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2025 Supreme(Online)(Guj) 6514
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
MRS. JUSTICE SUNITA AGARWAL, CJ, MR.JUSTICE D.N.RAY, J
KSY DYNAMIC SECURITY PVT LTD – Appellant
Versus
ROHTAK-HISSAR TOLLWAY PVT LTD – Respondent
FIRST APPEAL NO. 286 of 2025
For the Appellants/Petitioners: MR JF MEHTA
For the Respondents:MR BOMI H. SETHNA ADVOCATE WITH MR KIRAT M PARIKH
An MSME's earlier registration is valid for the jurisdiction of arbitration awards, despite subsequent transitions to formal designation.
Headnote:(A) Micro Small & Medium Enterprises Development Act, 2006 - Section-18 - Executing Court dismissed execution petition for an award based on jurisdiction grounds, ruling the petitioner registered as MSME after the service agreement execution - Court found earlier registration under MSME valid prior to the transition to 'Udyam Registration' and concluded the execution petition should not have been dismissed. (Paras 1, 8)
(B) Jurisdictional Authority - The court examined the effect of the service timeline and argued the prerogative regarding awards and arbitrator appointment was misunderstood by the lower court. (Para 2)
Facts of the case:
The petitioner, registered as an MSME, sought execution of the award from an arbitrator post-service agreement amid disputes over the timeline of MSME registration and jurisdiction.
Findings of Court:
The dismissal of the execution petition was found illegal, setting aside the earlier decision, and ordered prompt review of the original execution petition.
Issues: The main issues were concerning the legitimacy of the award under the MSME Council's jurisdiction and the correct timeline regarding MSME registration.
Ratio Decidendi: The court ruled that the Commercial Court committed a manifest error in dismissing the execution case for a lack of competence pertaining to the arbitrator and the MSME Council's jurisdiction, emphasizing the rightful execution of the petition.
Result: The petition is allowed, and the execution petition is revived.
| Table of Content |
|---|
| 1. jurisdictional basis for the execution petition. (Para 1 , 2) |
| 2. registration under msme is valid from earlier documents. (Para 3 , 4 , 5) |
| 3. transition from udyog aadhaar to udyam registration certificate. (Para 6 , 7) |
| 4. evaluating the correctness of lower court's dismissal. (Para 8) |
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
1. Though in the cause-title of the present appeal, reference is made to various provisions of the Civil Procedure Code to maintain the present appeal as a First Appeal against the order passed by the executing Court, however, during the course of argument, the learned counsel for the appellant would submit that the present appeal may be converted into a petition under Article 227 of the Constitution of India and the validity of the order passed by the executing Court, which is the Civil Court, over which the High Court is having supervisory jurisdiction, may be looked into. To this submission, no plausible objection could be taken by the learned counsel for the respondent. We, therefore, have proceeded to examine the correctness of the order dated 02.05.2024 passed by the Judge, Commercial Court, City Civil Court, Ahmedabad in Commercial Execution Petition No.301 of 2023, which has been filed seeking for execution of the award passed by the Arbitrator under Section-18 of the Micro Small & Medium Enterprises Development Act, 2006 [for short referred to as the ‘MSMED Act’] dated 12.09.2022.
2. We may note that the only ground for dismissing the execution petition is that the award holder namely, the petitioner herein got registration as an MSME Unit under the MSME Act, 2006 only on 07.05.2021, whereas the service agreement was executed between the parties on 01.06.2016. It is recorded by the Commercial Court that the petitioner/ award holder had applied for the registration under the MSME Act on 04.05.2016 and the certificate of registration as a Member [MSME] was issued on 07.05.2021. The conclusion, thus, is that the award passed by the Arbitrator appointed by MSME Council, under Section-18 of the MSME Act, 2006 is a nullity, inasmuch as, MSME Council had no jurisdiction to deal with the matter.
3. This decision of the executing court is sought to be assailed by bringing documents of the registration of the petitioner as a Small Scale Unit initially with the National Small Industries Corporation Limited. The registration certificate dated 22.01.2015 has been brought on record at Page-137 of the Paper-book, which demonstrates that the petitioner got Government Purchase Enlistment Certificate dated 22.01.2015. However, the petitioner has applied on 04.05.2016 under the Ministry of Micro, Small & Medium Enterprises for grant of ‘Udyog Aadhaar Memorandum’, which is at Page-139 of the Paper-book. In order to demonstrate that the date of application as 04.05.2016 mentioned on the certificate at Page-139 would be the date of issuance of the certificate, two facts are brought before us; firstly, that the document at Page-139 contains a statement “The Udyog Aadhaar Memorandum (UAM) Certificate” is valid till 30.06.2022”. Secondly, at Page-286 of the Paper-book, a copy of the E-mail of the Competent Authority, namely, NSIC Ltd. dated 04.05.2016 has been appended wherein, it is stated that “Your SSI certificate/EM Part-II has replaced with udyog aadhar from 01.05.2016, kindly send us your Udyog Aadhaar Memorandum on urgent basis.”
4. Based on the above two documents, a categorical statement has been made in the additional affidavit dated 05.02.2025 filed by the petitioner herein that the e-mail dated 04.05.2016 sent by the NSIC Ltd. unequivocally establishes that the ‘Udyog Aadhaar Memorandum’ was issued on 04.05.2016 itself. The said certificate was further modified as ‘Udyam Registration Certificate’, the date of registration whereof is mentioned as 07.05.2021.
5. Placing the document at Page-140, 141 and 288 to the Paper-book, it is demonstrated by the learned counsel for the p
