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VIBHU BAKHRU, J

1. Bharat Heavy Electricals Limited (hereafter 'the BHEL') has filed these petitions, challenging two separate orders (hereafter 'the impugned orders'), both dated 16.06.2016, passed by the respondent no.1, The Micro and Small Enterprises Facilitations Centre (hereafter 'the MSEFC'). By the impugned orders, MSEFC had recorded its conclusion that resolution of disputes between BHEL and respondent no.2 (hereafter 'DRIPLEX'), by conciliation, was not possible; it had, accordingly, decided to terminate the conciliation proceedings and refer the disputes to Delhi International Arbitration Centre (hereafter 'DIAC') for initiating arbitration proceedings.

2. The parties involved and the controversy raised in these petitions is common and, therefore, both the petitions were taken up and heard together.

3. The principal question involved in the present petitions is whether MSEFC could - in terms of Section 18 (3) of The Micro, Small and Medium Enterprises Development Act, 2006 (hereafter 'the Act') - refer the disputes for arbitration under the aegis of DIAC, considering that the disputing parties had also entered into an arbitration agreement. The General Conditions of Contracts (hereafter 'GCC'), included as a part of the agreements (purchase orders) entered into between the parties, contains an arbitration clause in terms of which the disputes are to be referred to an arbitrator appointed by BHEL. It is BHEL's contention that MSEFC does not have the jurisdiction to override the arbitration agreement and refer the disputes to DIAC. According to BHEL, once MSEFC had concluded that the disputes could not be resolved through conciliation, it could refer the parties to resolve their disputes by arbitration in terms of their agreement but it could not supplant the arbitration agreement. The respondents, both MSEFC and DRIPLEX, dispute the same. According to the respondents, in terms of Section 18(3) of the Act, if the conciliation proceedings initiated is not successful, MSEFC is enjoined to adjudicate the disputes or refer the disputes for arbitration to any institution or centre providing alternate disputes resolution services. The respondents claim that the provisions of Section 18(3) would override the arbitration agreement between the disputing parties.

4.5. It appears that certain proceedings were undertaken by MSEFC for reconciliation of the disputes but since MSEFC found that the same was not possible, MSEFC passed the impugned orders referring the disputes to arbitration under the aegis of DIAC.

Submissions

5. Mr Ashim Vachher, learned counsel appearing for BHEL contended that there was no dispute that MSEFC would have the jurisdiction to undertake the conciliation proceedings in terms of Section 18(3) of the Act. However, the parties could not be referred to arbitration contrary to the arbitration agreement entered into between them. He submitted that Section 18(3) of the Act only provided for the disputes to be resolved by arbitration failing the conciliation proceedings, however, the said arbitration was to be conducted in terms of the agreement between the parties. He canvassed that there was no conflict between the arbitration agreement and the provisions of Section 18(3) of the Act and, the same must be read in an harmonious manner. He relied on the decision of the Bombay High Court in the case of M/s Steel Authority of India v. The Micro, Small Enterprise Facilitation Council and Anr. : AIR 2012 Bom 178 and drew the attention of the Court to paragraph 11 of the said judgment, wherein the Court had observed that "we find that there is no provision in the Act, which negates or renders the arbitration agreement entered between the parties ineffective".

7. Mr Vikram Nandrajog, learned counsel appearing for DRIPLEX supported the contentions advanced on behalf of MSEFC. He further contended that there was a clear conflict between the provisions of Section 18(3) of the Act and the arbitration agreement between BHEL and DRIPLEX (Clause 30 of the GCC) and, therefore, the provisions of the Act would necessarily prevail. He relied on the decision of the Division Bench of Allahabad High Court in BHEL v. State of U.P. and Others : W.P. (C) 11535/2014 decided on 24.02.2014; the decision of the Punjab and Haryana High Court in The Chief Administrator Officer, COFMOW v. MSEFC of Haryana & Ors.: CWP 277/2015 decided on 09.01.2015; the decision of the Calcutta High Court in NPCC Limited and another v. West Bengal State MSEFC & Ors.: GA No. 304/2017 W.P. 294/2016 decided on 16.02.2017; and the decision of a coordinate bench of this Court in GE T & D India Ltd. v. Reliable Engineering Projects and Marketing : OMP (Comm.) No. 76/2016 decided on 15.02.2017, in support of his aforesaid contention. He also referred to the decisions of the Supreme Court in Fair Air Engineers Pvt. Ltd & Anr. v. N.K. Modi : (1996) 6 SCC 385 and National Seeds Corporation Ltd v. M. Madhusudhan Reddy & Anr. :