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TMI Blog2023 (11) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... the jurisdiction under Articles 226/227 of the Constitution. This was clearly impermissible. The appellant sought to urge that the view of the Facilitation Council to the effect that the provisions of the Limitation Act 1963 have no application, which has been affirmed by the Division Bench in the impugned judgment, suffers from a perversity, and hence a petition under Article 226 of the Constitution ought to have been entertained. This submission cannot be accepted for the simple reason that Section 18 of the MSMED Act 2006 provides for recourse to a statutory remedy for challenging an award under the Act of 1996. However, recourse to the remedy is subject to the discipline of complying with the provisions of Section 19. The entertaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Council decreed the claim in the principal sum of Rs 40,29,862, on which interest with monthly rests at three times the bank rate prevailing as on the date of the award was granted under Section 16 from the appointed day till final payment. 4 The award of the Facilitation Council was challenged in a petition under Articles 226/227 of the Constitution. By a judgment and order dated 14 September 2022, a Single Judge of the High Court of Telangana allowed the writ petition and set aside the award on the ground that the claim was barred by limitation. 5 In an appeal by the second respondent, the Division Bench by its judgment dated 21 March 2023, reversed the view of the Single Judge. The Division Bench has come to the conclusion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the second respondent. 8 Section 18 1 of the MSMED Act provides for a reference to the Facilitation Council. Sub-section (2) of Section 18 provides for the conduct of conciliation proceedings. Sub-section (3) empowers the Council to thereafter take up the dispute for arbitration or to refer it to an institution or centre providing for Alternative Dispute Resolution services for such arbitration . Sub-section (3) of Section 18 stipulates that the provisions of the Act of 1996 shall then apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section (1) of Section 7 of that Act . 9 Section 19 provides recourse against an award of the Facilitation Council in the following terms: 19. Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is imposed by Section 19 of MSMED Act 2006 to the effect that an application for setting aside an award can be entertained only upon the appellant depositing with the Council seventy-five per cent of the amount in terms of the award. Section 19 has been introduced as a measure of security for enterprises for whom a special provision is made in the MSMED Act by Parliament. In view of the provisions of Section 18(4), the appellant had a remedy under Section 34 of the Act of 1996 to challenge the award which it failed to pursue. 11 In the judgment of this Court in Gujarat State Civil Supplies Corporation Limited (supra), a two-Judge Bench of the Court has observed, in the course of drawing its conclusions, that: The proceedings before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance with the requirement of pre-deposit under Section 19, would defeat the object and purpose of the special enactment which has been legislated upon by Parliament. 15 For the above reasons, we affirm the decision of the Division Bench by holding that it was justified in coming to the conclusion that the petition under Articles 226/227 of the Constitution instituted by the appellant was not maintainable. Hence, it was unnecessary for the High Court, having come to the conclusion that the petition was not maintainable, to enter upon the merits of the controversy which arose before the Facilitation Council. 16 Mr Parag P Tripathi, senior counsel then submitted that the appellant would move proceedings under Section 34 of the Act of 1996 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution or centre, for conducting conciliation and the provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to such a dispute as if the conciliation was initiated under Part III of that Act. (3) Where the conciliation initiated under sub-section (2)is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer it to any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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