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Judgment
Anand Venkatesh, J
Heard the learned Senior Counsel appearing on behalf of the petitioner and carefully perused the materials available on record.
2.The sum and substance of the grievance expressed by the learned Senior Counsel is that, the award passed by the Council is bereft of reasons and it falls foul of the judgment of the Apex Court in Dyna Technologies Pvt. Ltd. v. Crompton Greaves Ltd. reported in (2019) 20 SCC 1. The learned Senior Counsel by relying upon Clause 10 of the tender terms and conditions, submitted that, it provided for a particular methodology for imposing penalty, whereby a penalty of 1% will be imposed of the value of the delayed supply for every week of delay or part thereof after the due date of delivery for a period of two weeks. For the delay beyond two weeks, it will be at the rate of 3% of the value of the delayed supply and installation for each week of delay or part thereof till completion and the maximum penalty was limited to 10% of the total contract value.
3.The learned Senior Counsel, by pointing out to the proceedings of the respondent dated 29.05.2020, submitted that, what was payable to the petitioner after the completion of the entire supply was paid to the extent of 80% and the dispute was regarding the balance 20%. The balance 20% amount worked out to Rs.1,29,49,887/-. Out of this amount, the respondent recovered a sum of Rs.58,88,575/-. While computing this amount, the respondent has imposed an additional 5% penalty and there is also no breakup on the number of days delay and the percentage of penalty that was imposed while arriving at the total amount of Rs.58,88,575/-. What was ultimately paid to the petitioner was only a sum of Rs.70,61,312/-. The learned Senior Counsel, by pointing out to the award, submitted that, there is absolutely no discussion on the part of the Council or application of mind, in the manner in which the Council was satisfied with the deduction of the penalty amount made by the respondent.
4.The learned counsel appearing on behalf of the respondent Corporation submitted that the entire calculation that was placed before the Council and which was relied upon by the Council, will also be placed before this Court.
5.On a careful reading of the award, it is seen that conciliation proceedings were going on from September 2021 and ultimately, the conciliation proceedings failed and the Council decided to conduct the arbitration proceedings under Section 18(3) of the Micro Small and Medium Enterprises Development Act, 2006. Accordingly, the hearing was conducted on 28.07.2022 and the award was also passed on the very same day. Two issues arises for consideration on the face of the award and they are :
(a) Whether the Council after having conducted the conciliation proceedings between the parties, should have referred the matter for arbitration to a different Arbitral Tribunal; and
(b)The Council having decided to conduct the arbitration proceedings, should have followed some procedure and should have assigned reasons reflecting the application of mind and the same is absent, due to the fact that the award itself came to be passed on the very same day, when the proceedings were conducted.
6.The learned counsel appearing on behalf of the respondent Corporation submitted that she is led by the learned Additional Advocate General and seeks for some more time to take instructions and to place relevant materials before this Court.
7.Post this petition under the caption “Part Heard Cases” on 22.01.2026.