M/S. VIJETA CONSTRUCTION versus M/S. INDUS SMELTERS LTD. & ANR.

Citation: [2021] 11 S.C.R. 798 · Decided: 23-09-2021 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Remitted to Lower Court

Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 11 S.C.R.
[2021] 11 S.C.R. 798
798
M/S. VIJETA CONSTRUCTION
v.
M/S. INDUS SMELTERS LTD. & ANR.
(Civil Appeal No. 5934 of 2021)
SEPTEMBER 23, 2021
[M. R. SHAH AND A. S. BOPANNA, JJ.]
Micro Small and Medium Enterprises Development Act, 2006
– Arbitration and Conciliation Act, 1996 – s.34 – Respondent’s case
that it supplied TMT bar to the appellant valuing Rs.2,44,92,846/-
out of which it received Rs.1,24,50,000/- – It was alleged that
appellant had not made the payment of the remaining amount –
Respondent approached the Chairman, Micro Small and Medium
Enterprises Facilitation Council – Facilitation Council closed the
proceedings by observing that Facilitation Council was constituted
with a limited object, jurisdiction and it had no jurisdiction to make
enquiry, take evidence and decide truth about the challenged
document – Writ petition by the respondent – The High Court
dismissed the writ petition by observing that order passed the
Facilitating Council can be said to be an award u/s.18 of the
MSMED Act and provision of Arbitration Act shall apply to the
dispute and such an order would be amenable to appeal u/s.34 of
the 1996 Act – On appeal, held: If there is any dispute between the
parties governed by the MSMED Act, the said dispute has to be
resolved through procedure prescribed u/s.18 of the MSMED Act –
As per sub-section (2) of s.18, on receipt of a reference under sub-
section (1), the Council shall have to resolve the dispute through
Conciliation either by the Council itself or seek the assistance of
any institution or centre providing alternate dispute resolution (ADR)
services by making reference to such an institution or centre, for
conducting conciliation and the provisions of section 65 to 81 of
the Arbitration and Conciliation Act shall apply to such dispute as
if the conciliation was initiated under Part-III of the Arbitration Act
– If Conciliation initiated is not successful, it will stand 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 ADR services for arbitration – In the instant
case, the Facilitating Council has not followed the procedure as
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was required to be followed u/s.18 of the MSMED Act r/w. ss.65 to
81 of the Arbitration Act – Once the Conciliation fails, the
arbitration proceedings commences and the Council as an arbitrator
shall have all the powers of the arbitrator as are available under
the provisions of the Arbitration Act – However, no such procedure
was followed – Therefore, matter is remitted to the Facilitation
Council to follow the procedure u/s.18 of the MSMED Act.
CIVIL APPELLATE JURISDICTION: Civil Appeal No.5934 of
2021.
From the Judgment and Order dated 12.03.2012 of the High Court
of Chattisgarh at Bilaspur in W. P. No.418 of 2012.
Ms. Akanksha Sisodia, Anup Jain, Advs. for the Appellant.
Nitin Gaur, Ranjit Kumar Sharma, Advs. for the Respondents.
The Order of the Court was passed by
M. R. SHAH, J.
Delay condoned.
Leave granted.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 12.03.2012 passed by the High Court of Chhattisgarh at
Bilaspur in writ petition (c) No.418 of 2012, by which the High Court
has dismissed the said writ petition as not maintainable in view of remedy
available to the original petitioner under Section 34 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the Arbitration Act),
the original respondent No.1 has preferred the present civil appeal.
2. That the dispute arose between the parties which could not be
resolved. The case on behalf of the respondent herein was that it supplied
TMT bar to the appellant herein valuing Rs.2,44,92,846/- out of which it
received Rs.1,24,50,000/-. The appellant had not made payment of the
remaining amount, therefore, the respondent being supplier approached
the Chairman, Micro Small and Medium Enterprises Facilitation Council
(hereinafter referred to as the Facilitation Council) constituted under the
Micro Small and Medium Enterprises Development Act, 2006 (hereinafter
referred to as the MSMED Act) for small scale industries.
3. By order dated 10.01.2012 the Facilitation Council closed the
said proceedings by observing that Facilitation Council has been
constituted with limited object and jurisdiction and the Facilitation Council
M/S. VIJETA CONSTRUCTION v. M/S. INDUS SMELTERS 

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