DALAPATHI CONSTRUCTION Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The case of the petitioner is as follows: The petitioner, who is a partnership firm, is in the business of Civil Constructions in 2014. The petitioner had registered itself as an Enterprise under the Micro, Small and Medium Development Enterprises Act, 2006, (for short 'the Act') on 28/11/2020.

(2.) The petitioner had entered into a contract with the 3rd respondent on 14/6/2018 for undertaking construction in a multistoreyed residential complex, viz., "Srivalli Pravas" at Kaja, Guntur District. However, the said contract could not be executed. As the petitioner had already stationed sizeable plant and machinery at the site, a further agreement, termed as a Memorandum of Understanding, was entered between the petitioner and the 3rd respondent on 20/5/2020. As per this Memorandum of Understanding, the 3rd respondent had agreed to pay a sum of Rs.253.00 lakhs + GST to the petitioner as consideration for the plant and machinery handed over to the 3rd respondent.

(3.) The 3rd respondent did not make the payment due to the petitioner. Therefore, the petitioner approached the 2nd respondentFacilitation Council, under the provisions of the Act for recovery of its dues. This application was rejected by the 2nd respondent in the meeting held on 22/6/2021 and the said decision was communicated to the petitioner by letter bearing Reference No.21C/IFC 2021/427 dtd. 23/9/2021. The endorsement in the said letter is as follows: "As per the Udyam registration certificate, the permissible activity for the petitioner is construction of building. The petitioner made claim for not honouring the MOU, where payment is to be made for the Plant & Machinery sold. As the activity is neither manufacturing nor servicing and only trading activity. It is beyond the scope of the Council. Hence the application is not admissible for adjudication under MSMED Act, 2006."