IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 20.08.2010 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.NOs.16908, 16909 and 25406 of 2009, 1202, 5062, 6015, 13308, 13407, 13430, 13431, 13613, 14431, 14432, 14650 and 14889 of 2010 and M.P.Nos.1,1 and 2 of 2009, 1,1,1, 1,1, 1,1,1,1,1,1,1,1,2,2, 2,2 and 3 of 2010 M/s.Eden Exports Company, rep. By its Partner, Mrs.Faiqua Shameel 1-G, Jamals Fent Court, Balarkalvi Avenue, Ritherton Road, Vepery, Chennai-600 007. .. Petitioner in W.P.No.25406 of 2009 Tamil Nadu Medicinal Plant Farms & Herbal Medicine Corporation Limited, rep. By its Chairman and Managing Director Mr.G.A.Rajkumar, Anna Hospital Campus, Arumbakkam, Chennai-600 106. .. Petitioner in W.P.Nos.16909 of 2009 and W.P.No.16908 of 2009 M/s.Australian Food India Pvt. Ltd. Plot Nos.22 and 23, Ambattur Industrial Estate, Ambattur, Chennai-600 058 rep. By its Vice President-Finance .. Petitioner in W.P.No.1202 of 2010 Health & Glow Retailing (P) Ltd. Represented by its Authorised Signatory Mr.Venkata Subbaiah.M. No.740, Eswari Industrial Estate, Gate No.2,Hulimava, Bannerghatta Road, Bangalore-560 076. .. Petitioner in W.P.No.6015 of 2010 Ucal Machine Tools Ltd. Rep. By its Executive Accounts, 7th Floor, Sigma Wing, Rajeja Towers,New No.177, Annasalai, Chennai-600 002. .. Petitioner in W.P.13308 of 2010 M/s.Shreeanna Merchandise Pvt. Ltd. https://hcservices.ecourts.gov.in/hcservices/ Rep. By its Manager, T.S.Kataria, Old No.10, New No.6, North Terminus Road, Toll Gate, Chennai-600 081. .. Petitioner in W.P.14650/2010 ABB Ltd., No.5 and 6, II Phase, Peenya Industriesl Area, Peenya, Bangalore-58 rep. By its Authorised Signatory. . Petitioner in W.P.14889 of 2010 Foodworld Supermarkets (P) Ltd. Represented by its Authorised Signatory Mr.Venkata Subbaiah.M No.740, Eswari Industrial Estate, Gate No.2, Hulimava, Bannerghatta Road, Bangalore-560 076. .. Petitioner in W.P.5062 of 2010 M/s.Mittal Distributors Pvt. Ltd. 4676/21, Ansari Road, Darya Ganj New Delhi-110 002. .. Petitioner in W.P.No.13407 of 2010 Jk Tyre & Industries Ltd. Rep. By its authorised officer, No.3, Bahadur Shah Zafar Marg, New Delhi-110 002. .. Petitioner in W.P.Nos.13430, 13431 and 13613 of 2010 Rolta India Private Ltd., Rolta Tower 'A', Rolta Tech Park, MIDC Marol, Andheri East, Mumbai-400 093 rep. By Executive Director .. Petitioner in W.Ps.14431 and 14432 of 2010 Vs. 1.Union of India, rep. By its Secretary, Ministry of Micro, Small and Medium Enterprises, Udyog Bhavan, New Delhi-110 011. 2.State of Tamil Nadu, rep. By its Secretary, Department of Industries and Commerce, Chepauk, Chennai-600 005. .. Respondents 1 to 2 in W.P.Nos.25406 of 2009, 1202, 13308, 13613, 14431 and 14432 of 2010, 14889/2010 https://hcservices.ecourts.gov.in/hcservices/ 3.Director, Ministry of Micro, Small and Medium Enterprises, Room 254, Udyog Bhawan, Rafi Marg, New Delhi-110 011. .. Respondent No.3 in W.P.Nos.25406 of 2009, 1202, 13308 and 13613 of 2010 4.Regional Joint Director of Industries and Commercial (i/c)/Zonal Officer MSE Facilitation council, Thiru Vi Ka. Industrial Estate, Guindy, Chennai-600 032. .. Respondent No. 4 in W.P.Nos.25406 of 2009, 1202, 13308 and 13613 of 2010 and 3rd respondent in W.P.Nos.14889, 14431 and 14432 of 2010 5.M/s.Falcon Prints Pvt. Ltd. No.69 (Old No.268) Royapettah High Road, Chennai-600 014. .. 5th Respondent in W.P.No.25406/2009 Diamond Packaging No.31, Begam Sahib II Lane, Anna Salai, Chennai-600 002. .. 5th respondent in W.P.No.1202/2010 1.The Union of India, represented by its Secretary, Department of Small Industries, New Delhi. 2.National Board for Micro, Small and Medium Enterprises, New Delhi. 3.The Secretary, Ministry of Small and Micro Enterprises, New Delhi. .. Respondents in W.P.No.16909 of 2009 1.The Union of India, represented by the Secretary to Ministry of Micro, Small and Medium Industries, Udyog Bhavan, New Delhi-110 011. https://hcservices.ecourts.gov.in/hcservices/ 2.The Government of Tamil Nadu, represented by its Director of Industries and Commerce, Department of Industries and Commerce, Chepauk, Chennai-600 005. 3.The Micro, Small and Medium Enterprises Facilitation Council, represented by its Chairman, O/o the Regional Joint Director of Industries and Commerce, Thiru-Vi-Ka Industrial estate, Guindy, Chennai-600 032. 