IMPORTANT POINT
The Court upheld the impugned Award and emphasized the finality of arbitral awards, reinforcing the limited grounds for challenging an award under the Arbitration and Conciliation Act, 1996.

JUDGMENT :

Moushumi Bhattacharya, J.

1. The petitioner has made an application under section 34 of The Arbitration and Conciliation Act, 1996 for setting aside of an Arbitral Award dated 24.9.2019 which was communicated to the petitioner under cover of a letter dated 7.11.2019. The impugned Award was passed by the West Bengal State Micro Small Enterprises Facilitation Council before which the petitioner was the respondent/buyer. The impugned Award was passed on an application made by the supplier unit which is the respondent before this Court.

2. By the impugned Award, the respondent’s claim of supply of materials to the petitioner (buyer) and performing the work as per the order of the petitioner was established. The petitioner was accordingly held liable to pay the total outstanding principal amount of Rs. 61,08,654/-together with the interest on the said amount at 3 times of the Bank rate of the RBI compounded with monthly rests to the respondent under section 16 of The Micro, Small and Medium Enterprises Development Act, 2006. The respondent was directed to submit its claim of interest on the principal amount to the petitioner duly certified by a Chartered Accountant along with the claim of the outstanding principal amount. The petitioner was directed to pay the amount within 30 days from the date of submission of the respondent’s claim failing which the respondent would be entitled to realise the amount in accordance with law.

3. The petitioner / buyer unit i.e., the respondent before the Council, has challenged the Award on primarily the ground that the petitioner was deprived of a sufficient opportunity of presenting its case and that the Award suffers from unequal treatment of the parties. Learned counsel appearing for the petitioner submits that the impugned Award suffers from non-application of mind and a failure to take admitted facts into account. Counsel further submits that the Award is devoid of reasons and does not establish any nexus between the facts presented by the respondent and the denial thereof by the petitioner. Counsel urges that the Award is such that it would shock the conscience of this Court and is hence liable to be set aside.

4. Learned counsel appearing for the respondent / supplier seeks to defend the impugned Award on the ground that it is a reasoned Award. Counsel places several provisions of the MSMED Act, 2006 to urge that the rate of interest awarded is strictly provided under the Statute. Counsel relies on a list of dates to show that the petitioner had sufficient notice of the proceedings at all relevant times and that there was no breach of the principles of natural justice. Counsel places emphasis on the fact that the petitioner did not attend any of the conciliation proceedings but was represented in the arbitration and also filed its counter-claim to the claim of the respondent without any documents in support thereof.

5. The petitioner’s case, as expressed from the submissions of counsel and the notes of argument, shows that the impugned Award has been challenged on several grounds. The decision of this Court is given on each of these grounds with reference to the specific heads of challenge.

Jurisdiction of the Tribunal

6. Section 18(1) of the MSMED Act, 2006 enables a party to make a reference to the Micro and Small Enterprises Facilitation Council provided the reference is made by a party to a dispute with regard to an amount due under section 17 of the Act. The Supreme Court in Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd.; 2022 SCC OnLine SC 1492, construed section 18(1) to be an enabling provision which gives an option to a party to a dispute covered under section 17 of the Act to approach the Facilitation Council despite an arbitration agreement existing between the parties.

7. Moreover, section 18(4) of the Act begins with a non-obstante clause and provides that the Facilitation Council shall have jurisdiction to act as an Arbitrator and Conciliator in a