# State of U.P. & Anr v. M/S Jindal Concrete Udyog

- **Citation:** (2024) 12 ILRA 296
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-12-20
- **Case number:** Matters Under Article 227 No. 4053 of 2017
- **Bench:** Rohit Ranjan Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/state-of-u-p-anr-v-m-s-jindal-concrete-udyog-51209
- **Pages:** 10

## Headnote

Civil Law-The Micro, Small and Medium
Enterprises
Development
Act,
2006Sections 18 & 19 - The Arbitration and
Conciliation Act, 1996-Section 34(1) (3) -
By the orders impugned, the doors for effective
adjudication on merits has been closed down by
the Courts below. The time for making predeposit of 75% of the awarded amount was
granted once and the Court below should have
taken a lenient view as the matter was not
being adjudicated nor any interim order was
operating and time should have been extended
so as to enable the St. to have made the predeposit before the application under Section 34
was entertained and heard--- The matter needs
to be heard on merit and St. be directed to
comply the mandatory provisions of Section 19
making a pre-deposit of 75% to the awarded
amount by extending the time--- Matter is
remitted to the District Judge to hear the
application filed by the petitioner under Section
34 of Act of 1996 subject to deposit of
Rs.20,00,000/- within a period of one month
from today.

Petition partly allowed. (E-15)

List of Cases cited:

## Text

296 INDIAN LAW REPORTS ALLAHABAD SERIES
judgments cited above. The resolution
applicant cannot be saddled with new
claims once a resolution plan has been
approved.

14. The argument that an assessment
that has been kept pending for a prior
period and is quantified subsequent to the
approval of the Resolution Plan is an
argument in sophistry. If this argument is
accepted then all authorities would be in a
position to keep assessment/re-assessment
pending till completion of the Resolution
Plan, and thereafter, culminate the same
and saddle the successful Resolution
Applicant with an unknown burden. Such
an action cannot be countenanced as the
same would be an anathema to the
fundamental principles of the moratorium
provided under the Code. The law cannot
be read in a manner wherein the basic
structure of the Code is breached by
hindering the flow of the same by creation
of roadblocks and dams - the underlying
principle of the Code is to give a fresh start
to the Resolution Applicant. Any new
liability being fastened after the approval of
the Resolution Plan would inherently and
palpably be illegal and go beyond the
Lakshman Rekha of the Code.

15. In light of the above, the impugned
assessment order dated April 28, 2021 is
quashed and set aside. In the event any
penalty proceedings have been initiated by
the department, the writ petitioner shall be
at liberty to challenge the same in
accordance with law.

16. Ergo, the writ petition is allowed.
----------
(2024) 12 ILRA 296
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 20.12.2024

BEFORE

THE HON'BLE ROHIT RANJAN AGARWAL, J.

Matters Under Article 227 No. 4053 of 2017

State of U.P. & Anr. ...Petitioners
Versus
M/S Jindal Concrete Udyog ...Respondent

Counsel for the Petitioners:
C.S.C.

Counsel for the Respondents:
Rama Goel Bansal, S.C.

Civil Law-The Micro, Small and Medium
Enterprises
Development
Act,
2006Sections 18 & 19 - The Arbitration and
Conciliation Act, 1996-Section 34(1) (3) -
By the orders impugned, the doors for effective
adjudication on merits has been closed down by
the Courts below. The time for making predeposit of 75% of the awarded amount was
granted once and the Court below should have
taken a lenient view as the matter was not
being adjudicated nor any interim order was
operating and time should have been extended
so as to enable the St. to have made the predeposit before the application under Section 34
was entertained and heard--- The matter needs
to be heard on merit and St. be directed to
comply the mandatory provisions of Section 19
making a pre-deposit of 75% to the awarded
amount by extending the time--- Matter is
remitted to the District Judge to hear the
application filed by the petitioner under Section
34 of Act of 1996 subject to deposit of
Rs.20,00,000/- within a period of one month
from today.

