1.Union of India, by its Secretary (Legislative), Ministry of Law and Justice, Government of India, 4th Floor, AWing, Shastri Bhavan, New Delhi 110001 2.M/s.Passive Infra Projects P Limited, by its Director, Sh.Varun Agrawal, Delhi 110088. Respondents Prayer: This writ petition is filed under Article 226 of the constitution of India, to issue a Writ of Declaration, declaring section 18 of the Micro, Small and Medium Enterprises Development Act, 2006, as ultravires Article 14 of the constitution of India. For petitioner : Mr.Srinath Sridevan For respondents : Mr.V.P.SengottuvelR1 ORDER This writ petition is filed by the petitioner company to issue a Writ of Declaration, declaring section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (herein after referred to as the MSMED Act), as ultravires Article 14 of the constitution of India. 2. The case of the petitioner, in a nutshell, is that the petitioner company placed three work orders, viz. (1) REL/COMET/PO04/1112, dated 03.06.2011, (2) REL/Vituza/PO03/1112, dated 16.06.2011 and (3) REL/Vituza/PO09/1112, dated 28.07.2011, with the 2nd respondent for the supply of Galvanized Steel Structures/Solar Module Mounting Structures. Subsequently, since the 2nd respondent made a further demand, without making any correlative supplies, certain disputes arose between them. After conciliation, by the settlement agreement dated 20.03.2012, the same was settled by themselves with a condition that the 2nd respondent shall not claim any further amount other than Rs.80,00,000/. For the amount payable to the 2nd respondent under the said settlement agreement, the 2nd respondent has to execute certain rectificatory service and on its failure, the petitioner withheld the said payment. The further case of the petitioner is that after a lapse of 3 years from the date of the said settlement agreement, the 2nd respondent filed a claim petition under section 18 of the MSMED Act, 2006, before the MSME Facilitation Council, claiming a sum of Rs.1,86,00,000/ along with interest thereon under section 16 of the MSMED Act. It is the further case of the petitioner that the facilitation council, despite the objections from the petitioner, referred the matter to arbitration and appointed Justice Shri S.S.Dahiya as the arbitrator to decide the claim petition. During the pendency of the arbitration proceedings, questioning the validity of section 18 of the MSMED Act, 2006 and raising the issue of legislative competence, this writ petition has been filed, with the prayer as stated above. 3. The learned counsel for the petitioner, in support of his contention that section 18 of the MSMED Act is ultra vires, has submitted as follows: a. A party cannot be forced to participate in the arbitration proceedings at the instance of the other party making the reference under section 18 of the MSMED Act. Section 18 contemplates initiation of unilateral arbitration proceedings, which is contrary to the spirit of alternate dispute resolution system, as without the consent of both the parties, the dispute cannot be referred to arbitration. Only payment as per the invoices by Micro, Medium and Small Scale industries would attract the provisions of sections 16, 17 and 18 of the MSMED Act. b. The parliament has no power to legislate in respect of Micro, Small and Medium Scale industries as it is a subject falling within the scope of Entry 24 of List II of Schedule VII of the constitution and only the states will have the power to enact. c. Section 18 deprives the petitioner of its right to approach the courts for redressal of their grievances. d. The dispute raised would not fall within the ambit of sections 16, 17 and 18 of the MSMED Act, 2006. e. Since a conciliation under section 18(2) is a prerequisite for the MSME facilitation council, in the absence of such conciliation between the parties, within the meaning of section 18(2) of the Act, the MSME Facilitation Council has no jurisdiction to entertain the claim of the 2nd respondent and therefore, the reference of the dispute to arbitration is bad in law. f. The 2nd respondent, having waived its right to invoke the arbitration clause in view of the settlement agreement and having consented to the courts within the territory of Chennai and contracted itself out of the statute, is not entitled to make any reference under section 18 of the MSMED Act and further