The applicability of the MSME Act, 2006 is contingent on the registration of the entity as an MSME being prior to the completion of the works.

JUDGMENT

Prathiba M. Singh, J. (Oral)

1. This hearing has been done through hybrid mode.

2. The issue that has arisen in these cases is whether reference could have been made by the Micro and Small Enterprises Facilitation Council (MSEFC) to the DIAC, considering that the Respondents got registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act, 2006) post the work order having been placed and the work having already been executed.

3. The Petitioner - Municipal Corporation of Delhi has challenged the impugned reference orders passed by the MSEFC, GNCTD (North) under the MSME Act, 2006.

4. The said references were issued by the MSEFC pursuant to agreements between the Petitioner and the Respondents. Due to certain disputes arising out of the agreements between the parties, the herein Respondents approached the MSEFC, which was the subject matter of the following reference orders and cases:

5. Both parties submit that the present petitions would be covered by the decision dated 16th March, 2023 passed by this Court in W.P.(C) 16891/2022 titled Municipal Corporation of Delhi v. Ram Prakash. The relevant part of the same is as under:

"7. Heard. In the judgements of Shilpi Industries (Supra) and Gujarat State Civil Supplies Corporation ltd. v. Mahakali Foods Pvt. Ltd. (unit 2) & Anr., (2022 SCC Online SC 1492) passed by the Hon'ble Supreme Court it has been held as under:

"M/s Shilpi Industries vs. Kerala State Road Transport Corporation, (2021 SCC Online SC 439)

"26. Though the appellant claims the benefit of 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 registration of supplier. The said judgment of 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 Industrial Undertakings Act, 1993, this Court, in the judgment in the case of Shanti Conductors Pvt. Ltd. & Anr. etc. v. Assam State Electricity Board & Ors. etc. has held that date of supply of goods/services can be taken as the relevant date, as opposed to date on which contract for supply was entered, for applicability of the aforesaid Act. Even applying the said ratio also, the appellant is not entitled to seek the benefit of the Act. There is no acceptable material to show that, supply of goods has taken place or any services were rendered, subsequent to registration of appellant as the unit under MSMED Act, 2006. By taking recourse to filing memorandum under sub-section (1) of Section 8 of the Act, subsequent to entering into contract and supply of goods and services, one cannot assume the legal status of being classified under MSMED Act, 2006, as an enterprise, to claim the benefit retrospectively from the date on which appellant entered into contra