Petition partly allowed. (E-15)

List of Cases cited:

1. Snehadeep Structures Pvt. Ltd.Vs Mah. Small
Scale Industries Development Corp. Ltd. (2010)
3 SCC 34

2. Goodyear India Ltd. Vs Norton Intech
Rubbers Pvt. Ltd.& anr.(2012) 6 SCC 345
12 All. State of U.P. & Anr. Vs. M/S Jindal Concrete Udyog
297
3. Gujarat St. Disaster Management Authority Vs
Aska Equipments Ltd. (2022) 1 SCC 61

4. Appeal under Section 37 of Arbitration and
Conciliation Act 1996 No.29 of 2024 (M/s Docket
Care Systems Vs M/s Hariwill Electronics India
Pvt. Ltd.) decided on 19.04.2024

5. O.M.P. (Comm) 11 of 2023 (Central
University of Jharkhand Vs M/s King Furnishing
& Safe Co.) decided on 22.02.2024

6. Silpi Industries & ors.Vs Kerala St. Road
Transport Corp. & anr.(2021) 18 SCC 790

(Delivered by Hon'ble Rohit Ranjan
Agarwal, J.)

1. The claimant-respondent M/s Jindal
Concrete Udhyog had supplied pipe etc. to
the provincial division of Public Works
Department, Mathura. A reference under
Section 18 of Micro, Small and Medium
Enterprises
Development
Act,
2006
(hereinafter called as "Act of 2006") was
moved
by
the
claimant-respondent
claiming a sum of Rs.2,78,480/- as
principal amount and Rs.3,58,096 as
interest till date of filing of claim petition,
totalling
Rs.6,36,576.63,
and
further
claimed interest at the rate of 18% on the
amount from the date of filing of claim
petition before U.P. State Micro and Small
Enterprises Facilitation Council, Kanpur,
which was registered as Claim Petition
No.28 of 2008, till date of actual recovery.

2. After contest from the State side,
final award was made on 03.08.2011
making a final award of Rs.2,78,480/- as
principal and Rs.7,47,795.86 as interest
upto 14.12.2010 totalling Rs.10,26,275.86
in favour of the claimant.

3. The State filed application under
Section
34(1)(3)
of
Arbitration
and
Conciliation Act, 1996 (hereinafter called
as "Act of 1996") challenging the award
before the District Judge, Mathura. An
application under Section 9 read with
Section 34(4) of Act of 1996 was also filed
by the State on 15.09.2011. The claimant
filed objection on 18.10.2011 objecting that
75% of the awarded amount was not
deposited, hence, proceedings were not
maintainable in view of Section 19 of the
Act of 2006. On 08.11.2012, an application
was moved by the State seeking further
time
for
making
deposit.
The
said
application was rejected on 8.11.2012 on
the ground that earlier, on 3.10.2012, time
had already been granted to the State to
comply the mandatory provisions of
Section 19 of the Act of 2006 but it failed
to do so and thus, the application seeking
extension of time as well as objections
under Section 34 were rejected.

4.
On
30.9.2014,
funds
were
sanctioned by the State Government which
led to filing of a recall application by the
State on 16.12.2014 for recalling its order
dated 08.11.2012 and permitting to deposit
75%
of
the
awarded
amount.
An
application under Section 5 of Limitation
Act was also filed for condoning the delay
in making recall application. The claimantrespondent contested the recall application
as well as delay condonation application
and filed its objection. By the order
impugned dated 23.02.2017, the application
for condonation of delay has been rejected,
hence, this writ petition.

