MSMED Act reference: writ interference is limited, and jurisdictional objections may be raised before the arbitral forum itself.

A reference under Section 18 of the MSMED Act triggers the statutory conciliation-and-arbitration mechanism, with the Arbitration and Conciliation Act, 1996 applying to the proceedings. Jurisdictional and maintainability objections, including the contention that the dispute arose from work contracts, may be raised before the arbitral forum itself. In view of that special statutory process and the limited scope for writ interference at this stage, the High Court declined to quash or restrain the reference and required the petitioner to participate in the arbitration while pursuing its objections before the tribunal.

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Issues: Whether the writ petitioner was entitled to have the reference before the Micro and Small Enterprises Facilitation Council recalled or restrained on the ground that the dispute arose out of work contracts and that jurisdictional objections should be decided before arbitration.

Analysis: The dispute arose from references made under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006. The statutory scheme under Section 18 contemplates conciliation first and, if unsuccessful, arbitration by the Council or a designated institution, with the Arbitration and Conciliation Act, 1996 applying to such proceedings. The Court noted that the writ petitioner's jurisdictional and maintainability objections could be raised before the arbitral forum itself. In view of the special statutory mechanism and the limited scope for writ interference at that stage, no ground was made out to quash or prohibit the reference proceedings.

Conclusion: The objection to the MSMED Act reference was rejected, and the petitioner was required to participate in the arbitration while pursuing its jurisdictional objections before the tribunal.

Ratio Decidendi: Where a reference is made under Section 18 of the MSMED Act, the writ court should not pre-empt the statutory arbitration process merely because jurisdictional objections are raised, as those objections may be decided by the arbitral forum itself.

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