# M/S Sahbhav Engineering Ltd. Ahmadabad v. U.P. State M.S.M.E. Facilitation Council, Kanpur & Ors

- **Citation:** (2024) 2 ILRA 365
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-01-09
- **Case number:** Writ C No. 3774 of 2023
- **Bench:** Alok Mathur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-sahbhav-engineering-ltd-ahmadabad-v-u-p-state-m-s-m-e-facilitation-council-51426
- **Pages:** 4

## Headnote

Civil Law - Micro, Small and Medium
Enterprises
Development
Act,
2006
(MSMED
Act)
-
Sections
18,
19
-
Arbitration and Conciliation Act, 1996 -
Sections 34 & 36 - Writ Jurisdiction - Article
226/227 of the Constitution - Maintainability of
Writ Petition Against Arbitral Award

The petitioner, M/s Sahbhav Engineering Lt , a
construction company registered under the
MSMED Act, 2006, challenged an arbitral award
dated 23.03.2021 passed by the U.P. St. MSME
Facilitation Council, Kanpur, in a dispute with
respondent No. 3, M/s Hightech Concrete Lt ,
over the supply of RCC pipes. The petitioner,
who participated initially but did not appear in
later arbitration proceedings due to the Covid19 pandemic, learned of the award only upon
receiving a recovery notice on 17.11.2022. The
petitioner sought to quash the award via a writ
petition under Article 226/227. The respondents
argued that the writ was not maintainable due
to the availability of an alternative remedy
under Section 19 of the MSMED Act read with
Section 34 of the Arbitration and Conciliation
Act, 1996, and that arbitral awards between
private parties are not amenable to writ
jurisdiction. Held: As per Bhaven Construction
Vs Sardar Sarovar Narmada Nigam Lt (2022)
1 SCC 75, writ jurisdiction under Article 226/227
should not be invoked when a statutory remedy
exists under the Arbitration Act, except in cases
of exceptional rarity or clear bad faith, neither of
which was established here. Section 19 of the
MSMED Act mandates that challenges to arbitral
awards be made under Section 34 of the
Arbitration Act, requiring a 75% deposit of the
awarded amount. Section 36 further stipulates
that unassailed awards become enforceable as
court decrees after the limitation period expires,
which had lapsed in this case. The dispute being
private
in
nature,
and
with
execution
proceedings pending where objections could be
raised, the writ petition was not maintainable.
The petition was dismissed for lack of merit,
with liberty to the petitioner to pursue
objections in execution proceedings.

Case Law Cited:

## Text

2 All. M/S Sahbhav Engineering Ltd. Ahmadabad Vs. U.P. State M.S.M.E. Facilitation
 Council, Kanpur & Ors.
365
reminded that while exercising jurisdiction
under Article 226 or 227, High Courts
should not act as if they are exercising an
appellate jurisdiction.

24.
In
Commandant,
22nd
Battalion, CRPF and others Vs. Surinder
Kumar (2011) 10 SCC 244, Apex Court
referring to its earlier decision in Union of
India Vs. R.K. Sharma (2001) 9 SCC 592
observed that only in an extreme case,
where on the face of it there is perversity or
irrationality, there can be judicial review
under Articles 226 or 227.

24. Accordingly, keeping in view the
aforesaid discussion more particularly
seeing the conduct of the petitioner as
stands
recorded
in
the
order
dated
26.03.2021, no case for interference is
made out with the orders impugned.
Accordingly, the writ petition is dismissed.
----------
(2024) 2 ILRA 365
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 09.01.2024
BEFORE

THE HON'BLE ALOK MATHUR, J.

Writ C No. 3774 of 2023

M/S Sahbhav Engineering Ltd. Ahmadabad
 ...Petitioner
Versus
U.P. State M.S.M.E. Facilitation Council,
Kanpur & Ors. ...Respondents

Counsel for the Petitioner:
Sri Mohit Sharma, Rakesh Kumar Srivastava

Counsel for the Respondents:

Civil Law - Micro, Small and Medium
Enterprises
Development
Act,
2006
(MSMED
Act)
-
Sections
18,
19
-
Arbitration and Conciliation Act, 1996 -
Sections 34 & 36 - Writ Jurisdiction - Article
226/227 of the Constitution - Maintainability of
Writ Petition Against Arbitral Award

