2003 (11) TMI 354 - HC - Companies Law

Issues Involved:
1. Jurisdiction of the A.P. Industrial Facilitation Council.
2. Bar of limitation on the claims.
3. Nature of the Council as a Tribunal.
4. Validity of the Council's order without recorded reasons.
5. Applicability of the Arbitration and Conciliation Act, 1996.

Detailed Analysis:

1. Jurisdiction of the A.P. Industrial Facilitation Council:
The petitioner argued that the Council lacked jurisdiction because the agreements specified that claims over Rs. 50,000 should be decided by a competent Civil Court. The Council, however, determined that it had jurisdiction based on the parliamentary enactment, specifically Act 32/1993 and its amendments, which established the Council for arbitration purposes.

2. Bar of Limitation on the Claims:
The petitioner contended that the claims were barred by limitation. The Council rejected this objection, stating that the claims were within the limitation period as per the parliamentary enactment. The Council's decision was based on the provisions of the Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertakings Act, 1993.

3. Nature of the Council as a Tribunal:
The petitioner, represented by the learned Additional Advocate General, argued that the Council should be considered a "Tribunal" as it discharges quasi-judicial functions. This argument was supported by references to various provisions of the Act and the Arbitration and Conciliation Act, 1996. The respondent, however, argued that the Council was merely an administrative body without adjudicatory power. The Court concluded that the Council is a "Tribunal" within the meaning of Article 227 of the Constitution of India, thus making it amenable to the supervisory jurisdiction of the High Court.

4. Validity of the Council's Order Without Recorded Reasons:
The petitioner argued that the Council's order was cryptic and lacked recorded reasons, making it unsustainable. The Court agreed, emphasizing that a body discharging quasi-judicial functions must record reasons for its decisions, especially when objections of jurisdiction and limitation are raised. The Court cited several precedents to support this requirement, including Engineering Mazdoor Sabha v. Hind Cycles Ltd. and Jaswant Sugar Mills Ltd. v. Lakshmichand.

5. Applicability of the Arbitration and Conciliation Act, 1996:
The Court examined the applicability of the Arbitration and Conciliation Act, 1996, to the proceedings before the Council. It was noted that the Act applies to arbitrations under any other enactment, as if the arbitration were pursuant to an arbitration agreement. The Court highlighted sections 16 and 34 of the Arbitration and Conciliation Act, which deal with the competence of the arbitral tribunal to rule on its jurisdiction and the setting aside of arbitral awards, respectively. The Court concluded that the Council's decision did not constitute an arbitral award, thus making the provisions of section 34 inapplicable.

Conclusion:
The Court set aside the Council's orders due to the lack of recorded reasons and remitted the matters to the Council for reconsideration. The Council was directed to afford an opportunity to both parties and pass appropriate orders in accordance with the law. The Civil Revision Petitions were allowed to this extent, with no order as to costs.

← Previous Next →