APHC010115472025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI Writ Appeal No: 208 of 2025 along with W.A.Nos.211 & 212 of 2025 [3552] Tamil Nadu Power Distribution Corporation Ltd ...Appellant Vs. A.P. Micro and Small Enterprises Facilitation Council and another ...Respondent(s) ********** Advocate for Appellant: Mr. S. T. Raja, appearing vice Mr. Shaik Mohammed Althaf Hussain Advocate(s) for Respondent(s): Mr. Avinash Desai, Senior Counsel appearing vice Mr. D.S. Sivadarshan Mr. Kalamata Raghu Babu CORAM : THE CHIEF JUSTICE DHIRAJ SINGH THAKUR SRI JUSTICE CHALLA GUNARANJAN DATE : 12.12.2025 Per DHIRAJ SINGH THAKUR, CJ: The present set of three appeals arises out of a common judgment and order, dated 10.01.2025, rendered in W.P. Nos.2771, 2778 and 2779 of 2013. Since the issues of law and fact which arise in all the three writ appeals are the same and since the judgment impugned before us is also a common judgment for all the three writ petitions, we propose to deal with the issues by way of a common order. 2 HCJ & CGR, J W.A. No: 208 of 2025 & batch 2. We will refer to the facts in reference to W.A. No.208 of 2025 to understand the genesis of the controversy before us. The appellant i.e., Tamil Nadu Electricity Board now rechristened as Tamil Nadu Generation and Distribution Corporation Limited, called for tenders for supply of ACSR/AAA conductors for which six purchase orders were placed with respondent No.2 M/s. Rajam Aluminium Metal Products Pvt. Ltd on 29.12.1997, 28.10.1998, 2011.1999, 16.12.1999, 05.10.2000 and 31.10.2000. The amount, according to the supplier, not having been paid in accordance with the terms and conditions of the purchase order led respondent No.2 to approach the A.P. Industries Facilitation Council, which was first constituted under the Interest On Delayed Payments To Small Scale And Ancillary Industrial Undertakings Act, 1993, now called „the Andhra Pradesh Micro and Small Enterprises Facilitation Council‟ after the coming into force of the Micro, Small and Medium Enterprises Development Act of 2006 (hereinafter referred to as „the Act of 2006‟), by way of a claim in Form-I on 02.08.2004. 3. From the record, it appears that the Facilitation Council entertained the claim on 04.08.2006 and issued notice to the Tamil Nadu Electricity Board as also the Council for the Electricity Board requiring them to cause appearance on 19.08.2006 before the said Council, failing which it was made clear that the Council would continue to proceed and make an Award on the basis of evidence before it. 3 HCJ & CGR, J W.A. No: 208 of 2025 & batch 4. A second notice was also served on the appellant, dated 17.12.2009, on the Chief Engineer, Material management, of the appellant Board as also the Counsel for the Board. It then appears that counter statement was filed by the appellant before the Facilitation Council in which apart from other grounds, the ground taken was that in terms of provisions of Section 18(3) of the Act of 2006, arbitration cannot proceed unless there was a process of conciliation initiated under Sub-section (2) of Section 18 of the Act of 2006. The Facilitation Council, however, allowed the claim of respondent No.2 claimant and directed the payment of Rs.14,17,823/- towards principal and Rs.57,21,619/- as interest totaling Rs.71,30,442/- as on 30.06.2004 being the price of goods, supplied to the respondents together with interest due from 12.02.1998 to 30.06.2004. Apart from this, interest at the rate of 1½ times of prime lending rate charged by the State Bank of India compounded with monthly rests with effect from 01.07.2004 was also directed to be paid. 5. Aggrieved of the Award, dated 11.11.2011, passed by the Facilitation Council, W.P. No.2771 of 2013 came to be filed by the appellant herein, which too came to be dismissed inter alia on the following grounds: “29. The provisions contained in the MSMED Act with the aid of the 1996 Act are self-contained, providing therein the statutory mechanism of conciliation and/or reference to arbitration. They also provide that the award passed by the Facilitation Council shall be deemed to be an award passed under the 1996 Act. lf the order/award passed by the Facilitation Council is an award under the 1996 Act, the same can be assailed under the MSMED Act, read with the provisions of the 1996 Act and writ remedy under Article 226 of the Constitution of India, is not available. .. 4 HCJ & CGR, J W.A. No: 208 of 2025 & batch 31. Supreme Court in Sterling Industries v. Jayprakash Associates Ltd has clearly disapproved the stand adopted by some High Courts that any order passed by an arbitral tribunal is capable of being corrected by the High Court under Articles 226 or 227 of the Constitution of India. Adverting to section 34 of the 1996 Act, Supreme Court has held that intervention by the High Court under Articles 226 or 227 of the Constitution of India in an arbitral award is not permissible. 