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2022 SCC OnLine Guj 2652
In the High Court of Gujarat at Ahmedabad

(BEFORE A.P. THAKER, J.)
Anupam Industries Ltd.

Versus
State Level Industry Facilitation Council
R/Special Civil Application No. 2825 of 2020
Decided on December 16, 2022
Advocates who appeared in this case:
Mr. Naveen Pahwa, SR. Advocate with Mr. Kamlesh P. Vaidankar
(10135) for the Petitioner(s) No. 1
Nilu K. Vaidankar(8382) for the Petitioner(s) No. 1
DS AFF. Not Filed (N) for the Respondent(s) No. 1,2
Mr. Dhaval Dave, SR. Advocate with Rohan A Shah(7497) for the
Respondent(s) No. 3
Rushabh H. Shah(7594) for the Respondent(s) No. 3
The Judgment of the Court was delivered by
A.P. THAKER, J.:— The present petition is filed under Article 227 of
the Constitution of India to quash and set aside the impugned award
dated 3.5.2019 passed by the Learned Sole Arbitrator in Arbitration
Matter titled Vishal Carriers v. Anupam Industries Ltd.
2. The brief facts of present petition is that the petitioner is a
Company incorporated under the provisions of the Companies Act
engaged in the business of manufacturing Gantry and EOT Cranes and
is one of the largest Company in the field of design, engineering and
manufacturing of heavy duty cranes.
2.1 It is contended that as per the claim of respondent No. 3, it has
filed before MSME Facilitation Council and it is a proprietorship concern
engaged in the business of providing transport services. It is the claim
of the respondent No. 3 that it has provided transport service to the
petitioner pursuant to different Purchase Orders, for which the
Respondent No. 3 had raised separate distinct invoices during the
period from 17.5.2013 to 15.7.2015, which fell due from 15.8.2013 to
13.10.2015. Respondent No. 3 approached the Micro, Small and
Medium Enterprises Facilitation Council (respondent No. 1) for invoking
the provisions of Micro, Small and Medium Enterprises Development
Act, 2006 (hereinafter referred to as “the MSMED Act”) somewhere in
the month of July-August, 2017.
2.2 It is contended that as per record produced by the respondent
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No. 3 before the respondent No. 1, respondent No. 3 Firm was

registered in “E” category i.e. “Small” enterprise category incorporated
with effect from 31.12.2016, which is reflected from the Certificate of
Registration issued by the concerned District Industries Centre, Anand.
It is contended that respondent No. 3 was registered under the MSMED
Act, subsequent to the dates of alleged transactions and had apparently
got itself registered under the MSMED Act only with a view to get the
benefit of all the provisions relating to Delayed Payment under the
MSMED Act.
2.3 It is contended that conciliation efforts exerted by the learned
MSME Facilitation Council, Gandhinagar did not yield the result and,
therefore, the matter was referred to GCCI for conducting the Arbitral
proceedings as per the provisions of Arbitration and Conciliation Act,
1996. it is contended that since the petitioner was not even informed
about having of the alleged Arbitration, it was impossible for him to
know about actual pendency of the arbitral proceedings and to attend
it. That due to that eventuality, the entire arbitral proceedings were
conducted ex-facie in absence of the petitioner and the impugned
award came to be passed by the sole Arbitrator.
2.4 The same has been challenged by the petitioner by way of filing
the petition on the grounds that the claim filed by the respondent No. 3
is not maintainable as it was not registered under the MSMED Act at
the time of transaction. It is also contended that Arbitrator has also not
appreciated the true and correct facts in absence of the petitioner and,
therefore, it has prayed to quash and set aside the impugned award of
the sole arbitrator.
3. Respondent No. 3 has filed its affidavit-in-reply and has raised
many contentions. By way of relevant facts, it has contended that on
7.7.2017, respondent filed application under Section 18 of the MSMED
Act, 2006 before the Facilitation Council along with all necessary
documents. It is contended that on such application the Counsel on
29.9.2017 issued notice to the petitioner, which was served upon the
petitioner through email on 3.10.2017. It is contended that pursuant to
such notice, the petitioner did not appear, therefore, the Council on 3-
6/11/2017 issued a reminder notice to the petitioner informing them to
submit all the relevant details within 7 days.
3.1 It is contended that the Council under Section 18(2) undertook
conciliation proceedings and conducted meeting on 24.1.2018,
14.2.2018, 14.3.2018 and 25.4.2018 and intimation to that meetings
were made to the petitioner. It is contended that despite giving last
opportunity to appear on 25.4.2018, the petitioner did not appear in
any of the aforesaid meetings. It is contended that however, advocate
Mr. Nilu Vaidankar once appeared on behalf of the petitioner in the
meeting on 14.3.2018 and even showed inclination to settle the matter
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on behalf of the petitioner. It is contended that since thereafter no

communication was received by the respondent, it addressed a email
dated 20.3.2018 and 28.3.2018 to the advocate who appeared for the
petitioner. According to respondent, the said email was not replied. It is
contended that despite repeated notices and reminders, the petitioner
chose not to appear in the conciliation proceedings and, therefore, the
Facilitation Council, on 24.5.2018, passed an order closing conciliation
proceedings under Section 18(2) and further referred the matter to
GCCI for arbitral proceedings under Section 18(3) of MSMED Act, 2006.
It is contended that the aforesaid order was sent by Registered Post to
the petitioner as well as the respondent. Thereafter, the Council on
13.6.2018 addressed a letter to GCCI-ADRC referring the matter for
arbitration. That, thereafter the GCCI-ADRC on 25.6.2018 addressed a
communication to both the parties informing about procedure and the
fees for conducting arbitration. That, on 21.7.2018, the GCCI-ADRC
addressed a communication to Mr. Mahendra Anand for giving consent
for his appoint as a Sole Arbitrator. Upon such consent being received,
the GCCI-ADRC on 3.8.2018, addressed a letter to Chairman, SLIFS,
Industrial Commissionarate, informing about the appointment of the
Sole Arbitrator. That thereafter a letter was addressed by GCCI-ADRC
dated 16.8.2018 to the parties and the Sole Arbitrator for fixing first
meeting on 5.9.2018 at 12 p.m. and Gujarat Chamber of Commerce
and Industry, Shri Ambica Mills, Gujarat Chamber Building, Ashram
Road, Ahmedabad.
3.2 It is also contended that several arbitration meetings were held
by Sole Arbitrator and prior to that he had sent intimation to the
petitioner as well as respondents. It is contended that, however, the
petitioner did not remain present on any od the dates. It is also
contended that the Arbitrator even sent Minutes of Meeting through
email to the petitioner as well as respondent. It is contended that the
respondent has, during the arbitral proceedings, served claim
statement, additional list of documents and writtens submissions by
Registered Post to the registered address of the petitioner Company
and yet neither the petitioner has chosen to appear nor the petitioner
has raised any objections during the time. It is contended that since
the petitioner was not appearing for arbitral proceedings, the Arbitrator
decided to proceed with the matter and passed an Award to that effect
on 3.5.2019 and allowed the claim of the respondent. It is also
contended that a copy of the award was sent to the petitioner by
Registered Post which was delivered to the registered addressed of the
petitioner Company on 6.6.2019. It is contended that despite having
knowledge about arbitral award dated 3.5.2019, the petitioner slept
over its right and did not challenge the same by way of filing statutory
Appeal under Section 34 of the 1996 Act within stipulated time and,
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therefore, the Award dated 3.5.2019 attained finality.

3.3 It is also contended that thereafter on 10.10.2019, the
respondent issued a demand notice under the provisions of the
Insolvency and Bankruptcy Code. That the petitioner on 19.10.2019
replied to the same, making averment that they were not aware about
such on-going arbitration proceedings and award dated 3.5.2019. It is
contended that subsequent thereof, the respondent on about 6.11.2019
preferred an Application under Section 9 of the Insolvency and
Bankruptcy Code before the National Company Law Tribunal,
Ahmedabad Branch against the petitioner. According to the
respondents, the present petition is filed with malafide intention to
derail and linger the insolvency proceedings.
3.4 By referring to the aforesaid factual matrix, the respondent has
denied the contention of the plaintiff raised in the petition and has
submitted that alternative remedy of Appeal is available to the
petitioner, and therefore, the present petition is not maintainable under
the facts of the present case. It is also contended that the present
petition is not bonafide one and filed only to derail the insolvency
proceedings.
4. Heard Mr. Naveen Pahwa, learned Senior Counsel assisted by Ms.
Neelu Vaidankar and Mr. Kamlesh Vaidankar, learned advocates for the
petitioner and Mr. Dhaval Dave, learned Senior Counsel assisted by Mr.
Rohan Shah and Mr. Rushabh Shah, learned advocates for the
respodnent No. 3 at length. Perused the materials placed on record and
the decisions cited at bar.
5. Mr. Naveen Pahwa, learned Senior Counsel for the petitioner,
while referring to the averment made in the Memo of Petition and the
documentary evidence produced along with petition, has vehemently
submitted that to claim any relief under the MSMED Act, one must be
registered prior to any business transaction entered into between the
parties. Mr. Pahwa has submitted that in the present case, the
transaction between the petitioner and private respondents was from
1.5.2013 to 31.7.2015. He has submitted that however at that stage,
the private respondent was not registered under the MSMED Act. He
has submitted that the respondent No. 3 came to be registered as
Medium, Small and Medium Enterprises on 31.12.2016. According to
Mr. Pahwa, therefore, the provisions of the MSMED Act would not be
applicable in respect of transaction between the parties. Mr. Pahwa,
learned Senior Counsel has also submitted that when the MSMED Act
itself was not applicable to the transaction between the parties, the
proceedings under the MSMED Act, which includes conciliation as well
as arbitration proceedings, would be non est in the eyes of law.
5.1 Mr. Pahwa, learned Senior counsel has also submitted that
admittedly, the respondent No. 3 has moved the MSME Council in July-
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August, 2017 for transaction in question. Mr. Pahwa has submitted that
there was no proper hearing conducted and the petitioner was not
informed. Mr. Pahwa, learned Senior Counsel has submitted that even
during arbitral proceedings at the instance of the MSME Council, no
opportunity of being heard was given to the petitioner and ex-parte
order came to be passed on 12.10.2019. Mr. Pahwa learned Senior
Counsel, while referring to the documentary evidence produced on
record, submitted that the letter dated 1.6.2019 (Page-40) was never
sent to the petitioner and it was accepted by the advocate for the
private respondent who is claimant before the MSME Council. Mr. Pahwa
has referred to Page-40 and drew the attention of the Court on the
endorsement made on Page-40 by the advocate of the claimant of
receipt of the same for both the parties and has submitted that this
itself suggest that this communication was never received by the
petitioner herein.
5.2 Mr. Pahwa, learned Senior Counsel has also submitted that
merely because lawyer of the petitioner was present in the conciliation,
cannot be deemed to be authorized to appear before the arbitral
proceedings. Mr. Pahwa, learned Senior Counsel, while referring to the
affidavit-in-reply of the respondent No. 3 and the e-mail addressed
relied upon by respondent No. 3 regarding the petitioner-company, he
has submitted that the said email address is of the other Company and
not of the petitioner, and therefore, there is no proper communication
regarding the arbitral proceedings and the award passed therein. Mr.
Pahwa has vehemently submitted that since there was no opportunity
of being heard given to the present petitioner, the entire proceedings is
also liable to be quashed and set-aside.
5.3 Mr. Pahwa, learned Senior Counsel has also submitted that when
the MSMED Act itself was not applicable to the transaction in question,
even if any award is passed by the Sole-Arbitrator, there is no need of
filing any Appeal under the provisions of the said Act as well as
Arbitration and Conciliation Act, as the initiation of proceedings under
the MSMED Act itself is not sustainable in the eyes of law. He has
submitted that, therefore, considering the facts of the present case, the
petitioner has every legal right to approach this Court by filing petition
under the provisions of the Constitution for quashment of the arbitral
award. Mr. Pahwa, learned Senior Counsel has submitted to allow the
present petition. He has relied upon the following decisions in support
of his submissions:
1. Judgment dated 27.12.2019 passed in LPA No. 619 of 2019 in
case of Nik San Engineering Co. Ltd. v. Easun Reyroller Limited:
“3.2 Having regard to the fact that section 17 of the MSMED Act
which provides for recovery of amount due, lays down that for any
goods supplied or services rendered by the supplier, the buyer shall
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be liable to pay the amount with interest thereon as provided under

section 16, the learned counsel referred to clause (n) of section 2 of
the MSMED Act which defines “supplier” and reads as under:—
“(n) “supplier” means a micro or small enterprise, which has
filed a memorandum with the authority referred to in sub-section
(1) of section 8, and includes,—
(i) the National Small Industries Corporation, being a company,
registered under the Companies Act, 1956 (1 of 1956);
(ii) the Small Industries Development Corporation of a State or
a Union territory, by whatever name called, being a company
(iii) any company, co-operative society, trust or a body, by
whatever name called, registered or constituted under any
law for the time being in force and engaged in selling goods
produced by micro or small enterprises and rendering
services which are provided by such enterprises;”
It was submitted that while the first part of the clause (n) of
section 2 of the MSMED Act lays down that supplier means a micro
or small enterprise which has filed a memorandum with the authority
referred to in sub-section (1) of section 8, the inclusive part of the
definition as contained in sub-clause (iii) thereof does not qualify
micro and small enterprises by filing of memorandum. It was
submitted that in the facts of the present case, the goods were
supplied from the State of Gujarat which is within the jurisdiction of
the Facilitation Council and hence the reference under section 18 of
the MSMED Act had rightly been made before the third respondent -
Facilitation Council. To bolster such submission, the learned counsel
placed reliance upon the decision of the High Court of Judicature at
Hyderabad for the State of Telangana and the State of Andhra
Pradesh in The Indur District Cooperative Marketing Society Ltd. v.
Microplex (India), Hyderabad, 2015 SCC OnLine Hyd 494, wherein
the court has held that a micro or small enterprise is not mandatorily
required to file a memorandum with the authorities specified by the
State Government or the Central Government as the case may be
and discretion is given to it in this regard. However, section 2(n),
insofar it defines a supplier to mean a micro or small enterprise is
followed with the qualification that it should have filed a
memorandum with the authority referred to in subsection (1) of
section 8. However, the inclusive part of the definition under section
2(n)(iii) states that any company, cooperative society, trust or body,
by whatever name called, and engaged in selling goods produced by
micro or small enterprises and rendering services which are provided
by such enterprises, would also qualify as a supplier. In the context
of this inclusive part of the definition, there is no requirement that
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the micro or small enterprise, whose goods are being sold or whose
services are being rendered by the company, cooperative society,
trust or body, should have filed a memorandum under section 8(1)
of the MSMED Act of 2006. The court held that it would be
anomalous to interpret the definition to mean that for a micro or
small enterprise to be a supplier, it must be mandatory to file a
memorandum under section 8(1), but any company, co-operative
society, trust or body, which either sells goods or renders services of
a micro or small enterprise, would automatically qualify as a
supplier, irrespective of whether or not such micro or small
enterprise has itself filed a memorandum under section 8(1). The
court accepted the submission that the phrase “which has filed a
memorandum with the authority” in section 2(n) is only qualifying
and does not curtail the scope of the definition. The court also held
that what is required is only that the supplier should be located
within the jurisdiction of the Facilitation Council and not that they
should be registered or have their registered office within such
jurisdiction.
4.8 Next, it was submitted that the word used in section 18 of the
MSMED Act is “party” as against “supplier”. Nothing prevented the
legislature from using the word “supplier” in section 18 of the
MSMED Act. Hence, the appellant as well as the intervener are
covered by the plain language of the MSMED Act and in the absence
of any ambiguity, the interpretation cannot deviate from such
language. It was submitted that it is a settled principle that literal
interpretation is the preferred method of interpretation where the
language used is clear, as held by the Supreme Court in the case of
Union of India Through Director of Income Tax v. Tata Chemicals
Ltd., (2014) 6 SCC 335, wherein the court has held thus:
“It is cardinal principle of interpretation of Statutes that the
words of a Statute must be understood in their natural, ordinary
or popular sense and construed according to their grammatical
meaning unless such construction leads to some absurdity or
unless there is something in the context or in the object of the
Statute to the contrary. The golden rule is that the words of a
Statute must prima facie be given their ordinary meaning. It is
yet another rule of construction that when the words of a Statute
are clear, plain and unambiguous, then the Courts are bound to
give effect to that meaning irrespective of the consequences. It is
said that the words themselves best declare the intention of the
law giver. The Courts have adhered to the principle that efforts
should be made to give meaning to each and every word used by
the legislature and it is not a sound principle of construction to
brush aside words in a Statute as being inapposite surpluses, if
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they can have proper application in circumstances conceivable

within the contemplation of the Statute.”
11. Section 18 of the MSMED Act provides for making reference to
the Facilitation Council by a party to a dispute with regard to any
amount due under section 17 of that Act. Section 17 of the MSMED
Act postulates that for any goods supplied or services rendered by
the supplier, the buyer is liable to pay the amount of interest
thereon as provided in section 16. Section 16 of the MSMED Act says
that where a buyer fails to make payment of the amount due to the
supplier, as required under section 15, the buyer shall,
notwithstanding anything contained in any agreement between the
buyer and the supplier or any law for the time being in force, be
liable to pay compound interest with monthly rests to the supplier on
that amount from the appointed day or, as the case may be, from
the date immediately following the date agreed upon, at three times
of the bank rate notified by the Reserve Bank. Section 15 of the
MSMED Act provides for “liability of buyer to make payment” and
provides that where any supplier, supplies any goods or renders any
services to any buyer, the buyer shall make payment therefor on or
before the date agreed upon between him and the supplier in writing
or, where there is no agreement in this behalf, before the appointed
day. The proviso thereto says that in no case the period agreed
between the supplier and the buyer in writing shall exceed forty five
days from the day of acceptance or the day of deemed acceptance.
14. On a conjoint reading of section 15 and section 2(b) of the
MSMED Act, it is discernible that section 15 casts an obligation upon
the buyer to make payment to the supplier within the period agreed
upon or within fifteen days of acceptance or deemed acceptance of
the goods or services. In case the buyer fails to do so, by virtue of
section 16 of the MSMED Act, he is saddled with the liability to pay
compound interest with monthly rests at three times of the bank
rate notified by the Reserve Bank. Section 17 of the MSMED Act
casts upon the buyer the liability to pay the supplier interest in
terms of section 16; and section 18 of the MSMED Act enables a
party to make a reference with regard to any amount due under
section 17.
15. A common thread which runs through sections 15 to 17 of the
MSMED Act is that goods must be supplied or services must have
been rendered by a “supplier”. Therefore, to invoke section 18 of the
MSMED Act, it is a sine qua non that the liability has to be with
regard to goods supplied or services rendered by a “supplier”.
16. The moot question that therefore arises is whether the
appellant is a “supplier” as contemplated under section 2(n) of the
MSMED Act.
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50. The next question that then arises for consideration is as to at

which point of time the memorandum should have been filed by a
micro or small enterprise to be eligible to make a reference under
section 18 of the MSMED Act, namely whether such memorandum
should have been filed before the supply is made or at any point of
time even after the contract is executed. In this regard, the scheme
of Chapter V of the MSMED Act may be revisited.
51. Section 15 of the MSMED Act provides that the buyer shall
make payment for any supply of goods or services rendered by a
supplier on or before the date agreed upon between them in writing
and in absence of an agreement before the appointed day.
“Appointed day” is defined under clause (b) of section 2 of the
MSMED Act to mean the day following immediately after the expiry
of the period of fifteen days from the day of acceptance or the day of
deemed acceptance of any goods or any services by a buyer from a
supplier. The Explanation thereto provides that for the purposes of
the clause, -T
(i) “the day of acceptance” means,
(a) the day of the actual delivery of goods or the rendering of
services; or
(b) where any objection is made in writing by the buyer
regarding acceptance of goods or services within fifteen days
from the day of the delivery of goods or the rendering of
services, the day on which such objection is removed by the
supplier;
(ii) “the day of deemed acceptance” means, where no objection is
made in writing by the buyer regarding acceptance of goods or
services within fifteen days from the day of the delivery of
goods or the rendering of services, the day of the actual
delivery of goods or the rendering of services;
52. The proviso to section 15 of the MSMED Act provides that in
no case the period agreed upon between the supplier and the buyer
in writing shall exceed forty-five days from the day of acceptance or
the day of deemed acceptance. Where the status of the enterprise,
viz. whether it is a micro enterprise or small enterprise is determined
by filing of a memorandum by such enterprise with the authority
referred to in sub-section (1) of section 8 of the MSMED Act, the
parties would be aware that the provisions of section 15 of that Act
have to be complied with and payment has to be made to the
supplier within the time provided thereunder. However, in the
absence of the status of the enterprise being determined, the
agreement between the parties would not be in terms of section 15
of the MSMED Act.
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53. Adverting to section 16 of the MSMED Act, it is an onerous

provision which casts an obligation upon a buyer who purchases
goods from a supplier, in case of nonpayment of the amount as
required under section 15 to the supplier, to pay compound interest
with monthly rests to the supplier on the amount from the appointed
date or the date immediately following the date agreed upon at three
times of the bank rate notified by the Reserve Bank. Therefore,
before a buyer purchases goods or avails services from a micro or
small enterprise, he should be aware about the status of the
enterprise, so that he knows that nonpayment of the amount within
the time provided under section 15 of that Act will entail payment of
compound interest at three times of the bank rate notified by the
Reserve Bank. Moreover, section 22 of the MSMED Act casts an
obligation upon a buyer who is required to get his annual accounts
audited under any law for the time being in force to furnish
additional information as stipulated therein, failure of which would
be visited by penalty under section 27 thereof. Moreover, in view of
the provisions of section 23 of the MSMED Act, the buyer would not
be entitled to claim deduction of the amount payable or paid by way
of interest under section 16 for the purposes of computation of
income under the Income Tax Act, 1961. Therefore, when such
onerous obligations are cast upon the buyer under the above
provisions of the MSMED Act, the buyer should be aware of the
status of the enterprise from which he is purchasing the goods or
availing services, viz. whether it is a micro or small enterprise. It,
therefore, appears that the legislature has intentionally provided that
for the purposes availing the benefit of the provisions of Chapter V of
the MSMED Act, a micro or small enterprise should have filed a
memorandum as contemplated under sub-section (1) of section 8 of
the MSMED Act and accordingly has employed the expression
“supplier” in sections 15, 16, 17 and 22 of the MSMED Act.
54. Another significant aspect of the matter is that for invoking
section 18 of the MSMED Act, the dispute must relate to any amount
due under section 17, which in turn says that for any goods supplied
or services rendered by the supplier, the buyer shall be liable to
interest thereon as provided under section 16. Therefore, a sine qua
non for invoking section 18 of the MSMED Act is that the goods must
have supplied or services must have been rendered by a supplier;
therefore, unless the micro or small enterprise satisfies the
requirements of “supplier” as defined under section 2(n) of the
MSMED Act at the time when the goods were supplied, the
provisions of section 18 of the MSMED Act would not be attracted.
55. Since the liability under section 15, 16 and 17 of Chapter V of
the MSMED Act arises only in case where the goods were supplied or
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services provided or rendered by a “supplier”, as a necessary