4.Micro Small Enterprises Facilitation Council Chennai Region, represented by Zonal Officer/Regional Joint Director of Industries and Commerce, Thiru-Vi-Ka Industrial Estate, Guindy Chennai-600 032. 5.M/s.Expanda Stand (P) Ltd. Represented by M.Mahadeva Reddy Managing Director, SP 86, TAN SIDCO Ambattur Industrial Estate Chennai-600 058. .. Respondents in W.P.Nos.6015 and 5062 of 2010 5.Zonal Officer/General Manager, MSEFC/District Industries Centre, Madurai-625 002. 6.M/s.Renaissance Petrolube Ltd. C3,D1 & D2-SIPCOT Industries Complex, Manamadurai, Sivagangi District. .. 5th and 6th respondents in W.P.No.13308 of 2010 1.Union of India, rep. By its Secretary, Ministry of Micro, Small and Medium Enterprises, Udyog Bhavan,New Delhi-110 001. 2.The Secretary, M.P.Micro & Small Enterprises Facilitation council, Directorate of Industries, Madhya Pradesh, Vindhyachal Bhawan, Bhopal. 3.The Director, Ministry of Micro, Small and Medium Enterprises, Room No.254, Udyog Bhavan, New Delhi-110 001. https://hcservices.ecourts.gov.in/hcservices/ 4.M/s.Bagree Fincom Pvt. Ltd., rep. By its Director, 72-A SDA Compound Annexe, Dewas Naka, Indore-452 010. Madhya Pradesh. .. Respondents in W.P.14650 of 2010 4.M/s.Westrix Technologies Pvt. Ltd. No.7, K.R.J. Building, Velder Street, Mount Road, Chennai-600 002 rep. By its Managing Director. .. 4th respondent in W.Ps.14889, 14431 and 14432 /2010 1.The Micro Small and Medium Enterprises Facilitation council, Chennai Region, rep. By its zonal Officer, O/o Industries Commissioner and Director Industries and Commerce, Behind Ezhilagam, Chepauk, Chennai-600 005. .. 1st respondent in W.P.Nos.16908/2009 and 13407 of 2010 2.M/s.Raymond Pharmaceutical P. Ltd. Rep. By its Director Mr.Sudhir Khanna 4/19, 2nd Cross Street, Dr.Radhakrishnan Nagar, Thiruvanmiyur, Chennai-600 041. .. 2nd Respondent in W.P.16908 of 2009 2.Kutty Flush Doors & Furniture Co. Pvt. Ltd. No.1167, Ponamallee High Road, Koyambedu, Chennai-600 107. .. 2nd respondent in W.P.13407/2010 1.Micro & Small Enterprises Facilitation Council, Chennai Region, Thiru Vi Ka Industries Estate, Guindy, Chennai-32. .. 1st respondent in W.P.Nos.13430 and 13431 of 2010 2.M/s.Norton Intec Rubber (P) Ltd. A-4 SIPCOT Complex, Gummidipoondi-601 201, Chennai .. 2nd Respondent in W.P.Nos.13430 and 13431 of 2010 and 5th 5th respondent in W.P.13613 of 2010 W.P.Nos.25406 of 2009, 1202, 6015, 13308, 13613, 14432, 14650 and 14889 of 2010 have been preferred under Article 226 of the Constitution of India praying for the issue of a writ of declaration to declare Sections 15 to 24 of Chapter V of the Micro, Small and https://hcservices.ecourts.gov.in/hcservices/ Medium Enterprises Development Act, 2006 (Act 27 of 2006) as ultra vires of the Constitution and strike down the same. W.P.No.16909 of 2009 has been preferred under Article 226 of the Constitution of India praying for the issue of a writ of declaration to declare the provisions of Sections 15 to 19 of the Micro, Small and Medium Enterprises Development Act, 2006 as unconstitutional and ultra vires the Constitution being in violation of Articles 14 and 16 of the Constitution of India. W.P.No.5062 of 2010 has been preferred under Article 226 of the Constitution of India praying for the issue of declaration declaring the application of part V comprising of Sections 15 to 23 of the Micro, Small and Medium Enterprises Development Act, 2006 (Act 27 of 2006) to individuals contracting with enterprises defined therein, as ultravires the Constitution and without jurisdiction and to consequently quash the proceedings against the petitioner in Rc No.3838/A1/2009 dated 24.09.2009 issued and consequential proceedings in OP No.MSEFC/CR/28/2009 on the file of the Micro, Small and Medium Enterprises Facilitation Council at Chennai, the fourth respondent. W.P.No.16908 of 2009 has been preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorari to call for the records of the first respondent in its proceedings Ref.No.MSEFC/CR.12/2008, dated 10.6.2009 culminating in the impugned award and to quash the same. W.P.No.13430 of 2010 has been preferred under Article 226 of the Constitution of India praying for the issue of a writ of certiorari to quash the impugned order in MSEFC/CR.4/2007, dated 3.6.2010 passed by the first respondent. W.P.No.13431 of 2010 has been preferred under Article 226 of the Constitution of India praying for the issue of writ of declaration declaring that the claim raised by the respondent