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SANJIV KHANNA, SANJAY KUMAR, MANMOHAN
Tamil Nadu Cements Corporation Limited – Appellant
Versus
Micro and Small Enterprises Facilitation Council – Respondent
Based on the facts provided, the following findings can be made:
The dispute primarily concerns the contractual obligations and performance of M/s Unicon Engineers in executing the work related to the installation of Electrostatic Precipitators (ESPs) for TANCEM. The contractor's failure to meet contractual standards and delays has led to financial and operational issues for TANCEM (!) .
The initiation of proceedings under Section 18 of the MSMED Act by M/s Unicon Engineers indicates that the dispute was recognized as falling within the scope of micro and small enterprise disputes, and the MSEFC was the designated forum for resolution (!) .
The order by the MSEFC to proceed with arbitration after unsuccessful conciliation suggests that the dispute was deemed arbitrable under the statutory framework, and the parties were directed to resolve their issues through arbitration rather than litigation (!) .
The subsequent orders for enforcement and execution of the arbitral awards reflect the recognition of the awards' finality and the legal mechanisms available for their implementation (!) .
TANCEM's challenge to the orders and the statutory provisions indicates a contention regarding the jurisdiction of the MSEFC, the validity of the dispute resolution process, and the procedural conditions imposed, such as deposit requirements for challenging awards (!) .
The legal proceedings, including writ petitions and appeals, highlight ongoing questions about the scope of judicial review over the orders of the MSEFC, particularly concerning the enforceability of arbitral awards and the protection of the rights of the parties to access courts (!) .
The case underscores the complex interaction between statutory dispute resolution mechanisms under the MSMED Act, arbitration processes, and constitutional rights to judicial review, especially in situations where jurisdictional or procedural errors are alleged (!) .
Overall, the findings suggest that while the dispute resolution framework aims to facilitate speedy resolution of micro and small enterprise disputes, issues of jurisdiction, procedural compliance, and access to judicial remedies remain significant points of contention in this case (!) .
JUDGMENT :
SANJIV KHANNA, CJI.
1. Leave granted.
2. The seminal issue which arises for consideration in the present appeal is whether a writ petition under Article 226 of the Constitution would be maintainable against an order passed by the Micro and Small Enterprises Facilitation Council1 [For short ‘MSEFC’] in exercise of power under Section 18 of the Micro, Small and Medium Enterprises Development Act, 20062 [For short ‘MSMED Act’] and if yes, under what circumstances.
3. Section 18 of the MSMED Act reads as under:
(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
Writ Jurisdiction – Access to High Courts by way of writ petition under Article 226 of Constitution of India, is not just a constitutional right but also a part of basic structure – It is available t....
Orders by MSEFC failing to follow arbitration procedures under the MSMED Act are not valid awards, allowing for writ petitions under Article 226 due to natural justice violations.
Important Point : The court established that statutory remedies must be exhausted before invoking writ jurisdiction against awards under the MSMED Act.
Writ petition against arbitral award is maintainable; petitioner must follow remedies under Arbitration Act.
The High Court cannot entertain writ petitions challenging awards of the Micro and Small Enterprises Facilitation Council without the mandatory deposit of 75% of the awarded amount as per Section 19 ....
The High Court cannot exercise its writ jurisdiction under Article 226 or 227 of the Constitution against the awards or orders passed by the Arbitral Tribunals as it would defeat the object of minimi....
The mandatory pre-deposit requirement under Section 19 of the MSMED Act, 2006 for challenging an award and the overriding effect of the MSMED Act, 2006 over the Arbitration Act, 1996 in specific disp....
Jurisdictional challenges to arbitration awards must be raised under Section 34 of the Arbitration Act, and the pre-deposit requirement under Section 19 of the MSME Act is mandatory.
The MSMED Act, 2006 provides a specific dispute resolution mechanism that overrides private arbitration agreements, making writ petitions not maintainable when an alternative remedy exists.
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