1. Writ petition challenging an award passed by the Micro and Small Enterprises Facilitation Council under the MSMED Act, 2006. (Para 1 , 2 , 3 )
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2026 Supreme(Raj) 600
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
REKHA BORANA, J.
National Co-Operative Consumers Federation Of India Limited, (Ministry of Consumer Affairs Foods and Public Distribution, Government of India) through its Managing Director – Petitioner
Versus
Micro and Small Enterprises Facilitation Council, MSEFS Rajasthan, Udaipur – Respondent
S.B. Civil Writ Petition No. 16944 of 2021
Decided On : 13-02-2026
Advocates Appeared:
For the Petitioner: Mr. Vinay Jain, Mr. Darshan Jain, Mr. Mudit Balia
For the Respondent: Mr. Rajat Arora, Mr. Lucky Rajpurohit, Mr. Vishan Das.
For the Petitioner: Mr. Vinay Jain, Mr. Darshan Jain, Mr. Mudit Balia
For the Respondent: Mr. Rajat Arora, Mr. Lucky Rajpurohit, Mr. Vishan Das.
A writ petition is not maintainable against an award passed under the MSMED Act, 2006, because Section 34 of the Arbitration and Conciliation Act, 1996, provides a specific statutory remedy to challenge such awards, including on grounds of procedural irregularity.
Headnote:(A) Micro, Small and Medium Enterprises Development Act, 2006 - Section 18 - Arbitration and Conciliation Act, 1996 - Section 34(2)(a)(v) - Maintainability of writ petition against an award - If the procedure prescribed under Section 18 of the Act of 2006, specifically the requirement of conciliation prior to arbitration, is not followed, such a ground for challenge falls within the ambit of Section 34 of the Act of 1996 - The court hearing objections under Section 34 has the jurisdiction to set aside an award on the ground that the arbitral procedure was not in accordance with the law - Writ jurisdiction cannot be exercised where a specific alternative remedy under a specific statute is provided. (Paras 12, 13)
(B) Constitution of India - Articles 226 and 227 - Scope of writ jurisdiction - Entertaining a petition under Articles 226/227 of the Constitution to bypass a statutory remedy provided in a special enactment would defeat the object and purpose of such legislation. (Para 14)
Facts of the case:
- A petition was filed challenging an award passed by a facilitation council. The petitioner contended that the order was not an "award" in terms of the Arbitration and Conciliation Act, 1996, because the mandatory conciliation proceedings prescribed under Section 18(2) of the Micro, Small and Medium Enterprises Development Act, 2006, were not conducted. It was argued that since the statutory process was not followed and no reference to arbitration was made after the failure of conciliation, the order was amenable to writ jurisdiction.
Findings of Court:
- The court found that the failure to follow the procedure laid down in Section 18 of the Act of 2006, including the failure to record that conciliation proceedings failed, is a ground that can be raised under Section 34(2)(a)(v) of the Arbitration and Conciliation Act, 1996. Since this statutory remedy exists to challenge the award, the writ petition is not maintainable.
Issues: Whether a writ petition is maintainable against an order passed by a facilitation council under the Micro, Small and Medium Enterprises Development Act, 2006, on the grounds that the mandatory conciliation procedure was not followed, despite the existence of a statutory remedy under the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: Where a special enactment provides a statutory remedy for challenging an award, such as Section 34 of the Arbitration and Conciliation Act, 1996, the writ jurisdiction of the High Court under Articles 226/227 of the Constitution cannot be invoked to bypass that remedy. Any procedural irregularity in the conduct of the proceedings under the MSMED Act must be challenged via the prescribed statutory forum.
Result: Writ petition dismissed as not maintainable.
