As per case facts, the petitioner, an MSME, began business with the respondent in 2018, supplying goods against work orders. After a payment in June 2023, no further payments were ...
No Acts & Articles mentioned in this case
ARB.P. 2129/2025 Page 1 of 29
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 18
th
March, 2026
Pronounced on: 09
th
April, 2026
+ ARB.P. 2129/2025
M/S JUBILANT MARKETING PVT . LTD. .....Petitioner
Through: Ms. Sonal Sarda, Ms. Sunidhi Gupta,
Ms. Jayantika Singh, Advocates
Mob: 8447078202
Email: sonal.ssarda@gmail.com
versus
M/S ROBBINS TUNNELING AND TRENCHLESS
TECHNOLOGY INDIA PVT. LTD. .....Respondent
Through: Mr. Utsav Saxena and Mr. Kartikey
Singh, Advocate
Mob: 9597753146
Email: saxenautsav96@gmail.com
CORAM:
HON'BLE MS. JUSTICE MINI PUSHKARNA
JUDGMENT
MINI PUSHKARNA, J.
INTRODUCTION:
1. The present petition has been filed under Section 11(6)(c) of the
Arbitration and Conciliation Act, 1996 (“Arbitration Act”), read with
Section 18(3) of the Micro, Small and Medium Enterprises Development
Act, 2006 (“MSMED Act”), seeking appointment of a sole arbitrator for the
adjudication of the disputes between the parties, with respect to non-
payment of outstanding dues by the respondent.
ARB.P. 2129/2025 Page 2 of 29
Brief Facts of the Case:
2. Relevant facts, as culled out from the pleadings on record, are as
follows:
2.1. The petitioner, i.e., M/s. Jubilant Marketing Pvt. Ltd., is registered as
a small enterprise with the Ministry of Micro, Small and Medium
Enterprises (“MSME”), Government of India, under the MSMED Act.
2.2. The petitioner, in January, 2018, commenced business with the
respondent for supply of conveyor structures, wherein, pursuant to work
orders issued by the respondent, the petitioner would supply goods as
requested, and raise invoices accordingly, to the respondent.
2.3. On 06
th
June, 2023, the respondent made a payment of Rs. 8 Lacs,
after which no payment has been received by the petitioner.
2.4. Aggrieved by the respondent’s repeated failure in making the
outstanding payments, the petitioner, in order to recover its alleged dues of
Rs. 77,04,901/- against 14 invoices, approached the Micro and Small
Enterprise Facilitation Council, New Delhi (“MSEF Council”), by filing an
application bearing Application No. UDYAM-DL-11-0001801/S/00001 under
Section 18(1) of the MSMED Act.
2.5. By way of notice dated 24
th
June, 2024, the MSEF Council admitted
the petitioner’s application, and thereby, directed the respondent to clear the
outstanding dues, not later than 15 days from the receipt of the notice.
Subsequently, the MSEF Council vide E-mail dated 02
nd
September, 2024
converted the application filed by the petitioner into a case bearing MSEFC
Case No. DL/11/S/NDC/01219.
2.6. Thereafter, the MSEF Council issued multiple notices to the parties
therein under Section 18(2) of the MSMED Act, intimating the holding of a
ARB.P. 2129/2025 Page 3 of 29
meeting to settle the matter and thereby, requesting the parties to appear in
person.
2.7. By way of the order dated 22
nd
April, 2025, the MSEF Council
categorically recorded that in the meeting held on 17
th
April, 2025, the
respondent had submitted that the payment was pending and sought time of
7 to 10 days to file its reply. Thus, the MSEF Council gave one final
opportunity to the respondent to file its final submissions, failing which the
case would be forwarded to arbitration for further necessary action.
2.8. It is the case of the petitioner that the respondent effectively failed to
file a response within the appropriate timeline and the MSEF Council
subsequently, has not appointed any arbitrator since its last order dated 22
nd
April, 2025. Therefore, the present petition has come to be filed before this
Court for appointment of an arbitrator.
Submissions of the Petitioner:
3. The submissions made by the petitioner, in the present case, are as
follows:
3.1. The petitioner has filed its application under Section 18 of the
MSMED Act before the MSEF Council, New Delhi, which has failed to
appoint an arbitrator for adjudication of the disputes between the parties.
3.2. A statutory arbitration agreement exists between the parties, as
Section 18(3) of the MSMED Act, creates an arbitration agreement as
envisaged under Section 7 of the Arbitration Act between the enterprises
covered under the MSMED Act. Further, all the provisions of the Arbitration
Act, thereby, applies to the said arbitration agreement in terms of Section 18
of the MSMED Act, read with Section 2(4) of the Arbitration Act.
ARB.P. 2129/2025 Page 4 of 29
3.3. By way of order dated 22
nd
April, 2025, the MSEF Council
categorically noted that the respondent has to file a reply, failing which the
case would be forwarded for arbitration. However, despite a passage of long
time from the said order, no date was forth coming by the MSEF Council for
further proceedings.
3.4. Consequently, the petitioner, on 18
th
November, 2025, inquired at the
MSEF Council and came to know that no reply has been filed by the
respondent. However, there was no clarity with regard to further proceedings
before the MSEF Council.
3.5. In view of the order dated 22
nd
April, 2025, as passed by the MSEF
Council, the matter ought to have been taken up for arbitration either by
MSEF Council itself or by reference to an institution.
3.6. Since the MSEF Council, being an institution under Section 11(6)(c)
of the Arbitration Act, has failed to perform the aforesaid function, as
entrusted to it under Section 18(3) of the MSMED Act, the petitioner has the
right to invoke the jurisdiction of this Court under Section 11(6) of the
Arbitration Act, for appointment of an arbitrator. The provisions of Section
18 of the MSMED Act are to be read harmoniously with Section 11 of the
Arbitration Act.
3.7. Since there is no provision under the MSMED Act which deals with
failure of MSEF Council to appoint an arbitrator, resort will have to be made
to the general provision of Section 11(6) of the Arbitration Act for
appointment of the arbitrator. Section 2(4) of the Arbitration Act makes Part
– I of the Arbitration Act, including Section 11(6), applicable to all
arbitrations under any enactment, as if the enactment was an arbitration
agreement, as long as the provisions in Arbitration Act are not inconsistent
ARB.P. 2129/2025 Page 5 of 29
with the provisions of the other enactment. Arbitration under the MSMED
Act is a statutory arbitration, within the ambit of Section 2(4) of the
Arbitration Act, thereby, making the enactment itself an arbitration
agreement.
