The judgment establishes the overriding effect of specific provisions in the Micro, Small & Medium Enterprises Development Act, 2006 over the Arbitration & Conciliation Act, 1996, and emphasizes the proper procedure to be followed by the Council under Section 18 of the Act.

JUDGMENT :

Biswanath Rath, J.

1. This is a Writ Petition filed assailing the impugned order vide Annexure-1 whereby considering the request of the Opp. Party therein, i.e. the present Petitioner, for referring the matter for Arbitration under Section 8 of the Arbitration & Conciliation Act, 1996, the authority has passed the order deciding to consider the matter under the provisions contained at Section 18(4) of the Micro, Small & Medium Enterprises Development Act. 2006. Mr. Patnaik, Learned Counsel appearing for the Petitioner states that the order is illegal on the following grounds:

(1) The rejection of Petitioner's claim for taking the matter under Section 8 of Arbitration & Conciliation Act 1986 is improper.

(2) Since the parties have entered into a contract, they are bound by the terms of the contract. The contract having contained a clause vide Proviso-22 making a provision for amicable settlement as well as arbitration of the matter following the provisions of Arbitration & Conciliation Act, 1996, the parties are bound by the same & a proceeding under Section 18 of the Micro, Small & Medium Enterprises Development Act, 2006 is not maintainable.

(3) Even assuming that a proceeding under Section 18 of the Act referred to hereinabove, following the provisions contained in Sub-section (2) of Section 18, before the matter is taken up for arbitration/conciliation of the matter should have been taken up. Justifying the claims made hereinabove, Mr. Patnaik during course of argument refers to Clause 22 of the agreement between the parties appearing at Annexure-4 of the Writ Petition. He also referred to the provisions contained in Section 18 of the Micro Small & Medium Enterprises Development Act, 2006.

Per contra, Mr. Mishra, Learned Counsel appearing for the Opp. Party No. 1 submits that there is no justification on the part of the Petitioner for making a request for referring the matter under Section 8 of the Arbitration & Conciliation Act, 1996 for the reason that Section 8 of the Arbitration & Conciliation Act, 1996 has no application to the present case. In making the submission, Mr. Mishra submitted that Section 8 is only applicable in case there is arbitration before the judicial authority & the authority under the Micro, Small & Medium Enterprises Development Act not being a judicial authority, the provisions contained in Section 8 of the Arbitration & Conciliation Act, 1996 has no application to the present case. Mr. Mishra next contended that in view of power given to the council under the Micro, Small & Medium Enterprises Development Act, 2006, the Council has the authority to decide the issues involved in the dispute &, as such there is no illegality in the impugned order.

2. Now coming to decide on the 1st question raised by the Learned Counsel for the Petitioner Section 8 of the Arbitration & Conciliation Act, 1996 reads as follows:-

8. Power to refer parties to arbitration where there is an arbitration agreement.-(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in Sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under Sub-section (1) & that the issue is pending before the judicial authority, an arbitration may be commenced or continued & an arbitral award made.

The above provision makes it clear that such contingency is made in the event an action is brought before a Judicial Authority. In the present case the authority before whom the action has been brought is not a Judicial Authority, thus above provision is not at all attracted to the case at hand. Further in view of clear provision contained in Section 24of the Micro, Small & Mediu