An award passed by the Micro and Small Enterprises Facilitation Council under the MSMED Act is an award under the Arbitration and Conciliation Act, 1996, and therefore, it cannot be challenged by way of a writ petition under Article 226 of the Constitution of India.

JUDGMENT :

Prashant Kumar Mishra, J

This Writ Appeal would call in question the order dated 20.10.2019 passed by the learned single Judge dismissing W.P.No.17258 of 2021 preferred by the writ petitioner challenging the order/award dated 14.07.2021 in Case No.21C/IFC/2018/5318, passed by the A.P. Micro and Small Enterprises Facilitation Council at Vijayawada/respondent No.2, directing the writ petitioner to pay the principal amount of Rs.84,45,275/- with interest to respondent No.7 (respondent No.6 herein).

2. The learned single Judge has framed an issue for consideration as to whether the plenary jurisdiction under Article 226 of the Constitution of India can be exercised to set aside the award passed by respondent No.2-Council under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (in short, "the MSMED Act") read with the Arbitration and Conciliation Act, 1996 (in short, "the 1996 Act").

3. Learned counsel for the writ petitioner/appellant argued that when principles of natural justice have been violated, existence of alternative remedy would not come in the way of the Writ Court to exercise jurisdiction under Article 226 of the Constitution of India. It is also argued that power under Article 226 has to be exercised to effectuate the regime of law and not for abrogating it, therefore, when principles enshrined under Article 14 of the Constitution of India have been violated, Writ Court should not refuse to entertain petition on the ground of existence of alternative remedy.

4. True it is that when principles of natural justice have been violated, Writ Court can exercise jurisdiction despite existence of alternative remedy, but in the case at hand, the writ petitioner has not assailed the legality and validity of any administrative or statutory order. What is under challenge is the award passed by the Facilitation Council under the MSMED Act. Section 18 (1) of the MSMED Act provides that, 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, which, in turn, shall decide the reference under the provisions contained in Sections 65 to 81 of the 1996 Act, as if conciliation was initiated under Part III of the 1996 Act. It is also provided under sub-section (3) of Section 18 of the MSMED Act that where conciliation was not successful and terminated without any settlement between the parties, the Council either itself take up the dispute for arbitration or refer it to any institution or centre providing alternate dispute resolution services and the provisions of the 1996 Act shall then apply to the dispute as if the arbitration was conducted pursuant to an arbitration agreement as per Section 7 (1) of the 1996 Act. Further, Section 19 of the MSMED Act speaks about the provision for appeal and pre-requisite of deposit of amount, providing that no application for setting aside decree, award or order made by the Council or any institution or centre to which reference is made, shall be entertained by any Court unless the appellant (not being a supplier) deposits with it 75% of the amount in terms of the decree, award or order.

5. It would also be profitable to refer to the Rules framed by the Government of Andhra Pradesh in exercise of powers conferred under Section 30 read with sub-section (3) of Section 21 of the MSMED Act. The Rules are known as the Andhra Pradesh Micro and Small Enterprises Facilitation Council Rules, 2007 (in short, "the 2007 Rules"). Rule 4 prescribes the procedure to be followed in the discharge of functions of the Council. Sub-Rule (viii) of Rule 4 provides that the Council shall either itself conduct conciliation in each reference placed before it or seek the assistance of any institute or centre providing alternate dispute resolution services by making reference to such an institution or centre, for conducting