( 2025:HHC:20716 ) IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA CMPMO No. 735 of 2024 a/w CMPMO No. 753 of 2024. Reserved on : 21 st June, 2025. Decided on : 1 st July , 2025. 1. CMPMO No. 735 of 2024. Er. Surinder Sharma ...Petitioner. Versus Himachal Pradesh Micro Small Enterprises Facilitation Council and Anr. ....Respondents. 2. CMPMO No. 753 of 2024. Er. Surinder Sharma ...Petitioner. Versus Himachal Pradesh Micro Small Enterprises Facilitation Council and Anr. ....Respondents. Coram: The Hon’ble Mr. Justice Satyen Vaidya, Judge. Whether approved for reporting?1 No. For the Petitioner.: Mr. Rahul Mahajan, Advocate. For the respondents: Mr. Amandeep Sharma, Addl. A.G., for respondent No.1. Mr. Utkarsh Singh, Thakur Nishant Kumar and Mr. Mayank Gupta, Advocates, for respondent No.2. 1 Whether reporters of the local papers may be allowed to see the judgment? 2 ( 2025:HHC:20716 ) Satyen Vaidya, Judge. Both these petitions have been heard and are being decided together as common questions of facts and law are involved. 2. Petitioner claiming himself to be a supplier as per Section 2(n) of the Micro, Small and Medium Enterprises Development Act, 2006 (for short “MSME Act”), filed two separate references before the Himachal Pradesh Micro Small Enterprises Facilitation Council (for short “the Council”) under Section 18 of the MSME Act and sought recovery of certain amounts from respondent No.2 herein (for short “ANS construction”). 3. The Council entered the references as Reference No. 20 of 2024 and Reference No.21 of 2024. However, vide impugned orders the Council held that it had no jurisdiction to enter the dispute between the claimant and the respondent in exercise of powers under Section 18 of the MSME Act for the reason that the claimant was registered as MSME only on 25.07.2022, whereas the contract was entered between the claimant and the respondent on 18.07.2022, when the claimant was not registered as MSME. 4. By way of instant petitions, the petitioner has invoked the jurisdiction of this Court under Article 227 of the 3 ( 2025:HHC:20716 ) Constitution of India, to test the legality and validity of the orders dated 21.08.2024 passed by the Council in Reference Petitions No. 20 of 2024 and 21 of 2024. 5. Respondent No.2 on notice has raised the objection as to the maintainability of these petitions in light of Three Judge Bench Decision of Hon’ble Supreme Court in M/s India Glycols Limited and Anr. vs. Micro and Small Enterprises Facilitation Council Medchal-Malkajgiri and Ors., (2023) SCC Online SC 1852. 6. On the other hand, the petitioner by placing reliance on the judgment passed by a Two Judges Bench of Hon’ble Supreme Court in Jharkhand Urja Vikas Nigam Limited vs. State of Rajasthan and others, (2021)9 SCC 206 as also on the judgment of Division Bench of Hon’ble High Court of Jharkhand in G.P.T. Infraprojects Limited and Anr. vs. State of Jharkhand, through Secretary and Ors., (2024) SCC Online Jharkhand 184 would contend that the jurisdiction of this Court to entertain the instant petitions is not barred. 7. During the pendency of the petition, the petitioner has filed an application being CMP No. 13649 of 2025 in CMPMO No. 735 of 2024 with a prayer to adjourn these petitions till the pendency of issues referred for decision of 4 ( 2025:HHC:20716 ) larger bench in Tamil Nadu Cements Corporation Ltd. vs. Unicorn Engineering (2025)4 SCC 1 and NBCC (India) Limited vs. State of West Bengal and others, (2025)3 SCC 440. 8. The Three Judges Bench of Hon’ble Supreme Court in M/s India Glycols Limited (supra) has held as under:- 8. Section 184 of the MSMED Act provides for a reference to the Facilitation Council. Sub-section (2) of Section 18 provides for the conduct of conciliation proceedings. Sub-section (3) empowers the Council to thereafter take up the dispute for arbitration or to refer it to an institution or centre providing for Alternative Dispute Resolution services “for such arbitration”. Sub-section (3) of Section 18 stipulates that the provisions of the Act of 1996 “shall then apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section (1) of Section 7 of that Act”. 