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The SC held that the Limitation Act does not apply to conciliation proceedings under Section 18(2) of the MSMED Act, and time-barred claims may be referred to conciliation, resulting in a valid settlement agreement enforceable as a contract. Conciliation is a voluntary process and cannot coerce parties into settlement. However, arbitration proceedings under Section 18(3) of the MSMED Act are subject to the Limitation Act, including Section 43, due to the overriding effect of the MSMED Act provisions over the ACA. Thus, while suppliers can recover time-barred debts through conciliation, arbitration claims must comply with limitation periods. The appeal was allowed in part, affirming the applicability of the Limitation Act to arbitration but not to conciliation under the MSMED Act.
The SC held that the Limitation Act does not apply to conciliation proceedings under Section 18(2) of the MSMED Act, and time-barred claims may be referred to conciliation, resulting in a valid settlement agreement enforceable as a contract. Conciliation is a voluntary process and cannot coerce parties into settlement. However, arbitration proceedings under Section 18(3) of the MSMED Act are subject to the Limitation Act, including Section 43, due to the overriding effect of the MSMED Act provisions over the ACA. Thus, while suppliers can recover time-barred debts through conciliation, arbitration claims must comply with limitation periods. The appeal was allowed in part, affirming the applicability of the Limitation Act to arbitration but not to conciliation under the MSMED Act.
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