Rajesh Shankar, J.
1. The present writ petition has been preferred for quashing the order as contained in memo no. 1630 dated 24.8.2021 (Annexure-5 to the writ petition) issued under the signature of the respondent no. 1-Under Secretary-cum-Member Secretary, Jharkhand Micro and Small Enterprises Facilitation Council (hereinafter referred to as "Council") in connection with Case No. JHMSEFC-09/2020 (New Case No. JH/01/S/JKH/00195), whereby the claim filed by the respondent no. 2 relating to payment of outstanding principal amount as well as accrued interest thereon against supplied goods/services rendered to the petitioner pursuant to several work orders dated 24.05.2005, 01.10.2008, 27.10.2008, 08.05.2009 and 15.07.2009 has been allowed.
2. Learned Senior Counsel for the petitioner submits that a claim application was filed by the respondent no. 2 under the provisions of Section 18(1) of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as "the Act, 2006") before the Council established under Section 20 of the Act, 2006 on 05.06.2000 for releasing outstanding payment against various invoices/bills relating to aforesaid work orders issued by the petitioner to the respondent no. 2 for unloading, handling, transportation of equipment/materials (refractory), storage, erection, testing and commissioning of mechanical plant & equipment, structures etc. and post commissioning services required for rebuilding of Coke Oven Battery Nos. 1, 2 and 5 at Bokaro Steel Plant, Bokaro. The aforesaid claim was made by the respondent no. 2 on the ground of wage escalation/price variation, extra work, additional manpower deployment and Final Acceptance Certificate (FAC) bill.
3. The petitioner raised three preliminary objections before the Council which were as under:
"a. There being three separate cause of action vis a vis three separate work orders, one composite claim could not have been filed.
b. The work so involved in the present case was in form of works contract and not a supplier contract as such the case so filed under the provisions of MSME Act, 2006 was not maintainable.
c. The respondent no. 2 was registered with MSME in the year 2016 whereas in the present case, all the work orders were issued prior to 2016 and also executed prior to 2016. As such in the light of the judgment of the Hon'ble Supreme Court in M/s Silpi Industries v. Kerala State Road Transport, C.A. Nos. 1570-1578 of 2021, the application was not maintainable."
4. However, the Council vide impugned order dated 24.08.2021 directed the petitioner to pay Rs. 7,79,25,422/-as principal outstanding amount and interest thereon calculated in the manner as stated in the said impugned order.
5. Learned Senior Counsel for the petitioner further submits that as per Section 18(2) of the Act, 2006, the Council is mandated to conduct conciliation of the disputes between the parties either by itself or by seeking assistance of any institution or centre providing alternative dispute resolution services by making a reference to such an institution or centre for conducting conciliation and no further reference can be made to arbitration under Section 18(3) of the Act, 2006 without compliance of the said procedure. However, in the present case, no conciliation was done by the Council through an institution. Compliance of Section 18(2) is a procedural prerequisite before making reference to arbitration under Section 18(3) and in absence of a valid reference made to conciliation in terms of Section 18(2) of the Act, 2006, there can be no reference to arbitration and as such, the question of adjudication of the disputes does not arise.
6. Learned Senior Counsel for the petitioner also submits that the respondent no. 2 got registered under the Act, 2006 only on 06.02.2016 and as such, during the relevant period of entering into the contract/performance of the said works, it was not registered as an MSME under the Act, 2006. The performance of the works which formed the subject matter of the dispute before the Council was carried out by the respondent no. 2 between the period 2005 and 2013. If an entity was not registered as MSME under the Act, 2006 at the time of entering into a contract/performance of contract, it cannot take recourse of the dispute settlement mechanism provided under the Act, 2006 and as such the application filed by the respondent no. 2 before the Council was itself without jurisdiction.
7. Learned Senior Counsel for the petitioner puts reliance on a judgment rendered by the Hon'ble Supreme Court in the case of "M/s Silpi Industries etc. Vs. Kerala State Road Transport Corporation & Anr." reported in 2021 SCC Online SC 439and submits that since the entire contract works were already completed before the registration of the respondent no. 2 under the Act, 2006, the Council had no jurisdiction to entertain and decide the claim of the respondent no. 2.
8. It is also submitted that the work so involved in the present case was in the form of works contract and not a supply contract as such the case so filed under the provisions of Act, 2006 was not maintainable. The said issue was though raised by the petitioner, but the same was not even been dealt with by the Council. Even the ground of separate cause of action vis-a-vis separate work order has not been dealt with in the impugned order. Though the amount so claimed by the respondent no. 2 was disputed, yet the Council has failed to examine the same and has not taken into consideration the provisions of the contract, rather has treated the said amount as sacrosanct without taking note of the submission and evidences of the petitioner. The Council has accepted false and untrue statements of the respondent no. 2 regarding payment of Rs. 3,67,99,350/-by the BSL to the petitioner against the bill raised for extra manpower deployment. The procedure adopted by the Council in awarding the claim of the respondent no. 2 is in breach of the principles of natural justice. Though an alternative/statutory remedy is available to the petitioner, the present writ petition has been filed particularly because the Council had no jurisdiction to entertain the claim of the respondent no. 2 in the facts and circumstance of this case.
9. Learned Senior Counsel for the petitioner puts reliance on a judgment rendered by the Hon'ble Supreme Court in the case of "Kranti Associates Private Limited & Anr. Vs. Masood Ahmed Khan & Ors." reported in (2010) 9 SCC 496, [LQ/SC/2010/939 ;] wherein the Hon'ble Supreme Court has held that a quasi-judicial authority must record reasons in support of its conclusions.
