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Issues Involved:
1. Validity of the order passed by the Chairman, Industrial Facilitation Council. 2. Applicability of Section 18(3) of the Micro, Small and Medium Enterprises Development Act, 2006 vis-à-vis the Arbitration and Conciliation Act, 1996. 3. The scope of counterclaims by the buyer under Section 17 of the Act, 2006. 4. The role of the Council as an Arbitrator under Section 18(3) of the Act, 2006. 5. Overriding effect of the Act, 2006 over the Act, 1996. Summary: 1. Validity of the Order Passed by the Chairman, Industrial Facilitation Council: The petitioner challenged the order of the Chairman, Industrial Facilitation Council, which proceeded with conciliation despite the petitioner's objections. The Council rejected the petitioner's plea that the dispute should be referred to arbitration as per the agreement under the Arbitration and Conciliation Act, 1996 (the Act, 1996). The Council held that the Micro, Small and Medium Enterprises Development Act, 2006 (the Act, 2006) was a special enactment and took precedence over the Act, 1996. 2. Applicability of Section 18(3) of the Act, 2006 vis-à-vis the Act, 1996: The petitioner argued that Section 18(3) of the Act, 2006 should be read harmoniously with the Act, 1996, and that the latter should prevail. The Court rejected this argument, stating that the Act, 2006, being a special enactment, has an overriding effect as per Section 24 of the Act, 2006. The Court emphasized that the Act, 2006 provides a specific mechanism for dispute resolution, which includes conciliation and arbitration by the Council itself. 3. The Scope of Counterclaims by the Buyer under Section 17 of the Act, 2006: The petitioner contended that Section 17 of the Act, 2006, which deals with the recovery of amounts due, excludes the possibility of counterclaims by the buyer. The Court rejected this contention, stating that the liability to pay under Section 17 includes the mutual rights of the parties, and the Act, 2006 allows for counterclaims by the buyer against the seller. 4. The Role of the Council as an Arbitrator under Section 18(3) of the Act, 2006: The petitioner argued that the Council could not act as an Arbitrator if there was an existing arbitration agreement under the Act, 1996. The Court held that Section 18(3) of the Act, 2006 explicitly allows the Council to act as an Arbitrator or refer the matter to arbitration, even if there is an existing arbitration agreement. The Court upheld the Council's decision to proceed with arbitration under the Act, 2006. 5. Overriding Effect of the Act, 2006 over the Act, 1996: The Court highlighted that the Act, 2006 has an overriding effect as per Section 24, which states that the provisions of Sections 15 to 23 shall prevail over any inconsistent provisions in other laws. The Court noted that the Act, 2006 is a special enactment aimed at promoting and developing Micro, Small, and Medium Enterprises, and its provisions take precedence over the general provisions of the Act, 1996. Conclusion: The Court dismissed the writ petitions, upholding the Council's decision to proceed with arbitration under the Act, 2006. The Court emphasized that the Act, 2006, being a special enactment, has an overriding effect and provides a specific mechanism for dispute resolution, which includes the Council acting as an Arbitrator. The petitioner's arguments regarding the applicability of the Act, 1996 and the exclusion of counterclaims were rejected.
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