The MSMED Act prevails over A&C Act provisions regarding interest, granting small enterprises specific rights on delayed payments independent of dispute resolution processes.

JUDGMENT

Vibhu Bakhru, J. (Oral)

1. The petitioner (hereafter `IHMCL') has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter `the A&C Act') impugning an arbitral award dated 11.10.2021 (hereafter `the impugned award') rendered by an Arbitral Tribunal constituted by Justice (Retired) Badar Durrez Ahmed as the Sole Arbitrator (hereafter `the Arbitral Tribunal').

2. The Arbitral Tribunal has rendered the impugned award in the context of disputes that have arisen between the parties in relation to a contract dated 28.10.2014 for "Conducting Traffic Surveys on National Highways in Zone-5 (in the States of Odisha, West Bengal and North Eastern States) using Portable Automatic Traffic Counter & Classified (ATCC) Systems" (hereafter `the Contract').

Factual Context

3. The respondent (hereafter `SOWiL') is a small enterprise under the Micro, Small, Medium Enterprise Development Act, 2006 (hereafter `the MSMED Act') and is, inter alia, engaged in the business of providing consultancy services to various organizations for development works, railway works, bridges, structures and tunnelling.

4. IHMCL is a public limited company incorporated under the Companies Act, 1956 and provides services in relation to management of toll collection on National Highways through electronic toll systems; assessment of the volume of traffic; and collection of data through traffic surveys using portable Automatic Traffic Counter-cum-Classifiers (ATCC).

5. The Ministry of Road Transport and Highways (hereafter `MORTH') had instructed IHMCL to conduct traffic surveys on the National Highways in India. Accordingly, on 13.05.2015, IHMCL issued a Request for Proposal (hereafter `2014 RFP') inviting bids for conducting traffic surveys using portable ATCC in seven zones on the National Highways in India (hereafter `the Project'). SOWiL participated in the bid for Zone-5 and was declared as the successful bidder.

6. IHMCL issued a Letter of Award (hereafter `LOA') to SOWiL on 13.08.2014. Consequently, on 28.10.2014, the parties entered into the Contract in respect of the aforesaid Project, for a contract value of Rs.68,03,80,000/-. In terms of the Contract, SOWiL agreed to conduct traffic surveys twice a year for a period of five years, at the specified locations.

7. SOWiL claims that, during the term of the Contract, IHMCL issued another RFP on 08.03.2018 bearing no. IHMCL/Portable-ATCC/March/2018 (hereafter `the 2018 RFP') and invited bids on a `Price Discovery Mechanism' for the balance works being carried out by SOWiL in Zone-5. Thereafter, IHMCL expressed its intention to terminate the Contract in terms of Article 12.2 of the Contract.

8. It is SOWiL's case that IHMCL's proposed invocation of Article 12.2 of the Contract to terminate the Contract during its tenure, for convenience, is a breach of the terms of the Contract. IHMCL countered the same and stated that an exercise of price discovery is not a breach of the Contract. It further contended that the prices under the 2014 RFP were higher and thus, it intended to award the remaining four rounds at a lower rate to save public money.

9. Aggrieved by the same, SOWiL filed a petition before this Court under Section 9 of the A&C Act [being OMP (I) (COMM) 169/2018] and by an order dated 19.04.2018, this Court restrained IHMCL from terminating the Contract. This Court, by an order dated 24.04.2018, further restrained IHMCL from awarding contracts pursuant to the 2018 RFP to any third party in respec