Calcutta High Court Steel Authority Of India Limited vs F. Harley And Company Private Limited on 12 October, 2023 1 Ordinary Original Civil Jurisdiction ORIGINAL SIDE (Commercial Division) Present : Hon'ble Justice Moushumi Bhattacharya AP 471 of 2022 IA No: GA 1 of 2023 Steel Authority of India Limited, IISCO Steel Plant VS F. Harley and Company Private Limited For the petitioner : Mr. Mohit Gupta, Adv. Mr. A.P. Agarwalla, Adv. For the respondent : Mr. Suddhasatva Banerjee, Adv. Mr. Chayan Gupta, Adv. Mr. Pourush Bandopadhyay, Adv. Mr. Dwip Raj Basu, Adv. Last heard on : 10.10.2023 Delivered on : 12.10.2023 Moushumi Bhattacharya, J. 1. The respondent awardholder has filed the present application in AP 471 of 2022 for a clarification that there is no embargo on the Micro and Small Enterprises Facilitation Council to proceed with the 2 adjudication of the respondent‟s application before the Council by reason of the pendency of AP 471 of 2022. 2. The applicant is the respondent in AP 471 of 2022 filed by the awarddebtor (petitioner in the AP) for setting aside of an award dated 11.12.2021. The impugned award was passed by a learned Sole Arbitrator as corrected by the award dated 23.3.2022. 3. The applicant/respondent in the AP was the claimant in the arbitration. 4. A brief background is necessary to understand the context in which the present application has been made. 5. The learned Arbitrator was appointed by an order of Court dated 7.5.2018. The applicant filed its statement of claim praying for an award for approximately Rs. 77.74 lacs on account of the applicant‟s/claimant‟s unpaid dues, charges for extra work and overstay compensation. The applicant also prayed for an award of Rs. 50,000/ on account of the expenses incurred by the applicant in connection with the proceedings filed under section 11 of The Arbitration and Conciliation Act, 1996 wherein the learned Arbitrator was appointed. 6. The part of the award which is relevant for the purpose of the present adjudication relates to the applicant‟s claim for interest under the provision of The Micro, Small and Medium Enterprises 3 Development Act, 2006 (MSMED Act). The applicant had claimed interest under section 16 of the said Act. 7. The petitioner before this Court (the respondent in the arbitration) had opposed the claim of interest under section 16 of the MSMED Act on the argument that the said Act was not applicable to the facts before the learned Arbitrator. According to the petitioner, the contract was not for supply of goods or for rendering of services. 8. To clarify, the petitioner‟s (the respondent buyer in the arbitration) resistance to the claim for interest under section 16 was based on the requirement on a buyer to pay compound interest with monthly rests to the supplier on the unpaid amount from the appointed day at three times of the bank rate notified by the Reserve Bank. Incidentally, the petitioner has paid the entire awarded amount to the respondent/applicant without prejudice to its right as would be evident from a letter dated 16.4.2022 issued by the petitioner to the respondent/applicant. 9. The arbitrator considered the issue of the applicant‟s claim for interest under the provisions of the MSMED Act and made the following observations. "31.(b). It will appear from Section 18 of the said MSMED Act that any party to a dispute "may", with regard to any amount due under Section 17, make a reference to the Micro and Small Enterprises Facilitation Council. It was argued on behalf of the Claimant that the word "may" in Section 18 indicates that the reference to the Facilitation Council is optional. This Tribunal is of 4 the view that the word "may" in the said Section 18 indicates that it may be optional for a party to claim interest but if a party decides to claim interest under the MSMED Act then that party has to approach the appropriate forum, that is, the said Facilitation Council as mentioned in the special provisions of the said MSMED. In the present