TMI Blog2021 (12) TMI 1451X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 Code of Civil Procedure or the Indian Evidence Act may not apply. Unless otherwise agreed, oral hearings are to be held. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order and other material placed on record. 5. It is mainly contended by learned Counsel for the Appellant, as there were some disputes on the supplies made by the 3rd Respondent, the bill amount due was not paid immediately. It is submitted that only on the ground that the Appellant has not responded in the conciliation proceedings, straightaway the order was passed by the Council without giving proper opportunity. The order impugned in the writ petition was passed, in utter disregard to the mandatory provision Under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (for short 'MSMED Act') and the provisions of Arbitration and Conciliation Act, 1996. It is submitted that even after the order passed by the Council on 06.08.2012, the Appellant after inspecting the records, has paid the due amount Rs. 63,43,488/- to the 3rd Respondent. Such amount was paid after inspecting the records to the 3rd Respondent, who had received that amount without any protest. After a period of three years thereafter, 3rd Respondent has filed Execution Case No. 69 of 2016 before the Civil Judge, Ranchi which ultimately ended in dismissal on the ground of main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not responded to the various notices/summons issued by the Council, the Council itself has taken up the dispute and passed the award. Sri Kailash Vasdev, learned Senior Counsel appearing for the Respondent No. 3 has submitted that though the supplies were made as per the terms of the contract, the Appellant has delayed the payment which necessitated the 3rd Respondent to approach the Council. Though several notices were issued by the Council, Appellant has not responded to the same and lastly by issuing summons on 18.07.2012 the Council has passed the award on 06.08.2012 by recording a finding that Appellant is guilty of delay in paying the amounts due to the 3rd Respondent. It is submitted that even after the award, a notice was issued to the Appellant, instead to comply the award only an amount of Rs. 63,43,488/- was paid. Thereafter as the awarded amount was not paid, the 3rd Respondent has filed execution case before the civil court at Ranchi, same was questioned by the Appellant by way of writ petition which was subsequently dismissed as withdrawn. It is submitted that Civil Judge at Ranchi has dismissed the execution case on the ground that it was not maintainable due t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. (2) On rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifference 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 Code of Civil Procedure or the Indian Evidence Act may not apply. Unless otherwise agreed, oral hearings are to be held. 11. If the Appellant had not submitted its reply at the conciliation stage, and failed to appear, the Facilitation Council could, at best, have recorded the failure of conciliation and proceeded to initiate arbitration proceedings in accordance with the relevant provisions of the Arbitration and Conciliation Act, 1996, to adjudicate the dispute and make an award. Proceedings for conciliation and arbitration cannot be clubbed. 12. In this case only on the ground that the Appellant had not appeared in the proceedings for conciliation, on the very first date of appearance, that is, 06.08.2012, an order was passed directing the Appellant and/or its predecessor/Jharkhand State Elect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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