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* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 9th May, 2023 Date of decision: 5th July, 2023 + W.P.(C) 16588/2022 and CM APPL. 52144/2022, 52145/2022 M/S GRAND MUMTAZ HOTEL AND RESORT THROUGH ITS MANAGING PARTNER MR WASIM MUSHTAQ ..... Petitioner Through: Mr. Shekhar Dasi and Mr. Ayush Dassi, Advocates (M-9871655327)

versus DEPUTY COMMISSIONER NORTH EAST GOVERNMENT OF NCT OF DELHI & ORS. ..... Respondents Through: Ms. Mehak Nakra, ASC with Mr.

Karan Kapur, Advocate for R-1 (M:9871144582)

Dr. Farrukh Khan, Mr. Anup Kr. Nagar, Mr. Aman Rai and Ms. Shagun Sarohi, Advocates for R-2 (M:9205029846).

CORAM:

JUSTICE PRATHIBA M. SINGH

JUDGMENT

Prathiba M. Singh, J.

1. This hearing has been done through hybrid mode.

2. This petition raises important issues under the Micro Small and Medium Enterprises Development Act, 2006 (hereinafter ‘MSMED Act, 2006’) and has been heard time to time by this Court along with other matters raising similar issues.

3 The question that arises in this petition is –

Signature Not Verified Digitally Signed W.P.(C) 16588/2022 Page 1 of 16 Whether the `Supplier’ ought to be registered under the MSMED Act, 2006 on the date when the contract is executed between the parties, in order to avail of the arbitral mechanism prescribed under the said Act?

Brief Facts

4. The Petitioner - M/s Grand Mumtaz Hotel and Resort seeks quashing/ setting aside of the impugned reference order dated 8th October, 2022 passed by Respondent No.1 - Deputy Commissioner, North East, Government of NCT of Delhi, acting as Micro and Small Enterprises Facilitation Council (hereinafter ‘MSEFC’) under the MSMED Act, 2006. By the impugned order the MSEFC has forwarded the reference sought under Section 18 of the MSMED Act, 2006 by Respondent No.2 - M/s Dhruv Construction & Interiors, to Respondent No.3 - Delhi International Arbitration Centre (DIAC). The Petitioner also challenges the order dated 17th October, 2022 passed by the DIAC by which the parties have been directed to file a statement of claim and reply before it.

5. An agreement dated 9th March, 2018 was entered into between the Petitioner and Respondent No. 2 for the renovation of hotel rooms of the Petitioner’s hotel located in Sonmarg, Jammu & Kashmir. By the said agreement the Petitioner handed over the interiors and other related works for his hotel to the Respondent No. 2.

6. The last invoices raised by the Respondent No. 2 in terms of the aforementioned agreement were on 17th September, 2019 and 18th September, 2019. Thereafter, Respondent No. 2 registered itself under the MSMED Act, 2006 on 25th September, 2020 vide Udhyam Registration No.

DL-05-0001690.

Signature Not Verified Digitally Signed W.P.(C) 16588/2022 Page 2 of 16

7. Certain disputes arose between the parties and a legal notice dated 23rd October, 2020 was issued by Respondent No. 2 to the Petitioner by which alleged due payments were demanded in terms of the provisions of the MSMED Act, 2006. Reply to the said notice was issued by the Petitioner which remained unresolved. In view of the disputes arising out of the agreement, the Respondent No. 2 filed a reference petition under Section 18 of the MSMED Act, 2006 before the Respondent No.1 for recovery of disputed amount to the tune of Rs.92,91,661/-.

8. The Respondent No. 1 issued notice to the Petitioner. The Petitioner raised objections as to the jurisdiction of the MSEFC both in its reply to the notice as also in its written submissions. The grievance of the Petitioner is that the said objection as to the applicability of the MSMED Act, 2006 and the jurisdiction of the MSEFC was not decided by the Respondent No. 1.

9. It is stated that six hearings were held in the conciliation proceedings before the MSEFC however, the same did not fructify into a settlement. Finally, the MSEFC referred the matter to DIAC vide the impugned order dated 08th October, 2022.

10. The DIAC vide the impugned order dated 17th October, 2022 directed the parties to file a statement of claim and reply.