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Issues: (i) Whether the Facilitation Council could, on the failure of the buyer to appear in conciliation proceedings, straightaway pass a final order without first terminating conciliation and initiating arbitration under the statutory scheme. (ii) Whether the challenge was barred because the appellant had not invoked the remedy under the Arbitration and Conciliation Act, 1996 and had approached the court belatedly.
Issue (i): Whether the Facilitation Council could, on the failure of the buyer to appear in conciliation proceedings, straightaway pass a final order without first terminating conciliation and initiating arbitration under the statutory scheme.
Analysis: The statutory framework requires the Council first to conduct conciliation and, only if that conciliation fails and stands terminated, to either take up the dispute for arbitration itself or refer it to an appropriate institution. Conciliation and arbitration are distinct stages and cannot be clubbed together. A final determination on the very first date of appearance, merely because the buyer did not attend conciliation, does not satisfy the mandatory procedure under the MSMED Act and the Arbitration and Conciliation Act, 1996.
Conclusion: The impugned order was without jurisdiction in law and could not be treated as a valid arbitral award.
Issue (ii): Whether the challenge was barred because the appellant had not invoked the remedy under the Arbitration and Conciliation Act, 1996 and had approached the court belatedly.
Analysis: The ordinary challenge to an arbitral award is under Section 34, but that remedy presupposes the existence of a lawful arbitral award. Where the Council acts in disregard of the mandatory statutory procedure and no valid arbitration has taken place, the order is a nullity and the Section 34 bar does not apply. The delay objection was also rejected because the surrounding events showed that the challenge was not abandoned and the respondent had received part-payment without protest.
Conclusion: The writ challenge was maintainable and was not defeated by alternate remedy or laches.
Final Conclusion: The Council's order was quashed, the High Court's judgment was set aside, and the matter was left open to be decided afresh through arbitration in accordance with law.
Ratio Decidendi: Under Section 18 of the MSMED Act, conciliation must precede arbitration, and a final determination made without first completing conciliation and then commencing arbitration in accordance with the Arbitration and Conciliation Act, 1996 is a legal nullity not protected by the ordinary Section 34 remedy.
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