Case Details: Chennai Petroleum Corporation Ltd. vs. Micro and Small Enterprises Facilitation Council, Chennai Region - [2025] 181 taxmann.com 976 (HC - Madras)
Judiciary and Counsel Details
- V. Lakshminarayanan, J.
- Om Prakash, Senior Counsel & Raghavendra Ross Divakar for the Petitioner.
- K. Krishnan for the Respondent.
Facts of the Case
In the instant case, the petitioner had entered into a works contract with the second respondent. The second respondent initiated proceedings before the Micro and Small Enterprises Facilitation Council (MSEFC), alleging default in payment.
The petitioner objected that, being a works contract, the claim was not covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED), and filed a writ petition before the High Court seeking to quash the proceedings.
The High Court, in writ petition, directed the MSEFC, before passing any final order, to immediately examine the petitioner’s application under Section 16 of the Arbitration and Conciliation Act regarding MSEFC’s jurisdiction, to call for any additional details if required, to conduct an enquiry with the opportunity of personal hearing, and to pass a reasoned order dealing with each contention and communicate decision.
Subsequently, the MSEFC disposed of the Section 16 petition vide the impugned order. Thereafter, an appeal was made before the High Court.
High Court Held
The High Court held that since MSEFC had not performed the exercise required to determine its jurisdiction in terms of Section 16 of the Act, the impugned order was to be set aside, and the matter was to be remanded back to MSEFC to redo the exercise directed by the High Court in the earlier writ petition.
List of Cases Referred to
- Chennai Petroleum Corporation Ltd. v. Micro and Small Enterprises Facilitation Council [W. P. No. 4861 of 2024, dated 27-2-2024] (para 4)
- Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods (P.) Ltd. (Unit 2) [2023] 153 taxmann.com 662 (SC) (para 5).
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