- (1.) All the 5 writ petitions challenge the order passed by the Chairman, Industrial Facilitation Council before which the 3rd respondent-Mithila Malleables Pvt. Ltd. had sought initially for conciliation for the dispute arising out of a claim towards cost of equipments for supplies effected to the petitioner. On an attempt of the Council to proceed with conciliation, in spite of the petitioner raising an objection and expressing his unwillingness to participate, the petitioner had earlier approached this Court through CWP Nos.13107 to 13112 of 2011. This Court had observed that the parties could not be compelled for conciliation and if he was not willing to have the benefit of such conciliation, he was entitled to seek reference for arbitration. When the proceedings went back to the Council, the petitioner had by that time issued a notice to the seller seeking for arbitration in the manner contemplated by the agreement between parties. The agreement provided for a reference to arbitral Tribunal in case of disputes between themselves through the procedure established under the Arbitration and Conciliation Act, 1996 (for short, 'the Act, 1996'). The 3rd respondent-seller did not respond to the notice and instead sought the Council itself to act as an Arbitrator by invoking Section 18(3) of the Micro, Small and Medium Enterprises Development Act, 2006 (for short, 'the Act, 2006'). The Council rejected the plea of the petitioner that the agreement provided for a reference to arbitration under the Act, 1996 and that the dispute shall not be adjudicated before the Council. According to the petitioner Section 18(3) of the Act, 2006 must be read harmoniously with the Arbitration Act, 1996 and it shall give place to the latter Act. The Council rejected the plea of the petitioner and proceeded to hold that the Act, 2006 was a special central enactment that provided for a mechanism realization of amount for goods supplied by a seller to a buyer, both of which were industries to which the provisions of the Act, 2006 had admittedly applied, the provisions of the Act, 1996, which was a general enactment has to be read down to give a full play for the applicability of the Act, 2006. The Council, while proceeding to pass the impugned order, had observed that for consideration of the dispute relating to the entitlement or otherwise of the 3rd respondent-company to secure the value for the goods supplied, the parties were to appear before the Council at the next hearing, which would be communicated separately. This order was passed on 15.11.2011 and that is in challenge in all the above writ petitions.
(2.) There is no denying the fact that the petitioner and the 3rd respondent fulfill the respective capacity as buyer and seller in the manner contemplated by the Act, 2006. There is also no denying the fact that the 3rd respondent claims that he has supplied goods for which the payments had not been made in full by the petitioner, while the petitioner has serious issues about some breach of the terms of the contract and denies the alleged claim to entitlement by the 3rd respondent. The petitioner has on the other hand counter claims for the loss, which the petitioner was alleged to have suffered by the conduct of the 3rd respondent by breach of some of the essential terms of contract of supply.
(3.) Learned counsel appearing for the petitioner would mount several objections on the validity of the order. Firstly, he would contend that the Act, 2006, which contemplates a resolution of a dispute under Section 18 through a reference, is in the context of a recovery of amount provided under Section 17 of the Act, 2006. Recovery of amount due. - For any goods supplied or services rendered by the supplier, the buyer shall be liable to pay the amount with interest thereon as provided under section 16. Learned counsel would read to this provision to mean that it contemplates a buyer's liability to pay the amount with interest as provided under Section 16 and to that extent it excludes any possibility of any counter claim by the buyer against the seller. I would reject this objection right away, for, a liability to pay is invariably a reckoning of the mutual rights of the parties and when Section 17 contemplates a buyer's liability to pay, the assessment cannot and ought not to exclude the liability of the seller to pay, if any. This issue was dealt within a slightly different context in the proceedings under the Recovery of Debts Due to Banks & Financial Institution Act, 1993, which originally did not contain a provision for making a set-off by a debtor. It came after the decision of Hon'ble the Supreme Court in "United Bank of India v. Abhjit Tea Co. (P) Ltd., 2000 7 SCC 357" that allowed for a plea for counter claim/set-off to be entertained that the law itself was amended explicitly by amending Section 19(6) of the 1993 Act to make explicit what the law even otherwise made possible. I would not, therefore, find that Section 17 does not fetter a buyer to plead that he is not liable to pay the money and that there is some entitlement, which he has against the seller himself. The Act, 2006 would, therefore, make possible a reference to include even a right, which a buyer claims against the seller.;