3.8. Further, Section 2(5) extends the applicability of Part - I to all
arbitrations and all proceedings relating thereto.
3.9. Thus, where the MSME Act is silent as to the procedure to be
followed when the MSEF Council fails to take the matter for arbitration,
either itself or by making a reference, recourse has to be made to the Section
11(6) of the Arbitration Act, which shall act as the governing procedure for
appointment of an arbitrator even under the MSMED Act.
3.10. As per Section 24 of the MSMED Act, Sections 15 to 23 of the
MSMED Act shall override any other law inconsistent with it. However, as
no similar provision exists under the MSMED Act, there is no inconsistency
with the Arbitration Act, and therefore, Section 11(6) of the Arbitration Act
shall prevail.
3.11. Upon failure of the MSEF Council to refer the dispute, a remedy
under writ jurisdiction would not lie, as Section 11(6)(c) of the Arbitration
Act operates as an in-built provision for appointment of an arbitrator.
Submissions of the Respondent:
4. The submissions made by the respondent to rebut the contentions of
the petitioner, are as follows:
4.1. A petition under Section 11 of the Arbitration Act is not maintainable,
as no valid arbitration agreement exists between the parties, in terms of
Section 7 read with Section 2(b) of the Arbitration Act.
ARB.P. 2129/2025 Page 6 of 29
4.2. Section 11(6) of the Arbitration Act only applies in cases of failure to
follow an appointment procedure as agreed between the parties. Thus, at the
stage of Section 11(6) of the Arbitration Act, the existence of a valid, written
arbitration agreement, which shows the ad idem intention of the parties to
submit their disputes to arbitration is a sine qua non.
4.3. It is an admitted case that there exists no such independent arbitration
agreement between the petitioner, whether in the work order or otherwise.
Thus, the Courts cannot refer the parties to arbitration under Section 11(6) of
the Arbitration Act.
4.4. It is settled that once the mechanism under Section 18(1) of the
MSMED Act has been triggered by a party, the statutory scheme under the
MSMED Act overrides any independent arbitration agreement.
4.5. The petitioner has consciously elected the statutory remedy under the
MSMED Act and has also participated in conciliation proceedings and the
meetings convened by the MSEF Council. Accordingly, the petitioner, after
invoking the jurisdiction of the MSEF Council, is obliged to follow the
MSME mechanism to its logical conclusion, and cannot abandon it midway
on the grounds that the MSEF Council ‗failed to initiate arbitration‘.
4.6. The provisions of the Arbitration Act do not apply prior to the stage of
MSEF Council initiating arbitration proceedings.
4.7. The words ―shall then‖, as appearing in Section 18(3) of the MSMED
Act, reflects the intention of the legislature that the provisions of the
Arbitration Act shall come into play only when the conciliation proceedings
between the parties stands formally terminated, and the MSEF Council
either takes up the dispute itself or refers it to any institution for arbitration.
ARB.P. 2129/2025 Page 7 of 29
4.8. In the present case, it is an admitted position that the MSEF Council is
still seized of the matter and is yet to appoint an arbitrator.
4.9. Further, the direction of the MSEF Council that if respondent failed to
file its final submissions, the case will be forwarded to arbitration, is only a
conditional observation, and thus, is not equivalent to actual commencement
of arbitration under Section 18(3) of the MSMED Act. Therefore, the pre-
conditions for deeming an arbitration agreement under Section 18(3) of the
MSMED Act are not satisfied in the present case.
4.10. Although, the petitioner has contended that the petitioner’s counsel
enquired at the MSEF Council with respect to further proceedings in the
matter, the petitioner has failed to place on record any proof thereto.
4.11. Thus, the present petition has come to be filed upon an erroneous
understanding of law that exists between the parties and the provisions of
Arbitration Act will apply to such arbitration agreement in terms of Section
18(3) of the MSMED Act.
ANALYSIS AND FINDINGS:
5. The instant petition has been filed by the petitioner, which is duly
registered as a small enterprise in terms of the MSMED Act, seeking
appointment of an arbitrator under Section 11(6) of the Arbitration Act, on
account of failure of the MSEF Council to appoint an arbitrator under
Section 18(3) of the MSMED Act.
6. Pertinently, conciliation proceedings in terms of Section 18(2) of the
MSMED Act are pending adjudication, and there is no formal order of
termination of the said proceedings or reference of the dispute to arbitration
by the MSEF Council under Section 18(3) of the MSMED Act. It is further
ARB.P. 2129/2025 Page 8 of 29
to be noted that admittedly there exists no valid written arbitration
agreement between the parties.
7. Accordingly, in the facts and circumstances of the present case, the
moot question arising before this Court is ―where conciliation proceedings
are pending before the MSEF Council, and the matter is yet to be taken up
for arbitration, either by the MSEF Council itself or by reference to an
arbitration institution, can the petitioner approach the Court under Section
11(6)(c) read with Section 2(4) of the Arbitration Act for appointment of an
arbitrator?‖
8. To appreciate the issue in question, this Court deems it appropriate to
examine the intent and scheme of the legislature behind the MSEMD Act. In
this regard, it would be apposite to refer to the decision of the Supreme
Court in the case of Gujarat State Civil Supplies Corporation Limited
Versus Mahakali Foods Private Limited (Unit 2) and Another
1
, wherein, it
was observed that the object of the MSMED Act is to ensure timely and
smooth flow of credit to MSMEs, and provide an expeditious dispute
resolution mechanism for resolving the disputes of non-payment of dues to
the MSMEs, in the following manner:
―xxx xxx xxx
12. Before adverting to the aforestated questions of law, beneficial
would be to glance through the legislative history and the Objects and
Reasons as also the relevant provisions of the MSMED Act, 2006 and
of the Arbitration Act, 1996. So far as the legislative history of the
MSMED Act, 2006 is concerned, it appears that in order to promote
and strengthen the small, tiny and medium scale industrial
undertakings, the “Interest on Delayed Payments to Small Scale and
Ancillary Industrial Undertakings Act, 1993” (hereinafter referred
to as “The Delayed Payments Act”) was enacted by Parliament. The
object of the said enactment was to provide for and regulate the
1
(2023) 6 SCC 401.
ARB.P. 2129/2025 Page 9 of 29
payment of interest on delayed payments to the small scale and
ancillary industrial undertakings.
