IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
Nagesh Bheemapaka, J
NTPC Limited – Appellant
Versus
Union of India – Respondent
WRIT PETITION No. 19857 OF 2025
| Table of Content |
|---|
| 1. petitioner disputes the applicability of the msmed act to a works contract. (Para 1) |
| 2. respondents defend the council's referral and raise the doctrine of kompetenz-kompetenz. (Para 2 , 3 , 4) |
| 3. writ court declines to interfere with ongoing arbitral proceedings. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19) |
O R D E R:
Petitioner states that it is a Government of India Company incorporated under the provisions of the Companies Act, 1956; its Western Region-II Headquarters is situated at Raipur, Chhattisgarh, and its Super Thermal Power Station is located at Lara, Raigarh District, Chhattisgarh, known as NTPC Lara Super Thermal Power Station. Petitioner Company is India's largest energy conglomerate, with its origins dating back to 1975, established with the object of accelerating power development in the country. Over the decades, they established themselves as a dominant public sector undertaking in the power sector, with an integrated presence across the entire value chain of power generation. While its initial focus was on fossil fuel-based power generation, Petitioner has since diversified into hydro, nuclear and renewable energy sources.
1.1. Petitioner further states that the Ministry of Micro, Small and Medium Enterprises, Government of India, is the apex executive authority responsible for formulation and administration of policies, rules, regulations and laws relating to micro, small and medium enterprises in India. With the object of facilitating promotion, development and enhancement of competitiveness of micro, small and medium enterprises, and for matters connected therewith or incidental thereto, the Union of India enacted the Micro, Small and Medium Enterprises Development Act, 2006, also referred to as Act 27 of 2006 or the MSMED Act, 2006. Under the scheme of the said Act, any person intending to establish a micro, small or medium enterprise engaged in the manufacture or production of goods pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951, or engaged in providing or rendering services, is required to file a memorandum in such form and before such authority as may be specified by the Central Government under sub-section (3) or by the State Government under sub-section (4) of Section 8 of the Act. The Act also extends an option to already established industries, subject to fulfillment of the statutory conditions, to file the prescribed memorandum within the stipulated period.
1.2. Petitioner states that the authority competent to receive such memorandum, the form thereof and the procedure for filing the memorandum in the case of medium enterprises is to be notified by the Central Government, while small enterprises may file the memorandum in the manner prescribed. Only upon filing such memorandum in accordance with Act 27 of 2006 does an enterprise come within the purview of the MSMED Act. Under the scheme of Sections 15, 16 and 17 of the Act, disputes relating to amounts due for goods supplied or services rendered by a "supplier", as defined under the Act, may be referred to the Micro and Small Enterprises Facilitation Council. Section 18 of Act 27 of 2006 prescribes a special and self-contained procedure for resolution of such disputes, beginning with conciliation and, upon failure thereof, arbitration.
1.3. In the present case, Petitioner Company invited tenders for a Long-Term Contract for maintenance of equipment of the Coal Handling Plant at NTPC Lara Super Thermal Power Station, Stage-I. Pursuant to the said tender process, the 4th respondent was awarded the long-term contract and, upon acceptance of the terms and conditions, entered into an agreement with the Petitioner Company. After completion of all formalities, Petitioner issued Service Purchase Order dated 27.04.2018, followed by an amended Service Purchase Order dated 29.04.2021. Though the contract is termed as a "Service Purchase Order
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