M.R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the Arbitral Tribunal- State Level Industry Facilitation Council constituted under Section 21 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as the Act, 2006), by which, the learned Council has dismissed the application submitted by the appellant herein, submitted under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Act, 1996") and by which, the appellant herein requested to refer the matter for arbitration in exercise of powers under Section 8 of the Act, 1996, the appellant herein preferred present First Appeal.

2. The facts leading to the present First Appeal in nutshell are as under:

"2.1. That the appellant herein is a registered Small Scale Manufacturer, who has established a Factory for manufacture of goods, such as Pre-stressed Mono-block Concrete Sleepers, that are being supplied to the Western Railways. That the dispute arose between the appellant and the Railway Authority with respect to Contract CS 160, entered into between the parties, on 20-10-2008. It appears that prior thereto one Contract CS 156 was entered into between the parties. It was the case of the Railways Authority that so far as CS 156 is concerned, appellant failed to supply the requisite quantity of Sleepers against the total ordered quantity and therefore, as per clause in the said contract the appellant was liable to pay Liquidated Damages at 5% of the cost of the stores. Therefore, the Railways Authority calculated the cost of the unsupplied quantity of sleepers i.e. 1,65,997 at Rs. 23,81,57,164.81 and Liquidated Damages at 5%, amounting to Rs. 1,19,07,858.00. The aforesaid came to be recovered by the Railways Authority from the bill of the appellant to be paid under second Contract, CS 160. Therefore, the appellant herein addressed letter dated 4.5.2009 to the Railways Authority stating that the Railways had no legal right to appropriate any amount from the payment of appellant meant for CS 160, towards the claim for damages pertaining to another contract, when such damages were neither accepted, nor acceptable by it. It appears that as no reply was received from the Railways in this regard, the appellant herein being a Registered Small-scale Entrepreneur, submitted an application, as per the provisions of Section 18 of the MSMED Act, before the Council on 06/11-06-2009, claiming the outstanding amount of Rs. 1,19,07,858/-, with interest. It appears that the Council initially resorted to conciliation proceedings, however thereafter the Council declared award on 21.08.2010. The award declared by the Council was challenged by the Railways Authority by way of Special Civil Application No. 2471 of 2011, which came to be dismissed by the learned Single Judge against which Railways Authority preferred Letters Patent Appeal No. 1997 of 2011 before the Division Bench of this Court. It was contended on behalf of the Railways Authority that considering the provision of the Act, 2006, more particularly, Section 18, unless and until there was failure of conciliation there was no question of taking any step for arbitration. It was also contended on behalf of the appellant - Railways Authority that in fact they already moved an application before the Council under Section 8 of the Act, 1996 and no order was passed on the said application. That thereafter, with the consent of the learned advocates for the respective parties, the Division Bench remanded the matter to the Council. It was agreed by the learned advocates for the respective parties that the Court be treated that the conciliation proceedings failed and the matter should be proceeded for next date for Arbitration. That thereafter, by impugned order the Council has rejected the application submitted by the appellant - Railways Authority, by which, it was requested to prefer matter for arbitration to the Arbitral Trib