NDLI: Gujarat State Civil Supplies Corporation Ltd. Vs. Mahakali Foods Pvt. Ltd. (unit 2) & Anr

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	2006 (MSMED) Act Arbitration and Conciliation Micro Small and Medium Enterprises Development Act
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Disposed Off
Headnote	Arbitration and Conciliation Act, 1996 – s. 37 – Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) – Whether the provisions of Chapter-V of the MSMED Act, 2006 would have an effect overriding the provisions of the Arbitration Act, 1996? – Held :One of principles of statutory interpretation relevant for our purpose is contained in the Latin maxim “leges posteriors priores contrarias abrogant” (the later laws shall abrogate earlier contrary laws) – Another relevant rule of construction is contained in the maxim “generalia specialibus non derogant” (General laws do not prevail over Special laws) – When there is apparent conflict between two statutes, the provisions of a general statute must yield to those of a special one – MSMED Act, 2006 being a special law and Arbitration Act, 1996 being a general law, the provisions of MSMED Act would have precedence over the Arbitration Act – It is settled legal position that no agreement entered into between the parties could be given primacy over the statutory provisions – When the Special Act i.e., MSMED Act, 2006 has been created for ensuring timely and smooth payment to the suppliers who are the micro and small enterprises, and to provide a legal framework for resolving the dispute with regard to the recovery of dues between the parties under the Act, also providing an overriding effect to the said law over any other law for the time being in force, any interpretation in derogation thereof would frustrate the very object of the Act.Arbitration and Conciliation Act, 1996 – s. 37 – Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) – Whether any party to a dispute with regard to any amount due under Section 17 of the MSMED Act, 2006 would be precluded from making a reference to the Micro and Small Enterprises Facilitation Council under sub-section (1) of Section 18 of the said Act, if an independent arbitration agreement existed between the parties as contemplated in Section 7 of the Arbitration Act, 1996? Held : That no party to a dispute covered under Section 17 of the MSMED Act, 2006 would be precluded from making a reference to the Facilitation Council under Section 18(1) thereof, merely because there is an arbitration agreement existing between the parties – S 18(1) of the MSMED Act, 2006 is an enabling provision which gives the party to a dispute covered under Section 17 thereof, a choice to approach the Facilitation Council, despite an arbitration agreement existing between the parties.Arbitration and Conciliation Act, 1996 – s. 37 – Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) – Whether the Micro and Small Enterprises Facilitation Council, itself could take up the dispute for arbitration and act as an arbitrator, when the council itself had conducted the conciliation proceedings under sub-section (2) of the Section 18 of the MSMED Act, 2006 in view of the bar contained in Section 80 of the Arbitration Act,1996? Held: In affirmative – Section 38 of the Arbitration Act, 1996 contains a bar that the Conciliator shall not act as an Arbitrator in any arbitral proceedings in respect of a dispute that is subject of conciliation proceedings, the said bar stands superseded by the provisions contained in Section 18 read with Section 24 of the MSMED Act, 2006 – The provisions of Arbitration Act, 1996 would apply to the proceedings conducted by the Facilitation Council only after the process of conciliation initiated by the council under Section 18(2) fails and the council either itself takes up the dispute for arbitration or refers to it to any institute or centre for such arbitration as contemplated under Section 18(3) of the MSMED Act, 2006
Judge	Hon'ble Ms. Justice Bela M. Trivedi
Neutral Citation	2022 INSC 1140
Petitioner	Gujarat State Civil Supplies Corporation Ltd.
Respondent	Mahakali Foods Pvt. Ltd. (unit 2) & Anr
SCR	[2022] 19 S.C.R. 1094
Judgement Date	2022-10-31
Case Number	8008

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