No.2 in MSEFC/CR/04/2007 is without jurisdiction and not maintainable particularly under the provisions of MSMED Act, 2006 and also barred by limitation. W.P.No.13407 of 2010 has been preferred under Article 226 of the Constitution of India praying for the issue of a writ of prohibition prohibiting the first respondent from acting as the Arbitrator in the dispute raised by the second respondent in O.P.No.MSEFC/CR/37/2009. W.P.No.14431 of 2010 has been preferred under Article 226 of the Constitution of India for the issue of a writ of mandamus to forbear the third respondent from proceeding with the hearing in O.P.No.MSEFC/CR/20/2010. https://hcservices.ecourts.gov.in/hcservices/ 1.WP.No.16908/2009: Mr.P.S.Raman, Advocate General for M/s. Pushpa Menon for Petitioner Mr.M.Dhandapani Spl. G.P.For R1 Mr.N.Viswanthan for R2 2.WP No.16909/2009: Mr.P.S.Raman, Advocate General for M/s.Pusha Menon for Petitioner No Appearance for Respondents 3.WP 25406/2009: Mr.Zaffarullakhan for Petitioner Mr.K.Mohana Murali SCGSC for R1,R3 Mr.M.Dhandapani Spl.G.P.For R2,R4 Mr.P.Ramamuthy For R5 4.WP 1202/2010 : Mr.K.S.V.Prasad for Petitioner Mr.K.Mohana Murali SCGSC for R1,R3 Mr.M.Dhandapani Spl. G.P. for R2,R4 Mr.R.Saravanakumar for R5 5. WP 5062/2010:Mr.Perumbulavil Radhakrishnan for Petitioner Mr.K.Mohana Murali SCGSC for R1 Mr.M.Dhandapani Spl.G.P.for R2 to R4 Mr.N.Viswanathan for R5 6.WP 6015/2010: Mr.Perumbulavil Radhakrishnan for Petitioner Mr.M.Dhandapani Spl.G.P.for R2 No Appearance for R1,R3 to R5 7.WP 13308/2010: Mr.Satish Parasaran for Petitioner Mr.M.Dhandapani Spl.G.P. for R2 Mr.K.Mohanamurali SCGSC for R5 No Appearance R1,R3,R4 8.WP 13407/2010: Mr.T.Mohan for Petitioner Mr.M.Dhandapani Spl.GP For R1 Mr.B.Ravi For R2 9.WP 13430/2010 WP 13431/2010 & WP 13613/2010 Mr.Jayesh B.Dolia Assisted by Mr.S.Arvaindan for Petitioner Mr.C.Saravanan for R2 in WP 13430/2010 and For R5 in WP 13613/2010 Mr.M.Dhandapani Spl.G.P. for R2 to R4 in WP 13613/2010 10.WP 14431/2010: Mr.Jayesh B.Dolia for Mr.R.Parthiban for Petitioner. MR.M.Dhandapani Spl.G.P. for R2 11.WP 14432/2010: Mr.R.Parthiban for Petitioner 12.WP 14650/2010: Mr.Jayesh B.Dolia Assisted by Mr.Aravindan for Petitioner Mr.S.Veerabaghu for R1 Mr.K.Mohanamurali SCGSC for R3 13.WP 14889/2010L: Mr.D.Abdullah for Petitioner Mr.M.Dhandapani Spl.G.P,for R2 https://hcservices.ecourts.gov.in/hcservices/ COMMON ORDER The questions that arise for consideration in most of the writ petitions are whether Sections 15 to 24 of the Micro, Small and Medium Enterprises Development Act, 2006 (Central Act 27 of 2006) (for short MSMED Act) are unconstitutional and ultravires of the Constitution of India, more particularly whether they infringe Articles 14 and 19(1)(g) of the Constitution. In some cases, the cognizance taken by the Micro, Small and Medium Enterprises Facilitation Council constituted under the Act are sought to be prohibited from proceeding with the enquiry initiated at the instance of the contesting private respondents? 2.This batch of writ petitions came to be posted before this court on being specially ordered by the Hon'ble the Chief Justice vide order, dated 11.8.2010. 3.Heard the arguments of Mr.P.S.Raman, learned Advocate General appearing for M/s.Pushpa Menon, Mr.Zaffarulla Khan, Mr.Rahul Balaji, Mr.Perumbulavil Radhakrishnan, Mr.K.S.V.Prasad, Mr.T.Mohan, Mr.Jayesh B.Dolia for M/s.Aiyar and Dolia, Mr.R.Parthiban, Mr.D.Abdullah for petitioners and Mr.K.Mohanamurali, learned Senior Central Government Standing Counsel appearing for the Union of India and for Director of Ministry of Micro, Small and Medium Enterprises, Mr.M.Dhandapani, learned Special Government Pleader (W), Mr.V.Balasubramanian, Mr.R.Saravanakumar, Mr.N.Viswanathan, Mr.B.Ravi, Mr.S.Veerabhagu and Mr.C.Saravanan for respondents. 4.The Director, Ministry of Micro, Small and Medium Enterprises has filed a counter affidavit, dated 25.2.2010 in W.P.No.25406 of 2009 on his behalf and the Union of India. The fifth respondent in W.P.No.25406 of 2009 has filed vacate stay applications supported by an affidavit. The second respondent in W.P.No.16908 of 2009 has also filed a vacate stay application supported by an affidavit. 