10. Learned Senior Counsel for the respondent no. 2, on the contrary, submits that the present writ petition is not maintainable since the petitioner has an alternative remedy to challenge the impugned award dated 24.08.2021 passed by the Council before the concerned statutory forum/court under Section 34 of the Arbitration & Conciliation Act, 1996. It is further submitted that the conciliation between the parties had already failed and the said fact was admitted by the parties before the Council which was recorded in the proceeding dated 18.12.2020. After conciliation, the Council itself took up the dispute for arbitration and adjudicated it as elaborated in the impugned award. Accordingly, the provisions of the Act, 1996 are applicable to the disputes between the parties and as such impugned award has to be challenged by the petitioner under Section 34 of the Act, 1996. The word 'only' provided in Section 34 categorically suggests the intention of the legislature which is to make an award open to challenge only as per the procedure prescribed under Section 34 of the Act, 1996 and not otherwise, which lays down the detail procedure for challenging an arbitral award. It is a settled law that when a statutory forum is created by law for redressal of grievance, a writ petition should not be entertained ignoring the statutory dispensation. It is also no more res-integra that the High Court under writ jurisdiction may interfere with an award only in exceptional cases, wherein one party is left remediless under the statute or a clear 'bad faith' is shown by one of the parties.
11. It is also submitted by learned Senior Counsel for the respondent no. 2 that though the date of filing mentioned in the Udyog Aadhar Registration Certificate issued to the respondent no. 2 by the Ministry of Micro, Small and Medium Enterprises, Government of India is 06.02.2016, but at the same time, the date of commencement of registration of the respondent no. 2 under the Bihar Shops and Establishment Act, 1953 as mentioned in the said certificate is 12.08.1991, which is the date of commencement of the concerned micro or small enterprise. The date of commencement of registration is a vital fact mentioned in the Udyog Aadhar Registration Certificate issued to the respondent no. 2 to be considered so as to ascertain if the respondent no. 2 could have claimed the benefit of the Act, 2006 for the period even prior to the date of filing the application for getting Udyog Aadhar Registration Certificate. If the date of commencement of registration of any enterprise is prior to the date of its registration under the Act, 2006, then the concerned enterprise is entitled to get the benefit of the Act, 2006 either from the date of commencement as mentioned in the Udyog Aadhar Registration Certificate or from the date on which the Act, 2006 was brought into force. It was impossible for the respondent no. 2 to get Udyog Aadhar Registration Certificate prior to September, 2015 since the process for getting the said Certificate was introduced by the Central Government only from September, 2015 vide notification no. SO 2576(E) dated 18.09.2015. It is also submitted that substantial exchange between the parties took place in relation to the contract/work orders after the alleged date of registration of the respondent no. 2 under the Act, 2006 i.e., 06.02.2016. The respondent no. 2 filed an application before the Council for recovery of outstanding principal amount and interest towards undisputed supply of goods and services rendered by it to the petitioner in relation to the five work orders. Four work orders were in relation to rebuilding of Coke Oven Battery No. 1 & Battery No. 2 at Bokaro Steel Plant, Bokaro and one work order was issued for rebuilding of Coke Oven Battery No. 5 at Bokaro Steel Plant, Bokaro. Three out of the four work orders relating to rebuilding of Coke Oven Battery Nos. 1 and 2 at Bokaro Steel Plant i.e., work order no. 8319 dated 01.10.2008, work order no. 8323 dated 27.10.2008 and work order no. 8336 dated 15.07.2009 were subsequently amended on 24.10.2017, which were substantially got completed on 20.03.2018. The said fact is itself evident from the Â-Final Acceptance Certificate' dated 23.03.2018 issued by the Steel Authority of India Ltd. Clause 16.4 of the aforesaid four work orders categorically provides that Â-Final Acceptance Certificate' will be issued by BSL/Bokaro Steel Plant only when the obligations under the contract are fulfilled and as such unless the Final Acceptance Certificate is issued, the contract cannot be said to be completed. Even after completion of the work on 20.03.2018, the respondent no. 2 continued rendering its services of maintaining and safeguarding the stores of the petitioner till 18.03.2020 which was used for rebuilding of Coke Oven Battery Nos. 1 and 2 at Bokaro Steel Plant since the petitioner had handed over the said stores on or around 19.03.2020. The said fact would be corroborated from the petitioner's email dated 28.02.2020 wherein it asked the respondent no. 2 to dismantle the temporary stores and office and to clear the site at Bokaro Steel Plant.
12. It is further submitted that substantial number of invoices of the respondent no. 2 which were outstanding and are the subject matter of the impugned Award, were issued to the petitioner in 2018 which is again much after the said date of registration of the respondent no. 2 under the Act, 2006. Substantial payments were made by the petitioner after 2018. The facts of the present case are different from the facts involved in the case of "M/s Silpi Industries" (supra). In the said case, there was no supply of goods or rendering of services subsequent to the registration of the appellant therein under the Act, 2006. Thus, the contract had concluded prior to the registration under the said Act. Moreover, the appellant did not have a registration under the said Act with a prior date of commencement. However, in the case in hand, the concerned contract/work orders did not get completed prior to 06.02.2016 i.e., the alleged date of registration of the respondent no. 2. The concerned work orders were amended on 24.10.2017 which is certainly after the said date of registration of the respondent no. 2 under the Act, 2006. The Final Acceptance Certificate dated 23.03.2018 shows that the work in relation to rebuilding of Coke Oven Battery Nos. 1 & 2 at Bokaro Steel Plant, was completed only on 20.03.2018 which is clearly much after the said date of registration of the respondent no. 2 under the Act, 2006. The respondent no. 2 was rendering its services of maintaining and safeguarding the stores of the petitioner located at the site of the rebuilding of Coke Oven Battery No. 1 and Battery No. 2 at Bokaro Steel Plant till 18.03.2020 which is again much after the date of registration of the respondent no. 2 under the Act, 2006. The registration certificate of the respondent no. 2 clearly provides that the date of commencement of registration of the respondent no. 2 is from 12.08.1991 and thus the respondent no. 2 is certainly entitled to get the benefit of the Act, 2006 either from the date of commencement of registration of the respondent no. 2 as mentioned in the Udyog Aadhar Registration Certificate or at least from the date when the Act, 2006 was brought into force.
