M/S. SILPI INDUSTRIES ETC. versus KERALA STATE ROAD TRANSPORT CORPORATION & ANR. ETC.

Citation: [2021] 3 S.C.R. 1044 · Decided: 29-06-2021 · Supreme Court of India · Bench: ASHOK BHUSHAN · Disposal: Dismissed

Cited by 2 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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1044
SUPREME COURT REPORTS
[2021] 3 S.C.R.
M/S. SILPI INDUSTRIES ETC.
v.
KERALA STATE ROAD TRANSPORT CORPORATION
& ANR. ETC.
(Civil Appeal Nos. 1570-1578 of 2021)
JUNE 29, 2021
[ASHOK BHUSHAN AND R. SUBHASH REDDY, JJ.]
Limitation Act, 1963: Applicability to proceedings under AC
Act, 1996 arising out of MSMED Act, 2006 – Held: Limitation Act
is applicable to arbitration covered by s.18(3) of the MSMED Act,
2006 – Arbitration and Conciliation Act, 1996 – Micro, Small and
Medium Enterprises Development Act, 2006 – s.18(3).
Micro, Small and Medium Enterprises Development Act, 2006:
s.18(3) – Maintainability of counter claim in arbitration proceedings
initiated as per s.18(3) of  MSMED Act – Held: In view of s.23(2A)
of AC Act, 1996, counter claim/set off is maintainable – Arbitration
and Conciliation Act, 1996 – s.23(2A).
Dismissing the appeals, the Court
HELD: 1.1 The Micro, Small and Medium Enterprises
Development Act, 2006 was enacted to provide, for facilitating
the promotion and development and enhancing the
competitiveness of micro, small and medium enterprises and for
matters connected therewith or incidental thereto.  By bringing
the aforesaid Act (Act 27 of 2006) w.e.f. 16th June 2006, the earlier
Act, namely, Interest on Delayed Payments to Small Scale and
Ancillary Industrial Undertakings Act, 1993 was repealed by virtue
of Section 32 of the 2006 Act. [Para 16][1056-F-G]
1.2 From the Statement of Objects and Reasons of both
the above legislations, it is clear that the earlier legislation, i.e.,
Act No.32 of 1993 was confined only with regard to delayed
payments to small scale and ancillary industrial undertakings but
by subsequent enactment of 2006, a comprehensive legislation
was brought covering the micro, small and medium enterprises.
[Para 17][1057-F-G]
[2021] 3 S.C.R. 1044
1044
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1.3 As per Section 15 of the 2006 Act, where supplier
supplies any goods or renders any services to any buyer, the
buyer shall make payment on or before the agreed date between
the parties in writing or where there is no agreement, before the
appointed day. Section 16 deals with date from which and rate of
interest payable in the event of not making the payment. The
recovery mechanism for the amount due is covered by Sections
17 and 18 of the said Act. If any party has a dispute with regard to
amount due under Section 17, a reference is required to be made
to the Micro and Small Enterprises Facilitation Council. On such
reference, the Council is empowered to conduct conciliation in
the matter or seek assistance of any institution or centre providing
alternate dispute resolution services by making a reference to
such institution for conducting conciliation. If the conciliation is
not successful, as contemplated under Section 18(2) of the said
Act, same stands terminated under Section 18(3) of the said Act.
Thereafter, the Council shall either itself take up the dispute for
arbitration or refer it to any institution or centre providing
alternate dispute resolution services for such arbitration and the
provisions of Arbitration and Conciliation Act, 1996 are made
applicable as if the arbitration was in pursuance of arbitration
agreement between the parties, under sub-section (1) of Section
7 of the 1996 Act. Applicability of Limitation Act, 1963 to the
arbitrations is covered by Section 43 of the 1996 Act. [Para
18][1065-E-H; 1066-A-B]
Andhra Pradesh Power Coordination Committee & Ors.
v. Lanco Kondapalli Power Ltd. & Ors. (2016) 3 SCC
468 : [2015] 12 SCR 447 – affirmed.
1.4 A reading of Section 43 itself makes it clear that the
Limitation Act, 1963 shall apply to the arbitrations, as it applies
to proceedings in court. When the settlement with regard to a
dispute between the parties is not arrived at under Section 18 of
the 2006 Act, necessarily, the Micro and Small Enterprises
Facilitation Council shall take up the dispute for arbitration under
Section 18(3) of the 2006 Act or it may refer to institution or
centre to provide alternate dispute resolution services and
provisions of Arbitration and Conciliation Act 1996 are made
applicable as if there was an agreement between the parties under
M/S. SILPI INDUSTRIES ETC. v. KERALA STATE ROAD
TRANSPORT CORPORATION
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SUPREME COURT REPORTS
[2021] 3 S.C.R.
sub-section (1) of Section 7 of the 1996 Act. In view of the express
provision applying the provisions of the Limitation Act, 1963 to
arbitrations as per Section 43 of the Arbitratio

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