5. Learned State counsel submitted
that dispute relates to supply made by the
claimant-respondent for the period between
2002 to 2004. Act of 2006 came into force
on 02.10.2006 and thus the goods supplied
prior to enforcement of Act of 2006 cannot
be claimed in proceedings under Section 18
of Act of 2006. He then contended that the
298 INDIAN LAW REPORTS ALLAHABAD SERIES
word 'entertained' as implied under Section
19 of Act of 2006 means, 'when effective
adjudication is done'. According to him,
only the application under Section 34 of
Act of 1996 was filed for setting aside the
award, which has to be read in consonance
with Section 19, and, pre-deposit of 75% of
the awarded amount would be prior to
entertainment of the application filed under
Section 34. In the instant case, the Court
below was not justified in refusing to grant
extension of time for making pre-deposit. It
was only on 30.10.2012 that the time was
granted and as the pre-deposit could not be
made, the Court, on the very next date i.e.
08.11.2012,
proceeded
to
reject
the
application seeking extension of time along
with application under Section 34 of the
Act of 1996. He has relied upon decisions
rendered in Goodyear India Limited vs.
Norton Intech Rubbers Private Limited
and Anr. (2012) 6 SCC 345; Snehadeep
Structures
Private
Limited
vs.
Maharashtra Small Scale Industries
Development
Corporation
Limited
(2010) 3 SCC 34; Gujarat State Disaster
Management
Authority
vs.
Aska
Equipments Limited (2022) 1 SCC 61;
Appeal under Section 37 of Arbitration
and Conciliation Act 1996 No.161 of
2024 (Ganga Prasad Memorial Trust
and another vs. DHK Eduserve Limited)
decided on 29.04.2024; judgment of Delhi
High Court in O.M.P. (COMM) No.144 of
2019 (Indian Oil Corporation Limited
vs. FEPL Engineering (P) Limited &
Anr.) decided on 21.10.2019; Arcelor
Mittal Nippon Steel India Limited vs.
Essar Bulk Terminal Limited (2022) 1
SCC 712; judgment of Division Bench of
this Court in Appeal under Section 37 of
Arbitration and Conciliation Act 1996
No.29 of 2024 (M/s Docket Care Systems
vs. M/s Hariwill Electronics India Pvt.
Ltd.) decided on 19.04.2024 and judgment
of Apex Court in Civil Appeal No.6555 of
2022 (Bajaj Auto Limited vs. Ajanta
Press and Mechanical Works & Ors.)
decided on 13.09.2022.

6. Smt. Rama Goel Bansal, learned
counsel appearing for claimant-respondent
submitted that provisions of Section 19 are
mandatory and deposit of 75% of the
awarded amount was to be made before the
objections under Section 34 were heard.
According to her, opportunity was provided
by the Court on 03.10.2012 for making predeposit of 75% of the awarded amount, but,
the State failed to comply the order. As the
Court below was not convinced with the
prayer made by the State, its objections
were rejected on 08.11.2012. According to
her, the petitioner has an alternative remedy
of filing an appeal under Section 37 of the
Act of 1996 and the writ petition under
Article 227 of Constitution of India is not
maintainable. Reliance has been placed
upon a decision of Apex Court rendered in
Bhavan
Construction
vs.
Executive
Engineer
Sardar
Sarovar
Narmada
Nigam Ltd. & Anr. AIR Online 2021 SC
6 and decision rendered by Apex Court in
Pathapati Subba Reddy (Died) by Lrs &
Ors. vs. The Special Deputy Collector
2024 INSC 286. She lastly contended that
the Act of 2006 has been enacted with an
object for speedy resolution of disputes. On
every stage, there is a time limitation which
has to be adhered to by the parties and non
compliance would only lead to dismissal of
the claim.

7. In the instant case, there had been
delay due to procedural approval by the
State which led to dismissal of the
application. She lastly contended that the
Apex Court had made strict observation for
speedy disposal of case in case of Rahul S.
12 All. State of U.P. & Anr. Vs. M/S Jindal Concrete Udyog
299
Shah vs. Jinendra Kumar Ghandhi
(2021) 6 SCC 418.

8. I have heard the respective counsel
for the parties and perused the material on
record.

9. The short controversy engaging
attention of this Court is, "whether the
Court below could have closed opportunity
of the State of making mandatory predeposit of 75% of the awarded amount
once there was failure on the part of State
to deposit the amount in view of order
dated 03.10.2012 and no extension of time
could have been given leading to dismissal
of the application under Section 34 of the
Act of 1996 ?"

