Point of Law: Section 34 of the Arbitration Act arises as is evident from sub Section (6) of Section 16 of the Arbitration Act, which inter alia provides that the parties aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with Section 34.

ORDER :

These two writ petitions involve common questions of facts and law, therefore, they were heard together and are being disposed of by this common judgment.

2. Facts of the case in brief are that the petitioner is a company incorporated under the Companies Act, 1956 and has its registered office at Simplex House 27 Shakespeare Sarani, Kolkata. Respondent No. 1, i.e., Himachal Pradesh Micro and Small Facilitation Council is a Council established by the State Government under Section 20 of the Micro, Small and Medium Enterprises Development Act, 2006 (for short MSMED Act). Respondent No. 2 is also a company incorporated under the Companies Act. It is registered under the MSMED Act read with Rule 4 (6) of the Himachal Pradesh Micro & small Facilitation Rules, 2007. Respondent No. 3 is shareholder and director of the respondent No. 2 company.

3. The petitioner-company has been dealing with the private respondents in the usual course of business, who supply materials, i.e., couplers and provide job work to them. The dispute involved in CWP No. 2041/2017 relates to couplers worth Rs.22,52,936/supplied to the petitioner-company and job work provided to the tune of Rs.12,65,707/, against the orders placed by it adding up to Rs.35,38,833/alongwith interest to the tune of Rs.21,88,187/, with respondent No.2 claiming total outstanding amount of Rs.57,26,920/under the MSMED Act. Similarly, dispute in CWP No. 1239/2018 pertains to claim with regard to nonpayment of couplers and job work supplied/provided by respondent No. 2 to the petitioner against the supply order worth Rs.31,46,165/and Rs.16,53,192/respectively, along with interest thereon of Rs.88,54,718/( as on 31.3.2016), thus totaling Rs.1,36,54,075/. Respondents No. 2 and 3 in both the matters made a reference to the Himachal Pradesh Micro and small Facilitation Council, which was constituted by the State Government vide Notification No. IndA (F) 1921/ 2005 dated 12.10.2007 in exercise of the power conferred upon it under Section 20 of the MSMED Act, for recovery of a sum of Rs.57,26,920/and Rs. 1,36,54,075/respectively. Reference was made under the provisions of Section 18 of the MSMED Act. The petitioner-company objected that the reference was not maintainable inasmuch as no part of cause of action arose within the State of Himachal Pradesh. Respondent No. 2 is only having its branch office in Himachal Pradesh, however, purchase orders were issued by the petitioner-company at Kolkata. Thus, the reference stood vitiated due to lack of jurisdiction. The reference was taken up by respondent No. 1-Facilitation Council in its 27th Meeting on 18.4.2017 and it was resolved that settlement could not be arrived at between the parties. Since the petitioner-company disputed the outstanding amount as alleged by private respondents, hence conciliation proceedings under Section 18 (2) of the MSMED Act failed. All the purchase orders/work order placed by the petitioner-company with respondent No. 2 had an arbitration clause which reads as under:

“In the event of any difference or dispute arising out of or in connection with this work order, the same shall be first amicably settled by mutual dialogue. If the parties fails to settle their differences or dispute arising out of or in connection with this work order (including interpretation of the terms thereof), the same shall be referred to arbitration. The arbitration proceedings shall be conducted by a sole arbitrator to be appointed by the Managing Director of Simplex Infrastructures Limited and the award/decision of such arbitration shall be final and binding upon both the parties. The venue of the arbitration shall be Kolkata. However, you will not stop the work during the pendency of the proceedings/and shall ensure that such work is proceeded uninterruptedly.”

4. The petitioner-company therefore, invoked arbitration clause incorporated in the purchase orders/work orders as the dispute arose in connection with the execution of the work ord