In the case of Mahanagar Telephone Nigam Ltd. vs. Delhi International Arbitration Centre & Ors., the petitioner, MTNL, challenged a decision by the Micro and Small Enterprises Facilitation Council under the MSME Act, 2006. The dispute centered around unpaid dues for architectural consultancy services provided by Respondent No. 3, who later registered as a micro enterprise. MTNL contended that since the respondent was not an MSME at the time of entering the contract, it could not claim the benefits of the MSME Act, raising a key legal issue regarding the applicability of the Act's provisions retroactively.
Mahanagar Telephone Nigam Ltd. (MTNL), the petitioner, filed a writ petition challenging a decision by the Micro and Small Enterprises Facilitation Council (Respondent No. 2) under the MSME Act, 2006. The Council had accepted a reference from Respondent No. 3, who was registered as a micro enterprise, and referred the dispute to arbitration at the Delhi International Arbitration Centre (DIAC), Respondent No. 1.
The dispute arose over payments due for architectural consultancy services provided by Respondent No. 3 for the construction of a telephone exchange building. The claim involved unpaid bills from 2007 and 2022 totalling ₹2,15,96,273.86. Respondent No. 3 had obtained MSME registration after the contract was signed, which led to a legal question regarding the applicability of the MSME Act.
MTNL contended that since Respondent No. 3 was not an MSME at the time of entering into the contract, it could not claim the benefits of the MSME Act. MTNL relied on the Supreme Court's judgment in Silpi Industries v. Kerala State Road Transport Corporation.
The court held that disputes regarding whether a party could claim MSME benefits for services rendered after registration could be determined by the arbitral tribunal. The court declined to interfere at this stage and left the matter to be raised before the learned Arbitrator. The writ petition was dismissed.
In conclusion, the court emphasized that MSME benefits are applicable only prospectively, from the date of registration, as clarified by the Supreme Court. The arbitral tribunal was tasked with determining the applicability of the MSME Act in this specific case.
Mahanagar Telephone Nigam Ltd. vs. Delhi International Arbitration Centre & Ors ;
W.P.(C) 14515/2023
Comments