13. It is also submitted that the petitioner and respondent no. 2 had consented to refer the disputes for adjudication in the form of arbitration before the respondent no. 1 which would be evident from the minutes of the meetings dated 25.02.2021 and 20.07.2021 wherein it has been recorded that the respondent no. 1 may decide the issue of outstanding principal amount as well as interest claimed by the respondent no. 2 against the petitioner.
14. Heard the learned Senior Counsel for the parties and perused the materials available on record. The petitioner has preferred the present writ petition against the order/award as contained in memo no. 1630 dated 24.08.2021 passed by respondent no. 1-the Council contending that the said order is without jurisdiction as well as in the teeth of the well settled principle of law laid down by the Hon'ble Supreme Court in the case of "M/s Silpi Industries" (supra) and "Jharkhand Urja Vikas Nigam Limited Vs. The State of Rajasthan & Ors.", (Civil Appeal No. 2899 of 2021).
15. The primary argument of learned Senior Counsel for the respondent no. 2 is that the writ petition is not maintainable since the petitioner has an alternative efficacious remedy of preferring application under 34 of the Act, 1996 against the impugned order as contained in memo no. 1630 dated 24.8.2021 passed by the Council. The petitioner instead of approaching the statutory forum has filed the instant writ petition to circumvent the mandatory pre-deposit condition of 75% of the awarded amount as provided under Section 19 of the Act, 2006. The Hon'ble Supreme Court in a very recent judgment rendered in the case of "M/S Tirupati Steels Vs. M/s Shubh Industrial Component & Anr.", (Civil Appeal No. 2941 of 2022) has held that pre-deposit of 75% of the awarded amount under Section 19 of the Act, 2006 is mandatory for entertaining an application filed under Section 34 of the Act, 2006, whereas the petitioner's contention that the impugned Award has been passed without jurisdiction is wholly erroneous and untenable as the respondent no. 1 was well within its jurisdiction to adjudicate/decide the application of the respondent no. 2 made under Section 18 of the Act, 2006 for recovery of principal dues and interest from the petitioner.
16. In support of the aforesaid contention, learned Senior Counsel for the respondent no. 2 puts reliance on a judgment rendered by the Hon'ble Supreme Court in the case of "S.B.P. and Company Vs. Patel Engineering Ltd. & Anr." reported in (2005) 8 SCC 618 [LQ/SC/2005/1104] wherein it has been held as under:
"45. It is seen that some High Courts have proceeded on the basis that any order passed by an Arbitral Tribunal during arbitration, would be capable of being challenged under Article 226 or 227 of the Constitution. We see no warrant for such an approach. Section 37 makes certain orders of the Arbitral Tribunal appealable. Under Section34, the aggrieved party has an avenue for ventilating its grievances against the award including any in-between orders that might have been passed by the Arbitral Tribunal acting under Section 16 of the Act. The party aggrieved by any order of the Arbitral Tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The Arbitral Tribunal is, after all, a creature of a contract between the parties, the arbitration agreement, even though, if the occasion arises, the Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the Arbitral Tribunal. It will still be a forum chosen by the parties by agreement. We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the Arbitral Tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution. Such an intervention by the High Courts is not permissible.
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."
17. In the case of "Bhaven Construction Through Authorised Signatory Premjibhai K. Shah Vs. Executive Engineer Sardar Sarovar Narmada Nigam Ltd. & Anr." reported in (2022) 1 SCC 75, [LQ/SC/2021/11 ;] the Hon'ble Supreme Court has held as under:
"18. In any case, the hierarchy in our legal framework, mandates that a legislative enactment cannot curtail a constitutional right. In Nivedita Sharma v. COAI [Nivedita Sharma v. COAI, (2011) 14 SCC 337] [LQ/SC/2011/1532] , this Court referred to several judgments and held : (SCC p. 343, para 11)
"11. We have considered the respective arguments/submissions. There cannot be any dispute that the power of the High Courts to issue directions, orders or writs including writs in the nature of habeas corpus, certiorari, mandamus, quo warranto and prohibition under Article 226 of the Constitution is a basic feature of the Constitution and cannot be curtailed by parliamentary legislation - L. Chandra Kumar v. Union of India [L. Chandra Kumar v. Union of India, (1997) 3 SCC 261] [LQ/SC/1997/514] . However, it is one thing to say that in exercise of the power vested in it under Article 226 of the Constitution, the High Court can entertain a writ petition against any order passed by or action taken by the State and/or its agency/instrumentality or any public authority or order passed by a quasi-judicial body/authority, and it is an altogether different thing to say that each and every petition filed under Article 226 of the Constitution must be entertained by the High Court as a matter of course ignoring the fact that the aggrieved person has an effective alternative remedy. Rather, it is settled law that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation."
(emphasis supplied)
It is therefore, prudent for a Judge to not exercise discretion to allow judicial interference beyond the procedure established under the enactment. This power needs to be exercised in exceptional rarity, wherein one party is left remediless under the statute or a clear "bad faith" shown by one of the parties. This high standard set by this Court is in terms of the legislative intention to make the arbitration fair and efficient.
19. In this context we may observe [Deep Industries Ltd. v. ONGC,(2020) 15 SCC 706] [LQ/SC/2019/1784] , wherein interplay of Section 5 of the Arbitration Act and Article 227 of the Constitution was analysed as under : (SCC p. 714, paras 16-17)
"16. Most significant of all is the non obstante clause contained in Section 5 which states that notwithstanding anything contained in any other law, in matters that arise under Part I of the Arbitration Act, no judicial authority shall intervene except where so provided in this Part. Section 37 grants a constricted right of first appeal against certain judgments and orders and no others. Further, the statutory mandate also provides for one bite at the cherry, and interdicts a second appeal being filed [see Section 37(2) of the Act].
