IMPORTANT POINT
Proceedings before the Council under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act are proceedings under Arbitration and Conciliation Act pursuant to a deemed agreement parties to the dispute.

JUDGMENT

Ruma Pal, J.-Leave granted.

2. This appeal has been preferred from an interim order granted by the Division Bench of the Bombay High Court staying the arbitration proceedings before the Uttar Pradesh Industry Facilitation Council (referred to as the Council ) set up under the Interest on Delayed Payments to Small Scale and Ancillary Industries Undertakings Act, 1993 (referred to as the Act ).

3. We are not concerned with the merits of the proceedings initiated by the appellant before the Council. The only question is whether the High Court had the jurisdiction to pass the impugned order.

4. The chronology of events which are relevant for the purposes of this appeal, commenced with a notice dated 11th September 2001 served by the appellant on the respondent raising a demand. The notice also contained the following paragraph:

"You may also treat this as a notice under the provisions of the `Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 . Failure or non-payment will force us to move our claims as mentioned above to the appropriate authorities for recovery of our dues as mentioned above."

5. In October, 2001 the appellants filed a claim petition before the Council. The Council forwarded the claim petition to the respondent No.1 under cover of its letter dated 27th December 2001 asking the respondent No.1 to respond to the same within a period of one month. The receipt of the claim petition was acknowledged by the respondent by letter dated 25th January 2002 and requested for time to submit its reply by six weeks. The prayer for extension of time was, however, made without prejudice to the respondent s "legal rights and contentions relating to the impugned notice dated 27th December and the claim purported to be made under Section 6 of the said Act".

6. On 12th February 2002 the respondent No.1 filed a suit in the City Civil Court at Bombay against the appellant who was named as the defendant No.1 and the Council which was named as the defendant No.2. The prayers in the plaint are, inter-alia, for a declaration that the claim petition filed by the appellant before the Council was ultra-vires the provisions of the Act and, therefore, illegal, null and void. A permanent order of injunction was also asked for restraining further proceedings before the Council. An application was filed in the suit for interim relief by the respondent No.1. By an order dated 5th February 2002 the City Civil Court granted an ad-interim injunction staying the proceedings under the Act. The application for interim relief was, however, ultimately dismissed by the City Civil Court on 28th November 2002 principally on the ground that the claim had been filed by the appellant under Section 6(2) read with Section 8(1) of the Arbitration and Conciliation Act, 1996 (which we will refer to as the 1996 Act) and in view of Section 5 of the 1996 Act no Court could intervene in arbitration proceedings except to the extent prescribed under the 1996 Act. According to the City Civil Court, the reliefs claimed for the respondent No.1 in its suit did not fall within the ambit of those situations where interference by Court was permissible and consequently the Court had no jurisdiction to stay the proceedings before the Council.

7. The respondent No.1 preferred an appeal from the decision of the City Civil Court before the High Court. The appeal is pending. On an application for interim relief filed by the respondent No.1 pending the appeal, the High Court by its order dated 21st January 2003 stayed the proceedings before the Council only on the ground that no notice had been served by the appellant on the respondent No.1 under Section 21 of the 1996 Act. The High Court rejected the appellant s application for expediting the appeal on 2nd May 2003. Both these orders of the High Court are questioned before us in these appeals.

Section 6 of the Act provides as follows:

"Recovery of amount due-

(1) The amount due from a buyer, tog