13. Though Sections 4 and 5 of the Delayed Payments Act, made the
provisions of the recovery of amount and computation of compound
interest and Section 10 thereof provided for the effect overriding the
other laws for the time being in force, it did not provide for any
dispute resolution mechanism through which a small enterprise
could avail of its remedies. The small enterprises, therefore, had to
file a suit or to follow the contractual terms as contained in the
arbitration agreement for the recovery of their dues.
14. The Government of India, Ministry of Industry, the Department of
Small Scale Industries and Argo and Rural Industries, realising the
need for reforms in the then existing policies and to design new
policies for the development of small and medium enterprises
constituted “an expert committee on small enterprises” vide the
order dated 29-12-1995. The committee recommended for enacting
an Act for the inclusion of stringent provisions for non-payment of
dues to the small scale. This was followed by the Small and Medium
Enterprises Development Bill, 2005 in August 2005.
15. The said Bill was referred to the Parliamentary Standing
Committee on Industry, which submitted its 176
th
Report on the said
Bill of 2005. The recommendations of the said committee culminated
into the MSMED Bill, which sought to achieve the following amongst
other objects:
(i) To make provisions for ensuring timely and smooth flow of credit to
small and medium enterprises to minimise the incidence of sickness
among and enhancing the competitiveness of such enterprises, in
accordance with the guidelines or instructions of the Reserve Bank of
India;
(ii) To make further improvements in the Interest on Delayed
Payments to Small Scale and Ancillary Industrial Undertakings Act,
1993 and making that enactment a part of the proposed legislation
and to repeal that enactment.
16. The MSMED Bill having been passed by both the Houses of
Parliament, received the assent of the President on 16-6-2006 and
came into the statute book as the MSMED Act, 2006 (27 of 2006). The
long title of the Act states that the said Act has been enacted to
provide for facilitating the promotion and development, and
enhancing the competitiveness of micro, small and medium
enterprises and for matters connected therewith or incidental
ARB.P. 2129/2025 Page 10 of 29
thereto. The Act has been divided into six Chapters, and Chapter V
pertains to the “Delayed payments to micro and small enterprises‖.
xxx xxx xxx
34. One of principles of statutory interpretation relevant for our
purpose is contained in the Latin maxim leges posteriores priores
contrarias abrogant (the later laws shall abrogate earlier contrary
laws). Another relevant rule of construction is contained in the maxim
generalia specialibus non derogant (General laws do not prevail over
Special laws). When there is apparent conflict between two statutes,
the provisions of a general statute must yield to those of a special
one.
35. As observed in Kaushalya Rani v. Gopal Singh [Kaushalya Rani
v. Gopal Singh, AIR 1964 SC 260], a “Special Law” means a law
enacted for special cases, in special circumstances, in contradiction
to the general rules of law laid down, as applicable generally to all
cases with which the general law deals.
36. Keeping in view the aforestated principles of statutory
interpretations as also the proposition of law laid down by this Court
with regard to the general rules of construction, let us proceed to
examine whether the MSMED Act, 2006 is a special enactment having
an effect overriding the Arbitration Act, 1996 which is perceived to be
a general enactment? As stated earlier, the very object of enacting
the MSMED Act, 2006 was to facilitate the promotion and
development, and enhance the competitiveness of micro, small and
medium enterprises. The Act also aimed to ensure timely and smooth
flow of credit to the micro, small and medium enterprises, and to
minimise the incidence of sickness. One of the main objects of the
Act was to delete the Interest on Delayed Payments to Small Scale
and Ancillary Industrial Undertakings Act, 1993, and to include
stringent provisions as also to provide dispute resolution mechanism
for resolving the disputes of non-payment of dues to the micro and
small enterprises. Thus, the seed of the MSMED Act, 2006 had
sprouted from the need for a comprehensive legislation to provide an
appropriate legal framework and extend statutory support to the
micro and small enterprises to enable them to develop and grow into
medium ones.
37. Sections 15 to 25 contained in Chapter V of the MSMED Act, 2006
pertain to the ―delayed payments to micro and small enterprises‖. A
bare perusal of the said provisions contained in Chapter V shows that
a strict liability is fastened on the buyer to make payment to the
supplier who supplies any goods or renders any services to the buyer,
prescribing the time-limit in Section 15. Section 16 further fastens the
ARB.P. 2129/2025 Page 11 of 29
liability on the buyer to pay compound interest if any buyer fails to
make payment to the supplier as required under Section 15. Such
compound interest is required to be paid at three times of the bank
rate notified by the Reserve Bank, notwithstanding contained in any
agreement between the buyer and supplier or in any law for the time
being in force. An obligation to make payment of the amount with
interest thereon as provided under Section 16 has been cast upon the
buyer and a right to receive such payment is conferred on the supplier
in Section 17. Thus, Section 17 is the ignition point of any dispute
under the MSMED Act, 2006. Section 18 thereof provides for the
mechanism to enable the party to the dispute with regard to any
amount due under Section 17, to make a reference to the Micro and
Small Enterprises Facilitation Council.
xxx xxx xxx‖
(Emphasis Supplied)
9. It is apposite to refer to the provisions of the MSMED Act that are
relevant to the present matter, and the same are reproduced as under:
―xxx xxx xxx
Section 16. Date from which and rate at which interest is payable.—
Where any buyer fails to make payment of the amount to the supplier,
as required under Section 15, the buyer shall, notwithstanding
anything contained in any agreement between the buyer and the
supplier or in any law for the time being in force, be liable to pay
compound interest with monthly rests to the supplier on that amount
from time the appointed day or, as the case may be, from the date
immediately following the date agreed upon, at three times of the bank
rate notified by the Reserve Bank.
Section 17. Recovery of amount due. — For any goods supplied or
services rendered by the supplier, the buyer shall be liable to pay the
amount with interest thereon as provided under Section 16.
Section 18. Reference to Micro and Small Enterprises Facilitation
Council. —
(1) Notwithstanding anything contained in any other law for the
time being in force, any party to a dispute may, with regard to any
amount due under Section 17, make a reference to the Micro and
Small Enterprises Facilitation Council.
(2) On receipt of a reference under sub-section (1), the Council shall
either itself conduct conciliation in the matter or seek the assistance
of any institution or centre providing alternate dispute resolution
services by making a reference to such an institution or centre, for
conducting conciliation and the provisions of Sections 65 to 81 of
ARB.P. 2129/2025 Page 12 of 29
the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply
to such a dispute as if the conciliation was initiated under Part III of
that Act.