17. This being the case, there is no doubt whatsoever that if petitions were to be filed under Articles 226/227 of the Constitution against orders passed in appeals under Section 37, the entire arbitral process would be derailed and would not come to fruition for many years. At the same time, we cannot forget that Article 227 is a constitutional provision which remains untouched by the non obstante clause of Section 5 of the Act. In these circumstances, what is important to note is that though petitions can be filed under Article 227 against judgments allowing or dismissing first appeals under Section 37 of the Act, yet the High Court would be extremely circumspect in interfering with the same, taking into account the statutory policy as adumbrated by us hereinabove so that interference is restricted to orders that are passed which are patently lacking in inherent jurisdiction."
18. To counter the argument of learned Senior Counsel for the respondent no. 2, learned Senior Counsel for the petitioner submits that the alternative remedy so provided under the statute cannot be said to be efficacious in the present case as the impugned order passed by the Council is wholly without jurisdiction that too without following the mandatory procedure provided under the Act, 2006.
19. The Hon'ble Supreme Court in the case of "State of U.P. Vs. Mohd. Nooh" reported in AIR 1958 SC 86 [LQ/SC/1957/99] has held as under:
"11. On the authorities referred to above it appears to us that there may conceivably be cases - and the instant case is in point - where the error, irregularity or illegality touching jurisdiction or procedure committed by an inferior court or tribunal of first instance is so patent and loudly obtrusive that it leaves on its decision an indelible stamp of infirmity or vice which cannot be obliterated or cured on appeal or revision. If an inferior court or tribunal of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings before it in a manner which is contrary to the rules of natural justice and all accepted rules of procedure and which offends the superior court's sense of fair play the superior court may, we think, quite properly exercise its power to issue the prerogative writ of certiorari to correct the error of the court or tribunal of first instance, even if an appeal to another inferior court or tribunal was available and recourse was not had to it or if recourse was had to it, it confirmed what ex facie was a nullity for reasons aforementioned. This would be so all the more if the tribunals holding the original trial and the tribunals hearing the appeal or revision were merely departmental tribunals composed of persons belonging to the departmental hierarchy without adequate legal training and background and whose glaring lapses occasionally come to our notice. The superior court will ordinarily decline to interfere by issuing certiorari and all we say is that in a proper case of the kind mentioned above it has the power to do so and may and should exercise it. We say no more than that."
20. In the case of "Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai & Ors." reported in (1998) 8 SCC 1, [LQ/SC/1998/1044] the Hon'ble Supreme Court has held as under:
"15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field."
21. In the case of "Embassy Property Developments (P) Ltd. Vs. State of Karnataka" reported in (2020) 13 SCC 308, [LQ/SC/2019/1812 ;] the Hon'ble Supreme Court has held as follows:
"15. One of the well-recognised exceptions to the self-imposed restraint of the High Courts, in cases where a statutory alternative remedy of appeal is available, is the lack of jurisdiction on the part of the statutory/quasi-judicial authority, against whose order a judicial review is sought. Traditionally, English courts maintained a distinction between cases where a statutory/quasi-judicial authority exercised a jurisdiction not vested in it in law and cases where there was a wrongful exercise of the available jurisdiction. An "error of jurisdiction" was always distinguished from "in excess of jurisdiction", until the advent of the decision rendered by the House of Lords, by a majority of 3 : 2 in Anisminic Ltd. v. Foreign Compensation Commission [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] . After acknowledging that a confusion had been created by the observations made in R. v. Governor of Brixton Prison, ex p Armah [R. v. Governor of Brixton Prison, ex p Armah, 1968 AC 192 : (1966) 3 WLR 828 (HL)] to the effect that if a Tribunal has jurisdiction to go right, it has jurisdiction to go wrong, it was held in Anisminic [Anisminic Ltd. v. Foreign Compensation Commission (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] that the real question was not whether an authority made a wrong decision but whether they enquired into and decided a matter which they had no right to consider."
22. In the case of "U.P. State Spinning Co. Ltd. Vs. R.S. Pandey & Anr." reported in (2005) 8 SCC 264, [LQ/SC/2005/965] the Hon'ble Supreme Court has held as under:
"24. Accordingly, the conclusion is inevitable that the High Court was not justified in entertaining the writ petition. Usually when writ petition is entertained notwithstanding availability of alternative remedy and issues are decided on merits, this Court is slow to interfere merely on the ground of availability of alternative remedy. But the facts of the present case have special features, which warrant interference."
23. In the case of "Arun Kumar Vs. Union of India" reported in (2007) 1 SCC 732, [LQ/SC/2006/843 ;] the Hon'ble Supreme Court has held thus:
74. A "jurisdictional fact" is a fact which must exist before a court, tribunal or an authority assumes jurisdiction over a particular matter. A jurisdictional fact is one on existence or non-existence of which depends jurisdiction of a court, a tribunal or an authority. It is the fact upon which an administrative agency's power to act depends. If the jurisdictional fact does not exist, the court, authority or officer cannot act. If a court or authority wrongly assumes the existence of such fact, the order can be questioned by a writ of certiorari. The underlying principle is that by erroneously assuming existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not possess.
76. The existence of jurisdictional fact is thus sine qua non or condition precedent for the exercise of power by a court of limited jurisdiction.