32. This Court is also not inclined to entertain the Writ Petition because under section 19 of the MSME Act, no application for setting aside an award passed by the Facilitation Council shall be entertained by any Court unless the party challenging the award deposits 75% of the amount in terms of the award. No such deposits have been made.” 6. The only ground that has been urged by learned counsel for the appellant before us is that the Facilitation Council could not have passed the Award without first resorting to the mechanism of conciliation as envisaged under Section 18(2) of the Act of 2006. For purposes of reference, Section 18 of the Act of 2006 is reproduced hereunder: “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 dispute 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 5 HCJ & CGR, J W.A. No: 208 of 2025 & batch 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.” 7. This argument at least insofar as W.A. No.208 of 2025 arising out of W.P. No.2771 of 2013 is concerned, in our opinion, is untenable for the reason that the Facilitation Council would be required to conduct conciliation proceedings and if the same was unsuccessful and terminated without settlement between the parties, the Council could either itself take up the dispute for arbitration or refer it to any institution or center providing alternate dispute resolution services for such arbitration to which the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter, referred to as “the Act of 1996”) would apply as if the arbitration was in pursuance of an arbitration agreement referred to in Sub-Section 1 of Section 7 of the Act of 1996. 8. Reference in this regard is also apt to Section 32 of the Act of 2006 which envisaged repealing of the Interest On Delayed Payments To Small Scale And Ancillary Industrial Undertakings Act, 1993, and, in particular, sub- section (2) of Section 32 of the Act of 2006, which clearly mandated that notwithstanding any such repeal, anything done or any action taken under the Act so repealed under sub-section (1) would be deemed to have been done or taken under the corresponding provisions of the Act of 2006. 6 HCJ & CGR, J W.A. No: 208 of 2025 & batch 9. Reference would also be relevant to the Act of 1993 and in particular Section 6, which, while in force, reads as under: “6. Recovery of amount due .- [(1)] The amount due from a buyer, together with the amount of interest calculated in accordance with the provisions of sections 4 and 5, shall be recoverable by the supplier from the buyer by way of a suit or other proceeding under any law for the time being in force. (2) [ Notwithstanding anything contained in sub-section (1), any party to a dispute may make a reference to the Industry Facilitation Council for acting as an arbitrator or conciliator in respect of the matters referred to in that sub-section and the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to such dispute as if the arbitration or conciliation were pursuant to an arbitration agreement referred to in sub- section (1) of section 7 of that Act.] 10. A reading of Section 6 of Act of 1993 and, in particular, sub-section 2 of Section 6 would thus make it clear that a choice lay with a party to a dispute to either approach the Facilitation Council for conciliation or seek arbitration as opposed to the provisions of the Act of 2006 and in particular, Section 18 of the Act of 2006, which envisages that the Facilitation Council should resort to the mechanism of Arbitration if the reconciliation between the parties fails. 11. The action of the Facilitation Council in taking resort to the mechanism of Arbitration and having initiated the proceedings, which proceedings are protected and deemed to have been done or taken under the provisions of the Act of 2006, in our opinion, would not even otherwise warrant any interference on this ground. 7 HCJ & CGR, J W.A. No: 208 of 2025 & batch 12. A preliminary objection was however raised by learned counsel for the respondents on the maintainability of the writ petition and consequently the present writ appeals. It is stated that all the three awards which became the subject matter of Writ Petitions bearing Nos. 2771, 2778 and 2779 of 2013 having been passed on 11.11.2011, the same ought to have been challenged in appropriate proceedings under Section 34 of the Act of 1996 with an outer limit of 120 days and the petitioners appellants having chosen not to do so, the writ petitions deserved not to be entertained in the light of the ratio laid down by the Apex Court in the case of ONGC v. GETCO Ltd.1 followed subsequently in CCT v. Glaxo Smith Kline Consumer Health Care Ltd.2. 13. In the light of the preliminary objection raised by learned counsel for the respondents, the issue that falls for our consideration is whether it is permissible to challenge an Award passed by the Facilitation Council under the MSMED Act of 2006 r/w provisions of the Arbitration and Conciliation Act, 1996, in exercise of the powers vested in the High Court under Article 226/227 of the Constitution of India especially when there is an effective alternate remedy available to a party, who feels aggrieved of such an Award. 