(3) Where the conciliation initiated under sub-section (2) is not
successful and stands terminated without any settlement between the
parties, the Council shall either itself take up the dispute for
arbitration or refer it to any institution or centre providing alternate
dispute resolution services for such arbitration and the provisions of
the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then
apply to the disputes as if the arbitration was in pursuance of an
arbitration agreement referred to in sub-section (1) of Section 7 of
that Act.
(4) Notwithstanding anything contained in any other law for the time
being in force, the Micro and Small Enterprises Facilitation Council
or the centre providing alternate dispute resolution services shall have
jurisdiction to act as an Arbitrator or Conciliator under this section in
a dispute between the supplier located within its jurisdiction and a
buyer located anywhere in India.
(5) Every reference made under this section shall be decided within a
period of ninety days from the date of making such a reference.‖
xxx xxx xxx‖
(Emphasis Supplied)
10. A bare reading of the aforementioned Sections makes it abundantly
clear that Section 17 of the MSMED Act deals with the recovery of dues
from the buyer for goods or services supplied/rendered by the supplier.
Further, where an amount is due under Section 17 of the MSMED Act, any
party may make a reference to the MSEF Council under Section 18(1) of the
MSMED Act.
11. Upon such a reference being made to the MSEF Council, the MSEF
Council under Section 18(2) of the MSMED Act shall either conduct
conciliation itself, or refer the matter to an institution for conciliation, and
the provisions of Sections 65 to 81 of the Arbitration Act, shall apply to such
a dispute as if the conciliation was initiated under Part-III of the Arbitration
Act. Reference in this regard may be made to the judgment in the case of
ARB.P. 2129/2025 Page 13 of 29
Idemia Syscom India Private Limited Versus Conjoinix Total Solutions
Private Limited
2
, wherein, it has been held as follows:
―xxx xxx xxx
11. MSMED Act has been enacted for the facilitating the promotion
and development and enhancing the competitiveness of micro, small
and medium enterprises and for matters connected therewith or
incidental thereto. Section 17 of the MSMED Act provides for the
recovery of dues of the supplier from the buyer for goods supplied or
services rendered. Section 18 (1) of the MSMED Act contains a non-
obstante clause and provides that for any amount due under Section
17, any party to the dispute may make a reference to the Micro and
Small Enterprises Facilitation Council. Thereafter, the facilitation
council would either conduct conciliation itself or refer the matter
for conciliation to any institution or centre providing alternate
dispute resolution services. Only upon failure of such conciliation
proceedings, arbitration proceedings are initiated, either by itself or
by reference to any institution.
xxx xxx xxx‖
(Emphasis Supplied)
12. In addition, Section 18(3) of the MSMED Act further provides that
where the conciliation proceeding, as aforesaid, initiated under Sub-Section
(2) is not successful and stands terminated without any settlement between
the parties, the MSEF Council shall take up the dispute for arbitration, either
itself or by referring it to any institution. Section 18(3) further provides that
the provisions of the Arbitration Act shall then apply to the disputes ―as if‖
the arbitration was in pursuance of an arbitration agreement referred to in
sub-section (1) of Section 7 of the Arbitration Act. Reliance, in this regard,
is placed upon the judgment in the case of Jharkhand Urja Vikas Nigam
Limited Versus State of Rajasthan and Others
3
, wherein, the Supreme
Court has held as follows:
2
2025 SCC OnLine Del 1023.
3
(2021) 19 SCC 206.
ARB.P. 2129/2025 Page 14 of 29
―xxx xxx xxx
14. From a reading of Sections 18(2) and 18(3) of the MSMED Act it
is clear that the Council is obliged to conduct conciliation for which
the provisions of Sections 65 to 81 of the Arbitration and Conciliation
Act, 1996 would apply, as if the conciliation was initiated under Part
III of the said Act. Under Section 18(3), when conciliation fails and
stands terminated, the dispute between the parties can be resolved by
arbitration. The Council is empowered either to take up arbitration
on its own or to refer the arbitration proceedings to any institution
as specified in the said section. It is open to the Council to arbitrate
and pass an award, after following the procedure under the relevant
provisions of the Arbitration and Conciliation Act, 1996, particularly
Sections 20, 23, 24 and 25.
xxx xxx xxx‖
(Emphasis Supplied)
13. The scheme of Section 18 of the MSMED Act makes it clear that once
the statutory mechanism under Section 18 is triggered, the same has to be
followed to its logical end. Thus, the Supreme Court in the case of Gujarat
State Civil Supplies Corporation Limited Versus Mahakali Foods Private
Limited (Unit 2) and Another
4
, has clearly observed that by way of the non-
obstante clauses in Section 18(1) and (4), the MSMED Act will have an
overriding effect, once the statutory mechanism contemplated under Section
18 of the MSMED Act is triggered by a party, on its own volition. The
relevant paragraph in this regard is reproduced as under:
―xxx xxx xxx
44. The submissions made on behalf of the counsel for the buyers that
a conscious omission of the word ―agreement‖ in sub-section (1) of
Section 18, which otherwise finds mention in Section 16 of the
MSMED Act, 2006 implies that the arbitration agreement
independently entered into between the parties as contemplated under
Section 7 of the Arbitration Act, 1996 was not intended to be
superseded by the provisions contained under Section 18 of the
MSMED Act, 2006 also cannot be accepted. A private agreement
between the parties cannot obliterate the statutory provisions. Once
4
(2023) 6 SCC 401.
ARB.P. 2129/2025 Page 15 of 29
the statutory mechanism under sub-section (1) of Section 18 is
triggered by any party, it would override any other agreement
independently entered into between the parties, in view of the non
obstante clauses contained in sub-sections (1) and (4) of Section 18.
The provisions of Sections 15 to 23 have also overriding effect as
contemplated in Section 24 of the MSMED Act, 2006 when anything
inconsistent is contained in any other law for the time being in force.
It cannot be gainsaid that while interpreting a statute, if two
interpretations are possible, the one which enhances the object of the
Act should be preferred than the one which would frustrate the object
of the Act. If submission made by the learned counsel for the buyers
that the party to a dispute covered under the MSMED Act, 2006
cannot avail the remedy available under Section 18(1) of the
MSMED Act, 2006 when an independent arbitration agreement
between the parties exists is accepted, the very purpose of enacting
the MSMED Act, 2006 would get frustrated.
xxx xxx xxx‖
(Emphasis Supplied)
14. Moreover, in the case of Total Application Software Co. Pvt. Ltd.
TASC Versus Ashoka Distillers and Chemicals Pvt. Ltd.