The petitioner, M/s Sahbhav Engineering Lt , a
construction company registered under the
MSMED Act, 2006, challenged an arbitral award
dated 23.03.2021 passed by the U.P. St. MSME
Facilitation Council, Kanpur, in a dispute with
respondent No. 3, M/s Hightech Concrete Lt ,
over the supply of RCC pipes. The petitioner,
who participated initially but did not appear in
later arbitration proceedings due to the Covid19 pandemic, learned of the award only upon
receiving a recovery notice on 17.11.2022. The
petitioner sought to quash the award via a writ
petition under Article 226/227. The respondents
argued that the writ was not maintainable due
to the availability of an alternative remedy
under Section 19 of the MSMED Act read with
Section 34 of the Arbitration and Conciliation
Act, 1996, and that arbitral awards between
private parties are not amenable to writ
jurisdiction. Held: As per Bhaven Construction
Vs Sardar Sarovar Narmada Nigam Lt (2022)
1 SCC 75, writ jurisdiction under Article 226/227
should not be invoked when a statutory remedy
exists under the Arbitration Act, except in cases
of exceptional rarity or clear bad faith, neither of
which was established here. Section 19 of the
MSMED Act mandates that challenges to arbitral
awards be made under Section 34 of the
Arbitration Act, requiring a 75% deposit of the
awarded amount. Section 36 further stipulates
that unassailed awards become enforceable as
court decrees after the limitation period expires,
which had lapsed in this case. The dispute being
private
in
nature,
and
with
execution
proceedings pending where objections could be
raised, the writ petition was not maintainable.
The petition was dismissed for lack of merit,
with liberty to the petitioner to pursue
objections in execution proceedings.

Case Law Cited:
1. Bhaven Construction Vs Sardar Sarovar
Narmada Nigam Lt , (2022) 1 SCC 75

2. Nivedita Sharma Vs Cellular Operators
Association of India, (2011) 14 SCC 337

3. L. Chandra Kumar Vs U.O.I., (1997) 3 SCC
261
366 INDIAN LAW REPORTS ALLAHABAD SERIES
(Delivered by Hon'ble Alok Mathur, J.)

1. Heard Sri Mohit Sharma, learned
counsel for petitioner as well as Sri G.P.
Mishra, learned counsel for respondent No.
3.

2. By means of present writ petition,
the petitioner has challenged the award
dated 23.03.2021.

3. It has been submitted by learned
counsel for petitioner that petitioner is a
construction company having its office at
Sadbhav House, Law Gardena Police
Chowki, Elis Bridge - Ahmedabad and is
primarily engaged in the business of
construction of highway and toll plaza
across the country.

4. It is stated that respondent No.
3/M/s.
Hightech
Concrete
Ltd.
is
manufacturer of other non-metalic, mineral
products, articles and concrete, cement and
plaster, Hume pipes and other prefabricated structural components of cement
and
concrete
for
building
or
civil
engineering and the petitioner has entered
into contract with respondent No. 3 for
supply of RCC pipes. There were certain
disputes between petitioner and respondent
No. 3 and the matter was referred to
conciliation. It is stated that the conciliation
proceedings had failed and consequently
the matter was referred for arbitration as
per Section 18 of Micro, Small and
Medium Enterprises Development Act,
2006.

5. It is further stated that petitioner
and respondent No. 3 are registered under
the Micro, Small and Medium Enterprises
Development
Act,
2006
(hereinafter
referred to as the MSME Act) and
accordingly the dispute was referred for
arbitration under Section 18 of MSME Act,
2006.

6. The petitioner had appeared in the
arbitration proceedings and filed his
objections to the claim preferred by
respondent No. 2. It is stated that
subsequently due to onset of Covid -19
pandemic, the petitioner did not appear in
the arbitration proceedings and the award
was passed on 23.03.2021.

7. It is further stated that petitioner
only came to know about the said award
when recovery notice dated 17.11.2022 was
received by them. Subsequently present
writ petition was filed challenging the said
award.

8. Learned counsel for respondents on
the other hand has submitted that present
writ petition would not be maintainable
inasmuch as the petitioner has an equally
efficacious remedy under Section 19 of
MSME Act of 2006 for challenging the
award. The said challenge has to be made
under Section 34 of the Arbitration and
Conciliation Act, 1996. He has further
submitted
that
the
dispute
between
petitioner and the respondent is a private
dispute and the matter was referred to
arbitration and further submitted that an
award passed by the Arbitrator would not
be amenable to writ jurisdiction under
Article 227 of the Constitution of India.

9. In this context, Hon'ble the
Supreme Court in the case of Bhaven
Construction
Vs.
Sardar
Sarovar
narmada Nigam Ltd, 2022 (1) SCC 75
has categorically observed :-

16. Thereafter, Respondent No. 1
chose to impugn the order passed by the
arbitrator under Section 16(2) of the
2 All. M/S Sahbhav Engineering Ltd. Ahmadabad Vs. U.P. State M.S.M.E. Facilitation
 Council, Kanpur & Ors.
367
Arbitration Act through a petition under
Article 226/227 of the Indian Constitution.
In the usual course, the Arbitration Act
provides for a mechanism of challenge
under Section 34. The opening phase of
Section 34 reads as 'Recourse to a Court
against an arbitral award may be made
only by an application for setting aside
such award in accordance with sub-section
(2) and sub-section (3)'. The use of term
'only' as occurring under the provision
serves two purposes of making the
enactment a complete code and lay down
the procedure.

