The court emphasized the desirability of staying the debarment order pending arbitration proceedings and ordered to keep the impugned order in abeyance during the pendency of the arbitration proceedings.

Leave is granted to place on record replication to the written statement of all the respondents (wrongly categorized as of respondent No. 3) and the application is allowed.

CWP No. 20476 of 2013

2. The petitioner seeks to assail before us the speaking order dated 2.8.2013 (Annexure-P-13) to the limited extent that it seeks to debar the petitioner upto 24.9.2017 from future participation in the tenders.

3. The petitioner, a private limited company, entered into an agreement with respondent No. 1 on 27.4.2010 for manufacture, testing, supply and delivery of 490 Km ACSR Panther 200 mm2 against Tender Specification No. DTQ-3155. Supplies were made against various invoices, but issue arose on account of quality of supply. The respondents thus, are stated to have refused to pay the balance consideration while asking the petitioner to lift the alleged defective supply. In view of this dispute, the petitioner approached Uttrakhand Small Enterprises Facilitation Council (USEFC) under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as the said Act). Initially as envisaged under the said provision, conciliation proceedings were endeavoured which did not proved to be fruitful and in terms of sub-section (3) of Section 18 of the said Act, the USEFC took upon itself to arbitrate in terms of the dispute under the Arbitration and Conciliation Act, 1996. In order to appreciate the procedure of what was done, we reproduce Section 18 of the said Act as under:

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 it to 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.

4. The stand of the respondent No. 2 was sought for, vide communication dated 10.10.2012, emanating from the USEFC and the petitioner is also stated to have filed revised claim petition thereafter.

5. A parallel proceeding arose out of action proposed by respondent No. 2, vide letter dated 25.9.2012, in the form of a debarment order against the petitioner for a period of five years for future participation and seeking to forfeit the bank guarantee amongst others. This letter claims that an earlier communication dated 29.7.2011 had been addressed in this behalf which remained unanswered. The petitioner a