The MSME Council had jurisdiction to pass the award, and the appeal was dismissed for lack of territorial jurisdiction, affirming the distinction between conciliation and arbitration.

ORDER :

SUNITA AGARWAL, CJ.

1. Having heard the learned counsel for the appellant and perused the record, it is pertinent to note that the original writ petition out of which the instant appeal has arisen, was filed challenging the award dated 05.01.2024 passed by the Micro & Small Enterprises Facilitation Council (in short ‘MSME Council’) located in the State of Madhya Pradesh (MP) on the premise of the same being nullity and without jurisdiction. The further challenge was to the consequential notice dated 26/27.11.2024 issued by the Mamlatdar, Mehsana seeking to make recovery under the said award passed by the MSME Council, MP.

2. The learned single Judge has categorically recorded the submissions of the learned counsel appearing for the petitioner that MSME Council had originally initiated the conciliation proceedings under Section 18(2) of the Micro, Small and Medium Enterprises Development Act, 2006 (in short MSMED Act’) and whereas, no settlement proposal has been submitted by the petitioner in the conciliation proceedings, the MSME Council without conducting any Arbitration proceedings further, had passed the award without following the procedure prescribed. The office of the Collector, Bhopal had sought assistance of the Collector, Mehsana for recovery of the awarded amount as arrears of the land revenue and consequential notice under Section 152 of the Land Revenue Code was accordingly issued by the Mamlatdar, Mehsana asking the petitioner to deposit the amount-in-question failing which recovery proceedings under the Land Revenue Code would be undertaken.

3. it was categorically recorded by the learned single judge that the preliminary question before the writ court was about the territorial jurisdiction to entertain the writ petition. Admittedly the challenge is to the validity of the award passed by the MSME Council located at Madhya Pradesh. It is also noted by the learned single Judge that the MSME Council at MP is the authority established in and for the State of MP. The contract was awarded in the State of MP. The original petitioner had engaged the respondent No.2 as sub-contractor for the contract awarded and the respondent no.2 had carried out the work within the State of MP. The dispute had arisen with regard to the work allegedly done by the respondent No.2 within the State of MP and consequentially MSME Council, MP had been approached by the respondent No.2.

4. Taking note of the above, the learned single Judge records that no part of cause of action can be said to have arisen conferring jurisdiction to this Court, which has no territorial jurisdiction to act as a supervisory authority/Court to examine the validity of the award passed by the MSME Council, MP.. As regards the notice issued by the Mamlatdar, Mehsana, it is categorically noted by the learned single Judge that the notice seeks to execute the award passed by the MSME Council, MP and unless and until the award passed by the MSME Council, MP is interfered with by the competent Court, no fault could be found with the revenue authority for having issued the notice to the petitioner.

5. Learned advocate appearing for the appellant has vehemently relied upon the decision of the Apex Court in Jharkhand Urja Vikas Nigam Limited vs. State of Rajasthan and Others [(2021) 19 SCC 206] to submit that the MSME Council has committed a grave error of jurisdiction in passing the award without undertaking the arbitration proceedings since after the conciliation failed. In the aforesaid decision, the Apex Court has categorically pointed out the fundamental difference between the conciliation and arbitration. It is categorically laid down therein that in conciliation, the Conciliator assists the party to arrive at an amicable settlement in an impartial and independent manner. Whereas in arbitration, the Arbitrator Tribunal/Arbitrator adjudicates the dispute between the parties. The claim has to be proved before the Arbitrator, if necessary, by adducing evidence. Even th