5.The MSMED Act came to be enacted by the Parliament with a view to provide for facilitating the promotion and development and enhancing the competitiveness of micro, small and medium enterprises and for matters connected therewith or incidental thereto, by the Central Act 27 of 2006. It receive the assent of the President on 16.6.2006 and was brought into effect from 2.10.2006 in terms of Section 1(2) of the Act. 6.The objects and reasons as appended to the Bill may be usefully reproduced below: "Small scale industry is at present defined by notification under Section 11-B of the Industries (Development and Regulation) Act, 1951. Section 29-B https://hcservices.ecourts.gov.in/hcservices/ of the Act provides for notifying reservation of items for exclusive manufacture in the small scale industry sector. Except for these two provisions, there exists no legal framework for this dynamic and vibrant sector of the country’s economy. Many Expert Groups or Companies appointed by the Government from time to time as well as the small scale industry sector itself have emphasised the need for a comprehensive Central enactment to provide an appropriate legal framework for the sector to facilitate its growth and development. Emergence of a large services sector assisting the small scale industry in the last two decades also warrants a composite view of the sector, encompassing both industrial units and related service entities. The world over, the emphasis has now been shifted from “industries” to “enterprises”. Added to this, a growing need is being felt to extend policy support for the small enterprises so that they are enable to grow into medium ones, adopt better and higher levels of technology and achieve higher productivity to remain competitive in a fast globalisation area. Thus, as in most developed and many developing countries, it is necessary, that in India too, the concerns of the entire small and medium enterprises sector are addressed and the sector is provided with a single legal framework. As of now, the medium industry or enterprise is not even defined in any law." 7.The Act under Section 32(1) had repealed the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 which was in the field from 1993 till 2006. The petitioners are all "buyers" within the meaning of Section 2(d) of the Act have come forward in these writ petitions to challenge the vires of Chapter V of the MSMED Act and in most of the cases Sections 15 to 24 and in some of the cases Section 15 to 19 of the Act. 8.It is also significant to note that the petitioner in W.P.Nos.16908 and 16909 is the Tamil Nadu Medicinal Plant Farms and Herbal Medicine Corporation Limited, which is wholly owned by State of Tamil Nadu, has chosen to challenge not only the proceedings initiated by the Facilitation Council, but also the Constitutional validity of Sections 15 to 19 of the MSMED Act. 9.It is not clear as to how the said Corporation had challenged the vires of the provisions of a Central Act and represented by the learned Advocate General when in most of the cases the State of Tamil Nadu is also a party. Further, under Section 30 of the Act, the appropriate State Government has the power to make rules to carry out the provisions of the Act. Under Section 26, the State https://hcservices.ecourts.gov.in/hcservices/ government is entitled to appoint such officers and employees for the purpose of the Act. The State Government had also framed rules known as the Tamil Nadu Micro and Small Enterprises Facilitation Council Rules, 2006 and had published it in the Tamil Nadu Government Gazette dated 8.12.2006. Under Rule 3, the Facilitation Council was established in terms of Section 20 of the MSMED Act. In respect of the Facilitation Council for Chennai and the other Zones, the Chair Person is the Industries Commissioner and the Director of Industries and Commerce. 10.Though the learned Advocate General tried to submit that since he is representing only a Government Corporation, which has its own liberty to challenge the vires of a Central Act notwithstanding the stand of the State Government. It is also rather unfortunate that the State of Tamil Nadu though was made a party to all these writ petitions, have not chosen to file any counter affidavit to express its stand on the issue and also whether it would approve its own company to challenge the provisions of the MSMED Act and allowed to be represented by the Advocate General. 11.Be that as it may, the controversy in these cases centers around Chapter V of the MSMED Act. Hence, it is necessary to refer to the provisions of Sections 15 to 24 of the said Act, which are as follows: "15. Liability of buyer to make payment.