bonding Gum, Black Vulcanizing and for processing of old tyres vide Letters of Intent dated 10.03.2007, 18.09.2007, 19/20112007 and 26.12.2007. AS.10/2013 3 3) It is stated that, Defendant made application to Facilitation Council on 24.07.2008 for claiming amount due from Plaintiff. On receipt of reference, Council took up the matter for conciliation. Conciliation stood terminated without any settlement between the parties. It is stated that, thereafter, Facilitation Council took up the matter for arbitration and impugned award came to be passed by the Facilitation Council. 4) Being aggrieved by the award, Plaintiff has challenged the same on the following grounds : (1) Defendant's unit is not classified as Micro or Small Enterprises as per the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 [for brevity 'MSMED Act']. Facilitation Council has not recorded any finding as to whether Defendant is a Micro or Small enterprises and whether claim petition filed by Defendant is maintainable before the Facilitation Council. In absence of such finding, the AS.10/2013 4 Facilitation Council could not have entertained the claim petition filed by the Defendant and therefore, impugned award passed is without jurisdiction. (2) Facilitation Council consists of chairman and three other members. Impugned award is passed by the Chairman only. No award is passed by other members. Hence, it is not all a award in the eye of law. (3) During the pendency of the proceedings, Plaintiff paid Rs.17,99,094/ to the Defendant, which amount was not taken into consideration by the Facilitation Council while passing the award. (4) Facilitation Council has not taken into consideration of the accounts produced by the Plaintiff. Facilitation Council, without applying its mind, mechanically passed the award. AS.10/2013 5 For all these grounds, Plaintiff prays for setting aside the award. 5) Defendant marked appearance through its counsel and filed its written statement, stating that, Section 19 of the MSMED Act lays down that, any person challenging the award has to deposit 75% of the award amount before filing the application for setting aside the award. Plaintiff filed this suit without depositing the same, hence, suit is not maintainable. 6)