9. Section 19 provides recourse against an award of the Facilitation Council in the following terms: “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: 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 5 ( 2025:HHC:20716 ) the case, subject to such conditions as it deems necessary to impose.” 10. In terms of Section 19, an application for setting aside an award of the Facilitation Council cannot be entertained by any court unless the appellant has deposited seventy-five per cent of the amount in terms of the award. In view of the provisions of Section 18(4), where the Facilitation Council proceeds to arbitrate upon a dispute, the provisions of the Act of 1996 are to apply to the dispute as if it is in pursuance of an arbitration agreement under sub-section (1) of Section 7 of that Act. Hence, the remedy which is provided under Section 34 of the Act of 1996 would govern an award of the Facilitation Council. However, there is a super added condition which is imposed by Section 19 of MSMED Act, 2006 to the effect that an application for setting aside an award can be entertained only upon the appellant depositing with the Council seventy-five per cent of the amount in terms of the award. Section 19 has been introduced as a measure of security for enterprises for whom a special provision is made in the MSMED Act by Parliament. In view of the provisions of Section 18(4), the appellant had a remedy under Section 34 of the Act of 1996 to challenge the award which it failed to pursue. 11. In the judgment of this Court in Gujarat State Civil Supplies Corporation Limited (supra), a two-Judge Bench of the Court has observed, in the course of drawing its conclusions, that: “The proceedings before the Facilitation Council/institute/centre acting as an arbitrator/Arbitral Tribunal under Section 18(3) of the MSMED Act, 2006 would be governed by the Arbitration Act, 1996.” 12. The appellant failed to avail of the remedy under Section 34. If it were to do so, it would have been required to deposit seventy-five per cent of the decretal amount. This obligation under the statute was sought to be obviated by taking recourse to the jurisdiction under Articles 226/227 of the Constitution. This was clearly impermissible. 6 ( 2025:HHC:20716 ) 13. For the above reasons, we are in agreement with the view of the Division Bench of the High Court that the writ petition which was instituted by the appellant was not maintainable. 14. Mr. Parag P Tripathi, senior counsel appearing on behalf of the appellant sought to urge that the view of the Facilitation Council to the effect that the provisions of the Limitation Act, 1963 have no application, which has been affirmed by the Division Bench in the impugned judgment, suffers from a perversity, and hence a petition under Article 226 of the Constitution ought to have been entertained. We cannot accept this submission for the simple reason that Section 18 of the MSMED Act, 2006 provides for recourse to a statutory remedy for challenging an award under the Act of 1996. However, recourse to the remedy is subject to the discipline of complying with the provisions of Section 19. The entertaining of a petition under Articles 226/227 of the Constitution, in order to obviate compliance with the requirement of pre-deposit under Section 19, would defeat the object and purpose of the special enactment which has been legislated upon by Parliament. 15. For the above reasons, we affirm the decision of the Division Bench by holding that it was justified in coming to the conclusion that the petition under Articles 226/227 of the Constitution instituted by the appellant was not maintainable. Hence, it was unnecessary for the High Court, having come to the conclusion that the petition was not maintainable, to enter upon the merits of the controversy which arose before the Facilitation Council. 16. Mr. Parag P Tripathi, senior counsel then submitted that the appellant would move proceedings under Section 34 of the Act of 1996 and this Court may direct that they may be disposed of expeditiously. Having come to the conclusion that the remedy which was adopted by the appellant was thoroughly misconceived, it is not necessary for this Court to make any observation on what course of action should be adopted by the appellant. Were the appellant at this stage to take recourse to the proceedings under Section 34 of the Act of 1996, it would be 7 ( 2025:HHC:20716 ) open to the second respondent to object on all counts which are available in law. 17. For the above reasons, we affirm the impugned judgment of the High Court of Telangana dated 21 March 2023 by affirming the finding that the petition which was instituted by the appellant to challenge the award of the Facilitation Council was not maintainable, in view of the provisions of Section 34 of the Act of 1996.” 