M/s. Merrito Polymers (India) Private Limited v. The State of Telangana

Counsel for the Appellant : SRI B.SUDHAKAR REDDY & NEERAJA REDDY Counsel forthe Respondent Nos.1&2 : Ms.J.SUNITHA, AGP., . Counsel forthe Respondent Nos.3 : rep., GP FOR INDUSTRIES COMMERCE -- The Court made the following: JUDGMENT HIGH COURT FOR THE STATE OF TELAI GANA AT HYDtrRABAD. THE HON'BLE JUSTICE MOUSHUMI BHATTI\ ]HARYA AND THE HON'BLE JUSTICE GADI PRAVEEN I,.:] IMAR WRIT APPEAL No.146O OF 2025 DATE: 16.12.2O25 Between M/s. Merrito Polymers (India) Private Limited Versus . ..Appellant The State of Telangana, Industries & Commerce Department, Telangana Secretariat, Hyderabad, Rep. by its Principal Secretary, and 2 others ... t espondents Ms. B. Neeraja l?eddv, Iearned counsel trppearing lor thc apl).1 fnt Ms. J. Sunitha, the learned Assistant Government Pleader rr lresenting thc learned Governrnent Pleader lor Indrrstries aDd Commerce a I rcaring for the respondent Nos 1 and 2. JUDGMENT: (Per Hon'ble Justice Moushumi Bhatta: t-arya)

1. The Writ Appeal arises out of an order datei 14.1.0.2024 passed by a iearned Single Judge of this Court in \/ P.No.24139 of 2023.

2. The Writ Petition was filed by the appellant s::king a Writ of Mandamus to declare the An ard passed by Lh: respondent \ 1 I 2 No.2/the Micro and Small Enterprises Facilitation Council, Medchat-Malkajgiri District (Facilitation Council) in Case No.2lClIFCl2018l52181, dated 06.O7.2023, as nul1 and void. The appellant also filed I.A.No.1 of 2023 for suspending the Award dal ed 06.O7.2023.

3. Learned counsel appearing for the appellant initially sought time on the ground that the respondent No.3, in whose favour the Award had been passed, is not represented

4. After considering the impugned ordcr, the material on record and thc submissions of counscl for the appellant, we do not hnd that notice is required in the matLer

5. The Writ Petition filed by the appellant was devoid of merit since the appellant/ petitioner had an alternative remedy under the provisions of The Arbitration and Conciliation Act, 1996 ('1996 Act'). Hence, the learned Single Judge was correct in disposing of the Writ Petition by granting liberty to the appellant/writ petitioner to avail the aiternative remedy available under 1aw.

6. We deem it fit to record the submissions made on behalf of the appellant. : ! I I I .': J

7. The appellant claims to be a Buyer in a conl 'act entered into between the appellant and the respondent I o.3 for the supply and ins tallation of Clcan Room Cons , r rction and Accessorics v,ith HFIPA Filter Air Supply. The rcs1r, ndcnt No.3 claimed that it supplied the material as per the pr r :hase order placed by thc appellant and submitted a frl al bill on

04.lO.2O17 . Despite several reminders and follt w-ups, the appellant/ Buyer dicl not pay the balance principrr amoun[ of Rs.15,40,268/ clue for thc material supplied and he sen ices rendcred- B. The rcspondenl No.3 approached the Facilita- :n Council, ri,hich culminated in the Award daLed O6.O7.2O2il. 3y the said Award, the Facilitation Council directed the appt 1 ant to pay Rs.15,40,268,/- Lowards the principal amount t ue to thc lespondent No.3 along with interest as stipuL r .ed in the MSMtrD Act, 2006, namely, interest with monthly re sts at three times of the trank rate as notihed by the RBI and 1 revzriling in the corresponding years under section 16 o[ the 1,r SMED Act, 2O06 from the appointed day to till the date orr which the respondent makes ful1 and final payment. The pr ncipal and interest amounts were directed to be paid by the z ppellant to 4 the respondent No.3 within a month from the date of receipt of that Award.

