JAIN STEELS INDUSTRIES Vs. LARSEN & TOUBRO LTD.

JUDGEMENT

(1.) Being aggrieved by non-payment of the sale consideration for the goods sold, the appellant, a supplier of steel materials to the respondent for the Dedicated Freight Corridor Corporation of India Limited (DFCCIL) project had approached the District-Level Micro and Small Enterprises Facilitation Council at Fatehgarh Sahib Punjab (hereinafter 'MSMED Council'), claiming a sum of Rs.59,42,986.21 is due and payable, along with interest. The claim petition before the MSMED Council claiming a sum of Rs.59,42,986.21 is primarily based on the alleged admission of the respondent in its email dtd. 12/5/2017.

(2.) The respondent, who participated in the proceedings before the MSMED Council, had made a counter-claim, stating that the goods supplied was not in tune with the specifications and were not delivered in time. Therefore, for breach of the terms of Letter of Intent (LOI), the respondent attempted to invoke the Performance Bank Guarantee (PBG). However, the claimant approached the Civil Court at Punjab seeking injunction against the invocation of the Bank Guarantee. The said application for injunction was dismissed after hearing both sides. Meanwhile, the 1st respondent claims to have suffered financial loss to Rs.70,44,017.00 had laid the claim petition before the MSMED Council under Sec. 18(1) of the MSMED Development Act, 2006. The said claim is not maintainable in view of dispute pending between the parties and in view of dispute resolution clause in the contract ended between the parties.

(3.) The MSMED Council, based on the pleadings, framed issues regarding jurisdiction, the counter-claim and the civil dispute between the parties regarding invocation of bank guarantee. It held that the claimant, being the supplier of the goods, have a right to make a claim before the MSMED Council in Punjab by taking recourse to the provisions under Ss. 15, 16 and 17 of MSMED Act, 2006. After upholding the jurisdiction to decide the dispute, the Council rejected the counter-claim made by the respondent and passed an award for payment of Rs.1,99,29,166.00 as principal along with interest on delayed payment up to 2/7/2024. Additionally, future interest also was awarded on the delayed payment from 3/7/2024, till the date of realisation.