9. By Judgment dated 22nd January, 2025 in Tamil Nadu Cements Corporation Ltd. vs. Micro and Small Enterprises Facilitation Council & Anr. (2025)4 SCC 1 the issue decided in M/S Glycol supra has been referred for consideration of larger Bench. The relevant extract of the judgment in Tamil Nadu Cement Corporation ltd. is reproduced as under: “64. In the light of the aforesaid decisions, we deem it appropriate to refer the following questions raised in the present appeal to a larger Bench of five Judges, namely: 64.1. (i) Whether the ratio in M/s India Glycols Limited (supra) that a writ petition could never be entertained against any order/award of the MSEFC, completely bars or prohibits maintainability of the writ petition before the High Court? 64.2. (ii) If the bar/prohibition is not absolute, when and under what circumstances will the principle/restriction of adequate alternative remedy not apply? 64.3. (iii) Whether the members of MSEFC who undertake conciliation proceedings, upon failure, can themselves act as arbitrators of the arbitral tribunal in terms of Section 18 of the MSMED Act read with Section 80 of the A&C Act? The first and second question will subsume the question of when and in what situation a writ petition can be 8 ( 2025:HHC:20716 ) entertained against an order/award passed by MSEFC acting as an arbitral tribunal or conciliator.” 10. Undoubtedly, as per the ratio in M/s India Glycols Ltd., the remedy available to petitioner herein is by challenging the impugned orders under Section 34 of the Arbitration and Conciliation Act, 1996 and, therefore, this Court will not have jurisdiction to entertain the petitions under Articles 226 and 227 of the Constitution of India, irrespective of the ground on which the order has been passed by the Council. The petitioner himself had invoked the jurisdiction of the Council under Section 18 of the Act. Section 16 of the Arbitration and Conciliation Act, 1996 authorises the Arbitral Tribunal to rule on its own jurisdiction, thus, the impugned orders cannot be termed to have been passed without jurisdiction. 11. Though, in Tamil Nadu Cements Corporation (supra) the issue of jurisdiction of this Court has been referred to the decision of larger bench but since the judgment in M/s India Glycols Ltd (supra) passed by a bench of equal strength subsists, this Court considers it appropriate to decide the issue against the petitioner taking into consideration the following observations of Hon’ble Supreme Court in State of 9 ( 2025:HHC:20716 ) Maharashtra and Anr. vs. Sarva Shramik Sangh, Sangli and Ors., (2013)16 SCC 16:- “20. It is, however, contended on behalf of the appellant that the said undertaking was being run by the irrigation department of the first appellant, and the activities of the irrigation department could not be considered to be an “industry” within the definition of the concept under Section 2(j) of the I.D. Act. As noted earlier, the reconsideration of the wide interpretation of the concept of “industry” in Bangalore Water Supply and Sewerage Board (1978) 2 SCC 213) is pending before a larger bench of this Court. However, as of now we will have to follow the interpretation of law presently holding the field as per the approach taken by this Court in State of Orissa v. Dandasi Sahu (supra) (1988) 4 SCC 12), referred to above. The determination of the present pending industrial dispute cannot be kept undecided until the judgment of the larger bench is received. 12. In result, both the petitions are dismissed being not maintainable. No order as to the costs. Needless to say, this order will not stand in the way of petitioner in pursuing such remedies, against the orders impugned herein, as may be available to him as per law. (Satyen Vaidya) 1st July, 2025. Judge (jai)