Madras High Court Waives Deposit Requirement Under Section 19 Of MSMED Act For Setting Aside Award Issued Under Section 18

Madras High Court Waives Deposit Requirement Under Section 19 Of MSMED Act For Setting Aside Award Issued Under Section 18

The Hon’ble Madras High Court dispensed with the requirement for payment of deposit contemplated under S. 19 of the MSMED Act, 2006 while hearing an application filed under Section 34 of the Arbitration & Conciliation Act, 1996.

Arguments were advanced on behalf of the Applicant, M/s Swiss Garnier Genexiaa Sciences Pvt. Ltd. by Ld. Senior Counsel Sricharan Rangarajan for M/s Lakshmikumaran and Sridharan Attorneys to the effect that the benefit of the special mechanism in Chapter V of the MSMED Act would only enure to a supplier who was registered as a Micro or Small entity as on the date of entering into the contract/purchase order.

Whereas the Respondent(s) who had filed the reference before the MSEFC, M/s Avant Garde Cleanroom & Engg. Solutions Pvt. Ltd. and Avant Garde Healthcare Engineering Solutions Pvt. Ltd., had obtained registration as a micro/small enterprise subsequent to entering into the contract/purchase order. It was argued that the Respondents had wrongly invoked the jurisdiction of the MSEFC as they were not registered as micro/small entities at the relevant point in time.

These contentions were sought to be refuted on behalf of the Respondent by the Ld. Senior Counsel P. V. Balasubramanian, for J. Lenin on the count that the jurisdiction had been rightly invoked.

The Hon’ble Madras High Court heard arguments in detail and recorded prima facie satisfaction with the Applicant’s arguments that the statutory authority under the MSMED Act would only have the jurisdiction to entertain a dispute when the supplier had been registered as a Micro or Small enterprise under the MSMED Act at that relevant point of time. While granting the parties liberty to canvass all grounds at the time of disposal of the Original Petition, the Hon’ble High Court dispensed with the requirement to make the deposit under Section 19 of the MSMED Act.

Advocates:

For M/s Swiss Garniers Genexiaa Sciences Pvt. Ltd.: Lakshmikumaran and Sridharan Attorneys, Ld. Senior Counsel M. Sricharan Rangarajan, assisted by Advocates Krithika Jaganathan, Kiran Manokaran, Nirupama Shankar, Deepak Krishnan and Gayathri Rajagopalan.

For M/s Avant Garde Cleanroom & Engg. Solutions Pvt. Ltd. and Avant Garde Healthcare Engineering Solutions Pvt. Ltd.: Ld. Senior Counsel P. V. Balasubramanian, for J. Lenin.