A writ petition challenging an award under the MSMED Act is generally not maintainable due to the availability of the statutory remedy under Section 34 of the Arbitration and Conciliation Act, 1996, and an entity registered under UAM retains its validity throughout the transition period to UDYAM.

ORDER:

The present writ petition is filed challenging the award dated 28.06.2024 passed by Respondent No.1 under the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter ‘MSMED Act, 2006’). By virtue of the said award, the Petitioner was directed to pay Rs.5,76,658/- along with interest.

2. Heard Mr. T.P.S. Harsha, learned counsel representing Ms. Challa Apoorva Reddy, learned counsel for the Petitioner and Mr. V.V.S.N. Murthy, learned counsel for Respondent No.2 and also learned Government Pleader for Industries and Commerce represented Respondent No.1.

3. The facts in brief are that, the Petitioner herein is in the business of manufacturing and supplying basic chemicals. Respondent No.2 is engaged in the activity of providing transportation services and supply of goods. Both the parties had an ongoing business relationship and Respondent No.1’s freight services were being availed by the Petitioner.

4. Respondent No.1 had raised an invoice of Rs.5,76,658/- for the services rendered pursuant to the work order dated 26.06.2020. As the same was not being paid and highlighting the fact that it was registered under the MSMED Act, 2006, Respondent No.1 filed an application in the Samadhaan portal seeking conciliation of the dispute under Section 18. Respondent No.1 admitted the claim of Respondent No.2 on 31.03.2023. Thereafter, on 26.05.2023, the conciliation proceedings commenced. As the Petitioner failed to participate in the conciliation proceedings, Respondent No.1 referred Respondent No.2’s claim to arbitration.

5. By virtue of the impugned award dated 28.06.2024, Respondent No.1 directed the Petitioner to pay Rs.5,76,658/- along with interest. In the said award, Respondent No.1 noted that, Respondent No.2 enjoyed the status of a supplier under the MSMED Act, 2006, as it was registered under the ‘UDYOG AADHAR/ UDYAM’ schemes.

6. Aggrieved by the impugned award, the Petitioner has filed the present writ petition.

7. This Court had queried the Petitioner as to how the present writ petition is maintainable, when an equally efficacious remedy of challenging the award under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘the Act, 1996’) is available.

8. The Petitioner had relied on T.N. Cements Corpn. Ltd. v. Unicon Engineers , (1. (2025) 4 SCC 1), to contend that it cannot be an absolute rule that no writ petition would ever lie against an award passed under the MSMED Act, 2006. Learned counsel for the Petitioner highlighted that the decision of India Glycols Ltd. v. MSEFC , Telangana, (2. (2025) 5 SCC 780), wherein it was held that a writ petition is not maintainable against an award passed under the MSMED Act, 2006, was doubted in T.N. Cements Corpn. Ltd., (1. (2025) 4 SCC 1). Therefore, the Petitioner prayed that this Court order ‘status quo’ as was done by the Supreme Court vide order dated 24.01.2025 in Ericsson India Pvt. Ltd. v. State of Punjab, (3. SLP (C) Diary No.57817 of 2024).

9. This Court cannot accede to the prayer of status quo made by the Petitioner. The Hon’ble Supreme Court in T.N. Cements Corpn. Ltd., (1. (2025) 4 SCC 1) nor in Ericsson India Pvt. Ltd., (3. SLP (C) Diary No.57817 of 2024), did not hold that in all matters where awards under the MSMED Act, 2006 are challenged, an order of status quo has to be maintained. In fact, T.N. Cements Corpn. Ltd., (1. (2025) 4 SCC 1) only stated that there may a few exceptional cases where a writ petition may lie against an award under the MSMED Act, 2006. Further, the Supreme Court referred the matter to a