5
, this Court while
observing that the MSMED Act being a special law, will have precedence
over the Arbitration Act, has held that once MSMED Act is invoked, the
procedure must be taken to its logical end. However, if there is no trigger to
the mechanism provided in the MSMED Act, the party will have the liberty
to resort to any other mechanism for resolution of disputes. The relevant
paragraph is reproduced as under:
―xxx xxx xxx
13. Reliance of the Respondent on the judgment of the Supreme Court
in Gujarat State Civil Supplies Corporation Limited (supra) and of
this Court in Bharat Heavy (supra) is misplaced in the facts of this
case. In Gujarat State Civil Supplies Corporation Limited (supra), the
Supreme Court observed that 1996 Act in general governs the law of
arbitration and conciliation, whereas MSME Act governs specific
nature of disputes arising between specific categories of persons, to be
resolved by following a specific process through a specific forum.
Ergo, MSME Act being a special law and 1996 Act being a general
5
2025 SCC OnLine Del 4562.
ARB.P. 2129/2025 Page 16 of 29
law, provisions of MSME Act will have precedence over 1996 Act.
However, it is of significance to note that in the same judgment, the
Supreme Court held that once the statutory mechanism under
Section 18(1) of MSME Act is triggered by any party, it would
override any other agreement independently entered into between
the parties, in view of non-obstante clauses contained in sub-
Sections (1) and (4) of Section 18. This is exactly the point Petitioner
makes. Once the mechanism under MSME Act is triggered by any
party, the procedure has to be taken to its logical end. However, once
there is no trigger by invoking the jurisdiction of the Council, party
cannot be precluded from resorting to any other mechanism for
resolution of its disputes.
xxx xxx xxx‖
(Emphasis Supplied)
15. From the aforesaid discussion, it is evident that the legislative intent
behind the use of the word ―may‖ in Section 18(1) of the MSMED Act is
not to mandatorily compel an aggrieved party to refer every dispute arising
in terms of the provisions of the MSMED Act, to the MSEF Council. In
contrast, a plain reading of Section 18(1) brings forth the fact that the
aggrieved party has discretion to decide whether to invoke the jurisdiction of
the MSEF Council in respect of the disputes contemplated under Section 17
of the MSMED Act.
16. However, the scheme of MSMED Act makes it equally clear that once
the dispute is, in fact, referred to the MSEF Council, the statutory
mechanism for dispute resolution therein comes into picture. Consequently,
the parties are bound to adhere to the procedure prescribed therein, and such
proceedings once triggered, have to be followed to its logical end, in
accordance with the provisions of the MSMED Act.
17. Now, adverting to the facts of the present case, it is an admitted
position that the petitioner has invoked the jurisdiction of the MSEF Council
under Section 18 of the MSMED Act, by way of an application dated 24
th
June, 2024. It is further not in dispute that the conciliation proceedings
ARB.P. 2129/2025 Page 17 of 29
pursuant thereto are presently pending before the MSEF Council.
Consequently, in terms of Section 18(3) of the MSMED Act, the dispute has
not been referred to arbitration.
18. Upon a bare perusal of the admitted case by the petitioner, it is
abundantly clear that the petitioner has consciously chosen to avail the
statutory remedy under the MSMED Act. Once a party initiates the
mechanism envisaged under Section 18 of the MSMED Act, it is bound to
adhere to the statutory framework and cannot be permitted to abandon the
process midway. Further, the proceedings initiated thereunder must
necessarily be taken to their logical conclusion. Such party cannot seek
recourse under Section 11(6) of the Arbitration Act, for appointment of an
arbitrator.
19. The petitioner has contended that where conciliation proceedings are
pending before the MSEF Council, and the matter is yet to be referred to
arbitration, recourse can be sought under the Arbitration Act for appointment
of an Arbitrator. The said contention is untenable.
20. The provisions of the Arbitration Act to MSMED cases become
applicable only upon the failure of the conciliation proceedings, as
prescribed in Section 18(3) of the MSMED Act. A bare perusal of Section
18(3) of MSMED Act makes it abundantly clear that where the conciliation
between the parties is not successful, and stands terminated without any
settlement between the parties, only then the MSEF Council shall take up
the dispute for arbitration either itself, or refer it to any institution providing
arbitration services. The provisions of the Arbitration Act, shall then apply to
the dispute.
ARB.P. 2129/2025 Page 18 of 29
21. Thus, in the case of Gujarat State Civil Supplies Corporation Limited
Versus Mahakali Foods Private Limited (Unit 2) and Another
6
, the
Supreme Court held that the legislature had consciously made the provisions
of the Arbitration Act applicable to the disputes under the MSMED Act at a
stage when the conciliation process failed and when the MSEF Council itself
takes up the disputes for arbitration or refers it to any institution, in the
following manner:
―xxx xxx xxx
43. The Court also cannot lose sight of the specific non obstante
clauses contained in sub-sections (1) and (4) of Section 18 which have
an effect overriding any other law for the time being in force. When
the MSMED Act, 2006 was being enacted in 2006, the legislature was
aware of its previously enacted Arbitration Act of 1996, and therefore,
it is presumed that the legislature had consciously made applicable
the provisions of the Arbitration Act, 1996 to the disputes under the
MSMED Act, 2006 at a stage when the conciliation process initiated
under sub-section (2) of Section 18 of the MSMED Act, 2006 fails
and when the Facilitation Council itself takes up the disputes for
arbitration or refers it to any institution or centre for such
arbitration. It is also significant to note that a deeming legal fiction
is created in Section 18(3) by using the expression “as if” for the
purpose of treating such arbitration as if it was in pursuance of an
arbitration agreement referred to in sub-section (1) of Section 7 of
the Arbitration Act, 1996. As held in K. Prabhakaran v. P. Jayarajan
[K. Prabhakaran v. P. Jayarajan, (2005) 1 SCC 754: 2005 SCC (Cri)
451], a legal fiction presupposes the existence of the state of facts
which may not exist and then works out the consequences which flow
from that state of facts. Thus, considering the overall purpose,
objects and scheme of the MSMED Act, 2006 and the unambiguous
expressions used therein, this Court has no hesitation in holding
that the provisions of Chapter V of the MSMED Act, 2006 have an
effect overriding the provisions of the Arbitration Act, 1996.
xxx xxx xxx
47. The aforesaid legal position also dispels the arguments advanced
on behalf of the counsel for the buyers that the Facilitation Council
having acted as a Conciliator under Section 18(2) of the MSMED Act,
2006 itself cannot take up the dispute for arbitration and act as an
6
(2023) 6 SCC 401.