corollary it follows that the micro or small enterprise should have
filed the memorandum before the goods were supplied or services
provided or rendered. A micro or small enterprise which files a
memorandum at a subsequent date after the goods are supplied or
services provided or rendered, would not be eligible to invoke section
18 of the MSMED Act as the said section envisages reference by any
party to a dispute with regard to any amount due under section 17,
and the amount due under section 17 would be in relation to goods
supplied or services rendered by a supplier, which requirement
would not be satisfied in such a case. The contention that a micro or
small enterprise can file a memorandum at any point of time even
after the goods are supplied and services are rendered and still
invoke section 18 of the MSMED Act because on the date when
section 18 is invoked, it falls within the ambit of supplier as defined
under section 2(n) of that Act, therefore, does not merit acceptance.
Considering the scheme of Chapter V of the MSMED Act, this court is
of the considered view that it is only a micro or small enterprise
which falls within the purview of the expression “supplier” as
contemplated in section 2(n) as discussed hereinabove, and which
has supplied goods or rendered services after filing a memorandum
as contemplated under section 8(1) of the MSMED Act, which would
be entitled to invoke section 18 of the MSMED Act in respect of any
dispute regarding any amount due in relation to goods supplied or
services rendered. Therefore, the contention that a micro or small
enterprise can file a memorandum even after the goods are supplied
and services are rendered and invoke section 18 of the MSMED Act,
must necessarily fail.
2. Easun Reyrolle Limited v. Nik San Engineering Co. Ltd., 2019 SCC
OnLine Guj 2474:
“15. To meet with the stand taken by learned senior counsel for
the petitioners, Mr. Jaimin R. Dave learned advocate for the
respondent No. 1 submitted that there is an alternative efficacious
remedy available to the petitioners and the arbitrator by virtue of
Section 16 of the Arbitration Act, 1996 can decide these issues, the
Hon'ble Court may not exercise jurisdiction under Article 226 of the
Constitution of India. It has further been contended that the
petitioners have never raised such contention of jurisdiction before
the State level facilitation council despite opportunities having been
granted, and therefore, now the petitioners cannot raise such issue
of jurisdiction as has acquiescence his right of agitating the same
even petitioners did not bother to remain present before the
authority to raise the issue related to jurisdiction, and therefore
once, the petitioners have submitted to the jurisdiction of
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respondent authority, the petition may not be entertained and only

idea behind bringing this petition is just to delay the proceedings.
28. So far as the contention with regard to the maintainability of
petition raised by respondent No. 1 by asserting that it can be gone
in to by the learned Arbitrator but in view of the scheme of the Act
and in view of this peculiar set of circumstances since reference itself
is not tenable for want of jurisdiction and authority it is always open
for the petitioner to invoke extraordinary jurisdiction of this Court. As
a result of this, the petition is maintainable and it is settled position
of law that challenge to the reference itself is amenable to the writ
jurisdiction if it is without the authority of law made by the
concerned authority and here is the case in which the authority has
made an attempt to allow respondent No. 1 to invoke such
jurisdiction by respondent Nos. 2 and 3 to raise such a huge claim
though not entitled to seek benefit of the provisions of the Act in
question. The contentions raised by the learned counsel for the
petitioner have got its own impact and the Court is therefore,
inclined to accept the petition by granting relief as prayed for.
3. Silpi Industries v. Kerala State Road Transport Corporation, 2021
SCC OnLine SC 439;
“26. Though the appellant claims the benefit of provisions under
MSMED Act, on the ground that the appellant was also supplying as
on the date of making the claim, as provided under Section 8 of the
MSMED Act, but same is not based on any acceptable material. The
appellant, in support of its case placed reliance on a judgment of the
Delhi High Court in the case of GE Y&D India Ltd. v. Reliable
Engineering Projects and Marketing, but the said case is clearly
distinguishable on facts as much as in the said case, the supplies
continued even after registration of entity under Section 8 of the Act.
In the present case, undisputed position is that the supplies were
concluded prior to registration of supplier. The said judgment of
Delhi High Court relied on by the appellant also would not render any
assistance in support of the case of the appellant. In our view, to
seek the benefit of provisions under MSMED Act, the seller should
have registered under the provisions of the Act, as on the date of
entering into the contract. In any event, for the supplies pursuant to
the contract made before the registration of the unit under
provisions of the MSMED Act, no benefit can be sought by such
entity, as contemplated under MSMED Act. While interpreting the
provisions of Interest on Delayed Payments to Small Scale and
Ancillary Industrial Undertakings Act, 1993, this Court, in the
judgment in the case of Shanti Conductors Pvt. Ltd. v. Assam State
Electricity Board has held that date of supply of goods/services can
be taken as the relevant date, as opposed to date on which contract
-----------------------------------------------------------------------------------------------------------------------------------------------------------
for supply was entered, for applicability of the aforesaid Act. Even
applying the said ratio also, the appellant is not entitled to seek the
benefit of the Act. There is no acceptable material to show that,
supply of goods has taken place or any services were rendered,
subsequent to registration of appellant as the unit under MSMED Act,
2006. By taking recourse to filing memorandum under sub-section
(1) of Section 8 of the Act, subsequent to entering into contract and
supply of goods and services, one cannot assume the legal status of
being classified under MSMED Act, 2006, as an enterprise, to claim
the benefit retrospectively from the date on which appellant entered
into contract with the respondent. The appellant cannot become
micro or small enterprise or supplier, to claim the benefits within the
meaning of MSMED Act, 2006, by submitting a memorandum to
obtain registration subsequent to entering into the contract and
supply of goods and services. If any registration is obtained, same
will be prospective and applies for supply of goods and services
subsequent to registration but cannot operate retrospectively. Any
other interpretation of the provision would lead to absurdity and
confer unwarranted benefit in favour of a party not intended by
legislation.
27. It is also not in dispute that the appellant approached the
District Industrial Centre and filed entrepreneur memorandum under
Section 8 of the MSMED Act, 2006 only on 25.03.2015 and later has
approached the Council invoking the provisions of MSMED Act by
filing application under Section 18 of the Act. It is the specific case
of the respondent that the appellant has abandoned the incomplete
work having made deficient and defective supplies in the month of
February/March 2015. In that view of the matter, we are of the firm
view that the appellant is not entitled to invoke the provisions of
Chapter V and seek reference to arbitration under Section 18 of the
MSMED Act, 2006. Further, as it is also not in dispute that there is
an agreement for arbitration between the parties for resolution of
disputes pursuant to their contract, as such, we are of the view that
the High Court has rightly allowed the application filed by the
respondent under Section 11(6) of the 1996 Act.”
4. Judgment of the Hon'ble Apex Court rendered on 15.12.2021 in
Civil Appeal No. 2899 of 2021 in the case of Jharkhand Urja Vikas
Nigam Limited v. The State of Rajasthan:
“7. In the writ petition the appellant has challenged the
nd
order/award dated 06.08.2012 passed by the 2 respondent-Council
constituted under provisions of MSMED Act. The 3rd respondent has
approached the Council seeking directions against the appellant for
payment of delayed bill amount along with interest under provisions
-----------------------------------------------------------------------------------------------------------------------------------------------------------
of MSMED Act. Immediately after filing application by initiating

conciliation proceedings, Council has issued notices and as the
appellant has not appeared summons were issued to the appellant
on 18.07.2012 for appearance on 06.08.2012. The relevant portion
of the summons dated 18.07.2012 issued by the Council reads as
under:
“Now, therefore, notice is hereby given to you to appear in
person or through authorized representative before the Council on
6th August, 2012 at 3.30 P.M. or on such day as may be fixed by
the Council to submit in support of the claim/dispute and you are
directed to produce on that day all the documents upon which you
intend to rely in support of your defense.
Take note that in default of your response within the period
mentioned above, the dispute shall stand terminated. Otherwise
the dispute shall be heard and reconciled with a view to the
settlement of dispute and in case settlement is not arrived at, the
Council shall either itself act as an arbitrator for final settlement of
dispute or refer it to an institute for such settlement as per
provisions of the Act.”
8. Only on the ground that even after receipt of summons the
appellant has not appeared the Council has passed order/award on
06.08.2012. As per Section 18(3) of the MSMED Act, if conciliation is
not successful, the said proceedings stand terminated and thereafter
Council is empowered to take up the dispute for arbitration on its
own or refer to any other institution. The said Section itself makes it
clear that when the arbitration is initiated all the provisions of the
Arbitration and Conciliation Act, 1996 will apply, as if arbitration was
in pursuance of an arbitration agreement referred under sub-section
(1) of Section 7 of the said Act.
Section 18 of the MSMED Act reads 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. C.A. No. 2899 of 2021
(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 subsection (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 subsection (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.”
9. From a reading of Section 18(2) and 18(3) of the MSMED Act it
is clear that the Council is obliged to conduct conciliation for which
the provisions of Sections 65 to 81 of the Arbitration and Conciliation
Act, 1996 would apply, as if the conciliation was initiated under Part
III of the said Act. Under Section 18(3), when conciliation fails and
stands terminated, the dispute between the parties can be resolved
by arbitration. The Council is empowered either to take up arbitration
on its own or to refer the arbitration proceedings to any institution as
specified in the said Section. It is open to the Council to arbitrate
and pass an award, after following the procedure under the relevant
provisions of the Arbitration and Conciliation Act, 1996, particularly
Sections 20, 23, 24, 25.
10. There is a fundamental difference between conciliation and
arbitration. In conciliation the conciliator assists the parties to arrive
at an amicable settlement, in an impartial and independent manner.
In arbitration, the Arbitral Tribunal/arbitrator adjudicates the
disputes between the parties. The claim has to be proved before the
arbitrator, if necessary, by adducing evidence, even though the rules
of the Civil Procedure Code or the Indian Evidence Act may not
apply. Unless otherwise agreed, oral hearings are to be held.
13. The order dated 06.08.2012 is a nullity and runs contrary not
-----------------------------------------------------------------------------------------------------------------------------------------------------------
only to the provisions of MSMED Act but contrary to various

mandatory provisions of Arbitration and Conciliation Act, 1996. The
order dated 06.08.2012 is patently illegal. There is no arbitral award
in the eye of law. It is true that under the scheme of the Arbitration
and Conciliation Act, 1996 an arbitral award can only be questioned
by way of application under Section 34 of the Arbitration and
Conciliation Act, 1996. At the same time when an order is passed
without recourse to arbitration and in utter disregard to the
provisions of Arbitration and Conciliation Act, 1996, Section 34 of the
said Act will not apply. We cannot reject this appeal only on the
ground that appellant has not availed the remedy under Section 34
of the Arbitration and Conciliation Act, 1996. The submission of the
rd
learned senior counsel appearing for the 3 respondent that there
was delay and laches in filing writ petition also cannot be accepted.
After 06.08.2012 order, the appellant after verification of the records
has paid an amount of Rs. 64,43,488/- on 22.01.2013 and the said
amount was received by the 3rd respondent without any protest.
Three years thereafter it made an attempt to execute the order in
Execution Case No. 69 of 2016 before the Civil Judge, Ranchi, which
ultimately ended in dismissal for want of territorial jurisdiction, vide
order dated 31.01.2017. Thereafter S.B. Civil Writ Petition No. 11657
of 2017 was filed questioning the order dated 06.08.2012 before the
Rajasthan High Court. In that view of the matter it cannot be said
that there was abnormal delay and laches on the part of the
rd
appellant in approaching the High Court. As much as the 3
respondent has already received an amount of Rs. 63,43,488/- paid
by the appellant, without any protest and demur, it cannot be said
that the appellant lost its right to question the order dated
06.08.2012. Though the learned counsel appearing for the
respondents have placed reliance on certain judgments to support
their case, but as the order of 06.08.2012 was passed contrary to
Section 18(3) of the MSMED Act and the mandatory provisions of the
Arbitration and Conciliation Act, 1996, we are of the view that such
judgments would not render any assistance to support their case.
5. In the case of JSW Steel Ltd. v. Kamlakar V. Salvi, 2021 SCC
OnLine Bom 3113,
“8. It is stated that the Micro, Small and Medium Enterprises
Development Act, 2006 (briefly “the MSMED Act” hereinafter) came
into effect on and from 02.10.2006. “Supplier” has been defined
under section 2(n) of the MSMED Act which basically means a micro
or small enterprise which has filed a memorandum with the authority
referred to in sub section (1) of section 8. Section 8 provides for
registration of a micro or small or medium enterprise which is
-----------------------------------------------------------------------------------------------------------------------------------------------------------
intended to be set up. As per the proviso, such an existing enterprise

may also register under the MSMED Act within 180 days from the
date of commencement of the said statute.
10. Respondent No. 1 had commenced production on or about
01.03.1996 and had applied for registration under the MSMED Act
sometime in the year 2010 which was much beyond the period of
180 days as provided by the proviso to section 8. Upon such
application, registration certificate under section 8 of the MSMED Act
was issued to respondent No. 1 on 14.12.2010.
11. Respondent No. 1 made a reference to respondent No. 2
under the MSMED Act on 13.09.2011 claiming an amount of Rs.
54,16,462.00/- as principal on account of alleged non-payment of
contractual dues and interest of Rs. 97,49,629.00/-, aggregating Rs.
1,51,66,091.00/-, from the petitioner. The said reference was
registered as Application No. 39 of 2011.
13. After a lapse of about two years, petitioner was informed
about the hearing scheduled on 15.11.2014 before respondent No. 2.
Though petitioner was represented, there was no representation on
behalf of respondent No. 1. Thereafter the matter was adjourned on
a couple of occasions. Throughout petitioner took the stand that
respondent No. 2 had no jurisdiction and that Application No. 39 of
2011 of respondent No. 1 was not maintainable.
14. On 08.05.2015 respondent No. 2 passed the order (award)
directing the petitioner to pay principal amount of Rs. 54,16,462.00/
- and interest as per section 16 within one month.
17. Petitioner has alleged that it was not furnished with a copy of
the order dated 05.09.2015. However, based on the impugned order
dated 05.09.2015, respondent No. 1 lodged Darkhast No. 188 of
2016 in the Court of the District Judge at Alibaug. Upon notice,
petitioner had entered appearance and filed its objection.
22. Respondent No. 1 in its reply affidavit has taken a preliminary
objection that the writ petition should not be entertained in view of
the decision of the Supreme Court in SBP & Company v. Patel
Engineering Ltd., (2005) 8 SCC 618 that an order passed by an
Arbitral Tribunal is incapable of being corrected by the High Court
under Articles 226 and 227 of the Constitution of India. Referring to
section 34(1) of the Arbitration and Conciliation Act, 1996, it is
stated that petitioner has remedy of filing application against the
award passed by the Council which is an Arbitral Tribunal but instead
of availing the statutory remedy, petitioner has invoked the
extraordinary jurisdiction of this Court under Article 226 of the
Constitution of India, because the statutory remedy has become
time barred. Reference has also been made to section 19 of the
MSMED Act which says that no application for setting aside any
-----------------------------------------------------------------------------------------------------------------------------------------------------------
decree, award or order made by the Council or by any institution to

which reference is made by the Council shall be entertained unless
the appellant (not being supplier) deposits 75% of the amount in
terms of the award. It is stated that 75% would be from out of the
amount awarded plus interest as per section 16 till the date of
deposit.
29. Reverting back to Shilpi Industries (supra), Mr. Janak
Dwarkadas submits that as per decision of the Supreme Court
benefits of the MSMED Act are available only to a registered supplier.
In other words, the seller should have registered under the
provisions of the MSMED Act as on the date of entering into the
contract. For supplies pursuant to a contract made before
registration under the MSMED Act, no benefit can be sought by such
entity.
30. Learned senior counsel argues with great emphasis that
provisions of the MSMED Act are prospective. Those cannot be
applied retrospectively. The contracts and supplies and claims based
thereon are all prior to coming into force of the MSMED Act as well as
registration by respondent No. 1 under section 8(1) of the MSMED
Act. There being no retrospective operation of the MSMED Act, no
benefit under the MSMED Act can be availed of by respondent No. 1.
That apart, these are jurisdictional facts which go to the root of the
matter. Since these jurisdictional facts were absent, Micro and Small
Enterprises Facilitation Council (Council) was rendered coram non
judice. Thus any order passed by such Council would be a nullity. In
this connection reliance has been placed on a decision of the
Supreme Court in Arun Kumar v. Union of India, (2007) 1 SCC 732.
31. Referring from the list of dates, learned senior counsel for the
petitioner submits that respondent No. 1 had filed application before
the Council i.e. respondent No. 2 on 13.09.2011 seeking benefit of
the MSMED Act by claiming amounts of Rs. 54,16,462.00/- and Rs.
97,49,629.00/- respectively as principal and interest, totaling Rs.
1,51,66,091.00/-, for works carried out and completed as of
31.08.2001 which would be evident from the fact that respondent
No. 1 had calculated interest from 01.09.2001. In the circumstances,
he submits that not only the claim is barred by limitation,
respondent No. 1 is not entitled to claim benefit under the MSMED
Act for goods supplied before coming into force of the said act and
before registration of respondent No. 1 under section 8(1).
33. Learned senior counsel submits that since the Council i.e.
respondent No. 2 acted without jurisdiction, impugned orders passed
by it would be nullity having been passed by an authority which is
rendered coram non judice. Reference has been made amongst
others to the following decisions:—
-----------------------------------------------------------------------------------------------------------------------------------------------------------
i) Kiran Sing v. Chaman Paswan, AIR 1954 SC 340.

ii) Embassy Property Development Pvt. Ltd. v. State of Karnataka,
(2020) 13 SCC 308.
34. Finally on the question of maintainability of the writ petition,
Mr. Janak Dwarkadas submits that petitioner's challenge is not only
to the award passed by the Council but to the very applicability of
the MSMED Act to the claim of the petitioner as well as other related
issues. In any event, power of judicial review under Article 226 is
always available in a case where the order complained of is
inherently lacking in jurisdiction. In this connection, he has placed
reliance on a decision of the Supreme Court in Whirlpool Corporation
v. Registrar of Trademarks, (1998) 8 SCC 1.
54. Before we enter into the rival contentions, it would be
apposite to highlight the relevant statutory provisions.
66. Let us now deal with the last of the three enactments i.e. the
Arbitration and Conciliation Act, 1996 which we have already
referred to as the 1996 Act. The other provisions of the 1996 Act
may not have much relevance to the present dispute; therefore, we
may confine our deliberation to sections 34, 37 and 43 of the 1996
Act. As per sub section (1) of section 34 recourse to a court against
an arbitral award may be made only by an application for setting
aside such award in accordance with sub section (2) and sub section
(3). While sub section (2) sets out the grounds for which an arbitral
award may be set aside by the court, sub section (3) provides for the
timeline within which such an application for setting aside an arbitral
award may be made.
67. Section 37 provides for appeal. As per sub section (1), an
appeal shall lie to the competent court amongst others against an
order setting aside or refusing to set aside an arbitral award under
section 34.
68. As per sub section (1) of section 43 of the 1996 Act, the
Limitations Act, 1963 applies to arbitrations as it applies to
proceedings in court.
70. In Shilpi Industries (supra) decided recently on 29.06.2021
two issues were raised for consideration before the Supreme Court.
The issues were:—
(i) Whether provisions of the Indian Limitation Act, 1963 are
applicable to arbitration proceedings initiated under section 18
(3) of the MSMED Act?
(ii) Whether counter claim is maintainable in such arbitration
proceedings?
73. However, what is of significance is that Supreme Court had
also dealt with the claim of the appellant in the said case seeking
-----------------------------------------------------------------------------------------------------------------------------------------------------------
benefit of the provisions of the MSMED Act on the ground that the
appellant was also supplying as on the date of making the claim. In
that case the undisputed position was that the supplies were
concluded prior to registration of the supplier. Supreme Court held
that to seek the benefit of the provisions under the MSMED Act, the
seller should have registered under the MSMED Act as on the date of
entering into the contract. For supplies pursuant to the contract
made before registration under the MSMED Act, no benefit under the
MSMED Act would be available. By taking recourse to filing
memorandum under sub section (1) of section 8 subsequent to
entering into contract and supply of goods and services one cannot
assume the legal status of being classified under the MSMED Act to
claim the benefit retrospectively. It was clearly held that the
appellant cannot become micro or small enterprise or supplier to
claim the benefits within the meaning of the MSMED Act by
submitting a memorandum to obtain registration subsequent to
entering into contract and supply of goods and services. Paragraph
26 of Shilpi Industries (supra) is relevant and the same is extracted
hereunder:—
“26. Though the appellant claims the benefit of provisions
under MSMED Act, on the ground that the appellant was also
supplying as on the date of making the claim, as provided under
Section 8 of the MSMED Act, but same is not based on any
acceptable material. The appellant, in support of its case placed
reliance on a judgment of the Delhi High Court in the case of GE
T&D India Ltd. v. Reliable Engineering Projects and Marketing,
2017 SCC OnLine Del 6978 but the said case is clearly
distinguishable on facts as much as in the said case, the supplies
continued even after registration of entity under Section 8 of the
Act. In the present case, undisputed position is that the supplies
were concluded prior to registration of supplier. The said
judgment of Delhi High Court relied on by the appellant also
would not render any assistance in support of the case of the
appellant. In our view, to seek the benefit of provisions under
MSMED Act, the seller should have registered under the provisions
of the Act, as on the date of entering into the contract. In any
event, for the supplies pursuant to the contract made before the
registration of the unit under provisions of the MSMED Act, no
benefit can be sought by such entity, as contemplated under
MSMED Act. While interpreting the provisions of Interest on
Delayed Payments to Small Scale and Ancillary Industrial
Undertakings Act, 1993, this Court, in the judgment in the case of
Shanti Conductors Pvt. Ltd. v. Assam State Electricity Board,
(2019) 19 SCC 529 has held that date of supply of goods/services
-----------------------------------------------------------------------------------------------------------------------------------------------------------
can be taken as the relevant date, as opposed to date on which

