Works contracts cannot invoke the jurisdiction of MSEFC under the MSMED Act, necessitating arbitration under the Arbitration and Conciliation Act, thereby rendering MSEFC proceedings void.

JUDGMENT :

SANJEEB K. PANIGRAHI, J.

1. The present Writ Petition has been preferred seeking setting aside of order dated 30.8.2025, passed by the Directorate of Industries, Cuttack in MSEFC Case No. 68 of 2021.

I. FACTUAL MATRIX OF THE CASE:

2. The brief facts of the case are as follows:

(i) The Petitioner has filed the present Petition to correct a jurisdictional error committed by the MSEF Council, vide its order dated 30.8.2025 and has challenged the impugned order on the ground of lack of inherent jurisdiction by the Council.

(ii) The petitioner, M/s Bridge and Roof Company (India) Limited, is a Government of India undertaking incorporated under the Indian Companies Act, 1913, having its registered office at Kolkata. The petitioner was engaged as the principal contractor for execution of works relating to a power plant project of M/s Bhushan Energy Limited at Dhenkanal, Odisha. In furtherance of the said project, the petitioner issued a work order dated 11.6.2010 in favour of M/s Adarsh Corporation Private Limited, the predecessor-in-interest of Opposite Party No. 3, for execution of structural steel works at the project site.

(iii) The work order dated 11.6.2010 pertained to “Fabrication, Erection and Painting of Structural Steel Work” in connection with the power plant area. The contract is allegedly composite in nature, involving labour, material, design coordination, erection, and site execution. The contract value at the inception stood at approximately Rs. 14.14 crores, subject to revisions. The terms of the work order incorporated the Notice Inviting Tender and Record Notes of Discussion as integral parts of the contractual framework.

(iv) Subsequently, on 19.9.2012, a formal amendment to the work order was issued, recording the change in the name of the contractor from M/s Adarsh Corporation Private Limited to M/s Adarsh Noble Corporation Limited. This amendment did not alter thescope of work but merely acknowledged the corporate name change at the request of the contractor.

(v) A second amendment followed on 29.6.2013, whereby the rates were revised for quantities executed or to be executed after 30.9.2012. Notably, the scope of work remained unchanged, and the contractual obligations continued to be governed by the original terms. Over time, the cumulative value of the contract increased to approximately Rs. 24.50 crores.

(vi) On 28.10.2014, the petitioner addressed correspondence to Opposite Party No. 3 requesting deputation of an authorised representative to discuss the progress and execution of the balance work at site. Records of discussions held thereafter reflected assurances by Opposite Party No. 3 to continue execution and complete pending works within stipulated timelines.

(vii) A third and final amendment to the work order was issued on 25.6.2015, whereby Opposite Party No. 3 undertook to complete the entire scope of work on or before 31.5.2016. This amendment did not enhance rates or expand scope but sought to bring finality to execution timelines.

(viii) In the interregnum, Opposite Party No. 3 applied for Udyog Aadhaar registration on 18.12.2015 under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006. The registration was subsequent to the issuance of the work order and its amendments but prior to certain later events forming part of the dispute.

(ix) On 10.5.2018, the petitioner issued a Mechanical Completion Certifi