JUDGMENT

Prathiba M. Singh, J.

1. This hearing has been done through hybrid mode.

2. This petition raises an important issue arising out of the Micro Small and Medium Enterprises Development Act, 2006 (hereinafter ‘MSMED Act, 2006’).

3. The question that is to be determined is –

Whether the Micro & Small Enterprises Facilitation Council (MSEFC) can entertain references to arbitration from Medium Enterprises, in addition to those made by Micro or Small Enterprises under the MSMED Act, 2006?

Brief Facts

4. The Petitioner – Sterlite Power Transmission Limited seeks quashing/ setting aside of the impugned reference order dated 27th October, 2021 passed by Respondent No.2 – Sub-Divisional Magistrate (East), Government of NCT of Delhi, acting as Micro and Small Enterprises Facilitation Council under the MSMED Act, 2006 (hereinafter, ‘MSEFC’). By the impugned reference order the reference filed by the Respondent No. 1 - M/s EPC Solutions LLP under Section 18 of MSMED Act, 2006 has been forwarded to the Delhi International Arbitration Centre (DIAC).

5. An agreement dated 15th September, 2017 was entered into by the Petitioner with Respondent No. 1 for providing vacuum pumps and engineers for PMC of 400kv Transmission Line on a rental basis on the project site in the State of Jammu & Kashmir. The effective date of the agreement was 5th September, 2017. As per the work order, the deployment of the engineer for PMC of GIS substation was for 90 days, deployment of the engineer for PMC of 400kV line was for 60 days and the supply for the vacuum pumps was for a period of 90 days from the effective date. Thus, as per the Petitioner the said agreement came to an end in November, 2017. It is stated by the Petitioner that the original value of the vacuum pumps is Rs. 9,41,084/-.

6. The case of the Petitioner is that Respondent No.1 failed to lift the vacuum pumps from the project site due to which disputes arose between the parties in respect of return of the said vacuum pumps. In view of the same, Respondent No.1 filed reference application before the MSEFC raising a claim of Rs. 20,27,31,392/-. Respondent No.1 also filed its Udhyam Registration certificate along with the reference application. The same has been placed on record and shows the Respondent No.1’s registration under the MSMED Act, 2006 as a medium enterprise. The date of filing as provided in the said certificate is 12th June, 2019. The same contains a reference to a previous registration bearing No.

DL07D0000528.

7. The claim filed by the Respondent No.1 was communicated to the Petitioner by the MSEFC. In response to the claim, the Petitioner took an objection that the provisions of the MSMED Act, 2006 would be applicable only to a micro or small enterprise and not to a medium enterprise. Accordingly, the jurisdiction of MSEFC was challenged by the Petitioner vide application dated 19th October, 2021 filed before the MSEFC. Thereafter, hearings were conducted in the conciliation proceedings before the MSEFC however, the same did not fructify into a settlement. Resultantly, the MSEFC referred the matter for arbitration to DIAC vide the impugned order dated 27th October, 2021. The same is challenged in the present petition.

8. In the present petition, vide order dated 6th December, 2021 notice was issued to the Respondents and counter affidavit/ short note was called from the Respondent No.1 explaining as to how it was entitled to refer the complaint to the DIAC. Vide the same interim order, DIAC was also directed not to commence arbitration proceedings.

9. In the counter affidavit/ short note filed by the Respondent No.1 it is submitted that Respondent no. 1 was a Micro enterprise prior to and during the period of dispute, the Udhyam Registration certificate of Respondent No.1 as a Micro enterprise is also relied upon.

10. It is submitted in the counter affidavit/ short note that in anticipation of a joint venture in the year 2018, the Respondent no. 1 got itself upgraded to the status of medi