17. In any case, the hierarchy in
our legal framework, mandates that a
legislative enactment cannot curtail a
Constitutional right. In Nivedita Sharma v.
Cellular Operators Association of India,
(2011) 14 SCC 337, this Court referred to
several judgments and held:

"11. We have considered the
respective arguments/submissions. There
cannot be any dispute that the power of the
High Courts to issue directions, orders or
writs including writs in the nature of
habeas corpus, certiorari, andamus, quo
warranto and prohibition under Article 226
of the Constitution is a basic feature of the
Constitution and cannot be curtailed by
parliamentary legislation - L. Chandra
Kumar v. Union of India, (1997) 3 SCC
261. However, it is one thing to say that in
exercise of the power vested in it under
Article 226 of the Constitution, the High
Court can entertain a writ petition against
any order passed by or action taken by the
State and/or its agency/ instrumentality or
any public authority or order passed by a
quasi-judicial body/authority, and it is an
altogether different thing to say that each
and every petition filed under Article 226 of
the Constitution must be entertained by the
High Court as a matter of course ignoring
the fact that the aggrieved person has an
effective alternative remedy. Rather, it is
settled law that when a statutory forum is
created by law for redressal of grievances,
a writ petition should not be entertained
ignoring the statutory dispensation.

(emphasis supplied)

It is therefore, prudent for a
Judge to not exercise discretion to allow
judicial interference beyond the procedure
established under the enactment. This
power needs to be exercised in exceptional
rarity, wherein one party is left remediless
under the statute or a clear 'bad faith'
shown by one of the parties. This high
standard set by this Court is in terms of
the legislative intention to make the
arbitration fair and efficient."

10. Considering the rival submissions,
this court is of the considered view that the
petitioner has an equally efficacious
remedy for raising all the grievances which
have been raised by him in the present case
in proceeding for challenging the said
award as per Section 34 of the Arbitration
and Conciliation Act read with Section 19
of the MSME Act, 2006. For ready
reference, Section 19 of MSME Act, 2006
is reproduced hereunder:-

"19. Application for setting aside
decree, award or order.?No application for
setting aside any decree, award or other
order made either by the Council itself or
by any institution or centre providing
alternate dispute resolution services to
which a reference is made by the Council,
shall be entertained by any court unless the
appellant (not being a supplier) has
deposited with it seventy-five per cent of the
amount in terms of the decree, award or, as
the case may be, the other order in the
manner directed by such court: Provided
that pending disposal of the application to
set aside the decree, award or order, the
368 INDIAN LAW REPORTS ALLAHABAD SERIES
court shall order that such percentage of
the amount deposited shall be paid to the
supplier, as it considers reasonable under
the circumstances of the case subject to
such conditions as it deems necessary to
impose."

11. It is noticed that even as per
Section 36, it is provided that where time
for making an application to set aside the
award under Section 34 of Arbitration and
Conciliation Act, 1996has expired, then,
subject to provisions of Sub-section 2 such
award shall be enforced in accordance with
the provision of the CPC in the same
manner as if it were a decree of the Court.

12. It is noticed that the consequences
not assailing the award within the time
prescribed have been provided under
Section 36 and the award has to be
challenged as per the provisions of Section
36(3) of Arbitration and Conciliation Act,
1996 and the time period, accordingly is
mandatory within which the award has to
be assailed undoubtedly the time for
challenge of award has expired.

13. Accordingly, this Court is of
the
considered
view
that
where
statutory prescription has already been
provided for challenging the award and
the dispute in between private parties a
writ petition in this regard would not be
maintainable. Further, it has been
informed that execution proceedings are
pending where the petitioner, if so
advised,
can
take
objections
in
accordance with law.

14. Subject to the aforesaid, this
Court has not find any merit in the
present writ petition, accordingly, the
writ petition being devoid of merits and
is dismissed.
----------
(2024) 2 ILRA 368
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 25.01.2024
BEFORE

THE HON'BLE MANISH MATHUR, J.

Writ C No. 6606 of 2023

Shivangi Sharma ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Shiv
Prakash
Dwivedi,
Ashish
Kumar
Dwivedi

Counsel for the Respondents:
C.S.C., Abhinav Trivedi

Government Order dated 21.10.2022 -
Paragraph 7(a) - Refund of Fees - NEET
Counselling - Unjust Enrichment - Writ of
Mandamus -The petitioner, Shivangi Sharma,
sought a writ of mandamus to direct the refund
of Rs. 8,25,000/- (tuition fees) and Rs.
2,00,000/- (security deposit) paid during the
first round of NEET UG 2022 counselling for
allotment to F.H. Medical College, Agr She
resigned from this allotment on 13.11.2022 (or
17.11.2022, as per respondents) due to
dissatisfaction and was subsequently allotted
NIMS University, Jaipur, in the second round of
counselling on 26.11.2022. The petitioner relied
on paragraph 7(a) of the Government Order
dated 21.10.2022, which permits refund of fees
(minus 10% deduction) if a student resigns
after first-round allotment upon securing a seat
in
second-round
counselling,
subject
to
providing proof of the new allotment. The
respondents argued that the second proviso to
paragraph 7(a), which allows a 50% deduction
for resignations due to personal reasons without
second-round allotment, applie Held: The
court interpreted the mandatory requirement in
paragraph 7(a) for submitting proof of secondround allotment at the time of resignation as
directory, given the beneficial nature of the
refund
provision.
Retaining
fees
without