The MSMED Act applies to work contracts, and the parties are bound to follow the mechanism provided under Section 18 of the Act, including participation in arbitration and the Tribunal's jurisdiction.

JUDGMENT :

Rajarshi Bharadwaj, J.

(Through Video Conference)

1. The instant writ petition has been filed in the Original side of this Hon’ble Court. The appellant/writ petitioner being aggrieved by and dissatisfied with the order dated 16.12.2021 as modified by another order dated 24.12.2021 passed by the Hon’ble Justice Rajasekhar Mantha in WPO No.1231 of 2021 has preferred the instant appeal.

2. The facts in a nutshell are that the appellant/writ petitioner, herein NBCC (India) Limited, a Government of India enterprise during a time period of 30.07.2015 to 19.08.2016 had issued four work orders of different values, inter alia, awarding respondent no.4, herein Saket Infra Developers Private Limited for undertaking the same. Again, on 15.09.2017, the appellant awarded the work contract of MSTC Building at New Town to respondent no.4.

3. On 19.11.2016, the respondent no.4 registered itself as a small enterprise under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. Amongst the five work orders undertaken by respondent no.4, two have been terminated for breach of contract by the respondent no.4 and the work has been taken up by new agencies at the risk and cost of the respondent no.4. However, two project works are still continuing and one has been completed. Furthermore, some disputes and discords have arisen between the appellant and the respondent no.4 in connection with the aforesaid five contracts out of which the MSTC Limited’s project work has already culminated into a commercial suit before the Commercial Court at Rajarhat. The respondent no.4 in connection with all the aforementioned five projects, had lodged a claim before the respondent no.2, herein the Chairman of the West Bengal State Micro and Small Enterprise Facilitation council under the MSMED Act to which the appellant objected on the ground of maintainability and also made representation for recalling of the order of reference on jurisdictional grounds. However, upon the receipt of the claim the authorities took cognizance and on failure of the conciliation sought to initiate statutory arbitration.

4. On 22.09.2021, the respondent no.2 issued a notice fixing the first date of arbitration under the said MSMED Act, referring disputes and differences to Arbitration under five several contracts with the respondent no.4 under Section 18(2) and 18(3) of the MSMED Act, 2006 which states :

“18. Reference to Micro and Small Enterprises Facilitation Council.— (1) Notwithstanding anything contained in any other law for the time being in force, any party to a dispute may, with regard to any amount due under section 17, make a reference to the Micro and Small Enterprises Facilitation Council. (2) On receipt of a reference under sub-section (1), the Council shall either itself conduct conciliation in the matter or seek the assistance of any institution or centre providing alternate dispute resolution services by making a reference to such an institution or centre, for conducting conciliation and the provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to such a dispute as if the conciliation was initiated under Part III of that Act. (3) Where the conciliation initiated under sub-section (2) is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer it to any institution or centre providing alternate dispute resolution services for such arbitration and the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section (1) of section 7 of that Act.”

5. However, the appellant again objected on some elementary issue stating that the respondents cannot proceed under the MSMED Act and further, on the date of the awarding of the four work contracts, the respondent no.4 was not registere