80. The Court relied upon a decision in White & Collins v. Minister of Health [(1939) 2 KB 838 : 108 LJ KB 768 : (1939) 3 All ER 548 (CA) sub nom Ripon (Highfield) Housing Order, 1938, Re] wherein a question debated was whether the court had jurisdiction to review the finding of administrative authority on a question of fact. The relevant Act enabled the local authority to acquire land compulsorily for housing of working classes. But it was expressly provided that no land could be acquired which at the date of compulsory purchase formed part of park, garden or pleasure ground. An order of compulsory purchase was made which was challenged by the owner contending that the land was a part of park. The Minister directed public inquiry and on the basis of the report submitted, confirmed the order.
84. From the above decisions, it is clear that existence of "jurisdictional fact" is sine qua non for the exercise of power. If the jurisdictional fact exists, the authority can proceed with the case and take an appropriate decision in accordance with law. Once the authority has jurisdiction in the matter on existence of "jurisdictional fact", it can decide the "fact in issue" or "adjudicatory fact". A wrong decision on "fact in issue" or on "adjudicatory fact" would not make the decision of the authority without jurisdiction or vulnerable provided essential or fundamental fact as to existence of jurisdiction is present."
24. In the aforesaid cases, it has been specifically held that the availability of alternative remedy is not absolute bar to exercise the writ jurisdiction if an inferior court or tribunal of first instance acts wholly without jurisdiction or is patently in excess of jurisdiction or manifestly conducts the proceedings before it in a manner which is contrary to the rules of natural justice and all accepted rules of procedure which offends the superior court's sense of fair play.
25. Now, the question before this Court is as to whether any of the circumstances as mentioned in the aforesaid cases is present in the case in hand so as to exercise the power of judicial review in spite of availability of alternative/statutory remedy being available to the petitioner by challenging the impugned order/award under Section 34 of the Act, 1996 before appropriate court.
26. Learned Senior Counsel for the petitioner puts emphatic reliance on a judgment rendered by the Hon'ble Supreme Court in the case of "Jharkhand Urja Vikas Nigam Limited Vs. The State of Rajasthan & Ors.", (Civil Appeal No. 2899 of 2021), wherein it has been held as under:
"9. From a reading of Section 18(2) and 18(3) of the MSMED Act it is clear that the Council is obliged to conduct conciliation for which the provisions of Sections 65 to 81 of the Arbitration and Conciliation Act, 1996 would apply, as if the conciliation was initiated under Part III of the said Act. Under Section 18(3), when conciliation fails and stands terminated, the dispute between the parties can be resolved by arbitration. The Council is empowered either to take up arbitration on its own or to refer the arbitration proceedings to any institution as specified in the said Section. It is open to the Council to arbitrate and pass an award, after following the procedure under the relevant provisions of the Arbitration and Conciliation Act, 1996, particularly Sections 20, 23, 24, 25.
10. There is a fundamental difference between conciliation and arbitration. In conciliation the conciliator assists the parties to arrive at an amicable settlement, in an impartial and independent manner. In arbitration, the Arbitral Tribunal/arbitrator adjudicates the disputes between the parties. The claim has to be proved before the arbitrator, if necessary, by adducing evidence, even though the rules of the Civil Procedure Code or the Indian Evidence Act may not apply. Unless otherwise agreed, oral hearings are to be held.
11. If the appellant had not submitted its reply at the conciliation stage, and failed to appear, the Facilitation Council could, at best, have recorded the failure of conciliation and proceeded to initiate arbitration proceedings in accordance with the relevant provisions of the Arbitration and Conciliation Act, 1996, to adjudicate the dispute and make an award. Proceedings for conciliation and arbitration cannot be clubbed.
12. In this case only on the ground that the appellant had not appeared in the proceedings for conciliation, on the very first date of appearance, that is, 06.08.2012, an order was passed directing the appellant and/or its predecessor/Jharkhand State Electricity Board to pay Rs. 78,74,041/-towards the principal claim and Rs. 91,59,705/-odd towards interest. As it is clear from the records of the impugned proceedings that the Facilitation Council did not initiate arbitration proceedings in accordance with the relevant provisions of the Arbitration and Conciliation Act, 1996.
13. The order dated 06.08.2012 is a nullity and runs contrary not only to the provisions of MSMED Act but contrary to various mandatory provisions of Arbitration and Conciliation Act, 1996. The order dated 06.08.2012 is patently illegal. There is no arbitral award in the eye of law. It is true that under the scheme of the Arbitration and Conciliation Act, 1996 an arbitral award can only be questioned by way of application under Section 34 of the Arbitration and Conciliation Act, 1996. At the same time when an order is passed without recourse to arbitration and in utter disregard to the provisions of Arbitration and Conciliation Act, 1996, Section 34 of the said Act will not apply. We cannot reject this appeal only on the ground that appellant has not availed the remedy under Section 34 of the Arbitration and Conciliation Act, 1996. The submission of the learned senior counsel appearing for the 3rd respondent that there was delay and laches in filing writ petition also cannot be accepted. After 06.08.2012 order, the appellant after verification of the records has paid an amount of Rs. 64,43,488/-on 22.01.2013 and the said amount was received by the 3rd respondent without any protest. Three years thereafter it made an attempt to execute the order in Execution Case No. 69 of 2016 before the Civil Judge, Ranchi, which ultimately ended in dismissal for want of territorial jurisdiction, vide order dated 31.01.2017. Thereafter S.B.Civil Writ Petition No. 11657 of 2017 was filed questioning the order dated 06.08.2012 before the Rajasthan High Court. In that view of the matter it cannot be said that there was abnormal delay and laches on the part of the appellant in approaching the High Court. As much as the 3rd respondent has already received an amount of Rs. 63,43,488/-paid by the appellant, without any protest and demur, it cannot be said that the appellant lost its right to question the order dated 06.08.2012. Though the learned counsel appearing for the respondents have placed reliance on certain judgments to support their case, but as the order of 06.08.2012 was passed contrary to Section 18(3) of the MSMED Act and the mandatory provisions of the Arbitration and Conciliation Act, 1996, we are of the view that such judgments would not render any assistance to support their case."
