IMPORTANT POINT
There is a fundamental difference between conciliation and arbitration – In conciliation conciliator assists parties to arrive at an amicable settlement, in an impartial and independent manner – In arbitration, Arbitral Tribunal/ arbitrator adjudicates disputes between parties.

JUDGMENT :

R. Subhash Reddy, J

1. In this civil appeal, challenge is to the order dismissing the intra-court appeal preferred by the appellant in D.B. Special Appeal Writ No.1854 of 2017 passed by the High Court of Judicature at Rajasthan, Jaipur Bench, vide judgment and order dated 11.12.2017, confirming the order of the learned Single Judge in W.P. No.11657 of 2017. In the writ petition, the order dated 06.08.2012 passed by the 2nd respondent, i.e., Rajasthan Micro & Small Industries Facilitation Council, Jaipur (in short, ‘Council’) was questioned.

2. The appellant herein, which is the successor company of erstwhile Jharkhand State Electricity Board, entered into a contract with the 3rd respondent - M/s. Anamika Conductors Ltd., Jaipur, for supply of ACSR Zebra Conductors. Respondent No.3 claiming to be a small scale industry, has approached the Rajasthan Micro and Small Enterprises Facilitation Council, claiming an amount of Rs.74,74,041/- towards the principal amount of bills and an amount of Rs.91,59,705.02 paise towards interest. On the ground that the appellant has not responded to earlier notices, the Council issued summons dated 18.07.2012 for appearance of the appellant before the Council on 06.08.2012. Only on the ground that on 06.08.2012 the appellant has not appeared, the order dated 06.08.2012 was passed by the Council directing the appellant to make the payment to the 3rd respondent, as claimed, within a period of thirty days from the date of the order.

3. The said order was under challenge before the High Court by way of writ petition in Civil Writ Petition No.11657 of 2017, and same was dismissed by the learned Single Judge. An intra-court appeal preferred by the appellant was also ended in dismissal. Hence, this appeal.

4. We have heard Sri Anup Kumar, learned Senior Standing Counsel appearing for the appellant; Dr. Manish Singhvi, learned Senior Counsel appearing for 2nd respondent and Sri Kailash Vasdev, learned Senior Counsel appearing for the 3rd respondent. Having heard the counsel for the parties we have perused the impugned order and other material placed on record.

5. It is mainly contended by learned counsel for the appellant, as there were some disputes on the supplies made by the 3rd respondent, the bill amount due was not paid immediately. It is submitted that only on the ground that the appellant has not responded in the conciliation proceedings, straightaway the order was passed by the Council without giving proper opportunity. The order impugned in the writ petition was passed, in utter disregard to the mandatory provision under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (for short ‘MSMED Act’) and the provisions of Arbitration and Conciliation Act, 1996. It is submitted that even after the order passed by the Council on 06.08.2012, the appellant after inspecting the records, has paid the due amount Rs.63,43,488/- to the 3rd respondent. Such amount was paid after inspecting the records to the 3rd respondent, who had received that amount without any protest. After a period of three years thereafter, 3rd respondent has filed Execution Case No.69 of 2016 before the Civil Judge, Ranchi which ultimately ended in dismissal on the ground of maintainability. When the said order was challenged by way of writ petition, said writ petition was subsequently dismissed as withdrawn. It is submitted that when the conciliation fails, as per Section 18(3) of the MSMED Act, Council has to initiate arbitration proceedings. On failure of conciliation, the Council shall either itself take up the dispute for arbitration or refer to any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of Arbitration and Conciliation Act, 1996 shall apply to the dispute, as if the arbitration was in pursuance of arbitration agreement referred to under sub-section (1) of Section 7 of Arbitration and Conciliation Act, 1996. It is submitted that in t