1 (2017) 5 SCC 42 2 (2020) 19 SCC 681 8 HCJ & CGR, J W.A. No: 208 of 2025 & batch 14. The issue first came to be examined by a seven Judge Bench of the Supreme Court in SBP & Co. v. Patel Engg. Ltd.3, in regard to an arbitral award which came to be challenged under Article 226/227 of the Constitution of India. The Apex Court held that a party aggrieved did have an avenue for ventilating its grievances against an Award under Section 34 as also the right of appeal under Section 37 of the Act of 1996 and disapproved the stand adopted by some of the High Courts that any order passed by the Arbitral Tribunal was capable of being corrected by the High Court under Article 226/227 of the Constitution of India, which, it held, was not permissible. What was held in para No.46 is: “46. The object of minimising judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High Court could be approached under Article 227 or under Article 226 of the Constitution against every order made by the Arbitral Tribunal. Therefore, it is necessary to indicate that once the arbitration has commenced in the Arbitral Tribunal, parties have to wait until the award is pronounced unless, of course, a right of appeal is available to them under Section 37 of the Act even at an earlier stage.” 15. In Mafatlal Industries Ltd. v. Union of India4, a nine Judge Bench of the Hon‟ble Supreme Court in a matter pertaining to the Excise Act and Customs Act held that while the powers under Article 226 or for that matter under Article 32 of the Constitution cannot be circumscribed by the provisions of the said enactments, yet due regard should be accorded to the “legislative 3 (2005) 8 SCC 618 4 (1997) 5 SCC 536 9 HCJ & CGR, J W.A. No: 208 of 2025 & batch intent” evidenced by the provisions of the said acts and to exercise the jurisdiction which is consistent therewith. It was held: “108. ..While the jurisdiction of the High Courts under Article 226 — and of this Court under Article 32 — cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11-B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it. ..” 16. This principle of law was subsequently followed in Union of India vs. Shri Kant Sharma5 and on a conspectus of the ratio of various judgments on this subject, the position in law was summarized as under: “36. The aforesaid decisions rendered by this Court can be summarised as follows: (i) The power of judicial review vested in the High Court under Article 226 is one of the basic essential features of the Constitution and any legislation including the Armed Forces Tribunal Act, 2007 cannot override or curtail jurisdiction of the High Court under Article 226 of the Constitution of India.(Refer : L. Chandra Kumar [L. Chandra Kumar v. Union of India, (1997) 3 SCC 261 : 1997 SCC (L&S) 577] and S.N. Mukherjee [(1990) 4 SCC 594 : 1990 SCC (Cri) 669] .) (ii) The jurisdiction of the High Court under Article 226 and this Court under Article 32 though cannot be circumscribed by the provisions of any enactment, they will certainly have due regard to the legislative intent evidenced by the provisions of the Acts and would exercise their jurisdiction consistent with the provisions of the Act. (Refer : Mafatlal Industries Ltd. [(1997) 5 SCC 536] ) (iii) When a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. (Refer : Nivedita Sharma [(2011) 14 SCC 337 : (2012) 4 SCC (Civ) 947] .) (iv) The High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has 5 (2015) 6 SCC 773 10 HCJ & CGR, J W.A. No: 208 of 2025 & batch been taken itself contains a mechanism for redressal of grievance. (Refer : Nivedita Sharma [(2011) 14 SCC 337 : (2012) 4 SCC (Civ) 947] .)” 17. In India Glycols Limited and another v. Micro and Small Enterprises Facilitation Council, Medhcal6, the Apex Court was dealing with a case where the Award of the Facilitation Council was challenged in a petition under Article 226/227 of the Constitution of India. The learned single Judge of the High Court of Telangana allowed the writ petition and set aside the Award on the ground that the claim was barred by limitation. In Appeal, the Division Bench came to a conclusion that the writ petition was not maintainable in view of the alternate remedy which was available in terms of the special statute. 18. The Apex Court, while considering a challenge to the decision so rendered by the Division Bench considering the scheme of the MSMED Act and, in particular, Section 19, which envisaged that no application for setting aside any decree, Award or other order made by the Council could be entertained by any Court unless the appellant (not being a supplier) had deposited with it seventy-five percent of the amount in terms of the decree, award or, as the case may be, held that in view of the provisions of Section 18(4) of the Act of 2006, the appellant did have a remedy under Section 34 of the Act of 1996 to challenge the Award and further held that entertaining a petition under Article 226/227 of the Constitution with a view to obviate the compliance with the requirement of pre-deposit under Section 19 of the Act of 6 2023 SCC OnLine SC 1852 11 HCJ & CGR, J W.A. No: 208 of 2025 & batch 2006 would defeat the object and purpose of the special enactment which had been legislated upon by the Parliament. This, it was held, was clearly impermissible. 19. In the present case also, we find that while it was open to the appellant to challenge the Award passed by the Facilitation Council under Section 34 of the Act of 1996, the course was not adopted which was otherwise permissible and instead with a view to avoid the pre-deposit as otherwise envisaged under Section 19 of the MSMED Act of 2006, the appellant had chosen to file the writ petitions challenging the said Awards, which, in our opinion, cannot be permitted in view of the clear ratio laid down by the Apex Court in the judgments discussed hereinabove. 