The mandatory nature of the pre-deposit requirement under Section 19 of the MSMED Act and the discretion of the court to permit the buyer to remit the amount in installments.

JUDGMENT

(Prayer:- Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, calling for the records pertaining to the proceedings intiated in O.P.55/MSEFC/Madurai/2021 by the 2nd respondent which culminated into an order dated 26.07.2022 in case No. MSEFC/MDU/55/2021 passed by the 2nd Respondent and quash the same.)

1.Heard Mr. M.Vallinayagam, Learned Senior Counsel appearing for the Petitioner, Mr. S.Meenakshisundaram, Learned Senior Counsel appearing for the First Respondent and Mr. V.J.Kumaravel, Learned Counsel for the Second Respondent and perused the materials placed on record, apart from the pleadings of the parties.

2. The First Respondent made a claim in Case No. MSEFC/MDU/55/2021 before the First Respondent under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as ''the MSMED Act'' for short), for payment of Rs. 99,74,825/- from the Petitioner towards the amount due for the works carried out with calculation in terms of the Act, in which an order dated 26.07.2022 was passed holding that the Petitioner was liable to pay the sum of Rs. 99,74,825/- together with compounded interest with monthly rests at three times of the Bank rate notified by the Reserve Bank of India as stipulated in MSMED Act for the invoices during the period from 23.10.2020 to 02.08.2021 till the date of realization of dues, which is assailed in this Writ Petition.

3. Learned Senior Counsel for the First Respondent has raised preliminary objections regarding the maintainability of the Writ Petition by contending that if the Petitioner is aggrieved by the impugned order, it has only to resort to filing of an application under Section 34 read with Section 2(4) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ''the A & C Act'' for short), to have it set aside as an arbitral award, and that in any event, a Writ Petition to set aside an arbitral award cannot be prosecuted without complying with the requirement of pre-deposit of 75% of the amount involved in terms of Section 19 of the MSMED Act.

4. In response, Learned Senior Counsel for the Petitioner contends that when the Second Respondent has not conducted the arbitral procedure as required to be followed under the A & C Act read with MSMED Act, the Petitioner is justified in invoking the plenary jurisdiction of this Court under Article 226 of the Constitution to impeach it placing reliance on the decision of the Hon''ble Supreme Court of India in Jharkhand Urja Vikas Nigam Limited -vs- State of Rajasthan (Order dated 15.12.2021 in Civil Appeal No. 2899 of 2021) in that regard. It is further submitted that the requirement of pre-deposit of 75% of the amount involved as stipulated in Section 19 of the MSMED Act cannot be made applicable to Writ Petitions under Article 226 of the Constitution.

5. The primordial question that arises for consideration in this case is whether a Writ Petition under Article 226 of the Constitution could be entertained to challenge the order passed under Section 18 of the MSMED Act and if so, whether the requirement of pre-deposit of 75% of the amount involved as required under Section 19 of the MSMED Act would not be applicable to such case?

6. At this juncture, it must be noticed that Section 34(2)(v) of the A & C Act provides that an arbitral award may be set aside by the jurisdictional Court on an application made by the aggrieved party when the arbitral procedure is not in accordance with the provisions of that Act. It must, at once, be emphasized that the Honourable Supreme Court of India in Assistant Collector of Central Excise -vs- Dunlop India Limited [(1985) 1 SCC 260] has precisely explained the legal position relating to the exercise of discretionary powers under writ jurisdiction when an alternative remedy exists, in the following words:-

"3. Article 226 is not meant to short-circuit or circumvent statutory procedures. It is only w