contract for supply was entered, for applicability of the aforesaid
Act. Even applying the said ratio also, the appellant is not entitled
to seek the benefit of the Act. There is no acceptable material to
show that, supply of goods has taken place or any services were
rendered, subsequent to registration of appellant as the unit
under MSMED Act, 2006. By taking recourse to filing
memorandum under subsection (1) of Section 8 of the Act,
subsequent to entering into contract and supply of goods and
services, one cannot assume the legal status of being classified
under MSMED Act, 2006, as an enterprise, to claim the benefit
retrospectively from the date on which appellant entered into
contract with the respondent. The appellant cannot become micro
or small enterprise or supplier, to claim the benefits within the
meaning of MSMED Act, 2006, by submitting a memorandum to
obtain registration subsequent to entering into the contract and
supply of goods and services. If any registration is obtained, same
will be prospective and applies for supply of goods and services
subsequent to registration but cannot operate retrospectively. Any
other interpretation of the provision would lead to absurdity and
confer unwarranted benefit in favour of a party not intended by
legislation.”
74. From the above, we find that Supreme Court has clarified that
if any registration under the MSMED Act is obtained, the same will
be prospective and would apply to supply of goods and services
subsequent to registration but cannot operate retrospectively.
According to the Supreme Court, any other interpretation of section
8 would lead to absurdity and confer unwarranted benefit in favour
of a party not intended by legislation.
75. There is no dispute to the proposition laid down in Patel
Engineering (supra). Primarily, the question before the seven judge
bench of the Supreme Court was about the nature of function of the
Chief Justice or his designate under section 11 of the 1996 Act.
Earlier a three judge bench of the Supreme Court had taken the view
that it was purely an administrative function, being neither judicial
nor quasi-judicial; Chief Justice or his nominee performing functions
under section 11(6) of the 1996 Act could not decide any
contentious issue between the parties. The said view was approved
subsequently by a constitution bench. Correctness of such view was
under consideration in Patel Engineering (supra). In that case the
seven judge bench held that the power exercised by the Chief
Justice of a High Court or the Chief Justice of India under section 11
(6) of the 1996 Act is not an administrative power; it is a judicial
power. Before summing up the conclusions, Supreme Court noted
-----------------------------------------------------------------------------------------------------------------------------------------------------------
that some High Courts had proceeded on the basis that any order
passed by an Arbitral Tribunal during arbitration would be capable of
being challenged under Articles 226 or 227 of the Constitution of
India. Adverting to section 37 of the 1996 Act, which makes certain
orders of the Arbitral Tribunal appealable and to section 34 whereby
the aggrieved party has an avenue for ventilating his grievance
against an award, Supreme Court disapproved of such stand and
held that such an intervention by the High Courts is not permissible.
Explaining further, Supreme Court held that the object of minimizing
judicial intervention while dispute is being arbitrated upon will be
defeated, if the High Courts could be approached under the Article
227 or under Article 226 of the Constitution against every order
made by the Tribunal.
76. This position has been reiterated by the Supreme Court in
Modern Industries (supra). That was a case under the 1993 Act. In
the facts of that case, Supreme Court observed that though the 1993
Act provides a statutory remedy of appeal against an award passed
by the Industry Facilitation Council but the buyer did not avail the
statutory remedy of appeal against the award and instead challenged
the award passed by the Council before the High Court under Article
226 of the Constitution of India bypassing the statutory remedy
which was viewed as not justified.
77. From a careful analysis of the above two judgments of the
Supreme Court in Patel Engineering (supra) and in Modern
Industries (supra), we find that view of the Supreme Court is that
any and every order (emphasis is ours) made by an Arbitral Tribunal
would not be open to challenge or being corrected by the High Court
under Articles 226 or 227 of the Constitution of India. Ordinarily, an
order or award passed by the Industry Facilitation Council under the
1993 Act or by the Micro and Small Enterprises Facilitation Council
(Council) is to be challenged under section 34 of the 1996 Act or
appealed against under section 37 of the said Act.
78. In Arun Kumar (supra), Supreme Court discussed what is a
jurisdictional fact and held that a jurisdictional fact is a fact which
must exist before a court, tribunal or an authority assumes
jurisdiction over a particular matter. It was held as under:—
“74. A “jurisdictional fact” is a fact which must exist before a
court, tribunal or an authority assumes jurisdiction over a
particular matter. A jurisdictional fact is one on existence or non-
existence of which depends jurisdiction of a court, a tribunal or an
authority. It is the fact upon which an administrative agency's
power to act depends. If the jurisdictional fact does not exist, the
court, authority or officer cannot act. If a court or authority
wrongly assumes the existence of such fact, the order can be
-----------------------------------------------------------------------------------------------------------------------------------------------------------
questioned by a writ of certiorari. The underlying principle is that

by erroneously assuming existence of such jurisdictional fact, no
authority can confer upon itself jurisdiction which it otherwise
does not possess.”
79. Explaining further, Supreme Court held that a jurisdictional
fact is one on the existence or non-existence of which depends
jurisdiction of a court, a tribunal or an authority. By erroneously
assuming existence of a jurisdictional fact, no authority can confer
upon itself jurisdiction which it otherwise doesn't possess. Thus,
existence of jurisdictional fact is the sine qua non or the condition
precedent for exercise of power by a court having limited
jurisdiction. It was held as under:—
“76. The existence of jurisdictional fact is thus sine qua non or
condition precedent for the exercise of power by a court of limited
jurisdiction.”
80. After referring to several decisions, Supreme Court reiterated
that existence of jurisdictional fact is sine qua non for the exercise of
power and held as follows:
“84. From the above decisions, it is clear that existence of
‘jurisdictional fact’ is sine qua non for the exercise of power. If the
jurisdictional fact exists, the authority can proceed with the case
and take an appropriate decision in accordance with law. Once the
authority has jurisdiction in the matter on existence of
‘jurisdictional fact’, it can decide the ‘fact in issue’ or ‘adjudicatory
fact’. A wrong decision on ‘fact in issue’ or on ‘adjudicatory fact’
would not make the decision of the authority without jurisdiction
or vulnerable provided essential or fundamental fact as to
existence of jurisdiction is present.”
81. The concept of jurisdictional fact was as a matter of fact
addressed by the Supreme Court way back in the year 1955 in the
case of Kiran Singh (supra). It was held that a defect of jurisdiction
whether it is pecuniary or territorial or whether it is in respect of
subject matter of the action, strikes at the every authority of the
court. It was held that a decree passed by a court without
jurisdiction is a nullity and that its invalidity can be set up whenever
and wherever it is sought to be enforced or relied upon even at the
stage of execution or even in collateral proceedings. A court without
jurisdiction would be coram non judice. It was held as under:—
“6. The answer to these contentions must depend on what the
position in law is when a court entertains a suit or an appeal over
which it has no jurisdiction, and what the effect of Section 11 of
the Suits Valuation Act is on that position. It is a fundamental
principle well-established that a decree passed by a court without
jurisdiction is a nullity, and that its invalidity could be set up
-----------------------------------------------------------------------------------------------------------------------------------------------------------
whenever and wherever it is sought to be enforced or relied upon,

even at the stage of execution and even in collateral proceedings.
A defect of jurisdiction, whether it is pecuniary or territorial, or
whether it is in respect of the subject-matter of the action, strikes
at the very authority of the court to pass any decree, and such a
defect cannot be cured even by consent of parties. If the question
now under consideration fell to be determined only on the
application of general principles governing the matter, there can
be no doubt that the District Court of Monghyr was coram non
judice, and that its judgment and decree would be nullities. The
question is what is the effect of Section 11 of the Suits Valuation
Act on this position.”
82. Insofar the question of exhaustion of alternative remedy is
concerned, again way back in the year 1958 in the case of
Mohammad Nooh (supra) Supreme Court held that the rule requiring
exhaustion of statutory remedies before the writ is granted is a rule
of policy, convenience and discretion rather than a rule of law.
83. This principle continues to hold good despite the passage of
time. It has been reiterated by the Supreme Court in Whirlpool
Corporation (supra), in the following manner:—
“15. Under Article 226 of the Constitution, the High Court,
having regard to the facts of a case, has a discretion to entertain
or not to entertain a writ petition. But the High Court has imposed
upon itself certain restrictions one of which is that if an effective
and efficacious remedy is available, the High Court would not
normally exercise its jurisdiction. But the alternative remedy has
been consistently held by this Court not to operate as a bar in at
least three contingencies, namely, where the writ petition has
been filed for the enforcement of any of the Fundamental Rights
or where there has been a violation of the principle of natural
justice or where the order or proceedings are wholly without
jurisdiction or the vires of an Act is challenged. There is a plethora
of case-law on this point but to cut down this circle of forensic
whirlpool, we would rely on some old decisions of the evolutionary
era of the constitutional law as they still hold the field.”
84. After surveying various decisions, Supreme Court summed up
the position as under:—
“20. Much water has since flown under the bridge, but there
has been no corrosive effect on these decisions which, though old,
continue to hold the field with the result that law as to the
jurisdiction of the High Court in entertaining a Writ Petition under
Article 226 of the Constitution, in spite of the alternative statutory
remedies, is not affected, specially in a case where the authority
against whom the writ is filed is shown to have had no jurisdiction
-----------------------------------------------------------------------------------------------------------------------------------------------------------
or had purported to usurp jurisdiction without any legal

foundation.”
85. In Embassy Property Developments Pvt. Ltd. (supra) one of
the questions before the Supreme Court was whether the High Court
ought to interfere under Articles 226/227 of the Constitution with an
order passed by the National Company Law Tribunal in a proceeding
under the Insolvency and Bankruptcy Code, 2016, ignoring the
availability of the statutory remedy of appeal to the National
Company Law Appellate Tribunal. Supreme Court observed that the
distinction between lack of jurisdiction and wrongful exercise of
available jurisdiction should certainly be taken account by the High
Courts when Article 226 is sought to be invoked bypassing the
statutory alternative remedy provided by a special statute. In the
facts of that case, it was held that National Company Law Tribunal
did not have jurisdiction to entertain an application against the
Government of Karnataka for a direction to execute supplemental
lease-deeds for extension of mining lease. Since the National
Company Law Tribunal chose to exercise a jurisdiction not vested in
it in law, the High Court was justified in entertaining the writ petition
on the ground that National Company Law Tribunal was coram non
judice.
86. On the basis of the above analysis and legal provisions, we
may now advert to the facts of the present case. As noticed above,
the contracts were awarded by petitioner's predecessor in interest to
respondent No. 1 on 06.11.1999. The principal amounts as per
statement of delayed payment were upto 31.08.2001. MSMED Act
came into force on 02.10.2006. Respondent No. 1 received
registration under section 8(1) of the MSMED Act on 14.12.2010.
Reference was made by respondent No. 1 to respondent No. 2 under
section 18 of the MSMED Act on 13.09.2011 claiming principal not
received for last ten years and therefore claimed interest. There is no
averment in the affidavit of respondent No. 1 or any document
placed on record that it was registered as a supplier under section 2
(f) of the 1993 Act or under section 2(n) of the MSMED Act. The
word “supplier” used in both the enactments can only mean a
“supplier” as defined under the two enactments. That means it ought
to have had a permanent registration certificate issued by the
Directorate of Industries as an ancillary industrial undertaking or as a
small scale industrial undertaking under the 1993 Act or as a micro
or as a small enterprise which had filed a memorandum with the
authority referred to in sub section (1) of section 8 of the MSMED
Act. In the absence of any material on record, respondent No. 1
cannot justify its claim to be a supplier under the 1993 Act to bring
the contracts entered into with the petitioner and the resultant dues
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under the saving clause of section 32(2) of the MSMED Act. To bring
anything done or any action taken under the 1993 Act within the
ambit of the savings clause under sub section (2) of section 32 of
the MSMED Act, it is axiomatic that such thing or action must have
been done in accordance with the 1993 Act, otherwise it will lead to
an absurd situation as expressed by the Supreme Court in Shilpi
Industries (supra).
6. Judgment of the Division Bench of this Court rendered on
30.7.2020 in LPA No. 308/2020 in the case of Narmada Clean-Tech v.
Indian Council of Arbitration:
“9. We quote the relevant observations made by the learned
Single Judge declining to entertain the writ application as under:
“9. Having heard the learned advocates for the respective
parties and having gone through the materials on record, the
short question which arises for consideration is whether the
impugned order dated 1 st October, 2017 passed by respondent
no. 2 arbitrator can be challenged by way of certiorari under
Articles 226 and 227 of the Constitution of India or not?
10. The issue is no more res integra as in case of GTPL Hathway
Ltd. v. Strategic Marketing Pvt. Ltd. in Special Civil Application
No. 4524/2019 rendered on 20.04.2020 this Court has held as
under:
“14. In view of aforesaid conspectus of law, and considering the
provisions of the Act, 1996, the order passed by the Arbitration
Tribunal during the course of Arbitration cannot be challenged by
the petitioner under Articles 226 and/or 227 of the Constitution of
India when the constitution bench of the Apex Court in case of
S.B.P. And Co. v. Patel Engineering Ltd. (supra) has disapproved
the stand that any order passed by the Arbitral Tribunal is capable
of being corrected by the High Court under Articles 226 and 227
of the Constitution of India and has categorically held that such
intervention by the High Court is not permissible. The Apex Court
in case of Deep Industries Limited v. Oil and Natural Gas
Corporation (supra) has held that it is also importan t to notice
that the seven Judge Bench has referred to the object of the Act
being that of minimizing judicial intervention and that this
important object should always be kept in the forefront when a
227 petition is being disposed of against proceedings that are
decided under the Act,1996 and that the policy of the Act is
speedy disposal of arbitration cases as the Act,1996 is ‘self
contained’ Code and deals with all the cases.
15. In view of aforesaid settled legal proposition, considering
the policy, object and the provisions of the Act,1996, an order
passed during arbitration proceedings by the Arbitration Tribunal
-----------------------------------------------------------------------------------------------------------------------------------------------------------
cannot be challenged under Articles 226 and 227 of the

Constitution of India as the Act,1996 is a special act and a self
contained code dealing with arbitration. Therefore, the impugned
order of the Arbitration Tribunal deciding the preliminary objection
raised by the petitioner cannot be challenged under Article 226 or
227 of the Constitution of India.
16. In view of foregoing reasons, the petition fails and is
accordingly dismissed. It is, however, made clear that the petition
is dismissed without entering into merits of the matter, only on
the ground that the order passed during course of arbitration
cannot be challenged under Articles 226 and/or 227 of the
Constitution of India and it would be open for both the sides to
raise all the contentions on merits before the appropriate forum in
appropriate proceeding at appropriate time in accordance with
law. Interim relief, if any stands vacated. Rule is discharged with
no order as to costs.”
11. In view of aforesaid discernment of law, the decisions relied
upon by both the sides are not required to be discussed at length
as impugned order dated 1 st October, 2017 passed by
respondent no. 2 arbitrator during the arbitration proceedings
cannot be challenged by way of certiorari by invoking extra
ordinary jurisdiction under Articles 226 and/or 227 of the
Constitution of India.
12. In view of the foregoing reasons, the petitions fail and are
accordingly dismissed. It is, however, made clear that the
petitions are dismissed without entering into merits of the matter,
only on the ground that the order passed during course of
arbitration proceedings cannot be challenged under Articles 226
and/or 227 of the Constitution of India and it would be open for
both the sides to raise all the contentions on merits before the
appropriate forum in appropriate proceeding at appropriate time
in accordance with law. Interim relief, if any stands vacated. Rule
is discharged with no order as to costs.”
26. Having heard the learned counsel appearing for the parties
and having gone through the materials on record, the only question
of law that falls for our consideration is as under:
“Whether the High Court can exercise its writ jurisdiction under
Article 226 or the power of superintendence vested in it under
Article 227 of the Constitution of India over the Arbitral Tribunals
constituted under the provisions of the Arbitration and
Conciliation Act, 1996?”
36. The scope of powers of superintendence vested in the High
Court under Article 227 of the Constitution of India again came up
-----------------------------------------------------------------------------------------------------------------------------------------------------------
for consideration in Shalini Shyam Shetty v. Rajendra Shankar Patil,

(2010) 8 SCC 329. The Apex Court, after detailed exposition of the
entire law on the subject, held as follows:
“47. The jurisdiction under Article 227 on the other hand is not
original nor is it appellate. This jurisdiction of superintendence
under Article 227 is for both administrative and judicial
superintendence. Therefore, the powers conferred under Articles
226 and 227 are separate and distinct and operate in different
fields. Another distinction between these two jurisdictions is that
under Article 226, High Court normally annuls or quashes an order
or proceeding but in exercise of its jurisdiction under Article 227,
the High Court, apart from annulling the proceeding, can also
substitute the impugned order by the order which the inferior
tribunal should have made. (See Surya Dev Rai, SCC page 690,
para 25 and also the decision of the Constitution Bench of this
Court in Hari Vishnu Kamath v. Ahmad Ishaque - [AIR 1955 SC
233, para 20 page 243]).
48. The jurisdiction under Article 226 normally is exercised
where a party is affected but power under Article 227 can be
exercised by the High Court suo motu as a custodian of justice. In
fact, the power under Article 226 is exercised in favour of persons
or citizens for vindication of their fundamental rights or other
statutory rights. The jurisdiction under Article 227 is exercised by
the High Court for vindication of its position as the highest judicial
authority in the State. In certain cases where there is
infringement of fundamental right, the relief under Article 226 of
the Constitution can be claimed ex-debito justicia or as a matter
of right. But in cases where the High Court exercises its
jurisdiction under Article 227, such exercise is entirely
discretionary and no person can claim it as a matter of right. From
an order of a Single Judge passed under Article 226, a Letters
Patent Appeal or an intra Court Appeal is maintainable. But no
such appeal is maintainable from an order passed by a Single
Judge of a High Court in exercise of power under Article 227. In
almost all High Courts, rules have been framed for regulating the
exercise of jurisdiction under Article 226. No such rule appears to
have been framed for exercise of High Court's power under Article
227 possibly to keep such exercise entirely in the domain of the
discretion of High Court.
49. On an analysis of the aforesaid decisions of this Court, the
following principles on the exercise of High Court's jurisdiction
under Article 227 of the Constitution may be formulated:
(a) A petition under Article 226 of the Constitution is different
from a petition under Article 227. The mode of exercise of
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power by High Court under these two Articles is also

different.
(b) In any event, a petition under Article 227 cannot be called
a writ petition. The history of the conferment of writ
jurisdiction on High Courts is substantially different from the
history of conferment of the power of Superintendence on
the High Courts under Article 227 and have been discussed
above.
(c) High Courts cannot, at the drop of a hat, in exercise of its
power of superintendence under Article 227 of the
Constitution, interfere with the orders of tribunals or Courts
inferior to it. Nor can it, in exercise of this power, act as a
Court of appeal over the orders of Court or tribunal
subordinate to it. In cases where an alternative statutory
mode of redressal has been provided, that would also
operate as a restrain on the exercise of this power by the
High Court.
(d) The parameters of interference by High Courts in exercise
of their power of superintendence have been repeatedly laid
down by this Court. In this regard the High Court must be
guided by the principles laid down by the Constitution Bench
of this Court in Waryam Singh (supra) and the principles in
Waryam Singh (supra) have been repeatedly followed by
subsequent Constitution Benches and various other
decisions of this Court.
(e) According to the ratio in Waryam Singh (supra), followed in
subsequent cases, the High Court in exercise of its
jurisdiction of superintendence can interfere in order only to
keep the tribunals and Courts subordinate to it, ‘within the
bounds of their authority'.
(f) In order to ensure that law is followed by such tribunals and
Courts by exercising jurisdiction which is vested in them and
by not declining to exercise the jurisdiction which is vested
in them.
(g) Apart from the situations pointed in (e) and (f), High Court
can interfere in exercise of its power of superintendence
when there has been a patent perversity in the orders of
tribunals and Courts subordinate to it or where there has
been a gross and manifest failure of justice or the basic
principles of natural justice have been flouted.
(h) In exercise of its power of superintendence High Court
cannot interfere to correct mere errors of law or fact or just
because another view than the one taken by the tribunals or
Courts subordinate to it, is a possible view. In other words
-----------------------------------------------------------------------------------------------------------------------------------------------------------
the jurisdiction has to be very sparingly exercised.

(i) The High Court's power of superintendence under Article
227 cannot be curtailed by any statute. It has been declared
a part of the basic structure of the Constitution by the
Constitution Bench of this Court in the case of L. Chandra
Kumar v. Union of India and therefore abridgement by a
Constitutional amendment is also very doubtful.
(j) It may be true that a statutory amendment of a rather
cognate provision, like Section 115 of the Civil Procedure
Code by the Civil Procedure Code (Amendment) Act, 1999
does not and cannot cut down the ambit of High Court's
power under Article 227. At the same time, it must be
remembered that such statutory amendment does not
correspondingly expand the High Court's jurisdiction of
superintendence under Article 227.
(k) The power is discretionary and has to be exercised on
equitable principle. In an appropriate case, the power can be
exercised suo motu.
(l) On a proper appreciation of the wide and unfettered power
of the High Court under Article 227, it transpires that the
main object of this Article is to keep strict administrative
and judicial control by the High Court on the administration
of justice within its territory.
(m) The object of superintendence, both administrative and
judicial, is to maintain efficiency, smooth and orderly
functioning of the entire machinery of justice in such a way
as it does not bring it into any disrepute. The power of
interference under this Article is to be kept to the minimum
to ensure that the wheel of justice does not come to a halt
and the fountain of justice remains pure and unpolluted in
order to maintain public confidence in the functioning of the
tribunals and Courts subordinate to High Court.
(n) This reserve and exceptional power of judicial intervention
is not to be exercised just for grant of relief in individual
cases but should be directed for promotion of public
confidence in the administration of justice in the larger
public interest whereas Article 226 is meant for protection of
individual grievance. Therefore, the power under Article 227
may be unfettered but its exercise is subject to high degree
of judicial discipline pointed out above.
(o) An improper and a frequent exercise of this power will be
counter-productive and will divest this extraordinary power
of its strength and vitality.”
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“40. There is a fine distinction between the maintainability and

entertainability of a writ petition under Article 226 of the
Constitution or a petition under Article 227 of the Constitution in
arbitration matters. Maintainability is not synonymous to
entertainability. This position of law has been well explained by the
Supreme Court in Hari Vishnu Kamath v. Ahmed Ishaque, AIR 1955
SC 233. In the said case, the question that arose before the
Supreme Court was, as to whether the High Court had the
jurisdiction to entertain a Writ Petition for the issue of a Writ of
Certiorari against the order of Election Tribunal constituted under the
Representation of People's Act, 1951, as it stood in 1955, deciding
an election dispute. Placing reliance on Article 329 of the
Constitution, it was contended before the Supreme Court that as an
election to the Parliament or State Legislature could be challenged
only by means of an Election Petition, petition under Article 226 of
the Constitution would not lie before the High Court for the issue of a
Writ of Certiorari against the decision of the Election Tribunal also.
The Supreme Court negatived the contention. In doing so, the
Supreme Court pointed out that the bar created under Article 329 of
the Constitution was against interfering in election matters and the
said Article did not curtail the power of the High Court under Article
226 of the Constitution to issue Writ of Certiorari to any Tribunal and
the Election Tribunal was no exception. The relevant portion of the
Judgment reads:
“6. The first question that arises for decision in this appeal is
whether High Courts have jurisdiction under Article 226 to issue
Writs against decisions of Election Tribunals. That Article confers
on High Courts power to issue appropriate writs to any person or
authority within their territorial jurisdiction, in terms absolute and
unqualified, and Election Tribunals functioning within the
territorial jurisdiction of the High Courts would fall within the
sweep of that power. If we are to recognise or admit any
limitation on this power, that must be founded on some provision
in the Constitution itself.”
“43. The aforesaid observations of the Supreme Court have been
quoted with approval in a recent pronouncement of the Supreme
Court in the case of ICOMM Tele Ltd. v. Punjab State Water Supply
th
and Sewarage Board [Civil Appeal No. 2713 of 2019 decided on 11
March 2019].
46 In Deep Industries Limited (supra), the Supreme Court
observed as under:
“At the same time, we cannot forget that Article 227 is a
constitution provision which remains untouched by the
nonobstane clause of section 5 of the Act. In these circumstances,
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what is important to note is that though petitions can be filed

under Article 227 against the judgments allowing or dismissing
first appeals under Section 37 of the Act, yet the High Court
would be extremely circumspect in interfering with the same,
taking into account the statutory policy as adumbrated by us
herein above so that interference is restricted to orders that are
passed which are patently lacking in inherent jurisdiction.”
47 The bare reading of the aforesaid observations of the Supreme
Court makes it clear that it was a case which had travelled right upto
the stage of Section 37 of the Act. It is suggestive of the fact that an
appeal was filed before the High Court against the order passed by
the District Court under Section 34 of the Act. In such
circumstances, a petition under Article 227 of the Constitution of
India would definitely be maintainable with a rider that the High
Court should be extremely circumspect in interfering with the same.
In other words, the interference should be restricted to orders that
are passed, which are patently lacking any inherent jurisdiction.
However, the ratio, as propounded in M/s. Deep Industries (supra)
does not, in any manner, dilute the principles propounded by the
Supreme Court in the SBP and company (supra). This decision, in
our opinion, is not in any manner helpful to Mr. Trivedi, the learned
senior counsel appearing for the appellant.
48 In Punjab Agro Industries Corporation (supra), the appellant
had entered into a collaboration agreement with the respondent for
setting up of a project through a company to be jointly promoted by
them. Certain disputes arose between the parties and the appellant
by notice appointed its Arbitrator and called upon the respondent to
appoint his Arbitrator. As the respondent failed to comply, the
appellant filed a petition under Section 11(4) of the Act, 1996 in the
Court of the Civil Judge, Senior Division, Chandigarh (a designate of
the Chief Justice of Punjab and Haryana High Court). The said
th
designate, by order dated 16 February 2002, dismissed the petition
holding that the appointment of Arbitrator was not called for, as the
matter had already been decided by the Board for Industrial and
Financial Reconstruction (for short, “BIFR”). Being aggrieved, the
appellant approached the High Court for quashing the order of the
designate and for appointment of an Arbitrator in terms of the
agreement. A Division Bench of the High Court disposed of the said
writ petition by the following short order:
“The Petitioner is aggrieved by rejection of application for
appointment of arbitrator under Section 11(4) of Arbitration and
Conciliation Act, 1996. Learned Counsel for the Respondent raises
a preliminary objection that Writ Petition is not maintainable in
-----------------------------------------------------------------------------------------------------------------------------------------------------------
view of judgment of Seven Judges of the Hon'ble Supreme Court

