The main legal point established in the judgment is that the remedy for a party aggrieved by the order or an award of the arbitral tribunal is to take remedy under the Act of 1996 rather than bringing the private dispute before a writ court.

ORDER :

1. Heard on admission and stay.

2. This intra court appeal is directed against order dated 26.09.2023 passed by the Ld. Single Judge, whereby, the appellant’s petition challenging an order dated 15.05.2023 of the Micro and Small Enterprises Facilitation Council (hereinafter referred to as ‘the Council’) mainly on the ground that there is an efficacious and alternative statutory remedy and therefore, the writ petition, being bereft of any material to prima facie show a case of mala fide exercise of power, could not be entertained.

3. Learned Senior Counsel appearing for the appellant argued that the contract was terminated way-back in the year 2018. The respondents, without any basis, only to somehow revive an old and stale matter, took recourse to the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as “the Act of 2006”) seeking conciliation which eventually failed. Thereafter, the Council, without drawing due and proper proceedings in the matter of adjudication of dispute through arbitration as ordained under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act of 1996”) as also without determining the rules of procedure as mandated under Section 19 thereof, proceeded hurriedly and summarily without there being any issue framed and not giving the parties sufficient opportunity to lead their respective evidence, recommendation for passing an award has been made vide order impugned in the writ petition. He would submit that though, upon failure of conciliation proceedings, the dispute between the parties was required to be resolved through the process of arbitration, the manner in which the proceedings in the name of arbitration have been drawn are in flagrant violation of not only the provisions of Act of 2006 but also of the Act of 1996. That being the extraordinary circumstances of the case, the appellant approached the writ court. He would submit that the extra-ordinary remedy under Article 226 of the Constitution of India is not barred and though ordinarily when there is an alternative remedy, discretionary jurisdiction may not be exercised but present is a case which shows that all rules and procedures of arbitration were kept at bay and hurriedly recommendation for passing an award in favour of respondent has been made. He would submit that in similar circumstances, the Hon’ble Supreme Court in the case of Jharkhand Urja Vikas Nigam Limited Versus State of Rajasthan and Others, 2021 SCC ON LINE SC 1257 categorically held that in such cases alternative remedy would not be a bar.

4. Per contra, learned counsel appearing for respondents, while opposing the prayer for stay, would also support the order passed by the Ld. Single Judge by submitting that the grounds which have been raised for consideration in the writ petition are only in the nature of grounds on which an application under Section 34 of the Act of 1996 could be filed before the Commercial Court. He would submit that the decision of the Hon’ble Supreme Court in the case of Jharkhand Urja Vikas Nigam Limited Versus State of Rajasthan (supra) is distinguishable on facts. That was a case where the proceedings of conciliation and arbitration were drawn simultaneously and even without appearance of other party the award was passed without any other proceedings in arbitration drawn. Present is not a case where arbitration proceedings were not drawn. After conciliation proceedings failed, the Council appointed arbitrator. Parties were allowed to file the statement of claim and reply and after consideration of the case of the rival parties, arbitrator applied its mind and has made recommendation for passing an award. Relying upon the decision of the Hon’ble Supreme Court in the case of S.B.P. and Co. Versus Patel Engineering Ltd., AIR 2006 SC 450, it is contended that Arbitral Tribunal is a forum chosen by the parties by agreement and it has been held that the jurisdiction of the High Cou