- 1 - HC-KAR NC: 2025:KHC:36522 WP No. 5018 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE R. NATARAJ WRIT PETITION NO. 5018 OF 2022 (GM-RES) BETWEEN: M/S. ICON CONTROLS PVT. LTD. A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE INDIAN COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT NO.127 FIE, PATPARGANJ INDUSTRIAL AREA, PATPARGANJ, DELHI-110092 REPRESENTED BY ITS MANAGING DIRECTOR MR. K. PASUPATHY AGE: 70 YEARS …PETITIONER (BY SRI. ANANTHARAM G.R., ADVOCATE) AND: 1. M/S. POWER NET DISTRIBUTION SOLUTIONS HAVING ITS OFFICE OPP. GOVINDADAS COLLEGE NH-17, SURATHKAL MANGALORE TALUK UTTAR KANNADA DISTRICT REP. BY SECRETARY 2. THE MICRO AND SMALL ENTERPRISES FACILITATION COUNCIL, O/O REGIONAL COMMISSIONER, MYSORE REGION, HIGH VIEW, VINOBA ROAD MYSORE-570005 REP. BY SECRETARY 3. SRI LIONEL ARANHA, ARBITRATOR HAVING HIS OFFICE AT NO.402, SHIVADEEP RESIDENCY, Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:36522 WP No. 5018 of 2022 SHIVABAGH NEW ROAD, SHIVBAGH KADRI, MANGALORE-575004 …RESPONDENTS (BY SRI. NAMAN JHABAK, ADVOCATE FOR VIVEK HOLLA, ADVOCATE FOR RESPONDENT NO.1; NOTICE SERVED ON RESPONDENT NOS.2 AND 3) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR RECORDS IN CASE NO.MSEFC 2/2022 PENDING ON THE FILE OF THE RESPONDENT NO.3 AND QUASH THE REFERENCE MADE BY THE RESPONDENT NO.2 IN CASE NO.DIC/MYS/MSME/MSEFC NO.93/2021 DATED 10.12.2021 OF THE EX-FACIE TIME BARRED CLAIM OF THE RESPONDENT NO.1 FOR ARBITRATION TO THE RESPONDENT NO.3 VIDE ANNEXURE-B BEING BARRED BY LAW AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE R. NATARAJ ORAL ORDER The petitioner has challenged a reference made by the respondent No.2 in Case No.DIC/MYS/MSME/MSEFC NO.93/2021 dated 10.12.2021 as time barred. He has also sought to quash arbitration proceedings which is presently pending before respondent No.3 in case No.MSEFC 02/2022 pursuant to the notice of arbitration dated 04.01.2022. He has also sought for quashing interim order dated 31.01.2022 passed in arbitration proceedings in Case No.MSEFC 02/2022 by the respondent No.3. - 3 - HC-KAR NC: 2025:KHC:36522 WP No. 5018 of 2022 2. Briefly put, the facts of the case are that the respondent No.1 being registered under Micro, Small and Medium Enterprises Development Act, 2006, (henceforth referred to as 'MSMED Act') was beneficiary of a work order issued by the petitioner on 21.01.2012. The respondent No.1 claimed that it had made certain supplies to the petitioner and that the petitioner had failed to pay for the supplies so made. The respondent No.1 therefore, approached the respondent No.2 with a claim against the petitioner to recover a sum of Rs.17,53,680/- plus interest thereon. The respondent No.2 issued notice of the proceedings to the petitioner and on 10.12.2021, noticing that the petitioner had absented from the proceedings referred the parties to arbitration. Following the above, the respondent No.3 was appointed as an arbitrator to decide the claims. 3. The petitioner appeared before the respondent No.3 and filed an application under Section 16 of the Arbitration and Conciliation Act, 1996 for rejection of the claim petition on the ground that the claim made by the respondent No.1 was barred by time. This application was not opposed by the respondent No.1. Nonetheless, the respondent No.3 in terms of an order - 4 - HC-KAR NC: 2025:KHC:36522 WP No. 5018 of 2022 dated 31.01.2022, rejected the application on the ground that the petitioner had also applied to MSME Facilitation Council, East Delhi on 19.03.2020 regarding a debit note raised by it, on 18.03.2013 which directly related to the work order placed on the respondent No.1 herein. It therefore, held that the claim petition cannot be rejected but will be heard and disposed off by the arbitral tribunal in due course. Following this, the respondent No.3, passed an interim order on 16.02.2022 holding inter alia that the arbitral tribunal will deal with the counter claim filed by the petitioner herein before MSEFC AD on 19.03.2020 since the counter claim emanated from the same work order. The petitioner therefore, being aggrieved by the aforesaid order is before this Court. 4. The learned counsel for the petitioner contended that the provisions of the Limitation Act, 1963 are applicable to the proceedings under Arbitration and Conciliation Act, 1996. He contends that the work order in question was issued on 21.01.2012 while, in the claim petition filed by the respondent No.1, he had specifically mentioned that the amount due was payable by 20.06.2012. He therefore, contends that the proceedings taken out by the respondent No.1, in the year - 5 - HC-KAR NC: 2025:KHC:36522 WP No. 5018 of 2022 2020 before the respondent No.2, was barred by time. He contends that this was not a mixed question of law and fact as the respondent No.1 admitted in the claim petition that the amount was due as on 20.06.2012 and the claim was made in the year 2020. He therefore, contends that the application was ex-facie barred by time and that there was no need for the respondent No.3 to postpone the to consideration of this question. He therefore contends that impugned order passed by the respondent No.3 rejecting the application filed by the petitioner under Section 16 of the Arbitration and Conciliation Act, 1996 is liable to be set at nought and consequently, the claim petition filed by the respondent No.1 is also liable to be rejected. 