20. 20. The main object for enacting the Arbitration and Conciliation Act, 1996 was, apart from reducing and minimizing supervisory role of Courts in the arbitration process, to make an arbitral procedure not only fair but also efficient. The scheme of the Act is not open-ended but is regulated and made time bound. After reference is made either with consent of the parties in accordance with the agreed procedure or through the Court, the Arbitrator or the Arbitral Tribunal is required to render its Award in terms of Section 29(A) of the Act of 1996, in domestic arbitrations within a period of twelve months from the date of completion of pleadings under sub-section 4 of Section 23. Time periods specified in sub-section (1) of Section 29(A) may be extended, by consent of parties for a further period not exceeding six months and if the 12 HCJ & CGR, J W.A. No: 208 of 2025 & batch Award is not made within the period specified or the extended period, the mandate of Arbitrators gets terminated unless the Court extends the said period. The extension is granted by the Court only if sufficient cause is shown and subject to such conditions as may be imposed by the Court. Even while extending the period, the Court may substitute one or all of the Arbitrators in terms of Section 29(A)(6). Section 34 of the Act of 1996, on the other hand,, provides a remedy for a party to make an application for setting aside such an Award and it is further envisaged under Section 34(3) that such an application for setting aside is not to be made after 120 days from the date on which an arbitral award is received by the party making the application, or if a request had been made under Section 33 from the date on which that request had been disposed of by the Arbitral Tribunal. 21. Even under Section 37 of the Act of 1996, an appeal is permitted to be filed inter alia against an order, setting aside or refusing to set aside an arbitral award, passed under Section 34 of the Act of 1996, for which the period of limitation is ninety days in terms of Article 116 of the Limitation Act, 1963. The legislative intent which can be deciphered from the scheme of the Act of 1996 is, therefore, clear that the arbitration proceedings are to be concluded within a time bound framework while affording adequate opportunity to a party to 13 HCJ & CGR, J W.A. No: 208 of 2025 & batch challenge the award under Section 34 or in appeal under Section 37 of the said Act. 22. In the instant case, it can be seen that even when the three awards came to be passed on 11.11.2011, the writ petitions came to be filed only on 30.01.2013. The outer limit for challenging the said awards within the period prescribed in terms of Section 34 had since expired. Exercising jurisdiction under Article 226/227 of the Constitution of India, in these circumstances, we feel, would defeat the object and purpose of the enactment and be contrary to its legislative intent, which in terms of the governing laws cannot be permitted to be reopened at a belated stage. 23. At this stage, we deem it appropriate to make a reference to the judgment of the Apex Court in Assistant Commissioner, Kakinada v. Glaxo Smith Kline Consumer Health Care Limited7 wherein the Apex Court was considering the question whether the High Court, in the exercise of its extraordinary writ jurisdiction under Article 226 of the Constitution, could entertain a challenge to an assessment order when the statutory remedy of appeal against that order stood foreclosed by the law of limitation. In that backdrop, the Apex Court held that while High Courts may exercise the jurisdiction under Article 226 of the Constitution, which may also non-suit the petitioner on the ground of availability of an alternative efficacious remedy, however, if the writ petitioner chose to approach the High Court after the 7 (2020) 19 SCC 681 14 HCJ & CGR, J W.A. No: 208 of 2025 & batch expiry of the maximum statutory limit prescribed under the Act, then the High Court cannot disregard the statutory period and entertain such a party as a matter of course and it was further held that doing so would be in the teeth of the principle of law laid down by a three Judge Bench in Oil & Natural Gas Corporation Ltd v. Gujarat Energy Transmission Corporation 8 as the same would render the legislative scheme and intention behind the stated provision otiose. 24. When we apply the aforementioned principle of law to the facts of the present case, entertaining a writ petition beyond the statutory period prescribed for challenging the arbitral award in terms of Section 34 would clearly be impermissible and would run in the teeth of the scheme of the Act of 1996. Be that as it may, We find no merit in the present set of writ appeals, which are accordingly dismissed. No costs. Pending miscellaneous applications, if any, shall stand closed. DHIRAJ SINGH THAKUR, CJ CHALLA GUNARANJAN, J akn 8 (2017)5 SCC 42 15 HCJ & CGR, J W.A. No: 208 of 2025 & batch HON’BLE MR.JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE & HON’BLE MR. JUSTICE CHALLA GUNARANJAN Writ Appeal No: 208 of 2025 along with W.A.Nos.211 & 212 of 2025 DATE : 12.12.2025 AKN 347