The impugned order was set aside due to the failure to conduct arbitration as per the provisions of the MSMED Act, and the petitioner was directed to seek relief under the Arbitration and Conciliation Act, 1996.

JUDGMENT

(Prayer: Writ Petition filed under Article 226 of Constitution of India, for issuance of a Writ of certiorari, to call for the records relating to the impugned order of the 1st respondent in MSCFC/CR/364/19, MSCFC/CR/365/19, MSCFC/CR/367/19, MSCFC/CR/406/19, MSCFC/CR/407/19 dated 23.11.2021 and quash the same.)

1. The petitioner has challenged the impugned order passed by the 1st respondent all dated 23.11.2021. The case of the petitioner appears to be that copy of the claim petition filed by the 2nd respondent before the 1st respondent on 23.11.2019 was not served.

2. That apart, it is submitted that the entire principal amount was settled by the petitioner to the 2nd respondent during the pendency of the proceedings before the 1st respondent after completion of the work by the 2nd respondent on 06.12.2021.

3. It is further submitted that it was incumbent on the part of the 1st respondent to either conciliate the dispute between the petitioner and the 2nd respondent by itself or by referring the matter a centre providing such services and one its failure to take up the case for arbitration by itself or by referring the matter a centre providing such services. It is therefore submitted that Section 18 of MSMED Act, 2006 has been violated by the 1st respondent and therefore the impugned order is liable to be quashed.

4. In this connection, a reference was made to decision of this Court rendered in W.P.No.25717 of 2016 vide order dated 27.04.2022 wherein it has been held as follows:-

“9.In the present case, after the 1st respondent holding that there is no settlement in conciliation proceedings, and terminating the conciliation proceedings without conducting any arbitration proceedings as per Section 18(3) of the MSMED Act, proceeded to pass impugned order. Due to the failure of the 1st respondent to conduct arbitration as per the provisions of Arbitration and Conciliation Act, the impugned order passed is invalid, illegal and liable to set aside. The contention of the learned counsel appearing for the 2nd respondent that the writ petition is not maintainable as the petitioner failed to comply with Section 19 of the MSMED Act is not acceptable. Section 19 of MSMED Act, deals with any decree or award or other made either by Council itself or refer to any Institution or Centre providing Alternate Dispute Resolution services to which reference made by the Council. The above provisions clearly shows that Section 19 of MSMED Act, relates only to the out come of the arbitration proceedings or Alternate Dispute Resolution Service Centre. In the present case, no arbitration proceedings was conducted by the 1st respondent or the dispute was referred to any Institution or Centre providing Alternate Dispute Resolution services. In view of the same, Section 19 of the MSMED Act, is not applicable to the facts of the present case and judgment relied on by the learned counsel appearing for the petitioner does not advance the case of the petitioner.

10. For the above reasons, the impugned order of the 1st respondent is set aside and the matter is remanded back to the 1st respondent. The 1st respondent can conduct the arbitration by itself or refer it to any Institution or Centre providing Alternate Dispute Resolution Services. The learned counsel appearing for the 1st respondent submitted that a direction may be issued to the 1st respondent to conclude the proceedings as expeditiously as possible if the 1st respondent arbitrate by itself or a direction may be issued to the Alternate Dispute Resolution Service Centre, if any such reference is made by the 1st respondent. Considering the same, this Court directs to conclude the arbitration proceedings as expeditiously as possible, in any event not more than three (3) months from the date of receipt of a copy of this order, either the arbitration proceedings is taken up by the 1st respondent or any other centre providing Alternate Dispute Resolution services. 5.This case was came up for a