5. The petition is opposed by the respondent No.1 who has filed a detailed statement of objections and has enclosed therewith various invoices pursuant to the work order dated 21.01.2012. It is also contended that this writ petition is not maintainable as the petitioner is bound to question all the issues under Section 34 of the Arbitration and Conciliation Act, 1996. In support of this contention, it has relied upon the judgments of the Hon'ble Apex Court, in the cases of Indian - 6 - HC-KAR NC: 2025:KHC:36522 WP No. 5018 of 2022 Farmers Fertilizer Cooperative Limited Vs. Bhadra Products - 2018 (2) SCC 534 and Bhaven Construction Through Authorised Signatory Premjibhai K. Shah Vs. Executive Engineer Sardar Sarovar Narmada Nigam Limited and Another - (2021) SCC Online SC 8. 6. It is contended that the petitioner had agreed to pay a sum of Rs.17,53,680/- to the respondent No.1 and accordingly, the respondent No.1 had carried out the work and raised periodical invoices. The petitioner had acknowledged the works carried out by the respondent No.1 and had made part payments accordingly. It has placed on record the ledger statement indicating the payments made by the petitioner to the respondent No.1 from time to time. It is also claimed that the respondent No.1 emailed the petitioner seeking balance payment as per the invoices raised. Despite, such communications, it is alleged that the petitioner failed and ignored to pay the same and therefore, the respondent No.1 was compelled to take out proceedings before the respondent no.1 under the MSMED Act. - 7 - HC-KAR NC: 2025:KHC:36522 WP No. 5018 of 2022 7. The learned counsel for the respondent No.1 reiterated the above contentions and submits that the question whether the claim petition was barred by time or not was a mixed question of fact and law and the arbitrator could not have decided the said question at an interim stage. He also contends that various supplies were made beyond the time prescribed under the work order which were accepted by the petitioner. Therefore, the time prescribed under the work order was not given effect to but was waived by the petitioner. He also contends that the petitioner cannot avail a remedy of writ petition before this Court in view of the alternative remedy provided under Section 19 of the MSMED Act, 2006. He has also relied upon judgment of a coordinate bench of this Court in W.P.No.12783/2020 connected W.P.No.12809/2020 and contended that Section 19 of MSMED Act, 2006 provides an alternative and efficacious remedy to the petitioner to challenge the order passed by the arbitral tribunal and therefore, the writ petition is not maintainable. - 8 - HC-KAR NC: 2025:KHC:36522 WP No. 5018 of 2022 8. I have considered the submissions of the learned counsel for the petitioner as well as the learned counsel for the respondent No.1. 9. As rightly contended by the learned counsel for the respondent No.1, the time prescribed under the work order was 14 weeks from 21.01.2012. The respondent No.1 has placed on record invoices which indicate that supplies were made beyond 14 weeks namely on 20.06.2012 and onwards. Therefore, the question whether the parties had acted upon the time stipulated in the work order or not was essentially a question of fact that had to be decided by the arbitrator. Similarly the question whether the claim made by the respondent No.1 is barred by time or not, is also a mixed question of fact and law that has to be decided upon by the arbitrator. 10. As also rightly contended by the learned counsel for the respondent No.1 the petitioner cannot assail the order passed by an arbitrator before this Court as any order including any interim order passed by an arbitrator under MSMED Act, can be questioned in proceedings under Section 24 of MSMED Act as prescribed under Section 19 of MSMED Act, 2006. - 9 - HC-KAR NC: 2025:KHC:36522 WP No. 5018 of 2022 Therefore, without going into the question whether the invoices produced by the respondent No.1 were genuine or not and whether those invoices were pursuant to the work order issued to the respondent No.1 or not, this Court considers it appropriate to relegate the parties before the arbitrator and permit the parties thereafter to avail the remedy of a proceeding before the Civil Court as prescribed under Section 34 of Arbitration and Conciliation Act or as provided under Section 19 of the MSMED act, 2006. 11. The writ petition therefore, stands disposed off on the above terms. 12. All contentions are left open. 13. In view of the pendency of this writ petition, the petitioner had not filed statement of objections before the arbitrator. Therefore, he is permitted to do so within one month from the date of receipt of a copy of this order. Sd/- (R. NATARAJ) JUDGE HJ List No.: 1 Sl No.: 9