ARB.P. 2129/2025 Page 19 of 29
arbitrator. Though it is true that Section 80 of the Arbitration Act,
1996 contains a bar that the Conciliator shall not act as an arbitrator
in any arbitral proceedings in respect of a dispute that is subject of
conciliation proceedings, the said bar stands superseded by the
provisions contained in Section 18 read with Section 24 of the
MSMED Act, 2006. As held earlier, the provisions contained in
Chapter V of the MSMED Act, 2006 have an effect overriding the
provisions of the Arbitration Act, 1996. The provisions of the
Arbitration Act, 1996 would apply to the proceedings conducted by
the Facilitation Council only after the process of conciliation
initiated by the Council under Section 18(2) fails and the Council
either itself takes up the dispute for arbitration or refers to it to any
institute or centre for such arbitration as contemplated under
Section 18(3) of the MSMED Act, 2006.
xxx xxx xxx‖
(Emphasis Supplied)
22. In this regard, the use of the words ―shall then‖ under Sub-Section
(3) of Section 18 of MSMED Act is of significance as it clearly postulates
that the provisions of the Arbitration Act shall come into play only when the
conciliation proceedings between the parties, as initiated under Section
18(3) of the MSMED Act, stand formally terminated and the MSEF Council
either takes up the dispute itself or refers the same to any arbitration
institution. It is only after the said two pre-conditions are fulfilled, that the
deeming fiction of the arbitration being in pursuance of an arbitration
agreement in terms of Section 7 of the Arbitration Act arises, and then the
provisions of the Arbitration Act shall apply.
23. It is a settled proposition of law that where the words/language used
in the legislation are plain, clear, and unambiguous, the same shall be
interpreted literally and they must be given their natural and ordinary
meaning. In this context, the use of the words ―shall then‖ in Section 18(3)
of the MSMED Act leaves no manner of doubt that the deeming fiction will
not come into existence till conciliation has failed and the same has been
terminated, followed by the MSEF Council taking up the dispute for
ARB.P. 2129/2025 Page 20 of 29
arbitration or referring it to an appropriate arbitral institution. Consequently,
the provisions of the Arbitration Act shall not apply prior thereto.
24. Further, perusal of Section 18(3) of the MSMED Act makes it clear
that the reference to arbitration/appointment of an arbitrator, is a statutory
exercise under the MSMED Act, and is not under the aegis of the Arbitration
Act. The words ―shall then‖ in Section 18(3) of MSMED Act reflects the
intention of the legislature that the provisions of the Arbitration Act shall
apply only at the post-referral stage, and not at the referral stage, and the
power of referral has been specifically envisaged in the MSEF Council by
the MSMED Act.
25. Reference in this regard may be made to the judgment in the case of
Shobhana Gupta Versus Atlas Cycles Haryana Ltd.
7
, wherein, this Court
dismissed the petition under Section 11(6) of the Arbitration Act and held
that the deeming fiction under Section 18(3) of the MSMED Act for
presuming existence of an arbitration agreement gets attracted only once the
arbitration proceedings are initiated thereunder, and the provisions of the
Arbitration Act do not apply prior to that stage. Thus, it was held as under:
―xxx xxx xxx
3. Admittedly, there is no Arbitration Agreement in writing between
the parties contained either in the Purchase Orders or otherwise.
4. The petitioner being aggrieved of the non-payment of its alleged
dues by the respondent, invoked the procedure under Section 18(1) of
the Micro, Small & Medium Enterprises Development Act, 2006
(hereinafter referred as to the ‗MSMED Act‘) before the Micro, Small
& Medium Enterprises Facilitation Council, District North-West,
Delhi (hereinafter referred to as the ‗Facilitation Council‘).
5. The conciliation proceedings before the Facilitation Council
failed on 20.05.2022. The Facilitation Council, however, refused to
act as an Arbitrator or refer the disputes to an institution for
7
2023 SCC OnLine Del 1473.
ARB.P. 2129/2025 Page 21 of 29
appointment of an Arbitrator, observing as under: ―Respondent
informed that the company is under insolvency and the matter is
before NCLT Principal Bench. Since the matter is pending in NCLT,
Claimant may take action as per provisions of NCLT Act. No purpose
will be served in keeping the case pending in this council. Hence the
case is closed.‖
xxx xxx xxx
11. A reading of the above provision would show that where the
conciliation proceedings initiated under sub-Section 2 of Section 18
of the MSMED Act are not successful and stand terminated without
settlement between the parties, the Facilitation Council is
empowered to either itself take up the dispute for arbitration or refer
it to any institution or Centre providing alternate dispute resolution
services for such arbitration. The provision further states that upon
taking up of arbitration by the Facilitation Council itself or upon
such reference to any institution or centre, the provisions of the
Arbitration Act shall apply to the dispute as if the arbitration was in
pursuance of an arbitration agreement referred to in sub-Section 1
of Section 7 of the Arbitration Act. The use of the word “then”
clearly indicates the intent of the legislature that it is only when the
arbitration proceedings are initiated in form of the Facilitation
Council itself taking it up or referring the dispute to any institution
or Centre providing alternate dispute resolution services for such
arbitration that the provisions of the Arbitration Act are to apply.
The deeming fiction under Section 18(3) of presuming existence of
an Arbitration Agreement gets attracted only once the arbitration
proceedings are initiated thereunder. The provisions of the
Arbitration Act do not apply prior to that stage.
xxx xxx xxx
13. A reading of the above would show that the Supreme Court also
observed that the provisions of the Arbitration Act would apply only
after the process of Conciliation initiated by the Facilitation Council
under Section 18(2) of the MSMED Act fails and the Council either
itself takes up the dispute for arbitration or refers it to any institution
or Centre for such arbitration as contemplated under Section 18(3)
of the MSMED Act. The provisions of the Arbitration Act have no
application prior thereto.
xxx xxx xxx
15. The above provision can be invoked only where inter-alia the
institution which has been entrusted to perform any function under the
appointment procedure agreed upon by the parties fails to perform
such function. The existence of an arbitration agreement as defined
ARB.P. 2129/2025 Page 22 of 29
in Section 7 of the Arbitration Act, therefore, is a sine qua non for
exercise of jurisdiction under Section 11(6) of the Arbitration Act. It
is only on the failure of the institution to act in accordance with a
duty cast upon it under the appointment procedure agreed upon in
the arbitration agreement as provided in Section 7(1) of the
Arbitration Act, that the jurisdiction of the Court under Section
11(6) of the Arbitration Act can be invoked.