10. The issue in regard to mandatory
deposit of 75% of the awarded amount
under Section 19 of the Act of 2006 had
been under consideration of Apex Court
right since the year 2010. In Snehadeep
Structures Private Limited (supra) the
Apex Court, in depth, dealt with Section 19
of the Act of 2006 and in paras 59 to 65 of
the judgment held as under :

"59. Section 19 of the 2006 Act
reads as follows:

"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 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."

This provision, no doubt, requires
the deposit to be made before an
application under Section 34 of the
Arbitration Act is filed. However, we are
not inclined to read this provision of a
subsequent legislation into the provision in
question.

60. While the learned counsel for
the appellant Company urged that the
legislature had used the terms "appeal"
and "application" interchangeably, we are
of the view that we cannot conclusively
infer
the
same.
Use
of
the
term
"application" appears to be in the context
of the dispute resolution mechanism
provided for under Section 17 (sic Section
18)
which
essentially
comprises
of
conciliation
and
arbitration,
to
be
governed by the Arbitration Act, 1996. The
legislature has intended to bring about
improvements to the Interest Act as stated
in the Statement of Objects and Reasons of
the 2006 Act. Indeed, it might have
contemplated a change in the legal position
while enacting the 2006 Act, but we cannot
make that change apply retrospectively. In
this respect, we agree with the reasoning of
the High Court and with the contentions of
learned counsel for the respondents as we
cannot read the provision of a subsequent
enactment into an Act which was repealed
by the former.

61. The learned counsel for the
appellant Company further contended that
when there is doubt about the meaning of a
word
appearing
in
legislation,
the
interpretation that harmonises the object
300 INDIAN LAW REPORTS ALLAHABAD SERIES
and purpose of the object of the statute
should be adopted, rather than the one
which renders the legislation a futility. (See
Nokes
v.
Doncaster
Amalgamated
Collieries Ltd. [1940 AC 1014 : (1940) 3
All
ER
549
(HL)],
Supdt.
and
Remembrancer of Legal Affairs v. Abani
Maity (1979) 4 SCC 85 .

62.
The
Interest
Act
is
a
beneficial piece of legislation intended to
expedite timely payment of money owed to
small-scale
industries.
Most
of
the
contracts of supply or sale that small-scale
industries enter into contain arbitration
clauses. These arbitration proceedings
result in an "award". If the term "appeal"
is interpreted in the limited context of a
"decree or order" and as excluding an
application to set aside or remit such
awards, the very purpose behind the
enactment of the Interest Act will be
defeated. We are in agreement with the
learned counsel for the appellant Company
in this respect.

63. According to the learned
counsel for the appellant Company, if the
term "appeal" is restricted to challenges
launched against a decree or an order, it
will effectively lead to discrimination
between small-scale industries who have an
award in their favour, and the ones which
have procured either a decree or an order
in their favour, submitted that if there is a
construction
that
leads
to
the
constitutionality
of
the
provision
in
question, that should be adopted even if
straining of language is necessary, relying
on State of Kerala v. M.K. Krishnan Nair
(1978) 1 SCC 552.

64. In the light of our views
expressed hereinabove, we do not need to
delve into the question whether Section 7
will lead to an unreasonable classification
if predeposit of interest is not required
before an award is challenged under
Section 34 of the Arbitration Act.

65. Keeping in mind the language
of Section 7, object of the legislation and
the contextual meaning of the term appeal,
we are, therefore, of the view that the term
"appeal" appearing in Section 7 of the
Interest Act should include an application
under Section 34 as well. The judgment and
order of the High Court shall, therefore,
stand set aside and the appeal is allowed to
the extent indicated above. The respondent
Corporation shall make a deposit of 75% of
the amount awarded by the learned
arbitrator by his award dated 30-6-2003 in
court where the application for setting
aside the award is now pending decision.
Such deposit shall be made within three
months from this date. In the event, such
deposit is made the court shall decide the
application for setting aside the award filed
under Section 34 of the Arbitration Act as
expeditiously as possible preferably within
six months from the date of deposit by the
Corporation."

