ORDER :

1. The case of the petitioner is as follows:

The petitioner, who is a partnership firm, is in the business of Civil Constructions in 2014. The petitioner had registered itself as an Enterprise under the Micro, Small and Medium Development Enterprises Act, 2006, (for short ‘the Act’) on 28.11.2020.

2. The petitioner had entered into a contract with the 3rd respondent on 14.06.2018 for undertaking construction in a multistoreyed residential complex, viz., “Srivalli Pravas” at Kaja, Guntur District. However, the said contract could not be executed. As the petitioner had already stationed sizeable plant and machinery at the site, a further agreement, termed as a Memorandum of Understanding, was entered between the petitioner and the 3rd respondent on 20.05.2020. As per this Memorandum of Understanding, the 3rd respondent had agreed to pay a sum of Rs.253 lakhs + GST to the petitioner as consideration for the plant and machinery handed over to the 3rd respondent.

3. The 3rd respondent did not make the payment due to the petitioner. Therefore, the petitioner approached the 2nd respondent- Facilitation Council, under the provisions of the Act for recovery of its dues. This application was rejected by the 2nd respondent in the meeting held on 22.06.2021 and the said decision was communicated to the petitioner by letter bearing Reference No.21C/IFC 2021/427 dated 23.09.2021. The endorsement in the said letter is as follows:

“As per the Udyam registration certificate, the permissible activity for the petitioner is construction of building. The petitioner made claim for not honouring the MOU, where payment is to be made for the Plant & Machinery sold. As the activity is neither manufacturing nor servicing and only trading activity. It is beyond the scope of the Council. Hence the application is not admissible for adjudication under MSMED Act, 2006.”

4. The petitioner, being aggrieved by the said rejection of its claim, has approached this Court by way of the present writ petition. It is the contention of the petitioner that the petitioner has already been recognised as an Enterprise falling within the ambit of the Act and the claim was made was for recovery of consideration, payable on account of sale of plant and machinery, which are goods.

5. Sri S. Ram Babu, learned counsel for the petitioner, submits that the endorsement of 23.09.2021 requires to be set aside and seeks a direction from this Court to the 2nd respondent to consider the application of the petitioner bearing No.UDYAM-AP-06-0004450/S/00001, dated 06.02.2021. He contends that once the petitioner has been recognised as an Enterprise falling within the ambit of the Act, the petitioner would be entitled for the benefit of the Act and the 2nd respondent would have to consider any claim made by the petitioner for recovery of money due on account of sale of goods or supply of services.

6. In the present case, the petitioner is seeking recovery of money payable on account of the sale of goods, viz., plant and machinery of the petitioner. He further contends that the view taken by the 2nd respondent that sale of plant and machinery is a trading activity and would not fall within the ambit of the provisions of the Act, is clearly incorrect. He submits that this issue had been considered by a learned Single Judge of the Hon’ble High Court of Bombay in the case of Shah & Parikh, Engineers & Contractors vs. Urmi Trenchless Technology Pvt. Ltd., and Ors., 2019 SCC OnLine Bom 340.

7. The 3rd respondent has filed a counter affidavit raising various disputes regarding the liability of the 3rd respondent to make any payment. The 3rd respondent would also submit that the relief sought by the petitioner cannot be granted, as there is an effective alternative remedy available under the agreement dated 14.06.2018. The 3rd respondent contends that Clause-38 of the said agreement provides for reference of all disputes to arbitration and any claim of the petitioner would have to be decided