in S.B.P. & Co. v. Patel Engineering Ltd. - (2005) 8 SCC 618
wherein it has been held that power of deciding an application for
appointment of an arbitrator is judicial power and is not amenable
to writ jurisdiction. After hearing learned counsel for the parties,
we uphold the preliminary objection and dismiss the Writ Petition.
It is made clear that this will not debar the Petitioner from taking
such other remedy as may be available under the law.”
49. The aforequoted order of the High Court was challenged in
appeal by special leave, on the following grounds:
“(a) The order of the High Court is a non speaking order and it
upholds the preliminary objection of the respondent without
assigning any reason.
(b) A writ petition under Article 227 was maintainable against the
order of the Civil Judge, Senior Division (designate of the Chief
Justice) and the High Court was wrong in assuming that the
writ petition was not maintainable in view of the decision of
this Court in SBP.”
50. The Supreme Court, while allowing the appeal, held as under:
“8. We have already noticed that though the order under
section 11(4) is a judicial order, having regard to section 11(7)
relating to finality of such orders, and the absence of any
provision for appeal, the order of the Civil Judge was open to
challenge in a writ petition under Article 227 of the Constitution.
The decision in SBP does not bar such a writ petition. The
observations of this Court in SBP that against an order under
section 11 of the Act, only an appeal under Article 136 of the
Constitution would lie, is with reference to orders made by the
Chief Justice of a High Court or by the designate Judge of that
High Court. The said observations do not apply to a subordinate
court functioning as Designate of the Chief Justice. This Court has
repeatedly stressed that Article 136 is not intended to permit
direct access to this Court where other equally efficacious remedy
is available and the question involved is not of any public
importance; and that this Court will not ordinarily exercise its
jurisdiction under Article 136, unless the appellant has exhausted
all other remedies open to him. Therefore the contention that the
order of the Civil Judge, Sr. Division rejecting a petition under
section 11 of the Act could only be challenged, by recourse to
Article 136 is untenable. The decision in SBP did not affect the
maintainability of the writ petition filed by Appellant before the
High Court.
9. We therefore allow this appeal and set aside the order of the
High Court. As a consequence, Civil Writ Petition No. 9889 of
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2002 shall stand restored to the file, and the High Court is
requested to dispose it of in accordance with law.”
51 The aforesaid decision, in the case of Punjab Agro Industries
(supra) has laid down the same principle of law as explained in the
case of M/s. Deep Industries (supra).
52 KKR India Financial Services Limited (supra) is a Division
Bench decision of this High Court to which one of us (J.B. Pardiwala,
J.) is a party. In the said case, the subject matter of challenge was
an interim consent order passed by the Small Causes Court at
Ahmedabad in a Commercial Civil Suit instituted by the Axis Bank
Limited against Sintex Company Limited. KKR India Financial
Services Limited was not impleaded as one of the defendants in the
suit. The consent order obtained by the parties to the suit was
hurting the KKR India Financial Services Limited. KKR had two
options available to it for the purpose of questioning the legality and
validity of the consent order passed by the Small Causes Court at
Ahmedabad. The first option was to seek leave of the High Court to
appeal against the consent order and the second option was to
question the legality and validity of the consent order by coming to
the High Court invoking its supervisory jurisdiction under Article 227
of the Constitution of India. Having regard to the gross facts of the
case, the Division Bench of the High Court thought fit to entertain
the application filed by the KKR India Financial Services Limited
under Article 227 of the Constitution of India by overruling the
preliminary objection raised on behalf of the Axis Bank as regards
the alternative remedy available with the KKR India Financial
Services Limited of filing an appeal after seeking leave from the High
Court. While deciding the matter, the Division Bench of this High
Court considered various provisions of the law, more particularly,
Article 227 of the Constitution of India. This Court took the view that
a petition under Article 227 of the Constitution of India was
maintainable although the petitioner was not a party in the suit
proceedings. The Division Bench took the view that to prevent
serious miscarriage of justice, it was necessary to interfere with the
consent order in exercise of its supervisory jurisdiction under Article
227 of the Constitution of India.
54. It is apparent on plain reading of the para 12 quoted above
that the learned Single Judge rejected the petition without entering
into the merits of the matter only on the ground that the order
passed during the course of the arbitration proceedings cannot be
challenged under Articles 226 and/or 227 of the Constitution of India
and it would be open for both the sides to raise all the contentions
on merits before appropriate forum in appropriate proceedings at an
appropriate time in accordance with law. The learned Single Judge
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saying so held that the petitions were not maintainable in law.

55 To the aforesaid extent, we find it difficult to agree with the
learned Single Judge. It would have been altogether a different
matter if the learned Single Judge would have said that having
regard to the nature of the order passed by the Arbitral Tribunal, no
case is made out for interference. The learned Single Judge is very
clear in his mind. The learned Single Judge says that His Lordship
has not gone into the merits of the order passed by the Arbitral
Tribunal as no order passed by the Arbitral Tribunal can be
questioned before the High Court either under Article 226 or 227 of
the Constitution as the petition itself is not maintainable.
56 Having taken the view that the writ application could be said
to be maintainable against the order passed by the Arbitral Tribunal,
we could have quashed the order passed by the learned Single Judge
and remitted the matter to the learned Single Judge. However,
instead of remitting the matter, this Court itself would like to hear
the learned Senior Counsel appearing for the appellant on the merits
of the impugned order passed by the Arbitral Tribunal.”
7. Hari Vishnu Kamath v. Syed Ahmad Ishaqu, AIR 1955 SC 233;
“21. Then the question is whether there are proper grounds for
the issue of certiorari in the present case. There was considerable
argument before us as to the character and scope of the writ of
certiorari and the conditions under which it could be issued. The
question has been considered by this Court in Parry & Co. v.
Commercial Employees' Association, Madras, Veerappa Pillai v.
Raman and Raman Ltd., Ibrahim Aboobaker v. Custodian General
and quite recently in T. C. Basappa v. T. Nagappa. On these
authorities, the following propositions may be taken as established :
(1) Certiorari will be issued for correcting errors of jurisdiction, as
when an inferior Court or Tribunal acts without jurisdiction or in
excess of it, or fails to exercise it. (2) Certiorari will also be issued
when the Court or Tribunal acts illegally in the exercise of its
undoubted jurisdiction, as when it decides without giving an
opportunity to the parties to be heard, or violates the principles of
natural justice. (3) The Court issuing a writ of certiorari acts in
exercise of a supervisory and not appellate jurisdiction. One
consequence of this is that the Court will not review findings of fact
reached by the inferior Court or Tribunal, even if they be erroneous.
This is on the principle that a Court which has jurisdiction over a
subject-matter has jurisdiction to de-cide wrong as well as right, and
when the Legislature does not choose to confer a right of appeal
against that decision, it would be defeating its purpose and policy, if
a superior Court were to re-hear the case on the evidence, and
substitute its own findings in certiorari. These propositions-are well
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settled and are not in dispute. (4) The further question on which
there has been some controversy is whether a writ can be issued,
when the decision of the inferior Court or Tribunal is erroneous in
law. This question came up for consideration in Rex v.
Northumberland Compensation Appeal Tribunal; Ex parte Shaw, and
it was held that when a Tribunal made a “speaking order” and the
reasons given in that order in support of the decision were bad in
law, certiorari could be granted. It was pointed out by Lord Goddard,
C. J. that had always been understood to be the true scope of the
power. Walsall Overseers v. London and North Western Ry. Co.(1)
and Rex v. Nat Bell Liquors Ld. were quoted in support of this view.
In Walsall Overseers v. London and North Western Ry. Co., Lord
Cairns, L.C. observed as follows:
“If there was upon the face of the order of the court of quarter
sessions anything which showed that order was erroneous, the
Court of Queen's Bench might be asked to have the order brought
into it, and to look at the order, and view it upon the face of it,
and if the court found error upon the face of it, to put an end to
its existence by quashing it”.
In Rex v. Nat Bell Liquors Ld. (2) Lord Sumner said:
“That supervision goes to two points; one is the area of the
inferior jurisdiction and the qualifications and conditions of its
exercise; the other is the observance of the law in the course of
its exercise”.
The decision in Rex v. Northumberland Compensation Appeal
Tribunal; Ex parte Shaw(3) was taken in appeal, and was affirmed
by the Court of Appeal in Rex v. Northumberland Compensation
Appeal Tribunal; Ex parte Shaw. In laying down that an error of law
was a ground for granting certiorari, the learned Judges emphasised
that it must be apparent on the face of the record. Denning, L.J. who
stated the power in broad and general terms observed:
“It will have been seen that throughout all the cases there is
one governing rule : certiorari is only available to quash a decision
for error of law if the error appears on the face of the record”.
The position was thus summed up by Morris, L.J.
“It is plain that certiorari will not issue as the cloak of an
appeal in disguise. It does not lie in order to bring an order or
decision for rehearing of the issue raised in the proceedings. It
exists to correct error of law where revealed on the face of an
order or decision, or irregularity, or absence of, or excess of,
jurisdiction where shown”.
In Veerappa Pillai v. Raman & Raman Ltd., it was observed by this
court that under article 226 the writ should be issued “in grave cases
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where the subordinate tribunals or bodies or officers act wholly

without jurisdiction, or in excess of it, or in violation of the principles
of natural justice, or refuse to exercise a jurisdiction vested in them,
or there is an error apparent on the face of the record”. In T.C.
Basappa v. T. Nagappa the law was thus stated:
“An error in the decision or determination itself may also be
amenable to a writ of ‘certiorari’ but it must be a manifest error
apparent on the face of the proceedings, e.g., when it is based on
clear ignorance or disregard of the provisions of law. In other
words, it is a patent error which can be corrected by ‘certiorari’
but not a mere wrong decision”.
“22. It may therefore be taken as settled that a writ of certiorari
could be issued to correct an error of law. But it is essential that it
should be something more than a mere error; it must be one which
must be manifest on the face of the record. The real difficulty with
reference to this matter, however, is not so much in the statement of
the principle as in its application to the facts of a particular case.
When does an error cease to be mere error, and become an error
apparent on the face of the record? Learned Counsel on either side
were unable to suggest any clear-cut rule by which, the boundary
between the two classes of errors could be demarcated. Mr. Pathak
for the first respondent contended on the strength of certain
observations of Chagla, C. J. in Batuk K. Vyas v. Surat Municipality
that no error could be said to be apparent on the face of the record if
it was not self-evident, and if it required an examination or
argument to establish it. This test might afford a satisfactory basis
for decision in the majority of cases. But there must be cases in
which even this test might break down, because judicial opinions
also differ, and an error that might be considered by one Judge as
self-evident might not be so considered by another. The fact is that
what is an error apparent on the face of the record cannot be defined
precisely or exhaustively, there being an element of indefiniteness
inherent in its very nature, and it must be left to be determined
judicially on the facts of each case.
8. In the case of T.C. Basappa v. Nagappa, AIR 1954 SC 440;
7. One of the fundamental principles in regard to the issuing of a
writ of certiorari is, that the. writ can be (I [1953] S.C.R. 1114 at
1150, of judicial acts. The expression “judicial acts” includes the
exercise of quasi-judicial functions by administrative bodies or other
authorities or persons obliged to exercise such functions and is used
in contrast with what are purely ministerial acts. Atkin L. J. thus
summed up the law on this point in Rex v. Electricity Commissioners
“Whenever any body or persons having legal authority to
determine questions affecting the rights of subjects and having
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the duty to act judicially act in excess of their legal authority they
are subject to the controlling Jurisdiction of the King's Bench
Division exercised in these writs.”
The second essential feature of a writ of certiorari is that the
control which is exercised through it over judicial or quasi-judicial
Tribunals or bodies is not in an appellate but supervisory capacity. In
granting a writ of certiorari the superior Court does not exercise the
powers of an appellate Tribunal. It does not review or reweigh the
evidence upon which the determination of the inferior Tribunal
purports to be based. It demolishes the order which it considers to
be without jurisdiction or palpably erroneous but does not substitute
its own views for those of the inferior Tribunal. The offending order or
proceeding so to say is put out of the way as one which should not
be used to the detriment of any person(2).
8. The supervision of the superior Court exercised through writs of
certiorari goes on two points, as has been expressed by Lord Sumner
in King v. Nat. Bell Liquors Limited. One is the area of inferior
jurisdiction and the qualifications and conditions of its exercise; the
other is the observance of law in the course of its exercise. These two
heads normally cover all the grounds on which a writ of certiorari
could be demanded. In fact there is little difficulty in the enunciation
of the principles; the difficulty really arises in applying the principles
to the facts of a particular case.
9. Certiorari may lie and is generally granted when a Court has
acted without or in excess of its jurisdiction. The want of jurisdiction
may arise from the nature of the subject-matter of the proceeding or
from the absence of some preliminary proceeding or the Court itself
may not be legally constituted or suffer from certain disability by
reason of extraneous circumstances(1). When the jurisdiction of the
Court depends upon the existence of some collateral fact, it is well
settled that the Court cannot by a wrong decision of the fact give it
jurisdiction which it would not otherwise possess (2).
10. A Tribunal may be competent to enter upon an enquiry but in
making the enquiry it may act in flagrant disregard of the rules of
procedure or where no particular procedure is prescribed, it may
violate the principles of natural justice. A writ of certiorari may be
available in such cases. An error in the decision or determination
itself may also be amenable to a writ of certiorari but it must be
amanifest error apparent on the face of the proceedings, e.g., when
it is based on clear ignorance or disregard of the provisions of law. In
other words, it is a patent error which can be corrected by certiorari
but not a mere wrong decision. The essential features of the remedy
by way of certiorari have been stated with remarkable brevity and
clearness by Morris L. J. in the recent case of Rex v. Northumberland
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Compensation Appellate Tribunal. The Lord Justice says:

“It is plain that certiorari will not issue as the cloak of an
appeal in disguise. It does not lie in order to bring up an order or
decision for re-hearing of the issue raised in the proceedings. It
exists to correct error of law when revealed on the, face of an
order or decision or irregularity or absence of or excess of
jurisdiction when shown.”
11. In dealing with the powers of the High Court under article 22
6 of the Constitution this Court has expressed itself in almost similar
terms and said:
“Such writs as are referred to in article 226 are obviously
intended to enable the High Court to issue them in grave cases
where the subordinate Tribunals or bodies or officers act wholly
without jurisdiction, or in excess of it, or in violation of the
principles of natural justice, or refuse to exercise a jurisdiction,
vested in them, or there is an error apparent on the face of the,
record, and such act, omission, error or excess has resulted in
manifest injustice. However extensive the jurisdiction may be, it
seems to us that it is not so wide or large as to enable the High
Court to convert itself into a Court of appeal and examine for itself
the correctness of the decision impugned and decide what is the
proper view to be taken or the order to be made.”
These passages indicate with sufficient fullness the general
principles that govern the exercise of jurisdiction in the matter of
granting writs of certiorari under a Srticle 226 the Constitution.”
9. In the case of Syed Yakoob v. K.S. Radhakrishnan, AIR 1964 SC
477;
“1. The short question which this appeal raises for our decision
relates to the limits of the jurisdiction of the High Court in issuing
a writ of certiorari while dealing with. orders passed by the
appropriate authorities granting or refusing to grant permits
under the provisions of the Motor Vehicles Act, 1939 (hereinafter
called ‘the Act’).
2. The State Transport Authority, Madras, (hereinafter referred to as
Authority)issued a notification on the 4th July, 1956, under section
57(2) of the Act calling for applications for the grant of two stage
carriage permits to run as an express service on the route Madras
to Chidambaram. 107 applications were received in response to
the said notification; some of these were rejected as time-barred
or otherwise defective, and the others which were in order were
examined by the Authority.
8. It is, of course, not easy to define or adequately describe what an
error of law apparent on the face of the record means. What can
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be corrected by a writ has to be an error of law; but it must be

such an error of law as can be regarded as one which is apparent
on the face of the record. Where it is manliest or clear that the
conclusion of law recorded by an inferior Court or Tribunal is
based on an obvious mis-interpretation of the relevant statutory
provision, or sometimes in ignorance of it, or may be, even in
disregard of it, or is expressly rounded on reasons which are
wrong in law, the said conclusion can be corrected by a writ of
certiorari. In all these cases, the impugned conclusion should be
so plainly inconsistent with the relevant statutory provision that
no difficulty is experienced by the High Court in holding that the
said error of law is apparent on the face of the record. It may also
be that in some cases. the impugned error of law may not be
obvious or patent on the face of the record as such and the Court
may need an argument to discover the said error; but there can
be no doubt that what can be corrected by a writ of certiorari is an
error of law and the said error must, on the whole, be of such a
character as would satisfy the test that it is an error of law
apparent on the face of the record. If a statutory provision is
reasonably capable of two constructions and one construction has
been adopted by the inferior Court or Tribunal, its conclusion may
not necessarily or always be open to correction by a writ of
certiorari. In our opinion, it is neither possible nor desirable to
attempt either to define or to describe adequately all cases of
errors which can be appropriately described as errors of law
apparent on the face of the record. Whether or not an impugned
error is an error of law and an error of law which is apparent on
the face of the record, must always depend upon the facts and
circumstances of each case and upon the nature and scope of the
legal provision which is alleged to have been misconstrued or
contravened.”
10. In the case of Whirlpool Corporation v. Registrar of Trade Marks,
Mumbai, (1998) 8 SCC 1;
“14. The power to issue prerogative writs under Article 226 of the
Constitution is plenary in nature and is not limite by any other
provision of the Constitution. This power can be exercised by the
High Court not only for issuing writs in the nature of habeas corpus,
mandamus, prohibition, quo warranto and certiorari for the
enforcement of any of the Fundamental Rights contained in Part-III
of the Constitution, but also for “any other purpose.
15. Under Article 226 of the Constituion, the High Court, having
regard to the facts of the case, has a discretion to entertain or not to
entertain a writ petition. But the High Court has imposed upon itself
certain restrictions one of which is that if an effective and efficacious
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remedy is available, the High Court would not normally exercise its
jurisdiction. But the alternative remedy has been consistently hel by
this Court not to operate as a bar in at least three contingencies,
namely, where the Writ Petition has been filed for the enforcement of
any of the Fundamental rights or where there has been a violation of
the principle of natural justice or where the order or proceedings are
wholly without jurisdiction or the vires of an Act is challenged. There
is a plethora of case law on this point but to cut down this circle of
fornices whirlpool we would rely or some old decisions of the
evolutionary era of the constitutional law as they still hold the field.
16. Rashid Ahmad v. Municipal Board, kairana, AIR 1960 SC 163,
laid down that existence of an adequate legal remedy was a factor to
be taken into consideration in the matter of granting Writs. This was
followed by another Rashid case, namely, K.S. Rashid & Son v. The
Income Tax Investigation Commissioner AIR 1954 SC 207 which
reiterated the above proposition and held that where alternative
remedy esisted, it would be a sound exercise of discreation to refuse
to interfere in a petition under Article 226. This proposition was,
however, qualified by the significant words, “unless there are good
grounds therefor”, which indicated that alternative remedy would not
operate as an absolute bar and that Writ Petition under Article 226
could still be entertained in exceptional circumstances.
17. Specific and clear rule was laid down in State of U.P. v. Mohd.
Nooh 1958 SCR 595 : AIR 1958 SC 86, as under:
“But this rule requiring the exhaustion of statutory remedies
before the Writ will be granted is a rule of policy convenience and
discretion rather than a rule of law and instances are numerous
where a writ of certiorari has been issued in spite of the fact that
the aggrieved party had other adequate legal remedies.”
18. This proposition was considered by a Constitution Bench of
this Court in A.V. Venkateswaran, Collector of Customs. Bombay v.
Ramchand Sobhraj Wadhwani AIR 1961 SC 1506 and was afrmed
and followed in the following words
“The passages in the judgments of this Court we have
extracted would indicate (1) that the two exceptions which the
learned solicitor General formulated to the normal rule as to the
effect of the existence of an adequate alternative remedy were by
no means exhaustive and (2) that even beyond them a discretion
vested in the High Court to have entertained the petition and
granted the petitioner relief notwithstanding the existence of an
alternative remedy. We need only add that the broad lines of the
general principles on which the Court should act having been
clearly laid down, their application to the facts of each particular
case must necessarily be dependent on a variety of individual
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facts which must govern the proper exercise of the discretion of

the Court, and that in a matter which is thus per-eminently one of
discretion, it is not possible or even if it were, it would not be
desirable to lay down inflexible rules which should be applied with
rigidity in every case which comes up before the Court”.
19. Another Constitution Bench decision in Calcutta Discount co.
Ltd. v. Income Tax Officer Companies Distt. I AIR 1961 SC 372 laid
down:
“Though the writ of prohibition or certiorari will not issue
against an executive authority, the High Courts have power to
issue in a fit case an order prohibiting an executive authority from
acting without jurisdiction. Where such action of an executive
authority acting without jurisdiction subjects or is likely to subject
a person to lengthy proceedings and unnecessary harassment. the
High Court will issue appropriate orders or directions to prevent
such consequences. Writ of certiorari and prohibition can issue
against Income Tax Officer acting without jurisdiction under 8.34
I.T. Act”.
20. Much water has since flown beneath the bridge, but there has
been no corrosive effect on these decisions which though old,
continue to hold the field with the result that law as to the
jurisdiction of the High Court in entertaining a Writ Petition under
Article 226 of the Constitution, in spite of the alternative statutory
remedies, is not affected, specially in a case where the authority
against whom the Writ is filed is shown to have had no jurisdiction or
had purported to usurp jurisdiction without any legal foundation.
21. That being so, the High Court was not justified in dismissing
the Writ Petition at the initial stage without examining the
contention that the show cause notice issued to the appellant was
wholly without jurisdiction and that the Registrar, in the
circumstances of the case, was not justified in acting as the
“Tribunal”.
11. Decision of the Apex Court dated 21.9.2012, in the case of
Benarsi Krishna Committee v. Karmayogi Shelters Pvt. Ltd., passed in
Special Leave Petition (Civil) No. 23860 of 2010:
15. Having taken note of the submissions advanced on behalf of
the respective parties and having particular regard to the expression
“party” as defined in Section 2(h) of the 1996 Act read with the
provisions of Sections 31(5) and 34(3) of the 1996 Act, we are not
inclined to interfere with the decision of the Division Bench of the
Delhi High Court impugned in these proceedings. The expression
“party” has been amply dealt with in Tecco Trechy Engineers's case
(supra) and also in ARK Builders Pvt. Ltd.'s case (supra), referred to
hereinabove. It is one thing for an Advocate to act and plead on
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behalf of a party in a proceeding and it is another for an Advocate to

