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IN THE HIGH COURT OF ORISSA AT CUTTACK
SANJEEB K.PANIGRAHI
Bridge and Roof Company (India) Ltd. Kolkata – Appellant
Versus
State of Orissa – Respondent
| Table of Content |
|---|
| 1. petition seeks to quash earlier proceedings. (Para 2) |
| 2. petitioner claims lack of jurisdiction of the msefc. (Para 3 , 4) |
| 3. issues surround jurisdiction and nature of works contracts. (Para 5 , 6 , 7 , 8 , 9) |
| 4. judicial interpretations limit msmed act to specific contracts. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18) |
| 5. court holds works contracts outside msmed act. (Para 20 , 21 , 22) |
| 6. writ jurisdiction invoked due to inherent jurisdictional issue. (Para 24 , 25 , 26 , 27 , 28) |
| 7. writ petition allowed, previous order quashed. (Para 29 , 30 , 31) |
JUDGMENT :
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.
2. The brief facts of the case are as follows:
(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
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.
The MSEFC lacks jurisdiction to adjudicate disputes arising from works contracts, which necessitate arbitration under traditional frameworks, not the MSMED Act.
The Facilitation Council lacks jurisdiction over disputes arising from works contracts under the MSME Act, and principles of natural justice must be adhered to in adjudicatory processes.
The court upheld that statutory remedies under the MSMED Act take precedence over private arbitration agreements, affirming the Facilitation Council’s jurisdiction in disputes involving MSMEs.
The MSMED Act operates as a special beneficial legislation, overriding the Arbitration Act in cases involving registered MSMEs, emphasizing exclusive jurisdiction of MSEFC for dispute resolution.
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....
The Act does not apply to works contracts with an element of supply and not mere supply and service contracts. The contractors must file the memorandum under section 8 of the Act to claim the benefit....
The Council has jurisdiction to adjudicate disputes in cases of works contracts, even if there is an arbitration clause in the contract.
The court ruled that a contract involving both supply and installation qualifies as a works contract, which is outside the jurisdiction of MSMED Act, leading to the Arbitrator's award being set aside....
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