A writ petition under Article 226/227 against an MSMED Act award is not maintainable when an effective alternate remedy under Section 34 of the Arbitration and Conciliation Act, 1996 exists.

Per DHIRAJ SINGH THAKUR, CJ:

The present set of three appeals arises out of a common judgment and order, dated 10.01.2025, rendered in W.P. Nos.2771, 2778 and 2779 of 2013. Since the issues of law and fact which arise in all the three writ appeals are the same and since the judgment impugned before us is also a common judgment for all the three writ petitions, we propose to deal with the issues by way of a common order.

2. We will refer to the facts in reference to W.A. No.208 of 2025 to understand the genesis of the controversy before us. The appellant i.e., Tamil Nadu Electricity Board now rechristened as Tamil Nadu Generation and Distribution Corporation Limited, called for tenders for supply of ACSR/AAA conductors for which six purchase orders were placed with respondent No.2 M/s. Rajam Aluminium Metal Products Pvt. Ltd on 29.12.1997, 28.10.1998, 2011.1999, 16.12.1999, 05.10.2000 and 31.10.2000.

The amount, according to the supplier, not having been paid in accordance with the terms and conditions of the purchase order led respondent No.2 to approach the A.P. Industries Facilitation Council, which was first constituted under the Interest On Delayed Payments To Small Scale And Ancillary Industrial Undertakings Act, 1993, now called „the Andhra Pradesh Micro and Small Enterprises Facilitation Council‟ after the coming into force of the Micro, Small and Medium Enterprises Development Act of 2006 (hereinafter referred to as „the Act of 2006‟), by way of a claim in Form-I on 02.08.2004.

3. From the record, it appears that the Facilitation Council entertained the claim on 04.08.2006 and issued notice to the Tamil Nadu Electricity Board as also the Council for the Electricity Board requiring them to cause appearance on 19.08.2006 before the said Council, failing which it was made clear that the Council would continue to proceed and make an Award on the basis of evidence before it.

4. A second notice was also served on the appellant, dated 17.12.2009, on the Chief Engineer, Material management, of the appellant Board as also the Counsel for the Board. It then appears that counter statement was filed by the appellant before the Facilitation Council in which apart from other grounds, the ground taken was that in terms of provisions of Section 18(3) of the Act of 2006, arbitration cannot proceed unless there was a process of conciliation initiated under Sub-section (2) of Section 18 of the Act of 2006.

The Facilitation Council, however, allowed the claim of respondent No.2 claimant and directed the payment of Rs.14,17,823/- towards principal and Rs.57,21,619/- as interest totaling Rs.71,30,442/- as on 30.06.2004 being the price of goods, supplied to the respondents together with interest due from 12.02.1998 to 30.06.2004. Apart from this, interest at the rate of 1½ times of prime lending rate charged by the State Bank of India compounded with monthly rests with effect from 01.07.2004 was also directed to be paid.

5. Aggrieved of the Award, dated 11.11.2011, passed by the Facilitation Council, W.P. No.2771 of 2013 came to be filed by the appellant herein, which too came to be dismissed inter alia on the following grounds:

“29. The provisions contained in the MSMED Act with the aid of the 1996 Act are self-contained, providing therein the statutory mechanism of conciliation and/or reference to arbitration. They also provide that the award passed by the Facilitation Council shall be deemed to be an award passed under the 1996 Act. lf the order/award passed by the Facilitation Council is an award under the 1996 Act, the same can be assailed u