Allowed

M.S Paramount Polymers Pvt. Ltd., v. Karnataka Micro and Small Enterprises Facilitation Council

Karnataka HC5 Sept 2024WP/16011/2023

Case brief

AI extract

What is this about?

The High Court, under Articles 226 and 227 of the Constitution, allowed a writ petition challenging an award by the Micro and Small Enterprises Facilitation Council. The court held that the council violated principles of natural justice by passing a final order without granting a second opportunity to the petitioner despite disputed facts. The award was set aside and remanded.

What did the court decide?

The impugned order dated 13.04.2023 passed by the Council was set aside; the matter was remanded for fresh consideration.

M.S Paramount Polymers Pvt. Ltd., Vs Karnataka Micro… — Company and Corporate | Karnataka HC (2024)

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NC: 2024:KHC:36525 WP No. 16011 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 5^TH DAY OF SEPTEMBER, 2024

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BEFORE

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THE HON'BLE MR. JUSTICE K. V. ARAVIND

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WRIT PETITION No. 16011 OF 2023 (GM-RES)

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BETWEEN:

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M.S. PARAMOUNT POLYMERS PVT. LTD., PLOT No.60, SECTOR 25, BALLABHGARH, FARIDABAD-121004, REP. BY ITS AUTHORISED REPRESENTATIVE, MR. ANEESH KHURANA. COMPANY IN CORPORATION UNDER COMPANIES ACT, 1956.

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…PETITIONER

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(BY SRI VIVEK S., ADVOCATE)

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AND:

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Digitally signed by VALLI MARIMUTHU Location: High Court of Karnataka

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KARNATAKA MICRO AND SMALL ENTERPRISES FACILITATION COUNCIL, BENGALURU, No.49, 2^ND FLOOR, SOUTH BLOCK, KHANIJA BHAVAN, RACE COURSE ROAD, BENGALURU-560001, REP. BY ITS DIRECTOR. CONSTITUTED UNDER SECTION 21 OF MSMED ACT, 2006.

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M/S S. K. ADHESIVE TAPES AND COMPONENTS, SY No.61/2A, BEHIND KALYANI MOTORS, OLD MADRAS ROAD, VIRGONAGAR, AVALAHALLI, BENGALURU-560049,

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REP. BY ITS MANAGING PARTNER, SIVASANKAR K. CONSTITUTED UNDER SECTION 21 OF MSMED ACT, 2006.

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…RESPONDENTS

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(BY SRI C. PATTABI RAMAN, ADVOCATE FOR R2 (ABSENT); R1 SERVED AND UNREPRESENTED)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH AND SET ASIDE THE IMPUGNED AWARD DATED 13/04/2023 PASSED BY THE MICRO AND SMALL ENTERPRISES FACILITATION COUNCIL, BENGALURU I.E., R1 IN CASE No. 267/2021 ON ITS FILE (PRODUCED AS ANNEXURE-A).

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THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE K. V. ARAVIND

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ORAL ORDER

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The present petition challenging the order dated 13.04.2023 at Annexure-A by the Micro and Small Enterprises Facilitation Council, Bengaluru.

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Respondent No.2 filed an application under

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Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as 'the Act of 2006' for short).

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3 - NC: 2024:KHC:36525 WP No. 16011 of 2023

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Council issued notice to the petitioner. Learned

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counsel appeared on behalf of petitioner on 09.03.2023. The council adjourned the matter to 06.04.2023. On 06.04.2023, there was no representation. The council recorded that despite giving opportunities and sending mails, the respondent has failed to turn up to the council and passed final order directing the petitioner to pay a sum of Rs.9,61,579/-.

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Sri. Vivek S., learned counsel for the petitioner submits that the council has not followed the procedure under Section 18 of the Act of 2006. It is submitted that when the matter was listed for hearing on 06.04.2023, by the time the petitioner counsel reached the council, the matter was posted for orders and the final order has been passed on 13.04.2003. It is the case of the petitioner that as the disputed facts are involved the council ought to have considered to grant another opportunity to the petitioner to defend its case.

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Respondent No.1 is served and unrepresented.

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None appears on behalf of respondent No.2.

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Considered the submission of the learned

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counsels and perused the writ papers.

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As per Annexure-A, respondent No.2 supplied

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components to petitioner and the amount in due is Rs.9,61,579/-. Respondent No.2 is a micro manufacturing enterprise registered with Ministry of MSME is eligible to file an application before the council. The council has entertained the application and issued notice to the petitioner. The petitioner appeared on 09.03.2023 through its counsel, the matter was adjourned to 06.04.2023. When the council heard the matter on 06.04.2023, there was no representation on behalf of the petitioner. The order records that despite giving opportunities and sending mails, the respondent has not turned up to the council.

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The order directing the petitioner to pay Rs.9,61,579/- is passed. The order does not indicate

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sufficient opportunity being granted. Sufficient opportunity to be provided when disputed facts regarding the liability are required to be adjudicated. When the matter was adjourned on 09.03.2023 which is the first appearance 06.04.2023, no prejudice would have caused to respondent No.2 if another opportunity was granted to the petitioner.

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On consideration of the list of dates, the council has proceeded to pass final order without providing reasonable opportunity to the petitioner and the same results in violation of principles of natural justice.

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