The main legal point established in the judgment is the requirement of complying with the provisions of Section 19 for challenging an award under the Act of 1996 and the limitations on entertaining a petition under Articles 226/227 of the Constitution to obviate compliance with the pre-deposit requirement under Section 19.

ORDER :

1. Leave granted.

2. The second respondent, M/s S R Technologies (Unit II), which is governed by the provisions of the Micro Small and Medium Enterprises Development Act 2006¹[“MSMED Act”], filed a claim before the Micro and Small Enterprises Facilitation Council, Medchal – Malkajgiri.

3. On 28 October 2021, the Facilitation 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 writ petition instituted by the appellant was not maintainable in view of the specific remedies which are provided under the special statute. The High Court held that the appellant ought to have taken recourse to the remedy under Section 34 of the Arbitration and Conciliation Act 1996²[“Act of 1996”] and having failed to do so, a writ petition could not be entertained. The observations of the High Court are set out in paragraph 38 of the impugned judgment which is extracted below:

“38. Insofar maintainability of the writ petition is concerned, when respondents No.2 and 3 had an adequate, efficacious and alternate remedy under Section 34 of the 1996 Act, learned Single Judge ought not to have entertained the writ petition. While maintainability of a writ petition is one aspect, entertainability is the relevant question. Considering the objective of the MSME Act and the provisions of Sections 15 to 23 thereof, learned Single Judge erred in entertaining the writ petition.

6. Having held that the petition was not maintainable, the High Court has nonetheless inquired into whether the claim was barred by the limitation and has come to the conclusion, following the decision of this Court in Gujarat State Civil Supplies Corporation Limited vs Mahakali Foods Private Limited (Unit 2) and Another, (2023) 6 SCC 401, that the claim was time barred.

7. We have heard Mr Parag P Tripathi, senior counsel appearing on behalf of the appellant and Dr S Muralidhar, senior counsel appearing on behalf of the second respondent.

8. Section 18⁴ [Reference to Micro and Small Enterprises Facilitation Council.—(1) Notwithstanding anything contained in any other law for the time being in force, any party to a dispute may, with regard to any amount due under section 17, make a reference to the Micro and Small Enterprises Facilitation Council.

(2) On receipt of a reference under sub-section (1), the Council shall either itself conduct conciliation in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution 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 in sub-section(1) of section 7 of that Act.

(4) Notwithstanding anything conta