27. In the aforesaid case, it has been held that the proceeding for conciliation and arbitration cannot be clubbed. Arbitration proceeding is initiated only when the conciliation fails. It has further been held that the award was passed by the Rajasthan Micro and Small Enterprises Facilitation Council merely on the ground that the appellant-Jharkhand Urja Vikas Nigam Limited did not appear in the proceeding for conciliation. If the said appellant did not submit its reply at the conciliation stage and failed to appear, then the Rajasthan Micro and Small Enterprises Facilitation Council could at best have recorded the failure of conciliation and have proceeded to initiate arbitration proceeding in accordance with the provisions of the Act, 1996 to adjudicate the dispute and make an award. Their Lordships have further held that if an order is passed without recourse to arbitration and in utter disregard to the provisions of the Act, 1996, then the provision of Section 34 will not apply.
28. Learned Senior Counsel for the petitioner contends that the impugned order has been passed without adhering to the procedure of conciliation as provided under the MSMED Act and the Act, 1996. The Council was required to conduct the conciliation proceedings and mere direction to the parties to conciliate amongst themselves cannot be said to have fulfilled its obligation under Section 18(2) of the MSMED Act, thus the impugned order having been passed without following the due procedure of law is liable to be quashed.
29. Learned Senior Counsel for the respondent no. 2, while countering the said contention, submits that it is incorrect to say that there was no conciliation proceeding in the present case, rather it would be evident from the impugned award itself that the conciliation proceeding continued for several dates and only when the same failed, the matter was heard by the Council and the impugned award was passed. It is further submitted that the judgment of "Jharkhand Urja Vikas Nigam Limited" (supra), as has been relied upon by learned Senior Counsel for the petitioner will not be applicable in the present case.
30. To appreciate the contention of learned Senior Counsel for the petitioner, I have perused the impugned order, the relevant part of which is reproduced hereinbelow:
"Councils meeting & proceeding:
Decision on 07.09.2020: The Council was informed that the petitioner has submitted required document vide letter-Nil dated 29.06.2020, a copy of which has been sent to the respondent vide Directorate letter no. 1130 dated 06.07.2020 for his reference. The Council has reviewed the matter and decided to admit the case. The case has been deferred to next date.
Decision on 28.10.2020: Both parties are present and heard. The claimant has acknowledged the receipt of Rs. 31,66,985.00 on 17.07.2020, Rs. 1,36,06,380.00 on 12.10.2020 and Rs. 42,34,642.00 on 20.10.2020, total amount of Rs. 2,10,08,007.00 from the respondent. The Council has directed both the parties to reconcile the point of dispute within 30 days and inform accordingly. The case is deferred to next date.
Decision on 18.12.2020: Both parties are present and heard. Both the parties have admitted that conciliation process has failed. The opposite party has submitted their stand, a copy of which has been received by the first party. The Council has directed to the first party to submit their reply within 15 days. The case has been deferred to next date.
Decision on 05.02.2021: Both the parties are present and heard. Both the parties agreed for joint reconciliation on 25th February, 2021 at Jharkhand Small Industries Association (JSIA) office, Kokar, Ranchi and submit the reconciled statement. The case has been deferred to next date.
Decision on 11.08.2021: Both the parties are present and heard. Minutes of meeting between both the parties dated 25.02.2021 & 20.07.2021 has been submitted. The opposite party has also submitted supplementary affidavit dated 11.08.2021. The Council decided to examine all the documents submitted by both parties and kept for order."
31. Thus, it transpires that on 28.10.2020, the Council directed the parties to reconcile on the point of dispute within 30 days and thereafter on 18.12.2020, the Council on the admission of the parties recorded that the conciliation had failed. Accordingly, on the said date, the conciliation proceeding was terminated in view of Section 76(b) of the Act, 1996 which provides that the conciliation proceedings shall be terminated by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at conciliation are no longer justified. It further appears that even after termination of the conciliation proceeding and on commencement of the arbitral proceeding, both the parties agreed for joint reconciliation on 25.02.2021 as has been recorded in the order dated 05.02.2021 and thereafter the proceeding was deferred to the next date i.e., on 11.08.2021. Finally, on 11.08.2021, the Council heard both the parties, perused the minutes of the meeting dated 25.02.2021 and 20.07.2021 and thereafter decided to examine all the documents submitted by both the parties and fixed it for order. It thus appears that further effort for settlement of dispute was made on 25.02.2021 and 20.07.2021 at the joint request of the parties during arbitration proceeding in terms with Section 30 of the Act, 1996 which provides that the arbitral tribunal may use mediation, conciliation or other procedures at any time during the arbitral proceedings to encourage settlement with agreement of the parties.
32. In view of the aforesaid observation made by the Council in the impugned award, this Court is of the view that several attempts were made by the Council for conciliation of the dispute between the petitioner and the respondent no. 2 and only when the conciliation failed on 18.12.2020 and re-conciliation between the said parties during arbitration proceeding also failed on 25.02.2021 and 20.07.2021, the Council heard both the parties on 11.08.2021, examined the documents submitted before it by them and passed the impugned award. It further appears that even the petitioner and the respondent no. 2 had jointly requested the Council to reconciliate the matter on 25.02.2021 and 20.07.2021.
33. On perusal of the judgment rendered by the Hon'ble Supreme Court in the case of "Jharkhand Urja Vikas Nigam Limited" (supra), as has been relied upon by learned Senior Counsel for the petitioner, it appears that in the said case, the process of conciliation was not done only due to the reason that even after receipt of summons, the appellant-Jharkhand Urja Vikas Nigam Limited had not appeared before the Rajasthan Micro and Small Enterprises Facilitation Council and thereafter the order/award dated 06.08.2012 was passed against the said appellant. Having observed so, the Hon'ble Supreme Court quashed the order passed by the said Council holding that if the appellant had not submitted reply at the conciliation stage, the Council at best should have recorded the failure of conciliation and have proceeded to initiate arbitration proceeding in accordance with the relevant provisions of the Act, 1996 to adjudicate the dispute and make an award.
