Eveready Industries Settles Dispute with Micro and Small Enterprises Facilitation Council

The case of Eveready Industries India Limited vs. Micro and Small Enterprises Facilitation Council, Chennai Region & Anr. is a significant ruling by the Supreme Court of India involving a dispute between a corporate entity and a regulatory body overseeing small businesses. The issue was resolved through mediation, and the Supreme Court formalized the settlement, emphasizing the role of alternative dispute resolution in commercial conflicts.

The Supreme Court’s judgment highlights the benefits of amicable settlements over prolonged litigation, ensuring efficiency and mutual benefit for both parties.

Background of the Case

The appellant, Eveready Industries India Limited, had a pending dispute with the Micro and Small Enterprises Facilitation Council, Chennai Region. The dispute arose over financial claims related to transactions governed by the Micro, Small and Medium Enterprises Development Act, 2006.

During the Supreme Court proceedings, the Court appointed senior counsel, Mr. R. Basant, as a mediator to facilitate discussions between the parties. The mediation process led to a mutually agreed settlement, which was documented in a Joint Memo dated 31.07.2017.

As part of the settlement, Eveready Industries agreed to pay Rs. 61,00,000 (Sixty-One Lacs) to the respondent, which was acknowledged in Court.

Key Legal Issues

Whether the dispute between Eveready Industries and the Micro and Small Enterprises Facilitation Council could be resolved through mediation.
Whether the financial settlement was fair and acceptable to both parties.
Whether the Supreme Court should formalize the settlement and allow withdrawal of the deposit made by Eveready Industries.

Arguments by the Petitioner (Eveready Industries India Limited)

The petitioner, represented by legal counsel, argued that:

The dispute should be resolved amicably to avoid prolonged litigation.
The company was willing to settle the claim by paying Rs. 61,00,000 to the respondent.
The Supreme Court should allow the withdrawal of the deposit made before the Court.

Arguments by the Respondent (Micro and Small Enterprises Facilitation Council)

The respondent, represented by counsel, countered:

The settlement amount was acceptable and acknowledged.
The respondent had no further claims against Eveready Industries.
The Court should approve the settlement and formalize the agreement.

Supreme Court’s Judgment

The Supreme Court, in a judgment delivered by Justice Kurian Joseph and Justice R. Banumathi, formalized the settlement and disposed of the appeal.

1. Mediation Process Was Successful

The Court appreciated the efforts of senior counsel Mr. R. Basant in facilitating the settlement:

“It is heartening to note that the mediation has been fruitful and the parties have settled their disputes amicably.”

2. Settlement Amount of Rs. 61,00,000 Approved

The Court confirmed that the settlement amount had been received by the respondent:

“The appellant has handed over a Demand Draft for a sum of Rs. 61,00,000/- to Respondent No.2, which has been duly acknowledged by the learned counsel for Respondent No.2.”

3. Withdrawal of Deposit Allowed

The Court granted permission to Eveready Industries to withdraw its deposit made before the Court:

“In view of the settlement, the appellant is permitted to withdraw the deposit made before this Court, pursuant to the order of this Court, along with the accrued interest.”

4. Contribution to Supreme Court Bar Clerk’s Association

The Court directed both parties to contribute Rs. 25,000 each to the Supreme Court Bar Clerk’s Association as a token of appreciation for the mediation process:

“Since the parties have been benefited by the process, we direct both the parties to pay an amount of Rs. 25,000/- to the Supreme Court Bar Clerk’s Association, within a month, which shall be equally shared between them.”

5. Formal Disposition of the Appeal

The Court disposed of the appeal in terms of the Joint Memo:

“This appeal is disposed of in terms of settlement by way of Joint Memo dated 31.07.2017, which shall form part of this judgment.”

Key Takeaways from the Judgment

Mediation is an effective dispute resolution tool: The case demonstrates that alternative dispute resolution mechanisms can save time and resources.
Financial settlements can prevent prolonged litigation: Both parties benefited from an amicable resolution instead of engaging in a lengthy court battle.
The Supreme Court encourages corporate responsibility: The ruling promotes ethical business practices by ensuring fair settlements.
Judicial orders can formalize settlements: The Court’s approval ensured that the agreement was binding on both parties.

Impact of the Judgment

This ruling has significant implications for commercial dispute resolution in India:

Encourages companies to engage in mediation before pursuing litigation.
Sets a precedent for resolving disputes under the Micro, Small and Medium Enterprises Development Act, 2006.
Demonstrates that courts support fair settlements in business disputes.

Conclusion

The Supreme Court’s ruling in Eveready Industries India Limited vs. Micro and Small Enterprises Facilitation Council, Chennai Region & Anr. highlights the advantages of mediation in resolving business disputes. By approving the settlement and allowing withdrawal of the deposit, the judgment ensures fairness and efficiency in commercial conflict resolution.

This decision serves as a precedent for businesses seeking amicable solutions, reinforcing the importance of alternative dispute resolution mechanisms in India’s legal landscape.

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