9. The appellant approached thc High Court and filed a Writ Pelition (W.P.No.24 139 of 2023) under Article 226 of t}re Constitution of India for a declaration that the Award passed by the Facilitation Council is illegal and arbitrary and in breach of the principles of natural justice.

10. By the impugned order, the learned Single Judge disposed of the Writ Petition on inter alia the ground that lhe appellant i'r:rcl an alternative efficacrous remedy under section 34 of the 1996 Act. The learned Single Judge was of the view that entertaining a Writ Petition under Article 226 of the Constitution against an Award passed by the Facilitation Council would defeat the object and purpose of The Micro, Small and Medium Enterprises Development Act, 2OO6 (MSMtrD Act, 2006), which is a special enactment meant for the promotion, development and security of Micro, Small and Medium Enterprises. 1 1. We are completely in agreement with the view taken by the learned Single Judge. Section 18 (4) of the MSMED Act, 2O06 empowers the Facilitation Council to resolve the dispute 1 i I I I i I I ! i I I I I I I ! i i ! t I ? q i I 5 between the supplier and the Buyer by arbitratrrr r under Lhe provisions ol- the 1996 Act in the event media r :n ir-ritiated under sub-se crions (2) and (3) ol section 18 stanr r terrninatccl s.ithout any setllement between [he parties. li:ction 18(5) reiterates that Lhc Council shall have the jurisdicri rn to acl as an Arbitrator

12. Moreover, section 19 of the MSMED AcL lr and:rtes an appellant (nol bcing a supplier) to deposit sevent_v-l'\ e percent of the arvarded iimount with the Court along with thr :hallenge to an Au,ard passcd by the Facilitation Council.

13. Il is clear from even a perusal of the MSMtrD ;, ct, 2006 as u.cll as fron: a plcthora of judgments pronoutL ed by the Supre mc Court, that the only remedy available to a party agElrieved by an l\ward passed by the Facilitation ,_ runcil is to file an applicrLtion for set[ing aside the Award undr:; section 34 of thc 1996 .,\ct. This remedy is subject to corrll Iiance il,ith t section i9 of the MSMED Act, 2006, if the aggriei e 1 person is the Buyer.

14. Neither the statutory provisions nor the judgr ents of the Supreme Court contemplate hling of a Writ Pe.i ,ion under I I 6 n Artiile 226 of the Constitution for a dcclaration that an Award passed by the Facilitation Council is illegal and arbitrary.

15. Hence, the Writ Petition was misconceived and wholly devoid of merit. The MSMED Act, 20O6 is a special enactment intended to protect the interest of Micro, Small and Medium scale Enterprises for goods supplied to Buyers. The appellant has an alternative, efhcacious, statutory rcmedy available to it under the i996 Act. We hence agree with thc vievv taken by thc learned Single Judge. The Appeal should be and is accordingly dismissed.

16. W.A.No.1460 of 2025, along with all connected applications, is accordingly dismisscd- There sl-rall be no order as to costs. //TRUE COPY// SD/-V.HARI PRASAD DEPUW REGISTRAR /<(9- SECTION OFFICER 1 t To,

1. One CC to SRI B.SUDHAKAR REDDY & NEERAJA REDDY' Advocate. loPUCl

2. fwo CCs to GP FOR INDUSTRIES COIVMERCE, High Court for the State of Telangana. [OUT]

3. Two CD Copies. BSK HIGH COURT DATED:1611212025 CC TODAY ! ; i I I I I I I I ,/ ,i, a. .-) ' 1"' v:t () ti- f FU s s,cy '<5 * /.:' :t Hottl * JUDGMENT WA.No.1460 of 2025 DISMISSING THE WRIT APPEAL WITHOUT COSTS t, NN f E l I I