Allahabad High Court Chhattisgarh Railway Corporation ... vs Micro And Small Enterprises ... on 13 December, 2022 HIGH COURT OF JUDICATURE AT ALLAHABAD AFR RESERVED Court No. 29 Case : WRIT C No. 32955 of 2022 Petitioner : Chhattisgarh Railway Corporation Limited(Crcl) Respondent : Micro And Small Enterprises Facilitation Council(Msefc) And Another Counsel for Petitioner : Kamal Krishna Roy Hon'ble Manoj Misra,J. Hon'ble Vikas Budhwar,J. (Delivered by Manoj Misra, J.) 1. This writ petition seeks quashing of the award dated 07.06.2022 passed by the Micro and Small Enterprises Facilitation Council, Kanpur (for short Facilitation Council) in Claim Petition No. 270 of 2020 filed by the second respondent against the petitioner and to declare the entire proceeding in Claim Petition No. 270 of 2020 as void. 2. Briefly stated the facts giving rise to the writ petition are as follows: 3. The second respondent claiming itself to be registered with the Directorate of Industries as a Small Enterprise under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 (for short MSMED Act, 2006) with a valid registration No. UP50E0002921 filed a claim petition before the Facilitation Council for recovery of Rs. 35,03,998.03/ in respect of delayed payment of its dues claiming, inter alia, (i) that the opposite party (i.e. the writ petitioner herein) invited tenders for the work of Geotechnical Investigation in Reach 2 and Reach 3; (ii) pursuant to which, the claimants offer was accepted and both parties entered into a contract subject to the standard general terms and conditions; (iii) that the original work was to carry out Geotechnical Investigation on 25 bridges sites; (iv) that the scope of Geotechnical Investigation included drilling of soil and rock at bridge sites, collecting the soil/rock samples, testing them in the laboratory, followed by preparation and submission of detailed report to the buyer (the petitioner herein); and (v) that the work was executed as per directions and a completion certificate was also issued in which the performance of the claimants was found satisfactory. By claiming that only part payment was made and the remaining was withheld without justification, and similar work carried out by other company was fully paid off, the claim petition was filed for recovery of the balance amount with interest thereupon. 4. On the claim petition, the Facilitation Council, on 03.12.2020, gave 20 days time to the parties for conciliation and required them to submit their respective papers. The parties thereafter exchanged their objections/counter objections. A preliminary objection was also taken with regard to maintainability of the proceedings before the Facilitation Council on the ground that the contract between the parties provided for an alternate dispute redressal mechanism, vide clause 63 and 64 of the contract, including resolution of dispute through an arbitration therefore, there was no justification for the claimants to invoke the provisions of MSMED Act, 2006. It was also claimed that the provisions of section 18 of the MSMED Act, 2006 would get attracted only for recovery of the amount due in respect of any supply of goods or services rendered by the supplier but not for recovery of dues under a works contract of which breach is alleged. 5. As no conciliation could be arrived at, conciliation proceeding was terminated and the matter was taken up for arbitral proceeding. 6. In the arbitral proceeding, after hearing both sides, the impugned award was passed on 07.06.2022. Questioning the award of the Facilitation Council, this writ petition has been filed. 7. We have heard Sri Aagney Sail along with Sri K.K. Roy for the petitioner. 8. At the outset, we required the learned counsel for the petitioner to address the Court as to why this petition be not dismissed on the ground that there exists an alternative remedy, inasmuch as the petitioner could challenge the award of the Facilitation Council by taking recourse to the remedy under Section 34 of the Arbitration and Conciliation Act, 1996 in light of the provisions of section 18(3) read with Section 19 of MSMED Act, 2006. 9. Sri Aagney Sail, learned counsel for the petitioner, submitted that existence of an alternative statutory remedy is not an absolute bar for the writ court to entertain a challenge against the award of the Facilitation Council, particularly where the Facilitation Council held no jurisdiction to enter upon the reference and decide the claim of the second respondent. According to him, the Facilitation Council held no jurisdiction to deal with the claim of the second respondent for the following reasons: (i) A claim under Chapter V of MSMED Act, 2006 by a supplier against the buyer is maintainable only for recovery of the dues which are payable b