Legal Category Hierarchy
- practice and procedure
- commercial law
Table of Contents
2. Petitioner argued procedure under Section 18 of MSMED Act not followed, thus order not an award. Respondent argued order is an award challengeable under Section 34, Arbitration Act. (Para 3 , 4 , 5 , 6 )
3. The court held that even if the prescribed procedure under Section 18 was not followed, it is a ground under Section 34 of the Arbitration Act, not a writ ground. (Para 12 , 13 , 19 )
4. An award under Section 18 of the MSMED Act, 2006 is challengeable only under Section 34 of the Arbitration and Conciliation Act, 1996, not by writ. (Para 13 , 14 , 19 )
5. Writ petition dismissed as not maintainable. Petitioners granted liberty to pursue remedy under Section 34 of the Arbitration and Conciliation Act, 1996. (Para 20 )
6. Is a writ petition maintainable against an award passed under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006?
No, a writ petition is not maintainable. The award can only be challenged under Section 34 of the Arbitration and Conciliation Act, 1996. (Para 2 , 3 , 13 , 14 , 19 )
7. Can procedural non-compliance under Section 18 of the MSMED Act be a ground in a writ petition?
No. Procedural non-compliance under Section 18 of the MSMED Act is a ground for setting aside the award under Section 34 of the Arbitration and Conciliation Act, 1996, not for a writ petition. (Para 12 , 13 )
8. What is the prescribed procedure under Section 18 of the MSMED Act, 2006?
The procedure has three stages: reference to the Council, conciliation, and only upon failure of conciliation, arbitration under the Arbitration and Conciliation Act, 1996. (Para 9 , 10 )
Order :
REKHA BORANA, J.
1. The present petition has been filed aggrieved of order dated 05.08.2021 (Annex.8) (wrongly mentioned to be 31.08.2021 in the prayer) whereby an Award/order has been passed against the petitioner firm by respondent No.1-Council.
2. A preliminary objection has been raised by Counsel for the respondents regarding maintainability of the present petition. Counsel submits that the impugned order is an ‘Award’ and hence, amenable to challenge under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act of 1996’).
3. Counsel while relying upon the Apex Court judgment in M/s India Glycols Limited and Another Vs. Micro and Small Enterprises Facilitation Council, Medchal - Malkajgiri and Others ; AIR 2024 SC 285 submits that no order/award/decree passed in terms of Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as the ‘Act of 2006’) can be assailed in a writ petition.
4. Responding to the above preliminary objection, counsel for the petitioners submits that Order dated 05.08.2021 is in fact not an ‘Award’ in terms of the Act of 1996. It is an order passed by the Council and hence, is not amenable to challenge in terms of Section 34 of the Act of 1996.
5. Counsel submits that in terms of Section 18(2) of the Act of 2006, conciliation proceedings ought to have been undertaken by the Council and it is only after the conciliation proceedings having failed that the dispute could have been referred to arbitration. Herein, there was no report to the effect that conciliation proceedings failed and hence, without any reference to arbitration been made, the order impugned cannot be termed to be an ‘Award’ in terms of the Act of 1996.
6. Further, the process as prescribed under Section 18 of the Act of 2006 having not been followed prior to passing of the impugned order, the same is definitely amenable to writ jurisdiction.
7. Heard the Counsels. Perused the Record.
8. Before proceeding further, reproduction of Section 18 of the Act of 2006 would be apt:
“18. Reference to Micro and Small Enterprises Facilitation Council.
(1) Notwithstanding anything contained in any other law for the time being in force, any party to a dispute may, with regard to any amount due under section 17, make a reference to the Micro and Small Enterprises Facilitation Council.
(2) On receipt of a reference under sub-section (1), the Council shall either itself conduct conciliation in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution or centre, for conducting conciliation and the provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to such a dispute as if the conciliation was initiated under Part III of that Act.
(3) Where the conciliation initiated under sub-section (2) is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer to it any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section(1) of section 7 of that Act.
(4) Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India.
(5) Every reference made under this section shall be decided within a period of ninety days from the date of making such a reference.”
9. A bare perusal of the above provision reflects t