11. In Goodyear India Limited
(supra) the Apex Court extended the time
for making pre-deposit in regard to Section
19 of the Act of 2006. Relevant paras 11
and 12 of the judgment are extracted
hereasunder :

"11.
Having
considered
the
submissions made, both on behalf of the
petitioner and on behalf of the respondents,
we do not see any reason to interfere with
the views expressed, both by the learned
Single Judge, as also the Division Bench
with regard to Section 19 of the 2006 Act.
It may not be out of place to mention that
the provisions of Section 19 of the 2006
Act, had been challenged before the Kerala
High Court in Kerala SRTC v. Union of
India (2010) 1 KLT 65 , where the same
12 All. State of U.P. & Anr. Vs. M/S Jindal Concrete Udyog
301
submissions
were
negated
and,
subsequently, the matter also came up to
this Court, when the special leave petitions
were dismissed, with leave to make the
predeposit in the cases involved, within an
extended period of ten weeks. We may also
indicate that the expression "in the manner
directed by such court" would, in our view,
indicate the discretion given to the court to
allow the predeposit to be made, if felt
necessary, in instalments.

12. Having regard to the above,
we are not inclined to entertain the special
leave petitions filed by M/s Goodyear India
Ltd. and the same are, accordingly,
dismissed. However, in keeping with the
other decisions rendered in these cases, we
extend the time for predeposit by the
petitioner, by a further period of twelve
weeks. If such deposit is made, the appeal
shall be treated to be in order and,
thereafter, the same may be proceeded
with."

12.
In
Gujarat
State
Disaster
Management Authority (supra), the Apex
Court
considering
both
the
above
judgments granted time for making predeposit. Relevant paras 13 to 15 of the
judgments are extracted hereasunder :

"13. On a plain/fair reading of
Section 19 of the MSME Act, 2006,
reproduced hereinabove, at the time/before
entertaining the application for setting
aside the award made under Section 34 of
the Arbitration and Conciliation Act, the
appellant-applicant has to deposit 75% of
the amount in terms of the award as a predeposit. The requirement of deposit of 75%
of the amount in terms of the award as a
pre-deposit is mandatory. However, at the
same time, considering the hardship which
may be projected before the appellate court
and if the appellate court is satisfied that
there shall be undue hardship caused to the
appellant-applicant to deposit 75% of the
awarded amount as a pre-deposit at a time,
the court may allow the pre-deposit to be
made in instalments.

14. An identical question came to
be considered by this Court in Goodyear
(India) Ltd. v. Norton Intech Rubbers (P)
Ltd., (2012) 6 SCC 345. In paras 10 and
11, this Court observed and held as under :
(SCC pp. 347-48)

"10. In his submissions, Mr
Ramachandran has referred to the various
decisions, all of which, however, are in the
context of enactments in which discretion
has been left to the appellate body to either
waive or reduce the amount of pre-deposit,
which factor is absent in the present case.
In support of his contention, however, he
referred to and relied upon the decision of
this Court in Snehadeep Structures (P) Ltd.
v. Maharashtra Small-Scale Industries
Development Corpn. Ltd. (2010) 3 SCC 34
wherein while considering the question as
to whether an application under Section 34
of the Arbitration and Conciliation Act,
1996, could be treated to be an appeal, a
question incidentally arose as to whether if
the same was to be treated as an appeal,
would it be necessary to comply with the
provisions of Section 19 of the 2006 Act.
Their
Lordships
observed
that
the
provision, no doubt, requires pre-deposit to
be made before an application under
Section 34 of the Arbitration Act is filed,
but that they were not inclined to read that
provision into the provision in question.
The facts of the said case are different from
the facts of this case and it would be
difficult to import the ratio of the decision
in the above case into the facts of this case.

