TMI Blog2016 (6) TMI 1444X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 - Establishment of Micro and Small Enterprises Facilitation Council:The State Government shall, by notification, establish one or more Micro and Small Enterprises Facilitation Councils, at such places, exercising such jurisdiction and for such areas, as may be specified in he notification. It cannot be disputed that the Act 2006 is a Special Act and as per Section 24 of the Act, 2006, the provisions of sections 15 to 23 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Therefore, Section 18 of the Act, 2006 would have overriding effect or any other law for the time being in force i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only one of two courses of action open to it, either to conduct an arbitration itself or to refer the parties to a centre or institution providing alternate dispute resolution services stipulated in Section 18(3) of the Act, 2006. The present appeal is dismissed. - FIRST APPEAL NO. 637 of 2016 With CIVIL APPLICATION NO. 3226 of 2016 In FIRST APPEAL NO. 637 of 2016 - - - Dated:- 20-6-2016 - HONOURABLE MR.JUSTICE M.R. SHAH AND HONOURABLE MR.JUSTICE A.S. SUPEHIA MR MUKESH PATEL ADVOCATE FOR THE APPELLANT JAYANI B SHAH, CAVEATOR, SHASHVATA U SHUKLA, CAVEATOR FOR THE DEFENDANT ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the Arbitral TribunalState Level Industry Facilitation Council constituted under Section 21 of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as the Act, 2006), by which, the learned Council has dismissed the application submitted by the appellant herein, submitted under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act, 1996 ) and by which, the appellant herein r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Division Bench of this Court. It was contended on behalf of the Railways Authority that considering the provision of the Act, 2006, more particularly, Section 18, unless and until there was failure of conciliation there was no question of taking any step for arbitration. It was also contended on behalf of the appellant Railways Authority that in fact they already moved an application before the Council under Section 8 of the Act, 1996 and no order was passed on the said application. That thereafter, with the consent of the learned advocates for the respective parties, the Division Bench remanded the matter to the Council. It was agreed by the learned advocates for the respective parties that the Court be treated that the conciliation proceedings failed and the matter should be proceeded for next date for Arbitration. That thereafter, by impugned order the Council has rejected the application submitted by the appellant Railways Authority, by which, it was requested to prefer matter for arbitration to the Arbitral Tribunal in exercise of powers under Section 8 of the Act, 1996. 2.2. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 1997 of 2011, thereafter it was not open for the Council not to entertain the application under Section 8 of the Arbitration Act, 1996. 3.5. It is further submitted by Shri Patel, learned advocate for the appellant that the learned Council has materially erred in not properly appreciating and / or considering the decision of the Bombay High Court in the case of M/s. Steel Authority of India Limited and Anr vs. Micro Small Enterprise Facilitation Council through Joint Director of Industries, Nagpur Region, Nagpur reported in AIR 2012 Bom 178. 3.6. Shri Patel, learned advocate for the appellant has also heavily relied upon the decision of the Hon'ble Supreme Court in the case of Management Committee of Montfort Senior Secondary School vs. Vijay Kumar and Others reported in AIR 2005 SC 3549, in support of his submission that in the present case Council can be said to be Judicial Authority having jurisdiction to entertain the application under Section 8 of the Arbitration Act, 1996. 3.7. It is further submitted by Shri Patel, learned advocate for the appellant that the learned Council ought to have appreciated that the respondent herein had entered into an agreement aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that as held by the Division Bench of the Allahabad High Court after Council conducted the Conciliation proceedings and thereafter Council recorded failure of conciliation and ordered that same should be placed before the sole Arbitrator, Council had only one of two courses of action open to it, either to conduct an arbitration itself or to refer the parties to a centre or institution providing alternate dispute resolution services stipulated in Section 18(3) of the Act, 2006. It is submitted that therefore, the Council had no jurisdiction to entertain the application under Section 8 of the Act. It is submitted that therefore, in the present case, the learned Council has rightly dismissed the application under Section 8 of the Act, 1996 submitted by the appellant. 