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IN THE HIGH COURT FOR THE STATE OF TELANGANA

AT HYDERABAD

* * *

THE HON’BLE JUSTICE MOUSHUMI BHATTACHARYA

AND

THE HON’BLE JUSTICE GADI PRAVEEN KUMAR

WRIT PETITION No.11193 OF 2024

DATE OF ORDER : 05.05.2026

Between:

SRP Minerals Pvt. Limited

…..Petitioner

AND

Union of India, rep. by Secretary, Ministry of

Law & Justice (Department of Legal Affairs),

Shastri Bhavan, New Delhi and 4 Others

…..Respondents

Mr. Surender Rao, learned Senior Counsel representing Mr. Srikanth Kaveti,

learned counsel appearing for the petitioner.

Mr. Iyengar, learned Senior Counsel representing Mr. A. Raja Shekar Reddy,

learned counsel appearing for the respondent No.4.

ORDER: (Per Hon’ble Justice Moushumi Bhattacharya

1. This Writ Petition has been filed for setting aside the

arbitration proceedings referred by the respondent

No.2/Facilitation Council to the respondent No.5/International

Arbitration and Mediation Centre (‘IAMC’) by a letter dated

22.07.2023 pursuant to an Application No.UDYAM-TS-02-

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0020734/S/0000. The writ petitioner also seeks to declare the said

reference made by the respondent No.2 as arbitrary and illegal.

2. The writ petitioner is the respondent/Buyer in the reference

made by the respondent No.2/MSME Facilitation Council to the

respondent No.5/IAMC. The respondent No.4 is the

Claimant/Supplier in the arbitration.

3. The only point raised by learned Senior Counsel appearing

for the writ petitioner is that reference to arbitration pursuant to

the claim made by the respondent No.4 is legally unsustainable by

reason of the contract between the parties (writ petitioner and the

respondent No.4) being in the nature of a works contract. Senior

Counsel submits that the works contracts are necessarily excluded

from the purview of The Micro, Small and Medium Enterprises

Development Act, 2006 (‘MSMED Act’).

4. Learned counsel appearing for the respondent

No.4/Claimant in the arbitration submits that the objection raised

by the writ petitioner is contrary to the writ petitioner’s own stand

in consenting to the constitution of the Arbitral Tribunal. Senior

Counsel submits that the issue as to whether claims arising out of

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works contract would fall within the purview of the MSMED Act

was decided against the contention of the writ petitioner, namely,

exclude works contract from the applicability/operation of the Act.

5. We have considered the submissions made on behalf of the

parties and perused the material placed on record.

6. The issue as to whether the MSMED Act excludes works

contracts from its purview was decided by a Co-ordinate Bench of

this Court in A.A.No.55 of 2025. In that decision, it was held that

the MSMED Act does not make a distinction between works

contracts and other contracts and that the Facilitation Council

under the MSMED Act has the jurisdiction to settle disputes

between parties through conciliation and thereafter arbitration

even in respect of works contracts. In coming to that conclusion,

the Co-ordinate Bench relied on Hindustan Petroleum Corporation

Limited v. West Bengal State Micro, Small Enterprises Facilitation

Council, 2023 SCC OnLine Cal 1700, a decision of a learned Single Judge of Calcutta High

Court in W.P.O.No.2896 of 2022 wherein the Calcutta High Court,

after considering the relevant decisions on the subject,

conclusively held that there is no distinction in the MESMED Act

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between MSMEs undertaking works contact and those engaging in

other contracts since the component of supply of goods or

rendering of services is present in both. The Court opined that the

distinction between the works contract and other contracts cannot

artificially be incorporated into the Act.

7. This Court agrees with the view taken by the Co-ordinate

Bench in A.A.No.55 of 2025 (supra) and the Calcutta High Court in

Hindustan Petroleum Corporation Limited (supra) since the only

criterion for an entity for referring a dispute to the Council under

section 18(1) of the Act is the entity b