16. In the present case, as admittedly there is no arbitration
agreement between the parties, the present petition is not
maintainable.
17. The present petition is, accordingly, dismissed, leaving it open to
the petitioner to avail of its remedy against the order dated
20.05.2022 passed by the Facilitation Council or such other remedy
as may be available to it in law.
xxx xxx xxx‖
(Emphasis Supplied)
26. Even otherwise, the contention of the petitioner that where the
conciliation proceedings remain pending and the MSEF Council has failed
to perform its function of forwarding the matter to arbitration, Section
11(6)(c) read with Section 2(4) of the Arbitration Act will be applicable, is
misplaced, as for a Court to exercise its jurisdiction under Section 11(6) of
the Arbitration Act, and to appoint an arbitrator thereto, the existence of an
arbitration agreement as per Section 7 of the Arbitration Act or mutual
consent is a sine qua non.
27. Reference in this regard to Section 11(6) of the Arbitration Act, makes
it clear that in order for this Court to exercise its powers for appointment of
an arbitrator under the said Section, there must exist an appointment
procedure which has been agreed upon by and between the parties. Section
11(6) of the Arbitration Act, reads as under:
―xxx xxx xxx
11. Appointment of arbitrators …..
xxx xxx xxx
ARB.P. 2129/2025 Page 23 of 29
(6) Where, under an appointment procedure agreed upon by the
parties,—
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an
agreement expected of them under that procedure; or
(c) a person, including an institution, fails to perform any function
entrusted to him or it under that procedure, a party may request 1
[the Supreme Court or, as the case may be, the High Court or any
person or institution designated by such Court] to take the necessary
measure, unless the agreement on the appointment procedure
provides other means for securing the appointment.
[(6A) The Supreme Court or, as the case may be, the High Court,
while considering any application under sub-section (4) or sub-
section (5) or sub-section (6), shall, notwithstanding any judgment,
decree or order of any Court, confine to the examination of the
existence of an arbitration agreement.
(6B) The designation of any person or institution by the Supreme
Court or, as the case may be, the High Court, for the purposes of this
section shall not be regarded as a delegation of judicial power by the
Supreme Court or the High Court.]
xxx xxx xxx‖
(Emphasis Supplied)
28. The words ―under that procedure‖ as appearing in Section 11(6)(c) of
the Arbitration Act, has to be read as the ―procedure agreed between the
parties‖. Further, the word ―agreed‖ simply refers to the arbitration
agreement, as provided in Section 7 of the Arbitration Act. Thus, Section 11
envisages an arbitration agreement between the parties and refers to the
procedure for appointment in the said agreement between the parties.
29. In this regard, it is to be noted that Section 2(b) of the Arbitration Act
defines an arbitration agreement to mean an agreement referred to in Section
7 of the Arbitration Act. In terms of Section 7 of the Arbitration Act, an
arbitration agreement is an agreement by and between the parties to submit to
arbitration, all or certain disputes which have arisen or which may arise
between them. Further, while Section 7(2) of the Arbitration Act stipulates
ARB.P. 2129/2025 Page 24 of 29
that an arbitration agreement may be in the form of an arbitration clause in a
contract or in the form of a separate agreement, Section 7(3) expressly
provides that an arbitration agreement between the parties shall be in writing.
Section 7 of the Arbitration act, reads as under:
―xxx xxx xxx
7. Arbitration agreement.—
(1) In this Part, ―arbitration agreement‖ means an agreement by the
parties to submit to arbitration all or certain disputes which have
arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration
clause in a contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in—
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of
telecommunication 1 [including communication through electronic
means] which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the
existence of the agreement is alleged by one party and not denied by
the other.
(5) The reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement if the contract
is in writing and the reference is such as to make that arbitration
clause part of the contract.
xxx xxx xxx‖
(Emphasis Supplied)
30. Holding that it is not permissible to appoint an arbitrator to adjudicate
disputes between the parties in the absence of an arbitration agreement or
mutual consent, the Supreme Court in the case of Jagdish Chander Versus
Ramesh Chander and Others
8
, held as follows:
8
(2007) 5 SCC 719.
ARB.P. 2129/2025 Page 25 of 29
―xxx xxx xxx
11. The existence of an arbitration agreement as defined under
Section 7 of the Act is a condition precedent for exercise of power to
appoint an arbitrator/Arbitral Tribunal, under Section 11 of the Act
by the Chief Justice or his designate. It is not permissible to appoint
an arbitrator to adjudicate the disputes between the parties, in the
absence of an arbitration agreement or mutual consent. The
designate of the Chief Justice of Delhi High Court could not have
appointed the arbitrator in the absence of an arbitration agreement.
xxx xxx xxx‖
(Emphasis Supplied)
31. In the present case, the petition has been filed under Section 11(6) of
the Arbitration Act, seeking appointment of an independent arbitrator for
adjudication of the disputes between the parties. Undisputedly, the present
petition does not arise out of an independent arbitration clause and has been
filed on the premise of a purported ―statutory arbitration agreement‖,
alleged to be created by Section 18(3) of the MSMED Act.
32. It is an admitted position that upon an application made by the
petitioner herein to the MSEF Council, the conciliation proceedings were
commenced between the parties, and as per the order dated 22
nd
April, 2025,
the respondent was directed to file its final submissions within 10 days, and
in case of failure to do so, the matter would be forwarded for arbitration.
However, no final order/direction terminating the conciliation or referring
the matter to arbitration has been passed by the MSEF Council. Thus, it is
manifest that the MSEF Council is still seized of the matter as a conciliator.
33. Consequently, no deeming fiction as to the existence of ―statutory
arbitration agreement‖, as provided in Section 18(3) of the MSMED Act
has arisen. It is evident that the provisions of the Arbitration Act shall only
be applicable once the conciliation proceedings under Section 18(2) of the
MSMED Act stand terminated, and the MSEF Council refers the disputes
ARB.P. 2129/2025 Page 26 of 29
between the parties to arbitration. Prior to that stage, the provisions of the
Arbitration Act shall not be applicable to any proceedings under the
MSMED Act. Since no ―statutory arbitration agreement‖ exists between
the parties, the condition precedent for exercising the jurisdiction under
Section 11 of the Arbitration Act has not been satisfied. Thus, the present
petition is not maintainable.