act as the party himself. The expression “party”, as defined in
Section 2(h) of the 1996 Act, clearly indicates a person who is a
party to an arbitration agreement. The said definition is not qualified
in any way so as to include the agent of the party to such
agreement. Any reference, therefore, made in Section 31(5) and
Section 34(2) of the 1996 Act can only mean the party himself and
not his or her agent, or Advocate empowered to act on the basis of a
Vakalatnama. In such circumstances, proper compliance with Section
31(5) would mean delivery of a signed copy of the Arbitral Award on
the party himself and not on his Advocate, which gives the party
concerned the right to proceed under Section 34(3) of the aforesaid
Act.
16. The view taken in Pushpa Devi Bhagat's case (supra) is in
relation to the authority given to an Advocate to act on behalf of a
party to a proceeding in the proceedings itself, which cannot stand
satisfied where a provision such as Section 31(5) of the 1996 Act is
concerned. The said provision clearly indicates that a signed copy of
the Award has to be delivered to the party. Accordingly, when a copy
of the signed Award is not delivered to the party himself, it would
not amount to compliance with the provisions of Section 31(5) of the
Act. The other decision cited by Mr. Ranjit Kumar in Nilakantha
Sidramappa Ningshetti's case (supra) was rendered under the
provisions of the Arbitration Act, 1940, which did not have a
provision similar to the provisions of Section 31(5) of the 1996 Act.
The said decision would, therefore, not be applicable to the facts of
this case also.
17. In the instant case, since a signed copy of the Award had not
been delivered to the party itself and the party obtained the same on
th
15 December, 2004, and the Petition under Section 34 of the Act
was filed on 3rd February, 2005, it has to be held that the said
petition was filed within the stipulated period of three months as
contemplated under Section 34(3) of the aforesaid Act.
Consequently, the objection taken on behalf of the Petitioner herein
cannot be sustained and, in our view, was rightly rejected by the
Division Bench of the Delhi High Court.
12. In the case of Vaishno Enterprises v. Hamilton Medical AG, 2022
SCC OnLine SC 355;
“10. It is further submitted by Shri Divan, learned Senior
Advocate for Respondent No. 1 that even otherwise considering the
relevant provisions of the Arbitration Agreement the parties to the
Agreement shall not be governed by the MSME Act. It is submitted
that in the present case the date of contract was 24.08.2020. The
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appellant herein is registered as MSME on 28.08.2020 i.e. after the

execution of the contract on 24.08.2020. It is submitted that as per
the Arbitration Agreement the parties shall be governed by the law
applicable in India which shall be the law prevailing at the time of
the execution of the contract. It is submitted that for that reason
also the parties shall not be governed by the MSME Act and therefore
the Council would have no jurisdiction to entertain the dispute
between the appellant and the Respondent No. 1.
13. The short question which is posed for consideration before this
Court is the jurisdiction of the Council under the MSME Act with
respect to the dispute between the appellant and the respondent.
15. It is not in dispute that the contract/agreement between the
appellant and the respondent has been executed on 24.08.2020.
Therefore, the laws of India applicable at the time of
contract/agreement shall be applicable and therefore the parties
shall be governed by the laws of India prevailing/applicable at the
time when the contract was executed. It is admitted position that
the date on which a contract/agreement was executed i.e. on
24.08.2020 the appellant was not registered MSME. Considering the
relevant provisions of the MSME Act more particularly Section 2(n)
read with Section 8 of the MSME Act, the provisions of the MSME Act
shall be applicable in case of supplier who has filed a memorandum
with the authority referred to in sub-section (1) of Section 8.
Therefore, the supplier has to be a micro or small enterprise
registered as MSME, registered with any of the authority mentioned
in sub-section (1) of Section 8 and Section 2(n) of the MSME Act. It
is admitted position that in the present case the appellant is
registered as MSME only on 28.08.2020. Therefore, when the
contract was entered into the appellant was not MSME and therefore
the parties would not be governed by the MSME Act and the parties
shall be governed by the laws of India applicable and/or prevailing at
the time of execution of the contract. If that be so the Council would
have no jurisdiction to entertain the dispute between the appellant
and the Respondent no. 1, in exercise of powers under Section 18 of
the MSME Act. Therefore, in the aforesaid peculiar facts and
circumstances of the case, more particularly the terms of the
Agreement, the order passed by the learned Single Judge confirmed
by the Division Bench holding the Council would have no jurisdiction
with respect to Respondent No. 1 is not required to be interfered
with.
6. Per contra, Mr. Dhaval Dave, learned Senior Counsel for the
private respondent has vehemently submitted that the petition itself is
not maintainable since it challenges the award passed under the
Arbitration and Conciliation Act, 1996. He has also submitted that even
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if it is held to be maintainable, the petitioner is liable to be rejected as

it is abuse of process of law. Mr. Dhaval Dave, learned Senior Counsel
has also submitted that the petitioner has tried to achieve something
which could not be achievable under the Arbitration & Conciliation Act,
1996. He has submitted that the petitioner has suppressed the material
facts in his petition, which has been highlighted by the private
respondent No. 3 in its affidavit-in-reply. Mr. Dave, learned Senior
Counsel has also submitted that the contention put forward by the
respondent No. 3 in his affidavit-in-reply regarding knowledge of the
arbitral proceedings and sending by mail to the registered address and
informing the advocate of the petitioner, have not been controverted by
the petitioner by filing rejoinder affidavit. According to him, thus, the
contention of the respondent No. 3 that the petitioner has suppressed
the material facts in the petition, needs to be accepted and accordingly
the petition may be dismissed.
6.1 Mr. Dhaval Dave, learned Senior Counsel has also submitted that
admittedly in the present matter the petitioner has not challenged the
award within the prescribed time limit provided in the Arbitration and
Conciliation Act, 1996 and, therefore, the award has attained finality.
According to him, the proper course for the petitioner is to challenged
the award under the provisions of the Arbitration and Conciliation Act.
Mr. Dave has submitted that as there is a provision of depositing a
certain amount of the awards, before filing the Appeal, the petitioner
has not chosen to refer the appeal against the award under the
Arbitration and Conciliation Act by suppressing the material facts has
approached this Court by filing the present petition.
6.2 Mr. Dhaval Dave, learned Senior Counsel, while referring to the
various provisions of MSMED Act as well as Arbitration and Conciliation
Act, has submitted that the proceedings is conducted under the
provisions of the MSMED Act would be government by the provisions of
the Arbitration and Conciliation Act and, therefore, the provision
relating to filing of Appeal and finality of the award would be under the
provisions of Arbitration and Conciliation Act, 1996. He has also
submitted that as per Section 4 of the Arbitration and Conciliation Act
since the petitioner did not chose to remain before the Sole - Arbitrator
appointed under the provisions of MSMED Act, it could be deemed that
the petitioner has waived his right to object the proceedings under the
MSMED Act. Mr. Dave learned Senior Counsel, while referring to
Sections 5, 16, 34 of the Arbitration and Conciliation Act has submitted
that only judicial authority contemplated in the Arbitration and
Conciliation Act has jurisdiction to entertain the dispute between the
parties. He has also submitted that Section 34 of the said Act, there is
no other avenue available to the challenge the award except under
Section 34 of the Act. He has also submitted the in view of sub-section
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(3) of Section 34, period for challenging the award is prescribed for 3
months, which may be extended only for one month thereafter. Mr.
Dave, learned Senior Counsel has also submitted that even the remedy
cannot be availed under Articles 226 and 227 of the Constitution of
India against any award governed under the provisions of the
Arbitration and Conciliation Act.
6.3 Mr. Dave, learned Senior Counsel, while referring to the
documentary evidence produced on record by respondent No. 3 along
with its affidavit-in-reply, has submitted that, even the Arbitrator has
sent the same to the petitioner as per Page-141 & 142 of the paper-
book. He has also submitted that even email addressed of the
petitioner has been obtained from the website of the Company and
accordingly that address the communication regarding arbitration
proceedings were sent. He has also submitted that there is no denial on
the part of the petitioner that the email address stated therein is not of
the Company. He has also submitted that not taking participation in
arbitral proceedings, the petitioner has waived its right of raising
objection as to jurisdiction of the arbitral proceedings. He has also
submitted there is no averment as to how remedy under Section 34 of
the Arbitration & Conciliation Act, 1996 would be ineffective to the
petitioner. Mr. Dave, learned Senior Counsel has also submitted that
the petitioner even has not mentioned as to not exhausting of
alternative remedy.
6.4 Mr. Dave, learned Senior Counsel has also submitted that to
avoid the implication of Section 19 of the MSMED Act, the petitioner
keeps quiet till the respondent No. 3 moved the Company Law Board
under the Insolvency & Bankruptcy Code. He has also submitted that as
there is a provision of depositing of 25% of the award for challenging
the award passed by the Arbitrator under the provisions of MSMED Act,
the petitioner has not chosen to challenge the award in the period of
limitation and filed the present petition with a ulterior motive and that
too by suppressing material fact.
6.5 Mr. Dave, learned Senior Counsel has submitted that there are
dispute involved in the present matter as to receipt of the
communication from the Arbitrator by the petitioner as well as award
and documentary thereof, and therefore, the present petition is not
maintainable and may be rejected on this ground also.
6.6 Regarding the various decision relied upon by Mr. Pahwa,
learned Senior Counsel, Mr. Dave, learned Senior Counsel has made the
following submission in respect of each decisions:
(i) Regarding Easun Reyrolle Limited v. Nik San Engineering Co. Ltd.
(Supra), it is submitted that it was a case of pre-award stage and
there was no dispute raised under the provisions of Section 18(1)
of the MSMED Act, with the provision of Arbitration and
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Conciliation Act, 1996.

(ii) Regarding Judgment dated 27.12.2019 passed in LPA No. 619 of
2019 (Supra), it is submitted that it was a case of pre-award
stage and there was no question or plea raised of the Arbitration
and Conciliation Act and SLP against this judgment is still
pending.
(iii) Regarding the case reported in 2021 SCC OnLine SC 439
(Supra), it is submitted that it is also case of the pre-reference
stage and does not pertain to fact of after passing of award.
(iv) Regarding Judgment of the Hon'ble Apex Court rendered on
15.12.2021 in Civil Appeal No. 2899 of 2021 (Supra), it is
submitted that in this case, there was no recourse to the
Arbitration and it only pertains at the stage of re-conciliation and
order under Section 18 of the MSMED Act was passed during
conciliation proceedings and the provisions of arbitration was
bypassed. It is also submitted that the facts of the case is also
different from the present one.
(v) Regarding the case 2021 SCC OnLine Bom 3113 (Supra), it is
submitted that this judgment of the Bomaby High Court is per-
incuriram as the judgment of the Supreme Court has not been
considered and the earlier judgment of the Division Bench was
also not considered.
(vi) Regarding Judgment of the Division Bench of this Court
rendered on 30.7.2020 in LPA No. 308/2020 (Supra) it is
submitted that the fact of that case is different from the present
one and the issues involved there is different from the present
one. He has also submitted that it was also state of pre-award
stage and as there was no appeal provided against the
interlocutory order passed in arbitral proceedings, this Court took
a view of maintainability of the writ-petition.
(vii) Regarding the decision reported in AIR 1954 SC 440 : AIR 1955
SC 223 (Supra), it is submitted that this judgments are not
applicable to the facts of the present case.
6.7 Regarding the other judgments, it has been submitted by
learned Senior Counsel Mr. Dave that the facts of those judgments are
different from the present one and in the present case, the petitioner
has received the award and there is suppression of material facts by the
petitioner and, therefore, those judgments are not applicable to the
facts of the case.
6.8 Mr. Dave, learned Senior Counsel for the respondent has
vehemently submitted to dismiss the petition with costs. Mr. Dave has
relied upon the following decisison in support of his submissions:
(1) National Highways Authority of India v. Ganga Enterprises,
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(2003) 7 SCC 410;

“6. The Respondent then filed a Writ Petition in the High Court, for
refund of the amount. On the pleadings before it, the High Court
raised two questions viz. (a) whether the forfeiture of security
deposit is without authority of law and without any binding contract
between the parties and also contrary to Section 5 of the Contract
Act and (b) whether the writ petition is maintainable in a claim
arising out of a breach of contract. Question (b) should have been
first answered as it would go to the root of the matter. The High
Court instead considered question (a) and then chose not to answer
question (b). In our view, the answer to question (b) is clear. It is
settled law that disputes relating to contracts cannot be agitated
under Article 226 of the Constitution of India. It has been so held in
the cases of Kerala State Electricity Board v. Kurien E. Kalathil,
(2000) 6 SCC 293, State of U.P. v. Bridge & Roof Co. (India) Ltd.,
(1996) 6 SCC 22 and B.D.A. v. Ajai Pal Singh, (1989) 2 SCC 116.
This is settled law. The dispute in this case was regarding the terms
of offer. They were thus contractual disputes in respect of which a
Writ Court was not the proper forum. Mr. Dave however relied upon
the cases of Verigamto Naveen v. Government of A.P., (2001) 8 SCC
344 and Harminder Singh Arora v. Union of India, (1986) 3 SCC
247. These however are cases where the Writ Court was enforcing a
statutory right or duty. These cases do not lay down that a Writ
Court can interfere in a matter of contract only. Thus on the ground
of maintainability the Petition should have been dismissed.”
(2) SBP and Company v. Patel Engineering Ltd., (2005) 8 SCC 618;
(PAGE-45 TO 47)
“45. It is seen that some High Courts have proceeded on the basis
that any order passed by an arbitral tribunal during arbitration,
would be capable of being challenged under Article 226 or 227 of the
Constitution of India. We see no warrant for such an approach.
Section 37 makes certain orders of the arbitral tribunal appealable.
Under Section 34, the aggrieved party has an avenue for ventilating
his grievances against the award including any in-between orders
that might have been passed by the arbitral tribunal acting under
Section 16 of the Act. The party aggrieved by any order of the
arbitral tribunal, unless has a right of appeal under Section 37 of the
Act, has to wait until the award is passed by the Tribunal. This
appears to be the scheme of the Act. The arbitral tribunal is after all,
the creature of a contract between the parties, the arbitration
agreement, even though if the occasion arises, the Chief Justice may
constitute it based on the contract between the parties. But that
would not alter the status of the arbitral tribunal. It will still be a
forum chosen by the parties by agreement. We, therefore,
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disapprove of the stand adopted by some of the High Courts that any
order passed by the arbitral tribunal is capable of being corrected by
the High Court under Article 226 or 227 of the Constitution of India.
Such an intervention by the High Courts is not permissible.
46. The object of minimizing judicial intervention while the matter
is in the process of being arbitrated upon, will certainly be defeated
if the High Court could be approached under Article 227 of the
Constitution of India or under Article 226 of the Constitution of India
against every order made by the arbitral tribunal. Therefore, it is
necessary to indicate that once the arbitration has commenced in the
arbitral tribunal, parties have to wait until the award is pronounced
unless, of course, a right of appeal is available to them under Section
37 of the Act even at an earlier stage.
47. We, therefore, sum up our conclusions as follows:
i) The power exercised by the Chief Justice of the High Court or
the Chief Justice of India under Section 11(6) of the Act is not
an administrative power. It is a judicial power.
ii) The power under Section 11(6) of the Act, in its entirety, could
be delegated, by the Chief Justice of the High Court only to
another judge of that court and by the Chief Justice of India to
another judge of the Supreme Court.
(iii) In case of designation of a judge of the High Court or of the
Supreme Court, the power that is exercised by the designated,
judge would be that of the Chief Justice as conferred by the
statute.
(iv) The Chief Justice or the designated judge will have the right
to decide the preliminary aspects as indicated in the earlier
part of this judgment. These will be, his own jurisdiction, to
entertain the request, the existence of a valid arbitration
agreement, the existence or otherwise of a live claim, the
existence of the condition for the exercise of his power and on
the qualifications of the arbitrator or arbitrators. The Chief
Justice or the judge designated would be entitled to seek the
opinion of an institution in the matter of nominating an
arbitrator qualified in terms of Section 11(8) of the Act if the
need arises but the order appointing the arbitrator could only
be that of the Chief Justice or the judge designate.
(v) Designation of a district judge as the authority under Section
11(6) of the Act by the Chief Justice of the High Court is not
warranted on the scheme of the Act.”
(3) Devi Enterprise Limited v. State Level Industry Facilitation
Council, Through Member, 2015 SCC OnLine Guj 6277 : AIR 2015
Guj 114,
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“4. Section 19 of the Act is extracted below:“19. Application for

setting aside decree, award or order.- No application for setting aside
any decree, award or other order made either by the Council itself or
by any institution or centre providing alternate dispute resolution
services to which a reference is made by the Council, shall be
entertained by any court unless the appellant (not being a supplier)
has deposited with it seventy five per cent of the amount in terms of
the decree, award or, as the case may be, the other order in the
manner directed by such court : Provided that pending disposal of
the application to set aside the decree, award or order, the court
shall order that such percentage of the amount deposited shall be
paid to the supplier, as it considers reasonable under the
circumstances of the case subject to such conditions as it deems
necessary to impose.”
5. The constitutional validity of Section 19 of the Act was
challenged before the High Court of Madras in the case of Eden
Exports Company v. Union of India, (2013) 1 Mad LJ 445 : (2012) 0
Supreme (Madras) 4654 [Writ Application Nos. 2461, 2475 and
others of 2011 and Writ Petition Nos. 27319, 27888 and others of
2011, which was decided on 20.11.2012] wherein in paragraph 14,
the Court has considered the validity of condition of 75% pre-deposit
as contemplated in Section 19 of the Act. Paragraph-14 of the
aforesaid decision is extracted below:
“14. Coming to the challenge in respect of 75% predeposit
contemplated under Section 19 of the MSMED Act, we have no
hesitation in confirming the conclusion arrived at by the learned
Single Judge in this regard, in view of the decisions of the
Supreme Court and this Court. The Hon'ble Supreme Court in
Snehadeep Structures Private Limited v. Maharashtra Small Scale
Industries Development Corporation Limited has categorically held
that the introduction of pre-deposit clause is a disincentive to
prevent dilatory tactics employed by the buyers against whom the
small-scale industry might have procured an award. The aforesaid
decision has been followed by the Kerala High Court in K.S.R.T.C.
v. Union of India (2010) 1 KLT 65 and this Court in Goodyear
India Limited, rep. By its Zonal Manager v. Nortan Intech Rubbers
(P) Ltd. (2011) 3 LW 626. Therefore, the appellants/writ
petitioners no more cannot contend that the condition of pre-
deposit imposed in Section 19 of the MSMED Act is arbitrary.”
“11. For the aforesaid reasons, we uphold the constitutional
validity of Section 19 of the Micro, Small and Medium Enterprises
Development Act, 2006. So far as the relief prayed by the learned
counsel for the petitioner is concerned, the relief cannot be granted
by this Court as the petitioner has an adequate statutory remedy
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under Section 19 of the Act for challenging the order dated

17.09.20012 by making a pre-deposit of 75% amount and getting
condonation of delay if the law permits. The writ petition, accordingly
stands dismissed. Notice stands discharged. No costs.”
(4) Bhaven Construction Through Authorised Signatore Premjibhai K.
Shah v. Executive Engineer, Sardar Sarovar Narmada Nigam
Limited, (2022) 1 SCC 75;
“12. We need to note that the Arbitration Act is a code in itself.
This phrase is not merely perfunctory, but has definite legal
consequences. One such consequence is spelled out under Section 5
of the Arbitration Act, which reads as under
“5. Extent of judicial intervention.- Notwithstanding anything
contained in any other law for the time being in force, in matters
governed by this Part, no judicial authority shall intervene except
where so provided in this Part.”
The non-obstante clause is provided to uphold the intention of the
legislature as provided in the Preamble to adopt UNCITRAL Model
Law and Rules, to reduce excessive judicial interference which is not
contemplated under the Arbitration Act.
13. The Arbitration Act itself gives various procedures and forums
to challenge the appointment of an arbitrator. The framework clearly
portrays an intention to address most of the issues within the ambit
of the Act itself, without there being scope for any extra statutory
mechanism to provide just and fair solutions.
14. Any party can enter into an arbitration agreement for
resolving any disputes capable of being arbitrable. Parties, while
entering into such agreements, need to fulfill the basic ingredients
provided under Section 7 of the Arbitration Act. Arbitration being a
creature of contract, gives a flexible framework for the parties to
agree for their own procedure with minimalistic stipulations under
the Arbitration Act.
15. If parties fail to refer a matter to arbitration or to appoint an
arbitrator in accordance with the procedure agreed by them, then a
party can take recourse for court assistance under Section 8 or 11 of
the Arbitration Act.
16. In this context, we may state that the Appellant acted in
accordance with the procedure laid down under the agreement to
unilaterally appoint a sole arbitrator, without Respondent No. 1
mounting a judicial challenge at that stage. Respondent No. 1 then
appeared before the sole arbitrator and challenged the jurisdiction of
the sole arbitrator, in terms of Section 16(2) of the Arbitration Act.
17. Thereafter, Respondent No. 1 chose to impugn the order
passed by the arbitrator under Section 16(2) of the Arbitration Act
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through a petition under Article 226/227 of the Indian Constitution.

