M/s Harcharan Dass Gupta vs Union of India

Court

Supreme Court of India

Date

14 May 2025

Case No.

Civil Appeal No. 6807 of 2025

Result

Allowed

Bench

Pamidighantam Sri Narasimha, Joymalya Bagchi

Citation

[2025] 6 S.C.R. 422 : 2025 INSC 689

Acts & Sections

Micro, Small and Medium Enterprises… Arbitration and Conciliation Act, 1996

Issue for consideration

In a case covered under the Micro, Small and Medium Enterprises (Development) Act, 2006, whether the High Court erred in holding that the Delhi Arbitration Centre lacked jurisdiction to conduct arbitral proceedings on the ground that the contract between the appellantsupplier (located in Delhi) and the respondent (based in Bengaluru) provided that the seat for arbitration shall be at Bengaluru.

Headnote

Micro, Small and Medium Enterprises (Development) Act, 2006 – s.18(4) – Arbitration and Conciliation Act, 1996 – Overriding effect of MSMED Act over Arbitration Act – Seat of arbitration in cases covered under the MSMED Act: Held: s.18(4), MSMED Act vests jurisdiction for arbitration in the Facilitation Council where the supplier is located – A private agreement between the parties cannot obliterate the statutory provisions – Thus, the agreement between the parties stands overridden by the statutory provisions under the MSMED Act – Appellant supplierMSME is located in Delhi and as such the Facilitation Council, Delhi in exercise of its power, entrusted the conduct of arbitration through the institutional aegis of the Delhi Arbitration Centre – Impugned order set aside – Arbitral proceedings restored under the aegis of Delhi Arbitration Centre. [Paras 2, 9, 10, 11, 13]

Judgment Pamidighantam Sri Narasimha, J. 1. Delay condoned, leave granted. 2. The present appeal is directed against the order dated 22.04.2024 passed by the Karnataka High Court whereby the writ petition1 filed by the respondent has been allowed, and it has been held that the Delhi Writ Petition No. 27269 of 2023 (GM-RES). Arbitration Centre lacks jurisdiction to manage arbitral proceedings as the contract between the appellant and the respondent provides that the seat for arbitration shall be at Bengaluru. For the reasons to follow and in view of the overriding effect of Micro, Small an

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