The central legal point established in the judgment is that the benefits under the MSMED Act, 2006 would not apply if the registration under the Act was obtained subsequently, as clarified by the Supreme Court judgments in Silpi Industries Etc. and Gujarat State Civil Supplies Corporation Limited v. Mahakali Foods Private Ltd.

JUDGMENT

Prathiba M. Singh, J. (Oral)

1. This hearing has been done through hybrid mode.

2. The present petition has been filed by the Petitioner-M/s. Quickdel Logistics Pvt. Ltd. challenging the impugned reference notice dated 16th June 2022 under the Micro Small and Medium Enterprise Development Act, 2006 (hereinafter `MSMED Act') by the Micro and Small Enterprises Facilitation Council(hereinafter `MSEFC').

3. The case of the Petitioner is that it had entered into an agreement with the Respondent No.3-M/s Sangeeta Cargo Movers on 1st October, 2013 for providing courier and cargo services on credit basis. Further, an addendum agreement dated 14th January, 2015 was also executed between the parties. The said Respondent No.3 was stated to have been registered under the MSMED Act only on 21st July, 2018 and sought to raise disputes against the Petitioner. The MSEFC initially started conciliation proceedings. However, the reference to arbitration proceedings was made by the MSEFC thereafter.

4. The matter was referred to the Delhi Arbitration Centre which has also appointed a Sole Arbitrator on 16th June, 2022. At that stage, the Petitioner approached this Court challenging the reference made by the MSEFC.

5. Vide order dated 7th July, 2022, the Court had noticed the judgment of the Supreme Court in Silpi Industries Etc. vs. Kerala State Road Transport Corp & Another 2021 SCC Online SC 439 and had stayed the arbitration proceedings. Notice was issued to the Respondents.

6. On 30th November, 2022, Respondent No. 3 had entered appearance. However, thereafter the Respondent No.3 has not appeared and neither has it filed the counter affidavit.

7. Clearly, as is evident from the facts in the present case, the registration of the Respondent No.3 under the MSME Act is subsequent to the award of the contract as also the completion of the contract in November, 2015. In fact an FIR also appears to have been registered in respect of the rendering of services by the Respondent No.3 in December, 2015.

8. Following the dictum of the Supreme Court in M/s Silpi Industries vs. Kerala State Road Transport Corporation (supra) as also the view taken by this Court in WP(C) 9608/2022 titled Malani Construction Company v. Delhi International Arbitration Centre & Ors., the reference would not sustain. The relevant extract of the said decision reads:

"11. In both MSEFC cases, the date of registration admittedly being after the date of the last invoice having been raised, the ratio in Silpi Industries (supra) would clearly be applicable to this case. In Silpi Industries (supra) the Supreme Court has clearly held as under:

"26. Though the appellant claims the benefit of the provisions under MSMED Act, on the ground that the appellant was also supplying as on the date of making the claim, as provided under Section 8 of the MSMED Act, but same is not based on any acceptable material. The appellant, in support of its case placed reliance on a judgment of the Delhi High Court in the case of GE T&D India Ltd. v. reliable Engineering Projects and Marketing, but the said case is clearly distinguishable on facts as much as in the said case, the supplies continued even after registration of entity under Section 8 of the Act. In the present case, undisputed position is that the supplies were concluded prior to the registration of the supplier. The said judgment of the Delhi High Court relied on by the appellant also would not render any assistance in support of the case of the appellant. In our view, to seek the benefit of provisions under MSMED Act, the seller should have registered under the provisions of the Act, as on the date of entering into the contract. In any event, for the supplies pursuant to the contract made before the registration of the unit under provisions of the MSMED Act, no benefit can be sought by such entity, as contemplated under MSMED Act. While interpreting the provisions of Interest on Delayed Payments to Small Scale and Ancillary In