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TMI Blog2017 (2) TMI 1557X X X X Extracts X X X X X X X X Extracts X X X X ..... e, holding on to the security deposit of the third respondent as a trustee of the third respondent. Limitation is a mixed question of fact and law. On the conspectus of the facts narrated above it cannot be said that the claim made by the third respondent is barred even as on date. The claim of the third respondent is, therefore, live. When there exists an arbitration agreement between two parties, and one of such parties to the arbitration agreement is an entity within the meaning of Micro, Small and Medium Enterprises Development Act, 2006, does the Council established under the provisions of the Act of 2006 have jurisdiction to arbitrate the disputes between such parties on a request being made for such purpose? - HELD THAT:- Section 18(4) of the Act of 2006 allows the Council to arbitrate in a dispute between a supplier located within its jurisdiction and a buyer located anywhere in India. The territorial jurisdiction of the first respondent has not been questioned. The third respondent is a supplier within the meaning of the Act of 2006. Therefore, in terms of Section 18(4) of the Act of 2006, the first respondent is the authority designated to arbitrate the disputes between t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Debdut Mukherjee, Advocate Ms. Saswati Chatterjee, Advocate. ORDER DEBANGSU BASAK, J.:- The petitioner questions the jurisdiction of the West Bengal State Micro Small Enterprises Facilitation Council in purporting to arbitrate in the disputes between the first petitioner and the third respondent. 2. Learned Advocate for the petitioners submits that, the claim of the third respondent arises out of a transaction of August 1995. The third respondent was paid off by the first petitioner. The third respondent had persisted in making claims against the first petitioner. The claims made by the third respondent are barred by the laws of limitation. In any event, the contract between the first petitioner and the third respondent on the basis of which the third respondent has made its claims, contains an arbitration clause. The first petitioner had appointed an arbitrator in terms of such arbitration clause. In view of the arbitrator being appointed in terms of the arbitration agreement to arbitrate on the disputes between the first petitioner and the third respondent, the West Bengal State Micro Small Enterprises Facilitation Council has no jurisdiction over such disputes. He relies upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder for design, manufacturing and installation of Radial Gate of Bakreswar Dam in August 1995 to the third respondent. According to the first petitioner, all running account bills raised by the third respondent were paid by it. The first petitioner claims that, nothing remains due and payable by it to the third respondent. 7. The contract appears to be of November 1998. In terms of such contract it appears that, the third respondent had kept a security deposit of a sum of Rs.16,42,460/- with the third respondent. Such claims appear from a writing dated February 25, 2005 made by the third respondent to the first petitioner. By such writing the third respondent had raised claims other than the refund of the security deposit lying with the first petitioner. This claim letter is annexed by the first petitioner in the writ petition itself. The first petitioner, however, has not averred that it had refunded the security deposit to the third respondent. There is no averment in the writ petition that, the account between the first petitioner and the third respondent stood settled. The petitioners, however, claim that the running account bills of the third respondent have been paid. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided under section 16. 18. Reference to Micro and Small Enterprises Facilitation Council.- (1) Notwithstanding anything contained in any other law for the time being in force, 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. (2) On receipt of a reference under sub-section (1), the Council shall either itself conduct conciliation in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution or centre, for conducting conciliation and the provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to such a dispute as if the conciliation was initiated under Part III of that Act. (3) Where the conciliation initiated under sub-section (2) is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer to it any institution or centre providing alternate dispute resolution services for such arbitration and provisions of the Arbitration and Conciliation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 to first conciliate and then arbitrate on the disputes between it and the other parties. 12. Section 2(4) of the Act of 1996 is as follows:- 2(4). This Part except sub-section (1) of section 40, sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as the provisions of this Part are inconsistent with that other enactment or with any rules made thereunder. 13. Section 2(4) of the Act of 1996 stipulates that, the provisions of the first part of the Act of 1996 will apply to a statutory arbitration as if there was an arbitration agreement between the parties. However, the first part of the Act of 1996 will not apply in the event there is a conflict between the provisions of the Act which enforces statutory arbitration and the provisions of the Act of 1996. 14. There are fundamental differences between the settlement of dispute mechanism provided by the Act of 2006 and the Act of 1996. One of such differences is that, the Council has to undertake a mandatory conciliation before an arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res Limited (supra) have noticed Section 2(4) of the Arbitration and Conciliation Act, 1996. In the present case, the parties are governed by an arbitration agreement entered into between themselves as well as a statutory arbitration which allows the third respondent to invoke the jurisdiction of the Council under the Act of 2006. 18. Section 18(4) of the Act of 2006 allows the Council to arbitrate in a dispute between a supplier located within its jurisdiction and a buyer located anywhere in India. The territorial jurisdiction of the first respondent has not been questioned. The third respondent is a supplier within the meaning of the Act of 2006. Therefore, in terms of Section 18(4) of the Act of 2006, the first respondent is the authority designated to arbitrate the disputes between the first petitioner and the third respondent. The existence of a live dispute between the first petitioner and the third respondent is established. On the other side of the spectrum is the arbitration agreement between the first petitioner and the third respondent. The arbitration agreement, however, has not been placed on record by the petitioners. Be that as it may, the petitioners have appointed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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