JITF WATER INFRASTRUCTURE LIMITED Vs. MSME COMMISSIONERATE

JUDGEMENT

(1.) This petition is filed under Article 226 of the Constitution of India for quashing and setting aside order dated 30.06.2018 (Annexure-A) passed by MSME Commissionerate. Under the said order, reference was made to respondent No.3 for arbitral proceeding in exercise of power under Section 18(3) of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter to be referred as "MSME Act").

(2.) Learned Senior Advocate for the petitioner submitted that the petitioner is an Infrastructure Company and had entered into an agreement with joint venture consisting of Aquafil Polymers Company Pvt. Ltd. (respondent No.2) and Wintech Engineering Pvt. Ltd. in respect of the work order issued in favour of the petitioner under 'Guwahati Water Supply Project'. It is submitted that respondent No.2 and Wintech Engineering Pvt. Ltd. being joint venture were separate entities. The joint venture did not perform its work as per the agreement and therefore, the petitioner was constrained to issue several notices to overcome defaults /breaches /defects in the work done. As the work was not carried out as per the agreement and to the satisfaction, by notice dated 08.01.2018, contract was terminated. Under the terms of the agreement, more particularly providing for arbitration clause, the joint venture, vide letter dated 08.02.2018 proposed name of Hon'ble Retired Supreme Court Judge as sole Arbitrator to adjudicate the disputes. In response, the petitioner took a stand by letter dated 14.02.2018 that under the relevant clause of the agreement, only the petitioner had right to appoint Arbitrator and such right was not available to the joint venture and accordingly, Hon'ble Retired Supreme Court Judge was appointed as sole Arbitrator.

(3.) As against this, learned Advocate for respondent No.2 submitted that the petitioner has suppressed material facts to his knowledge as insofar as arbitration referred to by the petitioner to the Hon'ble Retired Supreme Court Judge, the same is ordered not to be proceeded, which is communicated by the sole Arbitrator vide communication dated 26.03.2018. Therefore, it cannot be said that reference is entered into by the sole Arbitrator.