11.
Having
considered
the
submissions made, both on behalf of the
petitioner and on behalf of the respondents,
we do not see any reason to interfere with
302 INDIAN LAW REPORTS ALLAHABAD SERIES
the views expressed, both by the learned
Single Judge, as also the Division Bench
with regard to Section 19 of the 2006 Act.
It may not be out of place to mention that
the provisions of Section 19 of the 2006
Act, had been challenged before the Kerala
High Court in Kerala SRTC v. Union of
India (2010) 1 KLT 65, where the same
submissions
were
negated
and,
subsequently, the matter also came up to
this Court, when the special leave petitions
were dismissed, with leave to make the predeposit in the cases involved, within an
extended period of ten weeks. We may also
indicate that the expression "in the manner
directed by such court" would, in our view,
indicate the discretion given to the court to
allow the pre-deposit to be made, if felt
necessary, in instalments."

15. In view of the above and
considering the language used in Section
19 of the MSME Act, 2006 and the object
and purpose of providing deposit of 75% of
the awarded amount as a pre-deposit while
preferring
the
application/appeal
for
setting aside the award, it has to be held
that the requirement of deposit of 75% of
the awarded amount as a pre-deposit is
mandatory. Therefore, as such, both the
High Court as well as the learned
Additional District Judge (Commercial),
Dehradun were justified in directing the
appellant to deposit 75% of the awarded
amount as a pre-deposit."

13. In M/s Docket Care Systems
(supra) the Division Bench of this Court
had also extended time for making predeposit of 75% of the awarded amount so
that the application under Section 34 is
heard.

14. The Delhi High Court in O.M.P.
(Comm) 11 of 2023 (Central University
of Jharkhand vs. M/s King Furnishing &
Safe Co.) decided on 22.02.2024 held that
there is no bar in filing a petition under
Section 34 of Act of 1996. It can be filed
without pre-deposit of 75% of the awarded
amount. However, the said petition will not
be entertained without deposit of 75% of
the awarded amount. Thus, the Court had
distinguished the two situation i.e. one,
filing of a petition under Section 34, and,
another is of its entertainment. According
the Court, the petition could only be
entertained when pre-deposit of 75% of the
awarded amount was made.

15. Here, in the instant case, the Court
below on 08.11.2012 has rejected not only
the application seeking extension of time
for making pre-deposit but also on the same
date has rejected the application under
Section 34 on the ground that once the time
was granted on 03.10.2012 for making predeposit, which the petitioners have failed,
thus both the applications filed for seeking
extension of time as well as application
under Section 34 was rejected.

16. It is an admitted case that in 2014
the State had deposited 75% of the awarded
amount through draft along with a recall
application as well as delay condonation
application for recalling the order dated
8.11.2012. The pre-deposit of 75% of the
awarded
amount
has
already
been
withdrawn by the claimant-respondent, but,
the Court below has rejected the delay
condonation
application
which,
in
consequence, led to dismissal of recall
application.

17. In Silpi Industries and others vs.
Kerala
State
Road
Transport
Corporation and another (2021) 18 SCC
790, the Apex Court held that in order to
seek benefits of provision under Act of
2006, the seller should have registered
12 All. State of U.P. & Anr. Vs. M/S Jindal Concrete Udyog
303
under the provisions of the Act, as on the
date of entering into the contract. In any
event, for the supplies pursuant to the
contract made before the registration of the
unit under the provisions of Act of 2006, no
benefit can be sought by such entity, as
contemplated under the Act of 2006.
Relevant paras 42 and 43 of the judgment
are extracted hereas under :

"42. Though the appellant claims
the benefit of provisions under the Msmed
Act, on the ground that the appellant was
also supplying as on the date of making the
claim, as provided under Section 8 of the
Msmed Act, but same is not based on any
acceptable material. The appellant, in
support of its case placed reliance on a
judgment of the Delhi High Court in GE
T&D India Ltd. v. Reliable Engg. Projects
& Mktg. 2017 SCC OnLine Del 6978, but
the said case is clearly distinguishable on
facts as much as in the said case, the
supplies continued even after registration
of entity under Section 8 of the Act. In the
present case, undisputed position is that the
supplies
were
concluded
prior
to
registration of supplier. The said judgment
of the Delhi High Court relied on by the
appellant also would not render any
assistance in support of the case of the
appellant. In our view, to seek the benefit of
provisions under the Msmed Act, the seller
should have registered under the provisions
of the Act, as on the date of entering into
the contract. In any event, for the supplies
pursuant to the contract made before the
registration of the unit under provisions of
the Msmed Act, no benefit can be sought by
such entity, as contemplated under the
Msmed Act.

