ITI LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) In this Writ Petition, the petitioner is seeking a Writ of Mandamus declaring the action of respondent No.3 Council in entertaining the claim of respondent No.4 vide Claim Petition No.1191/MSEFC/2020 dt.11/9/2020 under the MSMED Act, 2006 on the ground that respondent No.4 does not fall within the definition of 'supplier' as per Sec. 2(n) of the Micro Small and Medium Enterprises Development Act, 2006, as illegal and arbitrary and consequently to direct the respondent No.3 to drop the claims of respondent No.4 and to pass such other order or orders as this Court may deem fit and proper in the circumstances of the case.

(2.) Brief facts leading to the filing of the present Writ Petition are that the petitioner, which is a Public Sector Undertaking under the Department of Telecommunications, Ministry of Communications, Government of India, is a nodal agency to the Central and State Governments for execution of turnkey projects and other data collection projects of the Government, including the project for execution of Socio Economic and Caste Census, Ministry of Rural Development, Ministry of Housing and Urban Poverty Alleviation and Registrar General and Census Commissioner of India, Ministry of Home Affairs, Government of India. It is submitted that the Consortium of Public Sector Undertakings had floated a tender for procuring data and processing the same on door to door basis for a 120 crore population. Respondent No.4 had entered into an agreement with the petitioner on 11/5/2012 and respondent No.4 was required to carry out all jobs related to the said Project.

(3.) According to the learned counsel for the petitioner, Sri P.Somashekar Reddy, all works related to the project were completed before 2016. It is submitted that respondent No.4 got registered as an MSM Enterprise on 23/2/2017, i.e., after the completion of the contract work. According to the learned counsel for the petitioner, the Micro Small and Medium Enterprises Development Act, 2006 (MSMED Act) had come into force in the year 2006 and the enterprises which are registered with Micro and Small Enterprises Facilitation Counsel (MSEF Council) alone are eligible to file claim petition before MSEF Council in respect of supply of goods or services. It is submitted that respondent No.4 had filed a claim petition before MSEF Council in respect of the contract entered into on 11/5/2012, i.e., before its registration under Sec. 8(1) of MSMED Act, 2006 and therefore, the MSEF Council ought not to have entertained the claim petition and issued notice to the petitioner. It is submitted that the Hon'ble Supreme Court in the case of Silpi Industries Etc. Vs. Kerala State Road Transport corporation and another 2021 SCC OnLine SC 439 has clearly held that the provisions of MSMED Act can be availed of only by such organizations which are registered with MSEF Council and also in respect of only such contracts which are entered into or executed after such registration under Sec. 8 of the MSMED Act. He therefore relied upon the said decision to argue that the MSEF Council, i.e., respondent No.3 ought not to have entertained the application. He also placed reliance upon the decision of the Hon'ble Supreme Court in the case of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and others (1998) 8 SCC 1 for the proposition that under Article 226 of the Constitution of India, the High Court can interfere if the order or proceeding is wholly without jurisdiction or vires of the Act is challenged. He also referred to the judgment of the Hon'ble A.P. High Court in the case of Rashtriya Ispat Nigam Limited rep. by its Authorized Signatory-R. Monikandan Vs. Union of India rep. by Secretary, the Ministry of Micro Small and Medium Enterprises 2022 SCC OnLine AP 970, wherein after taking into consideration the decision of the Hon'ble Supreme Court in the case of Silpi Industries Etc. Vs. Kerala State Road Transport corporation and another (2021 SCC OnLine SC 439 supra), it was held that the Court can interfere in the cases where the Council does not have jurisdiction to entertain and decide the dispute. Therefore, according to him, this Court can and should interfere in the matter and set aside the notice dt.9/2/2023 issued to the petitioner to appear before the MSEF Council.