—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: Provided 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. 16. Date from which and rate at which interest is payable.—Where any buyer fails to make payment of the amount to the supplier, as required under Section 15, the buyer shall, notwithstanding anything contained in any agreement between the buyer and the supplier or in any law for the time being in force, be liable to pay compound interest with monthly rests to the supplier on that amount from time 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. 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. https://hcservices.ecourts.gov.in/hcservices/ 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 disputes 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. 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 : https://hcservices.ecourts.gov.in/hcservices/ 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. 20. 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 the notification. 21. Composition of Micro and Small Enterprises Facilitation Council.—(1) The Micro and Small Enterprise Facilitation Council shall consist of not less than three but not more than five members to be appointed from amongst the following categories, namely:— (i)Director of Industries, by whatever name called, or any other officer not below the rank of such Director, in the Department of the State Government having administrative control of the small scale industries or, as the case may be, micro, small and medium enterprises; and (ii)one or more office-bearers or representatives of 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 sub- section (1) shall be the Chairperson of the Micro and Small Enterprises Facilitation Council. (3) The composition of the Micro and Small Enterprises 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. 22. Requirement to specify unpaid amount with interest in the annual statement of accounts.—Where any buyer is required to get his annual accounts audited under any law for the time being in force, such buyer shall furnish the following additional information in his annual statement of accounts, namely:— https://hcservices.ecourts.gov.in/hcservices/ (i)the principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier as at the end of each accounting year; (ii)the amount of interest paid by the buyer in terms of Section 16, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year; (iii)the amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act; (iv)the amount of interest accrued and remaining unpaid at the end of each accounting year; and (v)the amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under Section 23. 23. Interest not to be allowed as deduction from income.—Notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961), the amount of interest payable or paid by any buyer, under or in accordance with the provisions of this Act, shall not, for the purposes of computation of income under the Income-tax Act, 1961, be allowed as deduction. 24. Overriding effect.—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." 12.In the fitness of thing, it is necessary to first decide the challenge to the vires of the Act made by the petitioners. The first attack is against Section 15. It is contended that it interferes with the right to enter into contracts with suppliers and therefore, it is violative of Article 19(1)(g). The provisions curtails the freedom to enter into a contract. The challenge to Sections 16 and 17 is that these provisions do not stand the test of logic and do not conform the commercial scenario in the Country. The compound interest ordered is excessive and almost legalise charging of usurious interest. Therefore, the same is violative of Article 14 of the Constitution. Insofar as Sections 18 and 21 was concerned, the Facilitation Council is empowered to conduct quasi judicial proceedings and it does not have any judicial member on it to appreciate and understand the legal nuances so as to have judicial approach. Section 18(2) read with Section 18(4) enables the Facilitation Council to conduct Conciliation as well as Arbitration. Empowering the same authority to do both type of functions will result in prejudice and bias in its decisions. Further the bar