43.
While
interpreting
the
provisions of Interest on Delayed Payments
to Small Scale and Ancillary Industrial
Undertakings Act, 1993, this Court, in the
judgment in Shanti Conductors (P) Ltd. v.
Assam SEB, (2019) 19 SCC 529 has held
that date of supply of goods/services can be
taken as the relevant date, as opposed to
date on which contract for supply was
entered, for applicability of the aforesaid
Act. Even applying the said ratio also, the
appellant is not entitled to seek the benefit
of the Act. There is no acceptable material
to show that, supply of goods has taken
place or any services were rendered,
subsequent to registration of the appellant
as the unit under the Msmed Act, 2006. By
taking recourse to filing memorandum
under sub-section (1) of Section 8 of the
Act, subsequent to entering into contract
and supply of goods and services, one
cannot assume the legal status of being
classified under the Msmed Act, 2006, as
an
enterprise,
to
claim
the
benefit
retrospectively from the date on which the
appellant entered into contract with the
respondent."

18. The entire thrust by the State was
that supply of goods was made between
2002 and 2004. Act of 2006 came into
effect from 02.10.2006. The question,
which needs adjudication is as to whether
reference made under Section 18 at the
behest of the
claimant-respondent is
maintainable or not before the Facilitation
Council as the entire supply was made prior
to enforcement of Act of 2006.

19. Section 8(1) of Act of 2006
provides for filing of memorandum of
micro, small and medium enterprises for
those entrepreneurs who wants to establish
them. Proviso to Section 8(1) states that
any person who, before the commencement
of the Act, had already established a small
scale industry and obtained a registration
certificate; and an industry engaged in the
manufacture
or
production of
goods
304 INDIAN LAW REPORTS ALLAHABAD SERIES
pertaining to any industry specified in the
First
Schedule
to
the
Industries
(Development and Regulation) Act 1951,
shall within one hundred and eighty days
from the commencement of this Act file the
memorandum. Relevant Section 8(1) of Act
of 2006 is extracted hereas under :

"8. Memorandum of micro,
small and medium enterprises. (1) Any
person who intends to establish,--

(a) a micro or small enterprise,
may, at his discretion; or

(b) a medium enterprise engaged
in providing or rendering of services may,
at his discretion; or

(c) a medium enterprise engaged
in the manufacture or production of goods
pertaining to any industry specified in the
First
Schedule
to
the
Industries
(Development and Regulation) Act, 1951
(65 of 1951), shall file the memorandum of
micro, small or, as the case may be, of
medium enterprise with such authority as
may be specified by the State Government
under sub-section (4) or the Central
Government under sub-section (3):

Provided that any person who,
before the commencement of this Act,
established--

(a) a small scale industry and
obtained a registration certificate, may, at
his discretion; and

(b) an industry engaged in the
manufacture or production of goods
pertaining to any industry specified in the
First
Schedule
to
the
Industries
(Development and Regulation) Act, 1951
(65 of 1951), having investment in plant
and machinery of more than one crore
rupees but not exceeding ten crore rupees
and, in pursuance of the notification of the
Government of India in the erstwhile
Ministry
of
Industry
(Department
of
Industrial
Development)
number
S.O.
477(E), dated the 25th July, 1991 filed an
Industrial Entrepreneur's Memorandum,
shall within one hundred and eighty days
from the commencement of this Act, file the
memorandum, in accordance with the
provisions of this Act."

