The Limitation Act, 1963 applies to arbitration proceedings under the MSMED Act, ensuring fair opportunity for parties involved.

1. Petitioners have called in question award dated 12.3.2019 passed by Madhya Pradesh Micro and Small Enterprises Facilitation Council, Bhopal.

2. Respondent No.2 i.e. M.s. Sanfield India Limited has filed an application before Facilitation Council, Bhopal against buyers to make payment of order issued on 17.7.2009, 8.2.2010 and 15.7.2010 in respect of purchase of bearings and joint systems. Facilitation Council after failure of conciliation commenced Arbitration Proceedings and passed an award dated 12.3.2019 for principal amount of Rs. 13,48,305/- and interest of Rs. 8,74,820/- against petitioners / Company. Petitioners - Company being aggrieved by impugned award have preferred this writ petition under Art.226 of the Constitution of India.

3. Counsel appearing for the petitioners has challenged the impugned award on two grounds i.e., award was passed without giving an opportunity of hearing to petitioners / Company and Facilitation Council wrongly held that provision of Limitation Act 1963 is not applicable in Arbitration proceedings conducted under the Micro, Small and Medium Enterprises Development Act, 2006 .

4. Counsel appearing for the petitioners has drawn attention of this Court towards para 4 of the award and argued that case was fixed for conciliation on 18.2.2015, 7.5.2015, 28.8.2015, 3.1.2016, 18.2.2016, 23.6.2016, 21.12.2016 and 15.3.2017. Facilitation Council on 15.3.2017 held that non - applicants refused to do conciliation, therefore, conciliation proceedings were terminated. On the said date, non - applicants prayed for time as there was reconstitution DSC Ltd. Facilitation Council held that sufficient opportunity was given to petitioners, non - applicants therein and ordered to argue the matter today i.e. 15.3.2017 or to file written arguments by 25.3.2017. Referring to the said facts, counsel appearing for the petitioners submitted that after termination of conciliation proceedings and on commencement of Arbitration, notice ought to have been given to petitioners regarding initiation of arbitration under Arbitration and Conciliation Act, 1996 . Petitioners ought to have been given opportunity to lead their evidence. Since no notice regarding commencement of Arbitration Proceedings and opportunity to lead evidence was given to petitioners, therefore, their rights of natural justice have been violated.

5. Counsel appearing for the petitioners further argued that Limitation Act, 1963 is applicable in Arbitration Proceedings. He referred to S.18(3) of the Micro Small and Medium Enterprises Development Act, 2006 (herein after referred to as MSMED Act, 2006) and S.43 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to Act, 1996) before the Court. He also relied on Apex Court judgment, reported in 2021 SCC Online SC 439 - Shilpi Industries Etc. v. Kerala State Road Transport Corporation and another. Relying on the said judgment counsel appearing for the petitioner submitted that Apex Court held that provision of Limitation Act, 1963 is applicable to Arbitration Proceedings under S.18(3) of the MSMED Act, 2006. It was further argued by him that though there is an alternative remedy under S.19 of MSMED Act, 2006 to challenge the award, but this Court can exercise its discretion under Art.226 of the Constitution of India despite availability of alternative remedy because there is violation of fundamental rights and jurisdictional error to entertain claim barred by Limitation Act.

6. Counsel appearing for the respondents submitted that petitioners have an alternative remedy for setting aside the award in MSMED Act, 2006. Under S.19 of the MSMED Act 2006, 75% pre - deposit of award is mandatory for entertaining application. To av