The Telangana High Court stated that the MSEFC must address the issue of limitation at the preliminary stage before making a decision on the merits of the case.
The Telangana High Court noted that the question of whether a case can be maintained, especially regarding limitations, should first be addressed by the Micro and Small Enterprises Facilitation Council (MSEFC). Only after this initial decision should the Council consider the case’s merits. This observation came during a Civil Revision Petition against an order from the MSEFC under Section 16 of the Arbitration and Conciliation Act, 1996. Justice P. Sam Koshi emphasized that if issues about the claim’s sustainability arise, they must be resolved first, particularly if they relate to limitations, before the Council moves on to the merits of the case.
The Petitioner was represented by Senior Advocate Vikram Pooserla. The challenge to the order focused on the MSEFC’s decision to address the limitation issue while also considering the claim’s merits. Senior Counsel for the Petitioner referenced the Supreme Court’s ruling in Silpi Industries and others vs. Kerala State Road Transport Corporation and another, which stated that the Limitation Act of 1963 also applies to the Micro, Small and Medium Enterprises Development Act of 2006. He pointed out that under the updated Rules of the Telangana State Micro and Small Enterprises Facilitation Council Rules, 2017, Rule 10(3) indicates that the Council should not consider the merits of the case until it resolves any jurisdictional challenges or disputes regarding its members. He argued that since the petitioner has already raised a clear objection about the claimant’s claim being time-barred, the Council should have addressed this issue first. Only if the decision was against the petitioner should the Council then consider the merits of the case.
The Court noted, “Considering the various decisions mentioned and the contested decision by the MSEFC, we do not see any error in the MSEFC’s conclusion that the limitation issue raised by the respondent should be addressed while evaluating the claimant’s claim.” The Court instructed the MSEFC to prioritize the limitation issue as the first matter to be resolved after the pleadings are complete. The Petition was therefore granted.
Cause Title: M/s K/12 Techno Services Pvt. Ltd. v. M/s Brahma Teja Paper
