Allahabad High Court M/S Cummins Technologies India Private ... vs Micro And Small Enterprises ... on 3 March, 2020 HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. Court No. 34 Case : WRIT C No. 7785 of 2020 Petitioner : M/S Cummins Technologies India Private Limited Respondent : Micro And Small Enterprises Facilitation Council And 2 Others Counsel for Petitioner : Aditya Singh Parihar, Himanshu Kapoor, Prateek Dhanda Counsel for Respondent : C.S.C. Hon'ble Sudhir Agarwal,J. Hon'ble Rajeev Misra,J. 1. Petitioner, M/s Cummins Technologies India Private Limited, has filed present writ petition under Article 226 of Constitution of India with a prayer to issue a writ of Mandamus commanding respondent1, i.e., Micro and Small Enterprises Facilitation Council, Directorate of Industries, Kanpur (hereinafter referred to as "MASEF Council") to adjudicate and pass necessary orders on petitioner's application dated 7.2.2020 filed under Section 16 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Act, 1996") and refer Claim Petition No. 14 of 2018, raising dispute between petitioner and respondent3, i.e., M/s Roots Cooling System Pvt. Ltd. to an Institution, Centre or Arbitrator for Arbitration under Act, 1996. In the alternative, petitioner has also prayed that this Court should declare that respondent1, i.e., MASEF Council has no jurisdiction to entertain Claim Petition No. 14 of 2018, raising a dispute between petitioner and respondent3 in terms of Section 80 of Act, 1996. 2. Facts in brief, as pleaded in writ petition, are, that, petitioner is a Company incorporated under Companies Act, 1956 (hereinafter referred to as "Act, 1956"), validly existing and continuing under Provisions of Companies Act, 2013 (hereinafter referred to as "Act, 2013"). Petitioner is a Subsidiary Company and its Holding Company is "M/s Cummins Inc". 3. Cummins Inc which is an American Fortune 500 Company, has its Headquarter at Columbus, Indiana, United States. Holding Company is engaged in designs, manufactures, and distribution of Engines, Filtration and Power Generation products. It has its presence approximately in 190 countries and territories through a network of more than 600 Companies. It also own independent distribution through approximately 6,000 dealers. 4. The present writ petition has been filed by M/s Cummins Technologies India Private Limited through Mr. Zoheb Hasan, an Authorized Representative in terms of Letter of Authority dated February 25, 2020. 5. Respondent1 is Micro and Small Enterprises Facilitation Council, Directorate of Industries, Kanpur, which is an executive arm of respondent2, engaged in discharging functions entrusted to it under Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as "MSMED Act, 2006"). It acts for implementation of Government Policies for all round development of industries in State of U.P. 6. Respondent2 is State of U.P. through Chief Secretary, Department of MSMED and Export Promotion, responsible for economic development of State of Uttar Pradesh. 7. Respondent3 preferred an application under Section 18 of MSMED Act, 2006 before respondent1 seeking recovery of Rs. 84,80,577/ (Principal amount Rs.40,61,228 + interest Rs.44,19,349), claiming it, a dispute between parties as contemplated under Chapter V of MSMED Act, 2006. Earlier thereto, Conciliation proceedings were initiated, which remained unsuccessful. Petitioner also moved an application under Section 16 of Act, 1996 on 7.2.2020, praying that respondent1 should refer the dispute between parties to any Institution/Arbitrator or Centre providing alternate dispute resolution services for Arbitration on account of lack of jurisdiction with respondent1 to act as an Arbitrator for resolving the dispute between parties in the light of Section 80 of Act, 1996, which has not been adjudicated upon by respondent1 on the last date of hearing i.e. 17.02.2020, despite the fact that jurisdiction issue goes to the root of the matter and was expressly pressed by petitioner on 17.02.2020. Respondent1 even did not issue notice and call for reply from respondent3, thereby acting in complete derogation of the mandate of Section 16 of Act, 1996. 8. The case set up by petitioner is that after respondent1 has attempted to conciliate between parties, it cannot act as an 'Arbitrator' for adjudication of the dispute. Reliance is placed on Section 18 of MSMED Act, 2006 and Section 80 of Act, 1996. 9. The short question up for consideration is, "whether respondent1 can adjudicate the dispute between parties as an 'Arbitrator' or it has no such jurisdiction?" 10. Record shows that M/S Cummins Technologies India Private Limited is a private Company incorporated under Act, 1956. It is registered as a Small Enterprise under provisions of MSMED Act, 2006 with Director of Comp