34. Thus, the facts and circumstance of the present case is entirely different from that of "Jharkhand Urja Vikas Nigam Limited" (supra). In the present case, the conciliation under Section 18(2) of the Act, 2006 and reconciliation/effort of settlement made under Section 30 of the Act, 1996 during arbitral proceeding were made by the Council on the request of the parties and thus the aforesaid ratio laid down by the Hon'ble Supreme Court is not applicable here. As such, the argument of learned Senior Counsel for the petitioner to the extent that the impugned order passed by the Council is beyond jurisdiction, cannot be accepted.
35. Another argument of learned Senior Counsel for the petitioner is that the contract between the parties had already concluded before 06.02.2016 and the said fact would be reflected from the completion certificates dated 01.05.2013 (two certificates of the same date), 06.03.2013, 16.10.2013 and 20.03.2013 issued by the petitioner in favour of the respondent no. 2 for work orders dated 01.10.2008, 27.10.2008, 08.05.2009, 15.07.2009 and 24.05.2005 respectively.
36. Learned Senior Counsel for the petitioner puts much reliance on the judgment rendered by the Hon'ble Supreme Court in the case of "M/s Silpi Industries" (supra) and submits that the impugned order is in utter disregard of the judgment of the Hon'ble Supreme Court wherein it has been specifically held that no benefit as contemplated under the Act, 2006 can be sought by any entity for the supplies in terms with the contract made before the registration of the unit under the provisions of the Act, 2006. In the present case, the entire contract works were already completed before the registration of the respondent no. 2 under the Act, 2006 and thus, the Council had no jurisdiction to entertain the claim of the respondent no. 2. The judgment of "M/s Silpi Industries" (supra) was placed before the Council, however, the same was negated relying on a judgment of Delhi High Court rendered in the case of "GE T & D India Limited Vs. Reliable Engineering Projects and Marketing" reported in 2017 SCC online DEL 6978. The aforesaid judgment of Delhi High Court was dealt with by the Hon'ble Supreme Court while rendering the judgment of "M/s Silpi Industries" (supra) and thereupon it was held that an incumbent organization which was not registered with the Council at the time of entering into the contract, cannot avail the benefits of the Act, 2006. On bare perusal of the judgment of Delhi Court, it would appear that in the said case, the new work order was also issued after the date of registration with the Council under the Act, 2006 in continuation of the earlier work order.
37. To counter the aforesaid argument of learned Senior Counsel for the petitioner, it is submitted by learned Senior Counsel for the respondent no. 2 that the judgment of "M/s Silpi Industries" (supra) is not applicable in the facts and circumstance of the present case. In the said case, the entire contract was concluded before registration of the concerned person under the MSME Act, 2006, however, in the present case, the entire contract did not conclude before the alleged date of registration of the petitioner i.e., on 06.02.2016. In the instant case, the work order of the petitioner was amended in 2017 and the same got substantially completed on 20.03.2018. The said fact has been mentioned in the Final Acceptance Certificate provided by SAIL. Moreover, some of the invoices were raised in the year 2018 as well as substantial payments were released even after 2018 in course of the proceeding before the respondent no. 1-Council and due to the said payment made by the petitioner to the respondent no. 2, the outstanding claim of principal amount was reduced from earlier claim of Rs. 11,49,95,594/-to Rs. 7,79,25,422/-plus accrued interest.
38. Learned Senior Counsel for the respondent no. 2 submits that the completion certificates issued by the petitioner pursuant to the aforesaid work orders on the application of the respondent no. 2 to produce the same in various tenders as experience certificate. The said work completion certificate is provisional and not final in which it has been provided that issuance of the same does not absolve the respondent no. 2 from the responsibility of carrying out rectification works as and when arise during the maintenance and Guarantee period as per the general conditions of contract. Thus, the aforesaid completion certificates do not indicate that the contract was finally completed on the date of issuance of the same. Moreover, the said completion certificates do not cover the entire quantity of work executed by the respondent no. 2. The Final Acceptance Certificate which covers the entire work has been issued to the petitioner on 23.03.2018 wherein the date of completion has also been mentioned as 20.03.2018. The Final Acceptance Certificate given by Bokaro Steel Plant, Steel Authority of India Ltd. is recognized and accepted as conclusive certificate of work completion under the contract between the petitioner and the respondent no. 2. Therefore, Clause 5.5 of the relevant work orders provides that the last 5% of the contract price will be paid by the petitioner to the respondent no. 2 only when Final Acceptance Certificate is issued by BSL. Clause 16.4 of the work orders provides that Final Certificate shall be issued by BSL when the performance guarantee tests are successfully completed and the guaranteed output are met out. Accordingly, it is only after issuance of the Final Acceptance Certificate by BSL, the work can be said to be completed under the work orders issued to the respondent no. 2.
39. Learned Senior Counsel for the respondent no. 2 further submits that the Hon'ble Supreme Court in the case of "Modern Industries Vs. Steel Authority of India Limited" reported in (2010) 5 SCC 44, [LQ/SC/2010/393] has held that though the contract was entered into on 15.01.1983, the same was subsequently altered from time to time and thus, it cannot be said that Small Scale and Ancillary Industrial Undertakings Act, 1993 will not be applicable. It has further been held in the said case that there being statutory remedy of appeal provided under the Act, 1993, the writ petition under Article 226 was not maintainable.
40. I have perused the judgment of "M/s Silpi Industries" (supra), the relevant part of which is quoted hereinbelow for the ready reference in the present case.
