JUDGMENT :

1. The crux of the dispute in the present case is whether, in the teeth of the pendency of a reference under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as, “the 2006 Act”) to the Micro and Small Enterprises Facilitation Council (MSEFC), this Court can pass an order under Section 11 of the Arbitration and Conciliation Act, 1996 (for short, “the 1996 Act”).

2. Learned counsel for the petitioner contends that the contemplation of arbitration under Section 18 of the 2006 Act only comes into play once the conciliation fails. In the present case, since the conciliation stage is not yet over, there is no scope to argue that arbitration has begun before the MSEFC. Hence, there is no bar to proceed with the appointment of an Arbitrator under Section 11 of the 1996 Act.

3. Learned counsel further submits that Section 24, which confers overriding effect on the 2006 Act, is not attracted to the present case in view of the arbitration having not yet commenced.

4. Learned counsel cites a Division Bench Judgment of the Madhya Pradesh High Court in M/s. Ujas Associates Vs. M/s. KJS Cement (India) Ltd., to highlight the proposition that sub-section (3) of Section 18 of the 2006 Act is the stage from which the Act of 1996 comes into operation. As such, it was held that the application filed under section 9 of the 1996 Act was not maintainable, since the applicability of the 1996 Act had not yet been reached.

5. Learned counsel next cites M/s. Steel Authority of India Ltd. and another Vs. Micro, Small Enterprise Facilitation Council, through Joint Director of Industries, Nagpur Region, Nagpur, reported at AIR 2012 Bom 178, where a Division Bench of the Bombay High Court held that Section 24 of the 2006 Act would not have the effect of negating an arbitration agreement since that Section overrides only such things that are inconsistent with Sections 15 to 23, including Section 18, notwithstanding anything contained in any other law. Section 18(3) of the 2006 Act in terms provides where conciliation before the Council is not successful, the Council may itself take the dispute for arbitration or refer it to any institution. This procedure for arbitration and conciliation, it was further held, is precisely the procedure under which all arbitration agreements are dealt with. Thus, it was observed that it cannot be said that because Section 18 provides for a forum of arbitration, an independent arbitration agreement entered into between the parties will cease to have effect. UP TO THIS

6. Learned counsel appearing for the respondents cites Gujarat State Civil Supplies Corporation Ltd. Vs. Mahakali Foods Pvt. Ltd. (Unit 2) and another, reported at 2022 SCC OnLine SC 1492. In the said decision, the Supreme Court reiterated that the 2006 Act overrides the provisions of the 1996 Act, which is a general legislation, whereas the 2006 Act specifically governs disputes arising between specific categories of persons to be resolved by following a specific process through a specific forum. It was further held that no agreement entered into between the parties could be given primacy over statutory provisions.

7. Learned counsel also relies on a co-ordinate bench judgment of this Court rendered in 2017 SCC OnLine Cal 263 [National Projects Construction Corporation Limited and another Vs. West Bengal State Micro Small Enterprises Facilitation Council and others], where the same proposition was reiterated.

8. Learned counsel also cites Silpi Industries Etc. Vs. Kerala State Road Transport Corporation and another, reported at 2021 SCC OnLine SC 439, to highlight that if the MSEFC is already moved for resolution of disputes, a counter-claim can be filed before the said forum. While rendering such judgment, the Supreme Court also took into consideration that the 2006 Act is a beneficial legislation to the Micro and Small Enterprises.

9. Learned counsel for the respondent, in his usual fairness, also cites a ju