In the usual course, the Arbitration Act provides for a mechanism of
challenge under Section 34. The opening phase of Section 34 reads
as:
‘Recourse to a Court against an arbitral award may be made
only by an application for setting aside such award in accordance
with sub-section (2) and sub-section (3)'’.
The use of term ‘only’ as occurring under the provision serves two
purposes of making the enactment a complete code and lay down
the procedure.
18. In any case, the hierarchy in our legal framework, mandates
that a legislative enactment cannot curtail a Constitutional right. In
Nivedita Sharma v. Cellular Operators Association of India, (2011)
14 SCC 337, this Court referred to several judgments and held:
“11. We have considered the respective
arguments/submissions. There cannot be any dispute that the
power of the High Courts to issue directions, orders or writs
including writs in the nature of habeas corpus, certiorari,
mandamus, quo warranto and prohibition under Article 226 of the
Constitution is a basic feature of the Constitution and cannot be
curtailed by parliamentary legislation - L. Chandra Kumar v. Union
of India, (1997) 3 SCC 261. However, it is one thing to say that in
exercise of the power vested in it under Article 226 of the
Constitution, the High Court can entertain a writ petition against
any order passed by or action taken by the State and/or its
agency/instrumentality or any public authority or order passed by
a quasi-judicial body/authority, and it is an altogether different
thing to say that each and every petition filed under Article 226 of
the Constitution must be entertained by the High Court as a
matter of course ignoring the fact that the aggrieved person has
an effective alternative remedy. Rather, it is settled law that when
a statutory forum is created by law for redressal of grievances, a
writ petition should not be entertained ignoring the statutory
dispensation”.
(emphasis supplied)
It is therefore, prudent for a Judge to not exercise discretion to
allow judicial interference beyond the procedure established under
the enactment. This power needs to be exercised in exceptional
rarity, wherein one party is left remediless under the statute or a
clear ‘bad faith’ shown by one of the parties. This high standard set
by this Court is in terms of the legislative intention to make the
arbitration fair and efficient.
19. In this context we may observe Deep Industries Limited v. Oil
and Natural Gas Corporation Limited, wherein interplay of Section 5
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of the Arbitration Act and Article 227 of the Constitution was

analyzed as under : 9 SCC p. 714, paras 16-17)
“15. Most significant of all is the non-obstante clause contained in
Section 5 which states that notwithstanding anything contained in
any other law, in matters that arise under Part I of the Arbitration
Act, no judicial authority shall intervene except where so provided in
this Part. Section 37 grants a constricted right of first appeal against
certain judgments and orders and no others. Further, the statutory
mandate also provides for one bite at the cherry, and interdicts a
second appeal being filed (See Section 37(2) of the Act)”
“23. Respondent No. 1 did not take legal recourse against the
appointment of the sole arbitrator, and rather submitted themselves
before the tribunal to adjudicate on the jurisdiction issue as well as
on the merits. In this situation, the Respondent No. 1 has to endure
the natural consequences of submitting themselves to the
jurisdiction of the sole arbitrator, which can be challenged, through
an application under Section 34. It may be noted that in the present
case, the award has already been passed during the pendency of this
appeal, and the Respondent No. 1 has already preferred a challenge
under Section 34 to the same. Respondent No. 1 has not been able
to show any exceptional circumstance, which mandates the exercise
of jurisdiction under Articles 226 and 227 of the Constitution.”
“26. It must be noted that Section 16 of the Arbitration Act,
necessarily mandates that the issue of jurisdiction must be dealt first
by the tribunal, before the Court examines the same under Section
34. Respondent No. 1 is therefore not left remediless, and has
statutorily been provided a chance of appeal. In Deep Industries
case (supra), this Court observed as follows:
“22. One other feature of this case is of some importance. As
stated herein above, on 09.05.2018, a Section 16 application had
been dismissed by the learned Arbitrator in which substantially
the same contention which found favour with the High Court was
taken up. The drill of Section 16 of the Act is that where a Section
16 application is dismissed, no appeal is provided and the
challenge to the Section 16 application being dismissed must
await the passing of a final award at which stage it may be raised
under Section 34.”
(emphasis supplied)
(5) Kelkar & Kelkar v. Hotel Pride Executive Pvt. Ltd., 2022 SCC
OnLine SC 542;
“5. Having heard learned counsel appearing on behalf of the
respective parties and considering the impugned judgment and
order passed by the High Court, we are of the opinion that against
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the award made by the learned Arbitrator made under the Act and
against an order passed by the learned trial Court making the award
a decree and without availing the alternative statutory remedy
available by way of appeal under the provisions of the Act, the High
Court ought not to have entertained the writ petition under Articles
226 and 227 of the Constitution of India. When the statute provides
a further remedy by way of appeal against the award and even
against the order passed by the learned trial Court making the award
a decree of the court, the High Court ought not to have entertained
the writ petition and ought not to have set aside the award, in a writ
petition under Articles 226 and 227 of the Constitution of India. In
that view of the matter the impugned judgment and order passed by
the High Court is unsustainable and the same deserves to be
quashed and set aside.”
(6) P. Radha Bai v. P. Shok Kumar, (2019) 13 SCC 445;
“32. Section 34(3) deserves careful scrutiny and its characteristics
must be highlighted:
32.1 Section 34 is the only remedy for challenging an award
passed under Part I of the Arbitration Act. Section 34(3) is a
limitation provision, which is an inbuilt into the remedy provision.
One does not have to look at the Limitation Act or any other
provision for identifying the limitation period for challenging an
Award passed under Part I of the Arbitration Act.
32.2 The time limit for commencement of limitation period is
also provided in Section 34(3) i.e. the time from which a party
making an application “had received the Arbitral Award” or
disposal of a request under Section 33 for corrections and
interpretation of the Award.
32.3 Section 34(3) prohibits the filing of an application for
setting aside of an Award after three months have elapsed from
the date of receipt of Award or disposal of a request under Section
33. Section 34(3) uses the phrase “an application for setting aside
may not be made after three months have elapsed”. The phrase
“may not be made” is from the UNCITRAL Model Law and has
been 1 “An application for setting aside may not be made after
three months have elapsed from the date on which the party
making that application had received the award or, if a request
had been made under article 33, from the date on which that
request had been disposed of by the arbitral tribunal”. understood
to mean “cannot be made”. The High Court of Singapore in ABC
Co. Ltd. v. XYZ Co. Ltd, held:
“The starting point of this discussion must be the Model Law
itself. On the aspect of time, Article 34(3) is brief. All it says is
that the application may not be made after the lapse of three
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months from a specified date. Although the words used are ‘may
not’ these must be interpreted as ‘cannot’ as it is clear that the
intention is to limit the time during which an award may be
challenged. This interpretation is supported by material relating to
the discussions amongst the drafters of the Model Law. It appears
to me that the court would not be able to entertain any
application lodged after the expiry of the three months period as
Article 34 has been drafted as the all encompassing, and only,
basis for challenging an award in court. It does not provide for any
extension of the time period and, as the court derives its
jurisdiction to hear the application from the Article alone, the
absence of such a provision means the court has not been
conferred with the power to extend time”.
32.4 The limitation provision in Section 34(3) also provides for
condonation of delay. Unlike Section 5 of Limitation Act, the delay
can only be condoned for 30 days on showing sufficient cause. The
crucial phrase “but not thereafter” reveals the legislative intent to fix
an outer boundary period for challenging an Award.
32.5 Once the time limit or extended time limit for challenging
the arbitral award expires, the period for enforcing the award under
Section 36 of the Arbitration Act commences. This is evident from
the phrase “where the time for making an application to set aside
the arbitral award under Section 34 has expired”.2 There is an
integral nexus between the period prescribed under Section 34(3) to
challenge the Award and the commencement of the enforcement
period under Section 36 to execute the Award.
33. If Section 17 of the Limitation Act were to be applied to
determining the limitation period under Section 34(3), it would have
the following consequences:
33.1 In Section 34(3), the commencement period for
computing limitation is the date of receipt of award or the date of
disposal of request under Section 33 (i.e correction/additional
award). If Section 17 were to be applied for computing the
limitation period under Section 34(3), the starting period of
limitation would be the date of discovery of the alleged fraud or
mistake. The starting point for limitation under Section 34(3)
would be different from the Limitation Act.
33.2 The proviso to Section 34(3) enables a Court to entertain
an application to challenge an Award after the three months
period is expired, but only within an additional period of thirty
dates, “but not thereafter”. The use of the phrase “but not
thereafter” shows that the 120 days period is the outer boundary
for challenging an Award. If Section 17 were to be applied, the
outer boundary for challenging an Award could go beyond 120
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days. The phrase “but not thereafter” would be rendered

redundant and otiose. This Court has consistently taken this view
that the words “but not thereafter” in the proviso of Section 34(3)
of the Arbitration Act are of a mandatory nature, and couched in
negative terms, which leaves no room for doubt. (State of
Himachal Pradesh v. Himachal Techno Engineers, (2010) 12 SCC
210, Assam Urban Water Supply & Sewerage Board v. Subash
Projects & Marketing Ltd., (2012) 2 SCC 624 and Anilkumar
Jinabhai Patel (D) through LRs v. Pravinchandra Jinabhai Patel,
2018 SCC OnLine SC 276)
34. In our view, the aforesaid inconsistencies with the language of
Section 34(3) of Arbitration Act tantamount to an “express
exclusion” of Section 17 of Limitation Act.”
“44. In view of the above, we hold that once the party has
received the Award, the limitation period under Section 34(3) of
the Arbitration Act commences. Section 17 of the Limitation Act
would not come to the rescue of such objecting party.”
(7) Union of India v. Pam Development Private Limited, (2014) 11
SCC 366;
th
“15. As noticed above, by order dated 10 July, 1998, the High
Court appointed Mr. Justice Satyabrata Mitra as the sole arbitrator. It
is important to notice that this order dated 10th July, 1998 was not
challenged by the appellant and, therefore, the same became fnal
and binding. This apart, the appellant failed to raise any objection to
the lack of jurisdiction of the Arbitral Tribunal before the learned
arbitrator.
16. As noticed above, the appellant not only filed the statement of
defence but also rasied a counter claim against the respondent.
Since the appellant has not raised the objection with regard to
competence/jurisdiction of the Arbitral Tribunal before the learned
arbitrator, the same is deemed to have been waived in view of the
provisions contained in Section 4 read with Section 16 of the
Arbitration Act, 1996.
17. Section 16 of the Arbitration Act, 1996 provides that the
Arbitral Tribunal may rule on its own jurisdiction. Section 16 clearly
recognizes the principle of kompetenz-kompetenz. Section 16(2)
mandates that a plea that the Arbitral Tribunal does not have
jurisdiction shall be raised not later than the submission of the
statement of defence. Section 4 provides that a party who knows
that any requirement under the arbitration agreement has not been
complied with and yet proceeds with the arbitration without stating
his objection to such non-compliance without undue delay shall be
deemed to have waived his right to so object.
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18. In our opinion, the High Court has correctly come to the
conclusion that the appellant having failed to raise the plea of
jurisdiction before the Arbitral Tribunal cannot be permitted to raise
for the first time in the Court. Earlier also, this Court had occasion to
consider a similar objection in Bharat Sanchar Nigam Limited v.
Motorola India Private Limited [(2009) 2 SCC 337]. Upon
consideration of the provisions contained in Section 4 of the
Arbitration Act, 1996, it has been held as follows:
“39. Pursuant to section 4 of the Arbitration and Conciliation
Act, 1996, a party which knows that a requirement under the
arbitration agreement has not been complied with and still
proceeds with the arbitration without raising an objection, as soon
as possible, waives their right to object. The High Court had
appointed an arbitrator in response to the petition filed by the
appellants (sic respondent). At this point, the matter was closed
unless further objections were to be raised. If further objections
were to be made after this order, they should have been made
prior to the first arbitration hearing. But the appellants had not
raised any such objections. The appellants therefore had clearly
failed to meet the stated requirement to object to arbitration
without delay. As such their right to object is deemed to be
waived.”
19. In our opinion, the obligations are fully applicable to the facts
of this case. The appellant is deemed to have waived the right to
object with regard to the lack of the jurisdiction of the Arbitral
Tribunal.”
(8) State of Karnataka v. Laxuman, (2005) 8 SCC 709;
“10. A statute can, even while conferring a right, provide also for
a repose. The Limitation Act is not an equitable piece of legislation
but is a statute of repose. The right undoubtedly available to a
litigant becomes unenforceable if the litigant does not approach the
court within the time prescribed. It is in this context that it has been
said that the law is for the diligent. The law expects a litigant to seek
the enforcement of a right available to him within a reasonable time
of the arising of the cause of action and that reasonable time is
reflected by the various articles of the Limitation Act.”
(9) State of Madhya Pradesh v. Bhailal Bhai, (1964) 6 SCR 261 : AIR
1964 SC 1006;
“15. We see no reason to think that the High Courts have not got
this power. If a right has been infringed-whether a fundamental right
or a statutory right-and the aggrieved party comes to the court for
enforcement of the right it will not be giving complete relief if the
court merely declares the existence of such right or the fact that that
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existing right has been infringed. Where there has been only a threat
to infringe the right, an order commanding the Government or other
statutory authority not to take the action contemplated would be
sufficient. It has been held by this Court that where there has been a
threat only and the right has not been actually infringed an
application under Art. 226 would lie and the courts would give
necessary relief by making an order in the nature of injunction. It
will hardly be reasonable to say that while the court will grant relief
by such command in the nature of an order of injunction where the
invasion of a right has been merely threatened the court must still
refuse, where the right has been actually invaded, to give the
consequential relief and content itself with merely a declaration that
the right exists and has been invaded or with merely quashing the
illegal order made”
“17. At the same time we cannot lose sight of the fact that the
special remedy provided in Art. 226 is not intended to supersede
completely the modes of obtaining relief by an action in a civil court
or to deny defences legitimately open in such actions. It has been
made clear more than once that the power to give relief under Art.
226 is a discretionary power. This is specially true in the case of
power to issue writs in the nature of mandamus. Among the several
matters which the High Courts rightly take into consideration in the
exercise of that discretion is the delay made by the aggrieved party
in seeking this special remedy and what excuse there is for it.
Another is the nature of controversy of facts and law that may have
to be decided as regards the availability of consequential relief. Thus,
where, as in these cases, a person comes to the Court for relief
under Art. 226 on the allegation that he has been assessed to tax
under a void legislation and having paid it under a mistake is
entitled to get it back, the court, if it finds that the assessment was
void, being made under a void provision of law, and the payment
was made by mistake, is still not bound to exercise its discretion
directing repayment. Whether repayment should be ordered in the
exercise of this discretion will depend in each case on its own facts
and circumstances. It is not easy nor is it desirable to lay down any
rule for universal application. It may however be stated as a general
rule that if there has been unreasonable delay the court ought not
ordinarily to lend its aid to a party by this extraordinary remedy of
mandamus. Again, where even if there is no such delay the
Government or the statutory authority against whom the
consequential relief is prayed for raises a prima facie triable issue as
regards the availability of such relief on the merits on grounds like
limitation, the Court should ordinarily refuse to issue the writ of
mandamus for such payment. In both these kinds of cases it will be
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sound use of discretion to leave the party to seek his remedy by the
ordinary mode of action in a civil court and to refuse to exercise in
his favour the extraordinary remedy under Art. 226 of the
Constitution.”
“21. The learned Judges appear to have failed to notice that the
delay in these petitions was more than the delay in the petition
made in Bhailal Bhai's case out of which Civil Appeal No. 362 of
1962 has arisen. On behalf of the res-pondents-petitioners in these
appeals (C.A. Nos. 861 to 867 of 1962) Mr. Andley has argued that
the delay in these cases even is not such as would justify refusal of
the order for refund. He argued that assuming that the remedy of
recovery by action in a civil court stood barred on the date these
applications were made that would be no reason to refuse relief
under Art. 226 of the Constitution. Learned counsel is right in his
submission that the provisions of the Limitation Act do not as such
apply to the granting of relief under Art. 226. It appears to us
however that the maximum period fixed by the legislature as the
time within which the relief by a suit in a civil court must be brought
134-159 S.C. 18 may ordinarily be taken to be a reasonable
standard by which delay in seeking remedy under Art. 226 can be
measured. The Court may consider the delay unreasonable even if it
is less than the period of limitation prescribed for a civil action for
the remedy. but where the delay is more than this period, it will
almost always be proper for the court to hold that it is unreasonable.
The period of limitation prescribed for recovery of money paid by
mistake under the Limitation Act is three years from the date when
the mistake is known. If the mistake was known in these cases on or
shortly after January 17, 1956 the delay in making these
applications should be considered unreasonable. If, on the other
hand, as Mr. Andley seems to argue, the mistake was discovered
much later, this would be a controversial fact which cannot
conveniently be decided in writ proceedings. In either view of the
matter we are of opinion the orders for refund made by the High
Court in these seven cases cannot be sustained.”
(10) Assistant Commissioner (CT) Ltu. Kakinada v. Glaxo Smith
Kline Consumer Health Care, (2020) 19 SCC 681;
“1. Leave granted. The moot question in this appeal emanating
from the judgment and order dated 19.11.2018 in Glaxo Smith Kline
Consumer Healthcare ltd. v. CCT passed by the High Court of
Judicature at Hyderabad for the State of Telangana and the State of
Andhra Pradesh (for short “the High Court”) is : Whether the High
Court in exercise of its writ jurisdiction under Article 226 of the
Constitution of India ought Signature Not Verified Digitally signed by
to entertain a challenge to the assessment order on the sole ground
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that the statutory remedy of appeal against that order stood

foreclosed by the law of limitation?”
“13. The High Court finally allowed the writ petition vide the
impugned judgment and order on the ground that the statutory
remedy had become ineffective for the respondent (writ petitioner)
due to expiry of 60 days from the date of service of the assessment
order. Inasmuch as, the appellate authority had no jurisdiction to
condone the delay after expiry of 60 days, despite the reason
mentioned by the respondent of an extraordinary situation due to
the act of commission and omission of its employee who was in
charge of the tax matters, forcing the management to suspend him
and initiate disciplinary proceedings against him. Soon after
becoming aware about the assessment order, the respondent had
filed the appeal, but that was after expiry of 60 days' period. The
High Court was also impressed by the contention pressed into
service by the respondent that it ought to be given one opportunity
to explain to the authority (Assistant Commissioner) about the
discrepancies between the value reported in the CST returns and the
amount indicated in Form “F” relating to the turnover. The additional
reason as can be discerned from the impugned order is that the
respondent had already deposited an additional amount equivalent
to 12.5% of the disputed tax amount in terms of the earlier order.
We deem it apposite to reproduce the impugned order of the High
Court. The same reads thus : (Glaxo Smith case, SCC OnLine Hyd
paras 3-9)
“3. The impugned order of assessment is dated 21.6.2017. As
against the said order the petitioner filed an appeal with a delay.
Since the delay was beyond the period after which it can be
condoned, the same was not entertained. Therefore, the petitioner
has come up with the above writ petition.”
4. The reason stated by the petitioner is that one of the
employees who was in charge, indulged in malpractices forcing
the management to suspend him and initiate disciplinary
proceedings. The petitioner claims that they were not aware of
these orders. Therefore, the petitioner seeks one opportunity.
5. The reason why the petitioner seeks one opportunity is that
‘F’ forms submitted by the petitioner were rejected by the
Assessing Officer, on the ground that the value of the goods
transferred to branch office have not been disclosed in ‘F’ forms.
But the claim of the petitioner is that the value was wrongly
reported in the CST returns and that the amount indicated in the
‘F’ forms was more than the turnover. Therefore, they seek one
opportunity to explain this discrepancy.
6. In view of the peculiar circumstances, even while granting
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an opportunity to the petitioner, we wanted to put them on

condition. Therefore, on 8.11.2018 we passed an interim order to
the following effect,
“It is represented by Mr. S. Dwarakanath, learned counsel
for the petitioner that the petitioner has already paid 12.5% of
the disputed tax, for the purpose of filing an appeal. But, the
employee, who was incharge and who was subsequently,
suspended in contemplation of disciplinary proceedings, failed
to file the appeal. The contention of the learned counsel for the
petitioner is that the issue lies in a narrow campus.
Since the petitioner has already paid 12.5% of the disputed
tax, the request of the petitioner for granting one more
opportunity would be considered favourably, if the petitioner
pays an additional amount equivalent to 12.5% of the disputed
tax. The petitioner shall make such payment within a period of
one week.
Post on 19.11.2018 for orders.”
7. Pursuant to the aforesaid order, the petitioner made
payment of Rs. 9,59,190/, representing 12.5% of the taxes for
the year 2013-2014 (CST). The amount was paid on 13.11.2018.
8. Therefore, the writ petition is ordered, the impugned order is
st
set aside and the matter is remanded back to the 1 respondent.
The petitioner shall appear before the 1 st respondent on
10.12.2018 and explain the discrepancies. After such personal
hearing, the 1st respondent may pass orders afresh.
9. As a sequel, pending miscellaneous petitions, if any, shall
stand closed. No costs.”
14. In the backdrop of these facts, the central question is :
whether the High Court ought to have entertained the writ petition
filed by the respondent? As regards the power of the High Court to
issue directions, orders or writs in exercise of its jurisdiction under
Article 226 of the Constitution of India, the same is no more res
integra. Even though the High Court can entertain a writ petition
against any order or direction passed/action taken by the State
under Article 226 of the Constitution, it ought not to do so as a
matter of course when the aggrieved person could have availed of an
effective alternative remedy in the manner prescribed by law (see
Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad and
also Nivedita Sharma v. COAI). In Thansingh Nathmal v.
Superintendent of Taxes, Dhubri, the Constitution Bench of this
Court made it amply clear that although the power of the High Court
under Article 226 of the Constitution is very wide, the Court must
exercise self-imposed restraint and not entertain the writ petition, if
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an alternative effective remedy is available to the aggrieved person.

In paragraph 7, the Court observed thus : Thansingh Nathmal case,
AIR p. 423)-
“7. Against the order of the Commissioner an order for
reference could have been claimed if the appellants satisfied the
Commissioner or the High Court that a question of law arose out
of the order. But the procedure provided by the Act to invoke the
jurisdiction of the High Court was bypassed, the appellants moved
the High Court challenging the competence of the Provincial
Legislature to extend the concept of sale, and invoked the
extraordinary jurisdiction of the High Court under Article 226 and
sought to reopen the decision of the Taxing Authorities on
question of fact. The jurisdiction of the High Court under Article
226 of the Constitution is couched in wide terms and the exercise
thereof is not subject to any restrictions except the territorial
restrictions which are expressly provided in the Articles. But the
exercise of the jurisdiction is discretionary : it is not exercised
merely because it is lawful to do so. The very amplitude of the
jurisdiction demands that it will ordinarily be exercised subject to
certain self imposed limitations. Resort that jurisdiction is not
intended as an alternative remedy for relief which may be
obtained in a suit or other mode prescribed by statute. Ordinarily
the Court will not entertain a petition for a writ under Article 226,
where the petitioner has an alternative remedy, which without
being unduly onerous, provides an equally efficacious remedy.
Again the High Court does not generally enter upon a
determination of questions which demand an elaborate
examination of evidence to establish the right to enforce which
the writ is claimed. The High Court does not therefore act as a
court of appeal against the decision of a court or tribunal, to
correct errors of fact, and does not by assuming jurisdiction under
Article 226 trench upon an alternative remedy provided by statute
for obtaining relief. Where it is open to the aggrieved petitioner to
move another tribunal, or even itself in another jurisdiction for
obtaining redress in the manner provided by a statute, the High
Court normally will not permit by entertaining a petition under
Article 226 of the Constitution the machinery created under the
statute to be bypassed, and will leave the party applying to it to
seek resort to the machinery so set up.”
(emphasis supplied)
“15. We may usefully refer to the exposition of this Court in
Titaghur Paper Mills Co. Ltd. v. State of Orissa, wherein it is observed
that where a right or liability is created by a statute, which gives a
special remedy for enforcing it, the remedy provided by that statute
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must only be availed of. In paragraph 11, the Court observed thus:—
(SCC pp.440-41)
“11. Under the scheme of the Act, there is a hierarchy of
authorities before which the petitioners can get adequate redress
against the wrongful acts complained of. The petitioners have the
right to prefer an appeal before the Prescribed Authority under
sub-section (1) of Section 23 of the Act. If the petitioners are
dissatisfied with the decision in the appeal, they can prefer a
further appeal to the Tribunal under sub-section (3) of Section 23
of the Act, and then ask for a case to be stated upon a question of
law for the opinion of the High Court under Section 24 of the Act.
The Act provides for a complete machinery to challenge an order
of assessment, and the impugned orders of assessment can only
be challenged by the mode prescribed by the Act and not by a
petition under Article 226 of the Constitution. It is now well
recognised that where a right or liability is created by a statute
which gives a special remedy for enforcing it, the remedy
provided by that statute only must be availed of. This rule was
stated with great clarity by Willes, J. in Wolverhampton New
Waterworks Co. v. Hawkesford [(1859) 6 CBNS 336, 356] in the
following passage:
‘There are three classes of cases in which a liability may be
established founded upon statute…. But there is a third class,
viz. where a liability not existing at common law is created by a
statute which at the same time gives a special and particular
remedy for enforcing it…. The remedy provided by the statute
must be followed, and it is not competent to the party to
pursue the course applicable to cases of the second class. The
form given by the statute must be adopted and adhered to.’
The rule laid down in this passage was approved by the House
of Lords in Neville v. London Express Newspapers Ltd. and has
been reafrmed by the Privy Council in Attorney-General of
Trinidad and Tobago v. Gordon Grant & Co. Ltd. ([1935] A.C. 532)
and Secretary of State v. Mask & Co. (AIR 1940 PC 105). It has
also been held to be equally applicable to enforcement of rights,
and has been followed by this Court throughout. The High Court
was therefore justified in dismissing the writ petitions in limine.”
(emphasis supplied)
In the subsequent decision in Mafatlal Industries Ltd. v. Union
of India, this Court went on to observe that an Act cannot bar and
curtail remedy under Article 226 or 32 of the Constitution. The
Court, however, added a word of caution and expounded that the
constitutional Court would certainly take note of the legislative
intent manifested in the provisions of the Act and would exercise
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its jurisdiction consistent with the provisions of the enactment. To

put it differently, the fact that the High Court has wide jurisdiction
under Article 226 of the Constitution, does not mean that it can
disregard the substantive provisions of a statute and pass orders
which can be settled only through a mechanism prescribed by the
statute.”
16. Indubitably, the powers of the High Court under Article 226 of
the Constitution are wide, but certainly not wider than the plenary
powers bestowed on this Court under Article 142 of the Constitution.
Article 142 is a conglomeration and repository of the entire judicial
powers under the Constitution, to do complete justice to the parties.
Even while exercising that power, this Court is required to bear in
mind the legislative intent and not to 12 (1997) 5 SCC 536 render
the statutory provision otiose. In a recent decision of a three-Judge
Bench of this Court in Oil and Natural Gas Corporation Limited v.
Gujarat Energy Transmission Corporation Limited ((2017) 5 SCC 42,
the statutory appeal filed before this Court was barred by 71 days
and the maximum time limit for condoning the delay in terms of
Section 125 of the Electricity Act, 2003 was only 60 days. In other
words, the appeal was presented beyond the condonable period of
60 days. As a result, this Court could not have condoned the delay of
71 days. Notably, while admitting the appeal, the Court had
condoned the delay in filing the appeal. However, at the final hearing
of the appeal, an objection regarding appeal being barred by
limitation was allowed to be raised being a jurisdictional issue and
while dealing with the said objection, the Court referred to the
decisions in Singh Enterprises v. Commissioner of Central Excise,
Jamshedpur, (2008) 3 SCC 70, Commissioner of CC E v. Hongo
(India) (P) Limited. (2009) 5 SCC 791, Chhattisgarh State Electricity
Board v. CERC (2010) 5 SCC 23, and Suryachakra Power Corporation
Limited v. Electricity Department (2016) 16 SCC 152 and concluded
that Section 5 of the Limitation Act, 1963 cannot be invoked by the
Court for maintaining an appeal beyond maximum prescribed period
in Section 125 of the Electricity Act.
17. The principle underlying the dictum in this decision would
apply proprio vigore to Section 31 of the 2005 Act including to the
powers of the High Court under Article 226 of the Constitution.
Notably, in this decision, a submission was canvassed by the
assessee that in the peculiar facts of that case (as urged in the
present case), the Court may exercise its jurisdiction under Article
142 of the Constitution, so that complete justice can be done. This
argument has been considered and plainly rejected in the following
words:—
“12. In A.R. Antulay v. R.S. Nayak, (1988) 2 SCC 602, while
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explicating and elaborating the principles under Article 142,