34. Reliance in this regard is placed on the judgment of Bombay High
Court in the case of Bafna Udyog Versus Micro & Small Enterprises and
Another
9
, wherein, it was held as follows:
―xxx xxx xxx
10. The bare reading of Section 18 clearly provides for a specific
mechanism being firstly, the counsel shall conduct conciliation in
the matter or make a reference to any institution for conducting
conciliation. If the conciliation fails, then sub clause (3) is invoked
and the council shall take up the dispute for arbitration itself or refer
to any institution or centre. It is only then that the provisions of the
Act shall apply to the dispute as if the arbitration was in pursuance
of Section 7 of the Act. Thus, it is only when the council or its
designate enters into reference that the provisions of the Act will
apply.
11. Section 11(6)(c) of the Act provides for vesting of jurisdiction in
the Court to appoint an arbitrator if a person, including an
institution fails to perform the function entrusted to it “under that
procedure”. The words „under that procedure‟ contemplates a
procedure as agreed between the parties. This is clear from the plain
reading of the provision itself which commences with the words “(6)
Where, under an appointment procedure agreed upon by the
parties,- ……..”. The word „agreed‟ directly refers to an Arbitration
Agreement referred to in Section 7 of the Act. None of the criteria
laid down in Section 7 is met in the present case to indicate existence
of any arbitration agreement, either express or implied. Thus, in the
absence of an arbitration agreement, Section 11(6)(c) cannot be
invoked.
12. I have gone through the decision in Microvision Technologies
Private Limited (Supra) relied upon by Mr. Kirpekar. In the said
case there was a separate arbitration agreement between the parties.
9
2024 SCC OnLine Bom 110.
ARB.P. 2129/2025 Page 27 of 29
It is on the basis of existence of an arbitration agreement that an
arbitrator was appointed when there was inaction on the part of the
council to proceed with the statutory arbitration. Hence, this
decision is not applicable to the facts of the present case. Even in the
decision of Gujarat State Civil Supplies Corporation Limited
(Supra), the Supreme Court has held that the MSMED Act will
override the provisions of the Act. In the decision in the matter of
Silpi Industries (Supra) the Supreme Court has also held that
MSMED Act being a special statute, will have an overriding effect
vis-a-vis the Arbitration Act. Thus, the decisions in above two
matters are also of no assistance to the Petitioner.
13. The Supreme Court referring to its prior decision in various
matters, has, in the decision of Mahanadi Coal Fields v. IVRCL
AMR. Joint Venture
4
held that the invocation of the jurisdiction of
the High Court under Section 11(6) of the Act was not valid and
there being no arbitration agreement between the parties, no
reference to arbitration could have been made by the High Court.
Thus, inaction by the MSMED in referring to arbitration shall not
entitle the Petitioner to invoke the provisions of 11(6) of the Act and
seek appointment of an arbitrator dehors existence of an arbitration
agreement.
14. The contention of the Petitioner that acknowledgment of debt by
the Respondent No. 2 and the consequent non-payment implies
termination of conciliation proceedings without even reference to the
MSEFC cannot be accepted since the conciliation proceedings are to
be conducted by the council at the first stage and it is only upon
failure of the proceedings conducted by the council that the
subsequent step of reference to arbitration arises. On this ground also,
the present petition is premature.
xxx xxx xxx‖
(Emphasis Supplied)
35. The position of law is, thus, clear that the provisions of Arbitration
Act shall only apply once the dispute is taken up for arbitration by the
MSEF Council, either itself or by referring it to an institution. Further, for
referring the parties to arbitration under Section 11(6) of the Arbitration Act,
existence of a valid written agreement, which shows the ad idem intention of
the parties to submit to arbitration as a dispute resolution mechanism, is sine
qua non. Accordingly, in the absence of a valid written arbitration
agreement, or any statutory presumption of an arbitration agreement, a
ARB.P. 2129/2025 Page 28 of 29
petition under Section 11(6) of the Act shall not be maintainable.
Consequently, Section 11(6) of the Arbitration Act cannot be invoked in the
facts and circumstances of the present case.
36. The judgment in the case of Vallabh Corporation Versus SMS India
Pvt. Ltd.
10
, as relied upon by the petitioner is distinguishable, and does not
apply to the facts and circumstances of the present case. In the said case,
there existed an arbitration clause between the parties. Therefore, a petition
under Section 11(6) of the Arbitration Act was maintainable. However, in
the present case, admittedly there is no valid written arbitration agreement
between the parties. Furthermore, it has been specifically recorded in the
said judgment that the MSEF Council did not initiate the process of
conciliation under Section 18 of the MSMED Act, and in view of the same,
the petition under Section 11(6) of the Arbitration Act was allowed in the
said case. However, in the present case, the process of conciliation under
Section 18 of the MSMED Act has already been initiated, and the same is
pending adjudication.
37. Similarly, the judgment in the case of Microvision Technologies Pvt.
Ltd. Versus Union of India
11
, as relied upon by the petitioner, is also
distinguishable. In the said case as well, there existed an independent
arbitration agreement between the parties, therefore, a petition under Section
11(6) of the Arbitration Act was maintainable. However, there is no
arbitration agreement between the parties in the present case.
38. Likewise, the judgment in the case of M. B. Sugars &
Pharmaceuticals Private Limited Versus Micro Small Enterprises
10
2025 SCC OnLine Del 1795.
11
2023 SCC OnLine Bom 1848.
ARB.P. 2129/2025 Page 29 of 29
Facilitation Council and Ors.
12
, relied by the petitioner is distinguishable
and not applicable to the facts and circumstances of the present case. It is
specifically recorded in the said judgment that the MSEF Council had not
initiated the process of statutory mediation under Section 18 of the MSMED
Act. However, in the present case, the process of mediation under Section 18
of the MSMED Act has already been initiated and the same is pending
adjudication.
39. Considering the detailed discussion hereinabove, no merit is found in
the present petition.
40. However, in view of the long pendency of the conciliation
proceedings before it, the MSEF Council is directed to expeditiously finalize
the said proceedings and take further recourse thereto, preferably, within a
period of two months, from today.
41. The present petition is dismissed, in the aforesaid terms.
MINI PUSHKARNA
(JUDGE)
APRIL 09, 2026/KR/AK/SK
12
MANU/MH/3512/2025
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