20. Thus, the question as to the
applicability of Act of 2006 and validity of
the award made by Facilitation Council in
the year 2011 is still matter to be
considered in proceedings under Section 34
of Act of 1996.

21. By the orders impugned, the doors
for effective adjudication on merits has
been closed down by the Courts below. The
time for making pre-deposit of 75% of the
awarded amount was granted once on
03.10.2012 and the Court below should
have taken a lenient view as the matter was
not being adjudicated nor any interim order
was operating and time should have been
extended so as to enable the State to have
made the pre-deposit before the application
under Section 34 was entertained and
heard.

22. This Court finds that the very basis
of the award made in the year 2011 has
been assailed on the ground of competence
of the Facilitation Council for entertaining
it as the Act does not postulate any
situation for entertaining and resolving any
dispute
for
supplies
made
prior
to
enforcement of Act of 2006. The only
saving is the proviso to Section 8(1) of Act
of 2006.

23. In Silpi Industries and others
(supra) the Apex Court had in clear terms
held that no benefit can be sought by such
entity which was not registered before the
contract was entered between the parties.
12 All. Atul Kumar Singh @ Atul Rai Vs. State of U.P.
305

24. In such a situation, I find that the
matter needs to be heard on merit and State
be directed to comply the mandatory
provisions of Section 19 making a predeposit of 75% to the awarded amount by
extending the time, as has been done by
Hon'ble Apex Court in case of Goodyear
India
Limited
(supra),
Snehadeep
Structures Private Limited (supra) and
Gujarat State Disaster Management
Authority (supra).

25. Thus, looking to the facts of the
case that award was made in the year 2011
for an amount of Rs.10,26,275.86, almost
thirteen years have elapsed and the matter
could not be heard on merit despite
Rs.7,69,707/- has been deposited by the
State and withdrawn by the claimantrespondent in the year 2014, to balance the
equity, the State is hereby directed to
deposit Rs.20,00,000/- within one month
from today, which the claimant-respondent
would be entitled to withdraw and the
matter would be heard by the Court below
on merits.

26. In view of the above, the order
dated 08.11.2012 rejecting application
seeking extension of time along with
application under Section 34 of Act of 1996
as well as order dated 23.02.2017 rejecting
delay condonation application as well as
recall application are hereby set aside. The
matter is remitted back to the District
Judge, Mathura to hear the application filed
by the petitioner-State under Section 34
of Act of 1996 subject to deposit of
Rs.20,00,000/- (Rupees Twenty Lakhs
only) within a period of one month from
today. In case of default by the State in
making deposit of the aforesaid amount
within the stipulated time, the orders
passed by the Court below would stand
revived.

27. The entire exercise shall be carried
out by the District Judge, post deposit by
the State, within a period of three month.

28. In the result, the writ petition
succeeds in part.
----------
(2024) 12 ILRA 305
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 10.12.2024

BEFORE

THE HON'BLE RAJESH SINGH CHAUHAN, J.

Application U/S 482 No. 5495 of 2023

Atul Kumar Singh @ Atul Rai ...Applicant
Versus
State of U.P. ...Opposite Party

Counsel for the Applicant:
Kaustubh Singh, Malay Prasad

Counsel for the Opposite Party:
G.A.

Criminal Law - The Code of Criminal
Procedure, 1973 - Section 177 - Territorial
Jurisdiction - Section 177 Cr.P.C. provides
that every offence shall ordinarily be
inquired into and tried by a court in whose
jurisdiction
it
was
committed.
The
jurisdiction
of
a
Criminal
Court
is
determined by: (i) the offence and/or (ii)
the offender. The question of territorial
jurisdiction in criminal cases revolves
around: (i) place of commission of the
offence; (ii) place where the consequence
of an act, both of which constitute an
offence, ensues; (iii) place where the
accused was found; (iv) place where the
victim was found; (v) place where the
property in respect of which the offence
was committed was found; or(vi) place
where the property forming the subjectmatter of an offence was required to be
returned or accounted for. In the instant
case, the Applicant's argument was that