Sabyasachi Mukharji, J. (as his Lordship then was) opined thus :
(SCC p. 656, para 50)
“50. … The fact that the rule was discretionary did not alter
the position. Though Article 142(1) empowers the Supreme
Court to pass any order to do complete justice between the
parties, the 16 (2010) 5 SCC 23 17 (2016) 16 SCC 152 court
cannot make an order inconsistent with the fundamental rights
guaranteed by Part III of the Constitution. No question of
inconsistency between Article 142(1) and Article 32 arose.
Gajendragadkar, J., speaking [Prem Chand Garg v. Excise
Commr., AIR 1963 SC 996] for the majority of the Judges of
this Court said that Article 142(1) did not confer any power on
this Court to contravene the provisions of Article 32 of the
Constitution. Nor did Article 145 confer power upon this Court
to make rules, empowering it to contravene the provisions of
the fundamental right. At AIR pp. 1002-1003, para 12 : SCR p.
899 of the Report, Gajendragadkar, J., reiterated that the
powers of this Court are no doubt very wide and they are
intended and “will always be exercised in the interests of
justice”. But that is not to say that an order can be made by
this Court which is inconsistent with the fundamental rights
guaranteed by Part III of the Constitution. It was emphasised
that an order which this Court could make in order to do
complete justice between the parties, must not only be
consistent with the fundamental rights guaranteed by the
Constitution, but it cannot even be inconsistent with the
substantive provisions of the relevant statutory laws. The court
therefore, held that it was not possible to hold that Article 142
(1) conferred upon this Court powers which could contravene
the provisions of Article 32.”.
13. The said decision has been clarified by a Constitution Bench in
Union Carbide Corpn. v. Union of India, (1991) 4 SCC 584, wherein
M.N. Venkatachaliah, J. (as his Lordship then was) speaking for the
majority, ruled that : (SCC pp. 634-35, para 83)
“83. It is necessary to set at rest certain misconceptions in the
arguments touching the scope of the powers of this Court under
Article 142(1) of the Constitution. These issues are matters of
serious public importance. The proposition that a provision in any
ordinary law irrespective of the importance of the public policy on
which it is founded, operates to limit the powers of the Apex Court
under Article 142(1) is unsound and erroneous. In both Prem
Chand Garg v. Excise Commr., AIR 1963 SC 996, as well as A.R.
Antulay v. R.S. Nayak, (1988) 2 SCC 602, cases the point was
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one of violation of constitutional provisions and constitutional

rights. The observations as to the effect of inconsistency with
statutory provisions were really unnecessary in those cases as the
decisions in the ultimate analysis turned on the breach of
constitutional rights. We agree with Shri Nariman that the power
of the Court under Article 142 insofar as quashing of criminal
proceedings are concerned is not exhausted by Section 320 or
321 or 482 CrPC or all of them put together. The power under
Article 142 is at an entirely different level and of a different
quality. Prohibitions or limitations or provisions contained in
ordinary laws cannot, ipso facto, act as prohibitions or limitations
on the constitutional powers under Article 142. Such prohibitions
or limitations in the statutes might embody and reflect the
scheme of a particular law, taking into account the nature and
status of the authority or the court on which conferment of powers
— limited in some appropriate way — is contemplated. The
limitations may not necessarily reflect or be based on any
fundamental considerations of public policy. Shri Sorabjee,
learned Attorney General, referring to Garg case [Prem Chand
Garg v. Excise Commr., AIR 1963 SC 996], said that limitation on
the powers under Article 142 arising from “inconsistency with
express statutory provisions of substantive law” must really mean
and be understood as some express prohibition contained in any
substantive statutory law. He suggested that if the expression
“prohibition” is read in place of “provision” that would perhaps
convey the appropriate idea. But we think that such prohibition
should also be shown to be based on some underlying
fundamental and general issues of public policy and not merely
incidental to a particular statutory scheme or pattern. It will again
be wholly incorrect to say that powers under Article 142 are
subject to such express statutory prohibitions. That would convey
the idea that statutory provisions override a constitutional
provision. Perhaps, the proper way of expressing the idea is that
in exercising powers under Article 142 and in assessing the needs
of “complete justice” of a cause or matter, the Apex Court will
take note of the express prohibitions in any substantive statutory
provision based on some fundamental principles of public policy
and regulate the exercise of its power and discretion accordingly.
The proposition does not relate to the powers of the Court under
Article 142, but only to what is or is not “complete justice” of a
cause or matter and in the ultimate analysis of the propriety of
the exercise of the power. No question of lack of jurisdiction or of
nullity can arise.”
14. In this regard, another Constitution Bench in Supreme Court
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Bar Assn. v. Union of India, (1998) 4 SCC 409] opined : (SCC pp.
437-38, para 56)
“56. As a matter of fact, the observations on which emphasis
has been placed by us from the Union Carbide case [Union
Carbide Corpn. v. Union of India, (1991) 4 SCC 584], A.R. Antulay
case [A.R. Antulay v. R.S. Nayak, (1988) 2 SCC 602] and Delhi
Judicial Service Assn. v. State of Gujarat, (1991) 4 SCC 406, go
to show that they do not strictly speaking come into any conflict
with the observations of the majority made in Prem Chand Garg
case [Prem Chand Garg v. Excise Commr., AIR 1963 SC 996]. It is
one thing to say that “prohibitions or limitations in a statute”
cannot come in the way of exercise of jurisdiction under Article
142 to do complete justice between the parties in the pending
“cause or matter” arising out of that statute, but quite a different
thing to say that while exercising jurisdiction under Article 142,
this Court can altogether ignore the substantive provisions of a
statute, dealing with the subject and pass orders concerning an
issue which can be settled only through a mechanism prescribed
in another statute. This Court did not say so in Union Carbide case
[Union Carbide Corpn. v. Union of India, (1991) 4 SCC 584] either
expressly or by implication and on the contrary it has been held
that the Apex Court will take note of the express provisions of any
substantive statutory law and regulate the exercise of its power
and discretion accordingly. …”
15. From the aforesaid decisions, it is clear as crystal that the
Constitution Bench in Supreme Court Bar Assn. v. Union of India,
(1998) 4 SCC 409, has ruled that there is no conflict of opinion in
Antulay case [A.R. Antulay v. R.S. Nayak, (1988) 2 SCC 602] or in
Union Carbide Corpn. case [Union Carbide Corpn. v. Union of India,
(1991) 4 SCC 584] with the principle set down in Prem Chand Garg
v. Excise Commr., AIR 1963 SC 996. Be it noted, when there is a
statutory command by the legislation as regards limitation and there
is the postulate that delay can be condoned for a further period not
exceeding sixty days, needless to say, it is based on certain
underlined, fundamental, general issues of public policy as has been
held in Union Carbide Corpn. case [Union Carbide Corpn. v. Union of
India, (1991) 4 SCC 584]. As the pronouncement in Chhattisgarh
SEB v. Central Electricity Regulatory Commission, (2010) 5 SCC 23,
lays down quite clearly that the policy behind the Act emphasising
on the constitution of a special adjudicatory forum, is meant to
expeditiously decide the grievances of a person who may be
aggrieved by an order of the adjudicatory officer or by an appropriate
Commission. The Act is a special legislation within the meaning of
Section 29(2) of the Limitation Act and, therefore, the prescription
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with regard to the limitation has to be the binding effect and the
same has to be followed regard being had to its mandatory nature.
To put it in a different way, the prescription of limitation in a case of
present nature, when the statute commands that this Court may
condone the further delay not beyond 60 days, it would come within
the ambit and sweep of the provisions and policy of legislation. It is
equivalent to Section 3 of the Limitation Act. Therefore, it is
uncondonable and it cannot be condoned taking recourse to Article
142 of the Constitution.
16. We had stated earlier that we will be adverting to the passage
in Suryachakra Power Corpn. Ltd. v. Electricity Deptt., (2016) 16
SCC 152. There, the Court had referred to Section 14 of the
Limitation Act. It fundamentally relied on M.P. Steel Corpn. v. CCE,
(2015) 7 SCC 58, wherein the Court after referring to certain
authorities, analysed thus : (M.P. Steel Corpn. Case), SCC p. 91,
para 43)
“43. … when a certain period is excluded by applying the
principles contained in Section 14, there is no delay to be
attributed to the appellant and the limitation period provided by
the statute concerned continues to be the stated period and not
more than the stated period. We conclude, therefore, that the
principle of Section 14 which is a principle based on advancing
the cause of justice would certainly apply to exclude time taken in
prosecuting proceedings which are bona fide and with due
diligence pursued, which ultimately end without a decision on the
merits of the case.””
(emphasis in italics - in original, and in bold - supplied)
Similarly, in State v. Mushtaq Ahmad, this Court opined that
where minimum sentence is provided for an offence then no Court
can impose lesser punishment on ground of mitigating factors.
18. A priori, we have no hesitation in taking the view that what
this Court cannot do in exercise of its plenary powers under Article
142 of the Constitution, it is unfathomable as to how the High Court
can take a different approach in the matter in 18 (2016) 1 SCC 315
reference to Article 226 of the Constitution. The principle underlying
the rejection of such argument by this Court would apply on all fours
to the exercise of power by the High Court under Article 226 of the
Constitution.”
(11) Judgment of the Bombay High Court dated 27.10.2020 passed
in Writ Petition (L) No. 4049 of 2020 in the case of Union of India,
through Chief Administrative Officer (construction) v. Maharashtra
Steel Fabricators & Erectors:
“7. Two main topics arise for consideration. First, the law on
challenge to an arbitral award under Article 226 and 227 of the
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Constitution of India generally. Second, the law on the challenge to

an arbitral award under article 226 and 227 of the Constitution of
India after the limitation period under the Act is over.
8. The Supreme Court in the case of Deep Industries Limited,
considered the exercise of jurisdiction by the High Court under
Article 227 of the Constitution of India in the context of the Act of
1996. This case arose from a contract between appellant therein and
the respondent Oil and Natural Gas Corporation Limited. A sole
arbitrator was appointed to decide disputes between the parties.
After the claim petition was filed the appellant was black listed. An
application was moved by the appellant to amend the petition and to
challenge the order of black listing. The amendment was granted.
The application under section 16 of the Act of 1996 was moved
before the arbitrator stating that aspect of the black listing would be
outside the arbitrator's mandate. The application under Section 16 of
the Act of 1996 was dismissed by the arbitrator. So also the
application under Section 17 was also disposed of staying the order
of black listing. The appeal against the order under Section 17 was
rejected by the City Civil Court under Section 37 of the Act of 1996.
An application was filed under Article 227 of the Constitution of India
in the High Court of Gujarat. A preliminary objection was raised that
the petition under Article 227 should be dismissed at threshold. The
High Court, however, without answering this question went into the
merits and allowed the petition. Supreme Court noted that the
matter arose before High Court from the order of the subordinate
court. The Supreme Court observed that the statutory policy of the
Act is set down for time limits disposal of the arbitral proceedings
and Section 34 references. The court observed that this being the
case, if petitions were to be filed under Articles 226 and 227 of the
Constitution against orders passed in appeals under Section 37, the
arbitral process would not concluded for many years. The Supreme
court also commented on the plenary nature of Article 227 which
remains untouched by the non-obstante clause of Section 5 of the
Act. The Supreme Court however cautioned that the High Court
would be extremely circumspect in interfering under Article 227
against judgments allowing or dismissing first appeals under Section
37 of the Act and ensure that interference is restricted to orders that
are passed which are patently lacking in inherent jurisdiction. Having
expounded the legislative policy thus, the appeal was allowed by the
Supreme Court. In the case of Punjab State Power Corporation Pvt.
Ltd., the applicant had directly challenged an order passed by the
Arbitral Tribunal against under Section 16 of the Act of 1996 under
Article 227 of the Constitution of India in the High Court. The
Supreme Court observed that the reference in M/s. Deep Industries
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Ltd. that Article 227 is a Constitutional provision does not mean that
High Courts can indiscriminately exercise the power under Article
227 entertaining challenges to the judgments allowing or dismissing
the appeals under Section 37 of the Act. Similar is the position the
case of the decision of Division Bench of this Court in Dowell Leasing
& Financing Ltd. Therefore these decisions do not assist the
Petitioner. Petitioner has not challenged the order passed in appeal
under Section 37 of the Act of 1996 by a Court subordinate to the
High Court as was the case before the Supreme Court but is directly
challenging the award by a Petition under Article 226 and 227 of the
Constitution of India. The Supreme Court in SBP & Co. disapproved
the stand adopted by some of the High Courts that any order passed
by the arbitral tribunal can be corrected by the High Court under
Article 226 or 227 of the Constitution. The decision in SBP & Co. is
rendered by the bench of seven learned Judges and it lays down the
position of law such an intervention by the High Courts is not
permissible”.
“10. The Petitioner, having not applied under Section 34 of the
Act in time, is seeking to challenge the award by filing a writ petition
under Article 226 and 227 of the Constitution of India. Second issue
therefore is whether the challenge to an Arbitral Award under article
226 and 227 of the Constitution of India could be entertained after
the limitation period under the Act is over.
11. The Act of 1996 is a self-contained machinery for dispute
resolution. It lays down a simplified procedure. The arbitrator is
appointed by consensus, if not, by the Court. The remedies for
challenging the award under the Act, 1996 are not limitless.
Categories of challenge are limited. They are enumerated in Section
34(2) of the Act. The legislative intent of speedy disposal of arbitral
proceeding is woven through the entire scheme of the Act. A time
limit is stipulated under Section 34(3) of the Act. An application for
setting aside may not be made after three months have elapsed
from the date on which the party making that application had
received the arbitral award or, had a request been made under
section 33, from the date on which that request had been disposed
of by the arbitral tribunal. The Court may entertain the application
within thirty days, if it is satisfied that the applicant was prevented
by sufficient cause from making the application within the said
period of three months it, but not thereafter.
12. Whether the Court could extend the period under section 34
(3) of the Act by recourse to Section 5 of the Limitation Act, 1963
was considered the Supreme Court in the case of Union of India v.
Popular Construction Co. 9 The Supreme Court observed that the
words ‘but not thereafter’ used in the proviso section 34(3) are
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crucial which bar the application of Section 5 of the Limitation Act.

Supreme Court laid down the law that Court cannot entertain an
application to set aside the Award beyond the extended period under
the proviso.
13. Thus, had the Petitioner filed this petition as an application
under Section 34 of the Act of 1996, admittedly it would have been
beyond the permissible period and the Court under the Act would be
powerless to entertain it. The Petitioner however contends that the
powers of the High Court are not fettered by the limitation section 34
(3) of the Act and the High Court is not powerless to grant relief
under its writ jurisdiction.
14. The question therefore is whether the High Court can exercise
powers under article 226 and 227 of the Constitution of India
overriding the time limit placed on the challenge to arbitral awards
under the Act of 1996. An identical question arose before the
Supreme Court in the case of Assistant Commissioner (CT) LTU,
Kakinada v. Glaxo Smith Kline Consumer Health Care Ltd. under the
Andhra Pradesh Value Added Tax Act, 2005 Act as to whether the
High Court in exercise of its writ jurisdiction could entertain the
challenge because statutory remedy of appeal against the order
stood foreclosed by law of limitation. Here, the respondent, a trader,
filed an appeal against the order passed by the Commissioner of
Commercial Taxes which was dismissed as barred by limitation by
the Appellate Authority because of expiry of the maximum limitation
period of 60 days prescribed under the Andhra Pradesh Value Added
Tax Act, 2005 Act. The respondent filed a writ petition to challenge
the assessment order. The writ petition was entertained by the High
Court and the order passed by the Assistant Commissioner was
quashed and set aside. The Revenue filed appeal in the Supreme
Court contending that once the respondent failed to avail statutory
remedy within time, the High Court ought not have entertained the
writ petition. The respondent urged that the High Court had ample
power to grant relief under Article 226 of the Constitution of India.
The Supreme Court rejected the contention and laid down the
following position of law. The powers of the High Court under Article
226 of the Constitution are no doubt wide, but not wider than the
powers under Article 142 of the Constitution. There is a distinction
between the powers of the High Court under Article 226 and of the
power of the Supreme Court under Article 142 of the Constitution of
India to do complete justice between the parties. If the Supreme
Court may not issue certain directions in exercise of powers under
Article 142 of the Constitution, it cannot be that the High Court can
take a different approach under Article 226 of the Constitution. The
High Court cannot not disregard the statutory period. The High Court
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should not issue a writ inconsistent with the legislative intent. Doing
so would frustrate the legislative scheme and intention behind the
statutory provisions. The law laid down Assistant Commissioner (CT)
LTU, Kakinada squarely applies to the present case. If the legislative
intent is to close the challenge to an arbitral Award after a particular
period of time, then it must be adhered to. Therefore this writ
petition filed under Article 226 and 227 of the Constitution of India
challenging arbitral award after the stipulated time limit under the
section 34 of the Act is over, cannot be entertained.
15. There is no merit in the submission of the Petitioner that it is
rendered remediless which contrary to the Rule of Law. There is a
distinction between nonexistence of remedies in law and not availing
the remedy within limitation period. The Petitioner falls in the second
category. Petitioner is remediless by its own conduct.”
(12) Pranjan v. State of Maharashtra, 2021 SCC OnLine Bom 4284;
“3. The Apex Court in the case of Assistant Commissioner (CT)
LTU, Kakinada v. Glaxo Smith Kline Consumer Health Care Limited
has held that if a statutory remedy is barred by limitation, same
cannot be extended by exercising writ jurisdiction under Article 226
of the Constitution of India. Therefore, relief sought for by the
petitioner cannot be granted.”
(13) Radha Krishan Industries v. State of Himachal Pradesh, (2021)
6 SCC 771;
“27 The principles of law which emerge are that:
27.1 The power under Article 226 of the Constitution to issue
writs can be exercised not only for the enforcement of
fundamental rights, but for any other purpose as well;
27.2 The High Court has the discretion not to entertain a writ
petition. One of the restrictions placed on the power of the High
Court is where an effective alternate remedy is available to the
aggrieved person; (2003) 2 SCC 107 PART C
27.3 Exceptions to the rule of alternate remedy arise where (a)
the writ petition has been filed for the enforcement of a
fundamental right protected by Part III of the Constitution; (b)
there has been a violation of the principles of natural justice; (c)
the order or proceedings are wholly without jurisdiction; or (d) the
vires of a legislation is challenged;
27.4 An alternate remedy by itself does not divest the High
Court of its powers under Article 226 of the Constitution in an
appropriate case though ordinarily, a writ petition should not be
entertained when an efficacious alternate remedy is provided by
law;
27.5 When a right is created by a statute, which itself
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prescribes the remedy or procedure for enforcing the right or

liability, resort must be had to that particular statutory remedy
before invoking the discretionary remedy under Article 226 of the
Constitution. This rule of exhaustion of statutory remedies is a
rule of policy, convenience and discretion; and
27.6 In cases where there are disputed questions of fact, the
High Court may decide to decline jurisdiction in a writ petition.
However, if the High Court is objectively of the view that the
nature of the controversy requires the exercise of its writ
jurisdiction, such a view would not readily be interfered with.”
(14) R&P of Apex Court dated 8.1.2021 of the Special Leave to
Appeal (C) No. 15244/2020 in case of Nik San Engineering Co.
Ltd. v. Easun Reyrolle Limited,
(15) Gujarat State Disaster Management Authority v. Aska
Equipments Limited, (2022) 1 SCC 61;
“15. In view of the above and considering the language used in
Section 19 of the MSME Act, 2006 and the object and purpose of
providing deposit of 75% of the awarded amount as a pre-deposit
while preferring the application/appeal for setting aside the award, it
has to be held that the requirement of deposit of 75% of the
awarded amount as a pre-deposit is mandatory. Therefore, as such,
both the High Court as well as the learned Additional District Judge
(Commercial), Dehradun were justified in directing the appellant to
deposit 75% of the awarded amount as a pre-deposit.”
“17. With the aforesaid, the question posed is answered against
the appellant in terms of the above and we dispose of the appeal
laying down the law in terms of the above, however, as observed
hereinabove, continue with the interim arrangement as per order
dated 23.10.2019 till final disposal of the appeal/application under
Section 34 of the Arbitration & Conciliation Act, 1996 read with
Section 19 of the MSME Act, 2006, which shall not be treated as a
precedent.”
(16) General Manager, Haryana Roadways v. Jai Bhagwan, (2008) 4
SCC 127;
“7. The special leave petition was filed before the Court on
13.9.2004 with an application for condonation of 153 days' delay. In
the List of Dates filed with the SLP, the fact that the first respondent
had been reinstated in service or that his services had been
regularized had not been disclosed. To crown all, a prayer for interim
relief was made to the following effect:
“It is, therefore, respectfully prayed that Your Lordships may
graciously be pleased to grant ad interim ex parte stay of the
operation of the final judgment and Order dated 23.9.2002 of the
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High Court of Punjab and Haryana at Chandigarh in CWP No.

