A private company, challenged an award by the Micro and Small Enterprises Facilitation Council (MSEFC) issued under Section 18 of the MSMED Act. The petitioner contended that the award was passed without following due arbitration proceedings and alleged procedural irregularities by the MSEFC. The court rejected the writ petition, emphasizing the statutory appeal remedy under Section 34 of the Arbitration Act, requiring a 75% pre-deposit to contest awards under Section 19 of the MSMED Act.

Key Acts and Sections Discussed:

• Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act): Sections 18 and 19
• Arbitration and Conciliation Act, 1996: Sections 25, 34, 37, 65, 67, 76, and 80
• Constitution of India: Articles 226 and 227

Main Facts (Para-wise):

Introduction (Para 1-2)

• Parties Involved: Duro Shox Pvt. Ltd., the petitioner, contested an MSEFC award passed in favor of respondent Technomat Springs.
• Main Issue: The petitioner claimed that the award was invalid due to procedural lapses, specifically the lack of formal arbitration proceedings as required by the MSMED Act.

Background (Paras 2A - 2D)

• Supplier Agreement: Duro Shox and Technomat Springs entered into a supply contract in April 2019. Petitioner alleged receiving faulty materials from the respondent, leading to financial losses.
• Claim and Counterclaim: Technomat Springs claimed outstanding dues and interest, while Duro Shox countered with a claim for damages due to defective supplies.

Procedural Contentions (Paras 2E - 2H)

• Council Proceedings: The MSEFC initiated proceedings under the MSMED Act. The petitioner argued that conciliation and arbitration were improperly merged, violating Sections 18(3) of the MSMED Act and relevant sections of the Arbitration Act.

Legal Grounds for Writ (Paras 7-15)

• Alternative Remedy: Petitioner invoked Articles 226/227 to bypass the statutory pre-deposit under Section 19. Citing cases like Jharkhand Urja and India Glycols Ltd., the petitioner argued the award was "not an award in the eyes of law."

Judgment Analysis (Paras 16-23)

• Court's View on Writ Jurisdiction: The court reiterated that writ jurisdiction should be sparingly used in cases with clear statutory appeal procedures unless the award is patently without jurisdiction.
• Dismissing the Writ Petition: Given the appeal mechanism under Section 34, the court declined to exercise its writ powers.

Ratio Decidendi:

The court held that exercising writ jurisdiction to avoid a statutory pre-deposit under Section 19 of the MSMED Act would contravene the legislative intent, emphasizing that errors in awards should be addressed through designated appeal mechanisms under arbitration laws.

Subjects:

Judicial Review of MSMED Facilitation Council Award and Statutory Pre-deposit Requirements

MSMED Act, Arbitration, Writ Jurisdiction, Bombay High Court, Arbitration Act