Madhya Pradesh High Court
Bharat Sanchar Nigam Ltd. vs M/S Prasha Technologies Ltd. on 20 June, 2025
Author: Vishal Dhagat
Bench: Vishal Dhagat
NEUTRAL CITATION NO. 2025:MPHC-JBP:26552
1 AA-62-2024
IN THE HIGH COURT OF MADHYA
PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VISHAL DHAGAT
ARBITRATION APPEAL No. 62 of 2024
BHARAT SANCHAR NIGAM LTD. AND OTHERS
Versus
M/S PRASHA TECHNOLOGIES LTD.
Appearance:
Shri Rahul Rawat - Advocate for the appellants.
Shri Surendra Prasad Tiwari - Advocate with Anup K. Nagar - Advocate for
the respondent.
Reserved on : 21.04.2025
Delivered on : 20.06.2025
..............................................................................................................................................
ORDER
Appellants have filed arbitration appeal under Section 37 of the
Arbitration and Conciliation Act, 1996 challenging reference order dated
09.11.2023 passed by 11th District Judge, Bhopal (MP) under Section 34
of the Act of 1996.
2. Brief facts of the case are as under :-
Respondent has filed an application for making payment of
arrears of bills in respect of supply of Diesel Generating Sets to
appellants. In said application, Sole Arbitrator was appointed who
passed award dated 15.04.2008. Appeal was filed under Section 19 read
with Section 34 of the Act of 1996 before the District Judge, Bhopal InSignature Not Verified
Signed by: SHABANA
ANSARI
Signing time: 23-06-2025
12:08:37
NEUTRAL CITATION NO. 2025:MPHC-JBP:265522 AA-62-2024
MJC No.79/2021. Said MJC was dismissed by District Judge vide its
order dated 09.11.2023. Said order is under challenge before this Court
by filing this arbitration appeal. Said appeal was filed on grounds that
contract was a works contract and respondent was not registered under
the Micro, Small and Medium Enterprises Development Act, 2006
(hereinafter referred to as “MSME Act, 2006“) and respondent has not
filed any registration under MSME Act, 2006, therefore, said Act was
not applicable. Sole Arbitrator was appointed by Facilitation Council
and said appointment was without jurisdiction.
3. Learned counsel appearing for appellants has challenged the
order on ground that Facilitation Council at Punjab was withoutjurisdiction for appointment of Sole Arbitrator. Contract between
appellant and respondents is Works contract. Generating Sets which are
supplied by respondent will not fall within the ambit of MSME Act
2006, therefore, order passed by Sole Arbitrator as well as appellate
authority under Section 19 of the Act, 2006 and Arbitration and
Conciliation Act, 1996 is without jurisdiction. On aforesaid ground
counsel for appellant prays for allowing this arbitration appeal and set
aside the impugned order.
4. Learned counsel appearing for the respondent supported the
order passed by District Judge and award passed by Sole Arbitrator and
submitted that no illegality has been committed. Applicant was Supplier
and it cannot be said that contract was a Works Contract. It is furtherSignature Not Verified
Signed by: SHABANA
ANSARI
Signing time: 23-06-2025
12:08:37
NEUTRAL CITATION NO. 2025:MPHC-JBP:26552
3 AA-62-2024
submitted that supply of generating sets is covered under MSME Act,
2006. Order passed was within jurisdiction of Sole Arbitrator. There is
no illegality and none of the ground which are mentioned in Section 34
of the Act of 1996 is available to appellant.
5. Heard the counsel for the parties.
6. Works contract is defined in Section 2(I) of the Madhya
Pradesh Madhyastam Adhikaran Adhiniyam,1983. As per definition,
Works contract is an agreement for construction, repair, maintenance of
building, dam, canal, reservoir tank, Lake, road, Bridge, Culver, factory,
workshop, powerhouse, transformer, or other works. From aforesaid
definition, it is clear that Works contract means civil work for new
construction, repair, or maintenance. It also includes construction, repair
and maintenance of a powerhouse or transformers. Respondents were
granted tender for supply of generating sets and its installation. It does
not involve construction, repair and maintenance of powerhouse or
transformers or such other work. Supply is in respect of articles and its
installation, therefore, same will not come within the definition of
Works contract. In view of same, MP Madhyastam Adhikaran
Ahiniyam, 1983 is not applicable in this case.
7. Second question to be considered by this Court is whether
manufacturing activity of generating sets will be covered under the
MSME, Act 2006.
8. MSMES Act, 2006 will include medium enterprises engage in
Signature Not Verified
Signed by: SHABANA
ANSARI
Signing time: 23-06-2025
12:08:37
NEUTRAL CITATION NO. 2025:MPHC-JBP:26552
4 AA-62-2024
manufacturing or production of goods pertaining to an industry
specified in the Ist Schedule to the Industry Development and
Regulation Act, 1951 and also includes industries engage in
manufacturing or production of goods pertaining to any industry
specified in Ist Schedule having investment in plant and machinery of
more than Once Crore but not exceeding Ten Crores. Industries which
are described in Ist Schedule under Point No.5 mentions electrical
equipment which includes equipment for generation, transmission and
distribution of electricity including transformers. Diesel generating sets
are equipments for generation of electricity, therefore, diesel generating
sets will be covered within the definition of Point No.5(1) of Ist
Schedule of Act of 1951, therefore, said industries will be covered
within the definition of MSME Act, 2006. It is for appellants to show
that industry is having capital or investment more than 10 Crores. No
document has been produced by appellants to show that industry in
question was having investment and capital of more than 10 Crores. Said
point neither has been raised nor taken into consideration before the
Sole Arbitrator or before the Reference Court under Section 34 of the
Act of 1996 and MSME Act, 2006. Since, issue is factual in nature,
therefore, said issue cannot be considered by this Court and that to in
absence of material before it.
9. Sole Arbitrator has been appointed by Facilitation Council at
State of Punjab and Haryana. Affected party may file an application
Signature Not Verified
Signed by: SHABANA
ANSARI
Signing time: 23-06-2025
12:08:37
NEUTRAL CITATION NO. 2025:MPHC-JBP:26552
5 AA-62-2024
under Section 18 before the Facilitation Council within whose
jurisdiction is industry is situated. Respondent has filed memorandum of
manufacturing in which address has been described as “Gurukul
Indraprasth Estate, Faridabad, Pin 121003”. Said fact is reflected in
Ex.P/1 of record before Sole Arbitrator. As address is of Faridabad
which is situated in State of Haryana, therefore, it cannot be said that
order appointing Sole Arbitrator by Facilitation Council at State of
Punjab and Haryana is without jurisdiction.
10. In view of above, no case is made out for interference, hence,
arbitration appeal is dismissed.
(VISHAL DHAGAT)
JUDGE
$A
Signature Not Verified
Signed by: SHABANA
ANSARI
Signing time: 23-06-2025
12:08:37
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