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Issues: (i) Whether a writ petition under Article 226 of the Constitution is absolutely barred against an order passed by the Micro and Small Enterprises Facilitation Council under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006; (ii) if not, in what circumstances the rule of alternative remedy would not apply; and (iii) whether members of the Council who conduct conciliation may thereafter act as arbitrators under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 read with Section 80 of the Arbitration and Conciliation Act, 1996.
Issue (i): Whether a writ petition under Article 226 of the Constitution is absolutely barred against an order passed by the Micro and Small Enterprises Facilitation Council under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006.
Analysis: The Court noted conflicting views between earlier decisions on the scope of writ jurisdiction against orders of the Council. It reaffirmed that the power under Article 226 is plenary and cannot be taken away by statute, while the existence of an alternate statutory remedy is ordinarily a rule of discretion and self-restraint, not an absolute bar. The Court also noted that statutory pre-deposit conditions and the nature of the remedy under the Act raised important questions requiring reconsideration.
Conclusion: The question was not finally answered and was referred to a larger Bench.
Issue (ii): If not, in what circumstances the rule of alternative remedy would not apply.
Analysis: The Court referred to the settled exceptions to the alternative-remedy rule, including violation of natural justice, lack of jurisdiction, and challenge to vires, and observed that hardship created by onerous statutory conditions may also be relevant. It considered that these principles needed authoritative reconsideration in the context of the statutory scheme governing Council proceedings and challenges to its orders.
Conclusion: The question was not finally answered and was referred to a larger Bench.
Issue (iii): Whether members of the Council who conduct conciliation may thereafter act as arbitrators under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 read with Section 80 of the Arbitration and Conciliation Act, 1996.
Analysis: The Court noticed the divergence between decisions on whether the same authority may move from conciliation to arbitration despite the general prohibition in Section 80 of the Arbitration and Conciliation Act, 1996. It found that the interaction between the special statutory scheme and the conciliation-arbitration sequence under the Act required examination by a larger Bench.
Conclusion: The question was not finally answered and was referred to a larger Bench.
Final Conclusion: The appeal did not result in a final merits determination of the statutory questions and the controversy was placed before a larger Bench for authoritative resolution.
Ratio Decidendi: The constitutional writ jurisdiction under Article 226 is not ousted by the mere existence of a statutory remedy, and the effect of an alternate remedy depends on the nature of the statutory scheme and the recognized exceptions to judicial self-restraint.
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