The award passed by the Facilitation Council is without jurisdiction and, therefore, a nullity.

JUDGMENT :

1. Rule. Rule made returnable forthwith. With the consent of parties taken up for final hearing.

2. Maintainability of writ petition challenging the award of the Micro and Small Enterprises Facilitation Council and jurisdiction of the Council to decide a dispute arising before coming into effect of the Micro, Small and Medium Enterprises Development Act, 2006 are the two issues that need to be determined in the present petition.

3. Considering the broad two legal issues to be decided in the petition, it is not necessary to narrate the entire factual background under which the dispute between the parties has arisen.

4. Petitioner is a well known automobile manufacturer having one of its manufacturing facilities at Waluj in Aurangabad. Respondent No. 3 is a manufacturer of silencers, which are supplied inter alia to Petitioner. The dispute pertains to outstanding payment in respect of parts supplied by the respondent No. 3 to Petitioner during the years 2001-2002.

5. After coming into effect the Micro, Small and Medium Enterprises Development Act, 2006 (for short “MSMED Act”), the respondent No. 3 registered itself as a supplier. A claim was filed by it before the Micro and Small Enterprises Facilitation Council, Aurangabad, which was registered as Reference Proceeding No. MSMED/2/2012, which came to be dismissed by Award dated 06.08.2012 holding that respondent No. 3 had already received an amount of Rs. 1,50,000/- towards full and final settlement from Petitioner. The Award was challenged by respondent No. 3 in Writ Petition No. 9101 of 2012, which came to be dismissed for non-prosecution on 06th September, 2021.

6. Without disclosing filing and decision of earlier proceedings, the respondent No. 3 filed a fresh claim before the Facilitation Council in the year 2017 demanding amounts of Rs 8.64 Crores and Rs. 1,16,393.30 along with interest. The claim was resisted by Petitioner by filing its counter raising both the issues of suppression of earlier proceedings as well as jurisdiction of the Council to deal with the dispute relating to the period prior to coming into effect of the MSMED Act. By Award dated 28th April, 2019, the Council has proceeded to uphold the claim to the extent of Rs. 1,16,393/- along with compound interest with monthly rests at three times of the bank rate with effect from 31.03.2002. Aggrieved by the Award, the petitioner has filed present petition.

7. As the hearing commenced, I expressed a surprise as to how both the parties have routinely resorted to challenging the Awards passed by the Facilitation Council by filing writ petitions rather challenging them under Section 34 of the Arbitration and Conciliation Act, 1996 (for short “Act of 1996”). Mr. Vakil, the learned counsel appearing for the petitioner has therefore made strenuous submissions before me to demonstrate how a writ petition challenging the Award of the Facilitation Council is maintainable in the peculiar facts and circumstances of the case. Linked with the issue of maintainability of writ petition challenging the Award of the Facilitation Council, is a question whether Facilitation Council had jurisdiction to entertain dispute pertaining to the period prior to coming into effect MSMED Act. Accordingly, I have heard both the parties extensively on both the issues, in addition to few submissions on merits of the matter.

8. Appearing for the petitioner Mr. Vakil, the learned counsel for the petitioner would submit that the Award passed by the Facilitation Council is wholly without jurisdiction and is a nullity. He would submit that, the MSMED Act came into force with effect from 18.07.2006, Respondent No. 3 was registered as a supplied under the Act after 18-07-2006 and the Facilitation Council established under the Act did not have jurisdiction to decide the dispute relating to supply made during prior period. He would submit that, since the Award of the Facilitation Council is a nullity, the writ petition filed under the provisions of A