4.4. Now, so far as reliance placed upon the decisions of the Hon'ble Supreme Court in the case of Morgan Securities and Credit Pvt Ltd (supra) and in the case of Vijay Kumar and Others (supra) are concerned, it is submitted that on facts and considering the provision of the Act, 2006, the said decisions shall not be applicable to the facts of the case on hand. 4.5. It is submitted that similarly the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ward and at that time also the application submitted by the appellant, submitted under Section 8 of the Arbitration Act, 1996 was pending. Feeling aggrieved and dissatisfied with the award declared by the Council dated 21.08.2010, the appellant preferred Special Civil Application No.2471 of 2011, which came to be dismissed by the learned Single Judge. Against the order passed by the learned Single Judge dismissing the petition, the appellant preferred Letters Patent Appeal No. 1997 of 2011 before the Division Bench of this Court and after considering the provision of Sections 18 and 19 of the Act, 2006, the Division Bench of the opinion that before declaring the award the procedure as required under Section 18(2) of the Act, 2005 was not followed and considering the fact that even the application under Section 8 of the Act, 1996 preferred by the appellant was pending by order dated 11.04.2012 the Division Bench allowed the said Letters Patent Appeal and quashed and set aside the order / award dated 21.08.2010 and remanded the matter to the Council to proceed with the arbitration proceedings. While remanding the matter the Division Bench passed the following order: In the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subsection (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 to it 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... associations of micro or small industry or enterprises in the State; and (iii).one or more representatives of banks and financial institutions lending to micro or small enterprises; or (iv)one or more persons having special knowledge in the field of industry, finance, law, trade or commerce 2. The person appointed under clause (i) of subsection (1) shall be the chairperson of the Micro and Small Enterprise Facilitation Council 3. The composition of the Micro and Small Enterprise Facilitation Council, the manner of filling vacancies of its members and the procedure to be followed in the discharge of their functions by the members shall be such as may be prescribed by the State Government 24.The provisions of sections 15 to 23 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. 6.1. It cannot be disputed that the Act 2006 is a Special Act and as per Section 24 of the Act, 2006, the provisions of sections 15 to 23 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Therefore, Section 18 of the Act, 2006 would have overriding eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said decisions of the Hon'ble Supreme Court and the law laid down by the Hon'ble Supreme Court, the Council acting under Section 19 of the Act, 2006 cannot be said too be Judicial Authority performing judicial function or quasi judicial functions. As observed herein above, after conciliation failed, thereafter once the Council act as an Arbitrator itself, thereafter the Council had no jurisdiction to entertain the application under Section 8 of the Act. On fair reading of subsection( 3) of Section 18 only in a case where the Council itself does not act as an Arbitrator and decide to refer the parties, centre or institution providing alternate dispute resolution services as observed in subsection (3) of Section 18 the provision of the Arbitration Act shall then apply to the dispute if the arbitration is in pursuance of the Arbitration Act refer to subsection (1) of Section 7 of that Act. However, in any case, the application under Section 8 of the Arbitration Act would not be maintainable before the Council who itself take up issue as Arbitrator. 7.0. Identical question came to be considered by the Division Bench of the Allahabad High Court in the case of Paper and Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would prevail over the provision of Sick Industrial Companies (Special Provisions) Act or not (in the case of Morgan Securities and Credit Pvt Ltd (supra). In the case before the Hon'ble Supreme Court in the case of Vijay Kumar and Others (supra) a dispute was whether the Tribunal constituted under the Delhi School Education Act can be said to be Judicial Authority or not. Under the circumstances, the said decision shall not be applicable to the facts of the case on hand. 10. In view of the above and for the reasons stated above, no error has been committed by the learned Council in not entertaining the application under Section 8 of the Arbitration Act, 1996. We see no reason to interfere with the order passed by the learned Council. As observed herein above and considering the subsection (1) of Section 18 of the Act, 2006 the Facilitation Council has jurisdiction to act as Arbitrator and / or conciliator any dispute between the parties and that Council had only one of two courses of action open to it, either to conduct an arbitration itself or to refer the parties to a centre or institution providing alternate dispute resolution services stipulated in Section 18(3) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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