"25. In C.A. Nos. 1620-1622 of 2021, the High Court, while negating the plea of the appellant, on the maintainability of counter-claim, has allowed the application filed by the respondent under Section 11(6) of the 1996 Act and appointed the second arbitrator. Though, we are of the view that counter-claim and set-off is maintainable before the statutory authorities under MSMED Act, appellant in this set of appeals is not entitled for the relief, for the reason that on the date of supply of goods and services the appellant did not have the registration by submitting the memorandum as per Section 8 of the Act. The bids were invited on 23.02.2010, appellant submitted its bid on 17.05.2010, respondent awarded contract to the appellant on 24.09.2010 and the parties signed the contract documents for supply of material, installation/commissioning of the power plant on 29.07.2011. Thereafter, supplies were made and the appellant has raised first invoice on 02.11.2011 for supply contract and also raised the first invoice pursuant to contract for installation on 07.07.2012 and the appellant has raised the last invoice in furtherance of contract for supply of material, on 29.03.2014. The appellant also claims to have raised last invoice on 29.03.2015 in furtherance of contract for installation. It is to be noticed that appellant approached the District Industrial Centre for grant of entrepreneur memorandum only on 25.03.2015.
26. Though the appellant claims the benefit of provisions under MSMED Act, on the ground that the appellant was also supplying as on the date of making the claim, as provided under Section 8 of the MSMED Act, but same is not based on any acceptable material. The appellant, in support of its case placed reliance on a judgment of the Delhi High Court in the case of GE T&D India Ltd. v. Reliable Engineering Projects and Marketing, but the said case is clearly distinguishable on facts as much as in the said case, the supplies continued even after registration of entity under Section 8 of the Act. In the present case, undisputed position is that the supplies were concluded prior to registration of supplier. The said judgment of Delhi High Court relied on by the appellant also would not render any assistance in support of the case of the appellant. In our view, to seek the benefit of provisions under MSMED Act, the seller should have registered under the provisions of the Act, as on the date of entering into the contract. In any event, for the supplies pursuant to the contract made before the registration of the unit under provisions of the MSMED Act, no benefit can be sought by such entity, as contemplated under MSMED Act. While interpreting the provisions of Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, this Court, in the judgment in the case of Shanti Conductors Pvt. Ltd. v. Assam State Electricity Board has held that date of supply of goods/services can be taken as the relevant date, as opposed to date on which contract for supply was entered, for applicability of the aforesaid Act. Even applying the said ratio also, the appellant is not entitled to seek the benefit of the Act. There is no acceptable material to show that, supply of goods has taken place or any services were rendered, subsequent to registration of appellant as the unit under MSMED Act, 2006. By taking recourse to filing memorandum under sub-section (1) of Section 8of the Act, subsequent to entering into contract and supply of goods and services, one cannot assume the legal status of being classified under MSMED Act, 2006, as an enterprise, to claim the benefit retrospectively from the date on which appellant entered into contract with the respondent. The appellant cannot become micro or small enterprise or supplier, to claim the benefits within the meaning of MSMED Act 2006, by submitting a memorandum to obtain registration subsequent to entering into the contract and supply of goods and services. If any registration is obtained, same will be prospective and applies for supply of goods and services subsequent to registration but cannot operate retrospectively. Any other interpretation of the provision would lead to absurdity and confer unwarranted benefit in favour of a party not intended by legislation."
41. In the aforesaid case, the Hon'ble Supreme Court has held that the seller should have been registered under the provisions of the Act, 2006 on the date of entering into the contract so as to take benefit under the provisions of the Act, 2006. It has further been held that no benefit can be sought by any entity under the Act, 2006 for the supplies made before the registration of the unit under the provisions of the Act, 2006. Their Lordships have not overruled the judgment of Delhi High Court in the case of "GE T & D Vs. Reliable Engineering Project and Marketing" (supra), rather have distinguished it on the basis of the facts observing inter alia that in the said case, the supplies continued even after registration of entity under Section 8 of the Act, 2006 whereas in the case of "M/s Silpi Industries" (supra), the undisputed position is that the supplies were concluded prior to registration of the supplier.
42. It is not an admitted fact before this Court that the work related to unloading, handling, transportation of equipment/materials (refractory), storage, erection, testing and commissioning of mechanical plant & equipment, structures etc. and post commissioning services required for rebuilding of Coke Oven Battery No. 1, 2 and 5 at Bokaro Steel Plant, Bokaro were made by the respondent no. 2 prior to getting Udyog Aadhar Registration Certificate, rather both the parties have made claim and counter claim on the said aspect. The petitioner has claimed that the work was already completed before the aforesaid registration of the respondent no. 2 under the Act, 2006 and in support of the said claim, the petitioner has relied upon several documents and evidences, whereas the respondent no. 2 by citing various instances has claimed that the work continued even after its registration under the Act, 2006. This Court is of the view that the said rival factual claims of the parties require detailed examination by leading evidences which can effectively be adjudicated by the Principal Civil Court of Original Jurisdiction of the concerned district under Section 34 of the Act, 1996.
43. In view of the aforesaid reasons, this Court while exercising extraordinary writ jurisdiction does not find sufficient reason to interfere with the order/award as contained in memo no. 1630 dated 24.8.2021 issued under the signature of the respondent no. 1-Under Secretary-cum-Member Secretary, Jharkhand Micro and Small Enterprises Facilitation Council in connection with Case No. JHMSEFC-09/2020 (New Case No. JH/01/S/JKH/00195).
44. Hence, without commenting on the merit of the case, the writ petition is dismissed as not maintainable at this stage. The petitioner is, however, at liberty to challenge the impugned order/award as contained in memo no. 1630 dated 24.8.2021 under the provision of Section 34 of the Act, 1996.
45. I.A. No. 3093 of 2022 and I.A. No. 5515 of 2021 also stand dismissed.