15317 of 2002.”
13. Suppression of material fact is viewed seriously by the
Superior Courts exercising their discretionary jurisdiction. In S.J.S.
Business Enterprises (P) Ltd. v. State of Bihar [(2004) 7 SCC 166],
this court on suppression of fact held:
“As a general rule, suppression of a material fact by a litigant
disqualifies such litigant from obtaining any relief. This rule has been
evolved out of the need of the Courts to deter a litigant from abusing
the process of Court by deceiving it. But the suppressed fact must
be a material one in the sense that had it not bean suppressed it
would have had an effect on the merits of the case.” The said
observation was quoted with approval by one of us in Arunima
Baruah v. Union of India (UOI) [(2007) 6 SCC 120], wherein the
question which was raised was : How far and to what extent
suppression of fact by way of non-disclosure would affect a person's
right of access to justice? The court notices that so as to enable it to
refuse to exercise its discretionary jurisdiction, the suppression must
be of material fact. What would be a material fact, suppression
whereof would disentitle the Appellant to obtain a discretionary
relief, would depend upon the facts and circumstances of each case.
14. Recently, in Prestige Lights Ltd. v. State Bank of India
[(2007) 8 SCC 449], this court held:
“The High Court is exercising discretionary and extraordinary
jurisdiction under Article 226 of the Constitution. Over and above,
a Court of Law is also a Court of Equity. It is, therefore, of utmost
necessity that when a party approaches a High Court, he must
place all the facts before the Court without any reservation. If
there is suppression of material facts on the part of the applicant
or twisted facts have been placed before the Court, the Writ Court
may refuse to entertain the petition and dismiss it without
entering into merits of the matter.”
15. Had the aforementioned facts been brought to the notice of
this Court, the Special Leave Petition might have been dismissed
summarily. Even delay in filing the same might not have been
condoned. The Court was not required to waste so much of time
when the State itself had, for all intent and purport, accepted the
award.”
(17) Vaishno Enterprises v. Hamiltion Medical AG, 2022 SCC OnLIne
SC 355;
“However, at the same time, the larger question/issue whether in
a case where the buyer is located outside India but has availed the
services in India and/or done the business in India with the Indian
supplier and the contract was executed in India the MSME Act would
-----------------------------------------------------------------------------------------------------------------------------------------------------------
be applicable or not and/or another larger issue that in case the

supplier is subsequently registered as MSME the Council would still
have jurisdiction are kept open to be considered in an appropriate
case bearing in mind Section 18 as well as Section 8 of the MSME
Act and the judgments of this Court in the case of Shilpi Industries
v. Kerala State Road Transport Corporation, C.A. No. 1570-78 of
2021 [2021 SCC OnLine SC 439] arising under the provisions of
MSME Act and Shanti Conductors Pvt. Ltd. v. Assam State Electricity
Board, (2019) 19 SCC 529 in which case a similar provision under
the Small Scale and Ancillary Industries Undertakings, Act, 1993
came up for consideration before this Court.”
7. In rejoinder, learned Senior Counsel for the petitioner has
submitted that since firm of the private respondent was not registered
under the provisions of the MSMED Act at the time of transaction
between the parties, the entire provisions of the MSMED Act would not
be applicable and, therefore, the entire proceedings of conciliation as
well as passing of ex-parte arbitral award by the Arbitrator concerned is
non est from the very beginning. He has submitted that as the entire
proceedings under the MSMED Act of passing award is non est in the
eyes of law, there is no question of applicability of the MSMED Act itself
to the transaction in question, the provisions of even Section 19 of the
MSMED Act would not be applicable. He has submitted that the present
petition is maintainable and, therefore, considering the peculiar facts of
this case, the petition may be allowed.
7.1 Regarding various decisions relied upon by Mr. Dhaval Dave,
learned Senior Counsel, Mr. Pahwa has made following submissions:
(1) Regarding the decision of Division Bench in case of Nik San
Engineering Co. Ltd. v. Easun Reyrolle Limited, it is submitted
that there it is not stayed by the Apex court, and therefore, the
decision of the Division Bench of this Court holds the field.
(2) Regarding decision reported in 2022 SCC OnLine SC 355, he has
submitted that the petitioner is also relying upon the same in
various paras referred to herein above.
(3) Regarding decision reported in (2005) 8 SCC 618, it is
contended that this judgment has been considered by the Division
Bench of this Court.
(4) Regarding decisions reported in (2003) 7 SCC 410, 2022 SCC
OnLine SC 542, AIR 2015 Guj 114, (2008) 4 SCC 127 the facts
were different.
(5) Regarding decision reported in (2019) 13 SCC 445, in this case,
the issues were different.
(6) Regarding decisions reported in Writ Petition (L) No. 4049 of
2020 in the case of Union of India, through Chief Administrative
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Officer (construction) v. Maharashtra Steel Fabricators & Erectors

of the Bombay High Court, it is submitted that the issue, as to
lack of jurisdiction, was raised.
(7) Regarding decision reported in (2022) 1 SCC 61, it is submitted
that the matter was filed under Section 19 of the MSMED Act and
the issues were different from the present one.
(8) Regarding decision reported in (2014) 11 SCC 366, it is
submitted that its factually different and in that matter the award
itself was challenged and it was subsequent stage of the
proceedings. There was no question regarding lack of jurisdiction.
7.2 Regarding other decisions, Mr. Pahwa, learned Senior Counsel
has submitted that in those decisions, the facts are different and in
those decisions, there was no question raised regarding non-
applicability of provisions of MSMED Act whereas in the present case, at
the time of transaction between the parties, respondent No. 3 was not
registered as MSME under the MSMED Act and it was subsequently
registered. Therefore, according to him, the decision relied upon by the
other side are not applicable to the facts of the present case.
8. Having considered the submissions made on behalf of both the
sides coupled with the material placed on record and the decisions cited
at bar, it reveals that there is no dispute regarding the transaction
between the parties. It also reveals that the respondent No. 3 is
registered under the “E” Category i.e. “Small” Enterprise category with
effec from 31.12.2016 under the MSMED Act, 2006. It also reveals that
due to non-payment for the services provided by the respondent No. 3,
it has approached the mechanism established under the MSMED Act,
2006 in shape of Conciliation which ultimately failed and thereafter the
matter came to be referred to the Arbitrator and the Arbitrator has
passed the impugned award. It also appears from the record that the
petitioner herein has not participated in the arbitral proceedings. It also
reveals that against the said award, no proceedings under the
Arbitration and Conciliation Act, 1996 or under Section 19 of the
MSMED Act, 2006 has been initiated by the petitioner herein. The
petitioner has approached this Court only on the ground that the
proceedings under the MSMED Act was legally not tenable as at the
time of transaction in question, respondent No. 3 was not registered
under the MSMED Act, 2006. At this juncture it is worthwhile to refer to
certain provisions of the MSMED Act, 2006 as well as the Arbitration
and Conciliation Act, 1996.
8.1 Under the MSMED Act, the term “supplier” has been defined in
Section 2(n) as follows:
“Section 2(n):“supplier” means a micro or small enterprise, which
has filed a memorandum with the authority referred to in sub-
section (1) of section 8, and includes,--
-----------------------------------------------------------------------------------------------------------------------------------------------------------
(i) the National Small Industries Corporation, being a company,

(ii) the Small Industries Development Corporation of a State or a
Union territory, by whatever name called, being a company
(iii) any company, co-operative society, trust or a body, by whatever
name called, registered or constituted under any law for the time
being in force and engaged in selling goods produced by micro or
small enterprises and rendering services which are provided by
such enterprises;
8.2 The Scheme of the MSMED Act pertaining to the recovery of the
dues, especially Sections 17, 18 and 19, needs to be referred to herein,
which provides as under:
“Section 17 : Recovery of amount due.
For any goods supplied or services rendered by the supplier, the
buyer shall be liable to pay the amount with interest thereon as
provided under section 16.”
“Section 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.”
“Section 19 : Application for setting aside decree, award or
order.
No application for setting aside any decree, award or other order
made either by the Council itself or by any institution or centre
providing alternate dispute resolution services to which a reference is
made by the Council, shall be entertained by any court unless the
appellant (not being a supplier) has deposited with it seventy-five
per cent. of the amount in terms of the decree, award or, as the case
may be, the other order in the manner directed by such court:
Provided that pending disposal of the application to set aside
the decree, award or order, the court shall order that such
percentage of the amount deposited shall be paid to the supplier,
as it considers reasonable under the circumstances of the case,
subject to such conditions as it deems necessary to impose.”
8.3 Thus, according to the aforesaid provisions, when there is an
arbitral proceedings, the provisions of the Arbitration and Conciliation
Act, 1996 would be applicable.
9. The provisions of Arbitration and Conciliation Act, 1996 especially
Section 5, 16 and 34 needs to be referred to, which provides as under:
“5. Extent of judicial intervention.—Notwithstanding anything
contained in any other law for the time being in force, in matters
governed by this Part, no judicial authority shall intervene except
where so provided in this Part.”
“16. Competence of arbitral tribunal to rule on its
jurisdiction.-(1) The arbitral tribunal may rule on its own
jurisdiction, including ruling on any objections with respect to the
existence or validity of the arbitration agreement, and for that
purpose,—
(a) an arbitration clause which forms part of a contract shall be
treated as an agreement independent of the other terms of the
contract; and
(b) a decision by the arbitral tribunal that the contract is null and
void shall not entail ipso jure the invalidity of the arbitration
clause.
(2) A plea that the arbitral tribunal does not have jurisdiction
-----------------------------------------------------------------------------------------------------------------------------------------------------------
shall be raised not later than the submission of the statement of

defence; however, a party shall not be precluded from raising such a
plea merely because that he has appointed, or participated in the
appointment of, an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its
authority shall be raised as soon as the matter alleged to be beyond
the scope of its authority is raised during the arbitral proceedings.
(4) The arbitral tribunal may, in either of the cases referred to in
sub-section (2) or sub-section (3), admit a later plea if it considers
the delay justified.
(5) The arbitral tribunal shall decide on a plea referred to in sub-
section (2) or sub-section (3) and, where the arbitral tribunal takes a
decision rejecting the plea, continue with the arbitral proceedings
and make an arbitral award.
(6) A party aggrieved by such an arbitral award may make an
application for setting aside such an arbitral award in accordance
with section 34.
“34. Application for setting aside arbitral award.—
(1) Recourse to a Court against an arbitral award may be made
only by an application for setting aside such award in
accordance with sub-section (2) and subsection (3).
(2) An arbitral award may be set aside by the Court only if-(a) the
party making the application 1 [establishes on the basis of the
record of the arbitral tribunal that]—
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to
which the parties have subjected it or, failing any indication
thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper
notice of the appointment of an arbitrator or of the arbitral
proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated
by or not falling within the terms of the submission to
arbitration, or it contains decisions on matters beyond the
scope of the submission to arbitration : Provided that, if the
decisions on matters submitted to arbitration can be
separated from those not so submitted, only that part of the
arbitral award which contains decisions on matters not
submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral
procedure was not in accordance with the agreement of the
parties, unless such agreement was in conflict with a
provision of this Part from which the parties cannot
-----------------------------------------------------------------------------------------------------------------------------------------------------------
derogate, or, failing such agreement, was not in accordance

with this Part; or
(b) the Court finds that—
(i) the subject-matter of the dispute is not capable of settlement
by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
[(2A) An arbitral award arising out of arbitrations other than
international commercial arbitrations, may also be set aside by the
Court, if the Court finds that the award is vitiated by patent illegality
appearing on the face of the award:
Provided that an award shall not be set aside merely on the
ground of an erroneous application of the law or by re-appreciation of
evidence.]
(3)An application for setting aside may not be made after three
months have elapsed from the date on which the party making that
application had received the arbitral award or, if a request had been
made under section 33, from the date on which that request had
been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was
prevented by sufficient cause from making the application within
the said period of three months it may entertain the application
within a further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court
may, where it is appropriate and it is so requested by a party,
adjourn the proceedings for a period of time determined by it in
order to give the arbitral tribunal an opportunity to resume the
arbitral proceedings or to take such other action as in the opinion of
arbitral tribunal will eliminate the grounds for setting aside the
arbitral award.
(5) An application under this section shall be filed by a party only
after issuing a prior notice to the other party and such application
shall be accompanied by an affidavit by the applicant endorsing
compliance with the said requirement.
(6) An application under this section shall be disposed of
expeditiously, and in any event, within a period of one year from the
date on which the notice referred to in sub-section (5) is served
upon the other party.
10. In view of the aforesaid definition clause, a Micro, Small
Enterprise can be treated as supplier only when it has filed
Memorandum with the Authority as per Section 8 of the Act. Unless and
until, the firm or establishment is treated as Micro, Small or Medium
Enterprise and registered under Section 8, the provisions of the Act
would not be applicable. Therefore, if any enterprise is not registered as
-----------------------------------------------------------------------------------------------------------------------------------------------------------
a “small” or “medium” or “micro” enterprise at the time of transaction

then for the said transaction, such establishment has no right to take
shelter under the various provisions of the MSMED Act, 2006. It is
necessary for initiation of proceedings like Conciliation and Arbitration
under MSMED Act that such establishment i.e. supplier must be
registered one. Now, admittedly in the present case, the period of
transaction between the parties is from 17.5.2013 to 15.7.2015 and
15.8.2013 to 13.10.2015. In view of the material placed on record,
during this period, respondent No. 3 supplier was not registered under
the MSMED Act. As per the records, it has been registered as Small
Enterprise category with effect from 31.12.2016. At this juncture, it is
pertinent to note that the Hon'ble Apex Court has also observed in the
case of Silpi Industries v. Kerala State Road Transport Corporation
(Supra), that to seek the benefit under the provisions of MSMED Act,
the seller should have registered under the provisions of the Act, as on
the date of entering into the contract. It is also observed that for the
supplies pursuant to the contract made before the registration under
provisions of the MSMED Act, no benefit under the MSMED Act would be
available. In view of the observation of the Supreme Court, if any
registration under the MSMED Act is obtained, the same will be
prospective and will apply supply of service subsequent to registration,
but cannot operate retrospectively. Considering these observation of
the Apex Court, if we consider the facts of the present case, it clearly
reveals that in the present case also, the respondent No. 3 has initiated
the proceedings under the MSMED Act after its registration, for the
services provided before the date of registration. Therefore, the entire
proceedings undertaken by the Council under the provisions of the
MSMED Act, would be without jurisdiction.
11. It is pertinent to note that it is imperative for every Tribunal or
Court that there should be existence of jurisdiction for entertaining any
disputes between the parties. If the concerned Tribunal or the Court
has no inherent jurisdiction to entertain and decide the dispute
between the parties and yet such Court or Tribunal passes any order or
award, then it is nothing but a nullity in the eyes of law. It is well
settled principles of law that if any action is null and void from very
beginning then such question of nullity can be raised at any stage of
the proceedings by any party even at the stage of execution of the
decree. In such cases, whether the parties have participated in such
proceedings or not, is not material one. Participation in a proceedings in
a Forum which has no jurisdiction, does not give jurisdiction to such
Forum. The lack of jurisdiction goes to the roots of the entire
proceedings. Therefore, considering the facts of the present case, even
if the petitioner had knowledge regarding the arbitral proceedings
conducted under the MSMED Act and it has purposefully did not
-----------------------------------------------------------------------------------------------------------------------------------------------------------
participated in the proceedings, and ultimately the Award came to be

passed, does not give any jurisdiction to the mechanism under the
MSMED Act.
12. It is pertinent to note that when the provisions of MSMED Act
itself is not applicable to the transaction in question, there would not be
any question of applicability of the provisions of the Arbitration and
Conciliation Act, 1996.
13. Further, it is settled law that the Writ Petition is maintainable in
the following circumstances:
(a) A petition under Article 226 of the Constitution is different from a
petition under Article 227. The mode of exercise of power by High
Court under these two Articles is also different.
(b) In any event, a petition under Article 227 cannot be called a writ
petition. The history of the conferment of writ jurisdiction on High
Courts is substantially different from the history of conferment of
the power of Superintendence on the High Courts under Article
227 and have been discussed above.
(c) High Courts cannot, at the drop of a hat, in exercise of its power
of superintendence under Article 227 of the Constitution, interfere
with the orders of tribunals or Courts inferior to it. Nor can it, in
exercise of this power, act as a Court of appeal over the orders of
Court or tribunal subordinate to it. In cases where an alternative
statutory mode of redressal has been provided, that would also
operate as a restrain on the exercise of this power by the High
Court.
(d) The parameters of interference by High Courts in exercise of their
power of superintendence have been repeatedly laid down by this
Court. In this regard the High Court must be guided by the
principles laid down by the Constitution Bench of this Court in
Waryam Singh (supra) and the principles in Waryam Singh
(supra) have been repeatedly followed by subsequent Constitution
Benches and various other decisions of this Court.
(e) According to the ratio in Waryam Singh (supra), followed in
subsequent cases, the High Court in exercise of its jurisdiction of
superintendence can interfere in order only to keep the tribunals
and Courts subordinate to it, ‘within the bounds of their
authority'.
(f) In order to ensure that law is followed by such tribunals and
Courts by exercising jurisdiction which is vested in them and by
not declining to exercise the jurisdiction which is vested in them.
(g) Apart from the situations pointed in (e) and (f), High Court can
interfere in exercise of its power of superintendence when there
has been a patent perversity in the orders of tribunals and Courts
-----------------------------------------------------------------------------------------------------------------------------------------------------------
subordinate to it or where there has been a gross and manifest

failure of justice or the basic principles of natural justice have
been flouted.
(h) In exercise of its power of superintendence High Court cannot
interfere to correct mere errors of law or fact or just because
another view than the one taken by the tribunals or Courts
subordinate to it, is a possible view. In other words the
jurisdiction has to be very sparingly exercised.
(i) The High Court's power of superintendence under Article 227
cannot be curtailed by any statute. It has been declared a part of
the basic structure of the Constitution by the Constitution Bench
of this Court in the case of L. Chandra Kumar v. Union of India,
and therefore abridgement by a Constitutional amendment is also
very doubtful.
(j) It may be true that a statutory amendment of a rather cognate
provision, like Section 115 of the Civil Procedure Code by the Civil
Procedure Code (Amendment) Act, 1999 does not and cannot cut
down the ambit of High Court's power under Article 227. At the
same time, it must be remembered that such statutory
amendment does not correspondingly expand the High Court's
jurisdiction of superintendence under Article 227.
(k) The power is discretionary and has to be exercised on equitable
principle. In an appropriate case, the power can be exercised suo
motu.
(l) On a proper appreciation of the wide and unfettered power of the
High Court under Article 227, it transpires that the main object of
this Article is to keep strict administrative and judicial control by
the High Court on the administration of justice within its territory.
(m) The object of superintendence, both administrative and judicial,
is to maintain efficiency, smooth and orderly functioning of the
entire machinery of justice in such a way as it does not bring it
into any disrepute. The power of interference under this Article is
to be kept to the minimum to ensure that the wheel of justice
does not come to a halt and the fountain of justice remains pure
and unpolluted in order to maintain public confidence in the
functioning of the tribunals and Courts subordinate to High Court.
(n) This reserve and exceptional power of judicial intervention is not
to be exercised just for grant of relief in individual cases but
should be directed for promotion of public confidence in the
administration of justice in the larger public interest whereas
Article 226 is meant for protection of individual grievance.
Therefore, the power under Article 227 may be unfettered but its
exercise is subject to high degree of judicial discipline pointed out
above.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
(o) An improper and a frequent exercise of this power will be counter

-productive and will divest this extraordinary power of its strength
and vitality.”
14. Now, admittedly, in the present case, the exercise of the
jurisdiction of the Arbitral Tribunal under the MSMED Act is under
challenge and, therefore, the present petition is maintainable.
15. Therefore, considering the facts and circumstances of the case, it
is crystal clear that the exercise of the jurisdiction by the Arbitrator
under the MSMED Act, 2006 was without jurisdiction and, therefore, the
impugned award is not sustainable in the eyes of law and the same
deserves to be set aside and the present petition is liable to be allowed.
16. The present petition is allowed. The impugned award dated
3.5.2019 passed by the Sole Arbitrator in Arbitration Matter titled
Vishal Carriers v. Anupam Industries Ltd. is hereby quashed and set-
aside.
Considering the facts and circumstances of the case, no order as to
costs.
Civil Application, if any, stands disposed of accordingly.
FURTHER ORDER
At this stage, learned advocate for the respondent requested to stay
this Order.
Considering the observations made in the judgment, the request is
declined.
———
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Page 1 Wednesday, December 11, 2024

2022 SCC OnLine Guj 2652

In the High Court of Gujarat at Ahmedabad

Anupam Industries Ltd.

No. 3 before the respondent No. 1, respondent No. 3 Firm was

on behalf of the petitioner. It is contended that since thereafter no

therefore, the Award dated 3.5.2019 attained finality.

be liable to pay the amount with interest thereon as provided under

they can have proper application in circumstances conceivable

50. The next question that then arises for consideration is as to at

53. Adverting to section 16 of the MSMED Act, it is an onerous

services provided or rendered by a “supplier”, as a necessary

respondent authority, the petition may not be entertained and only

of MSMED Act. Immediately after filing application by initiating

Conciliation Act, 1996 (26 of 1996) shall apply to such a

only to the provisions of MSMED Act but contrary to various

intended to be set up. As per the proviso, such an existing enterprise

decree, award or order made by the Council or by any institution to

i) Kiran Sing v. Chaman Paswan, AIR 1954 SC 340.

can be taken as the relevant date, as opposed to date on which

questioned by a writ of certiorari. The underlying principle is that

whenever and wherever it is sought to be enforced or relied upon,

or had purported to usurp jurisdiction without any legal

cannot be challenged under Articles 226 and 227 of the

for consideration in Shalini Shyam Shetty v. Rajendra Shankar Patil,

power by High Court under these two Articles is also

the jurisdiction has to be very sparingly exercised.

“40. There is a fine distinction between the maintainability and

what is important to note is that though petitions can be filed

view of judgment of Seven Judges of the Hon'ble Supreme Court

saying so held that the petitions were not maintainable in law.

where the subordinate tribunals or bodies or officers act wholly

Compensation Appellate Tribunal. The Lord Justice says:

be corrected by a writ has to be an error of law; but it must be

facts which must govern the proper exercise of the discretion of

behalf of a party in a proceeding and it is another for an Advocate to

appellant herein is registered as MSME on 28.08.2020 i.e. after the

if it is held to be maintainable, the petitioner is liable to be rejected as

Conciliation Act, 1996.

(2003) 7 SCC 410;

“4. Section 19 of the Act is extracted below:“19. Application for

under Section 19 of the Act for challenging the order dated

through a petition under Article 226/227 of the Indian Constitution.

of the Arbitration Act and Article 227 of the Constitution was

days. The phrase “but not thereafter” would be rendered

that the statutory remedy of appeal against that order stood

an opportunity to the petitioner, we wanted to put them on

an alternative effective remedy is available to the aggrieved person.

its jurisdiction consistent with the provisions of the enactment. To

explicating and elaborating the principles under Article 142,

one of violation of constitutional provisions and constitutional

Constitution of India generally. Second, the law on the challenge to

crucial which bar the application of Section 5 of the Limitation Act.

prescribes the remedy or procedure for enforcing the right or

High Court of Punjab and Haryana at Chandigarh in CWP No.

be applicable or not and/or another larger issue that in case the

Officer (construction) v. Maharashtra Steel Fabricators & Erectors

(i) the National Small Industries Corporation, being a company,

Council or the centre providing alternate dispute resolution