[Cites 20, Cited by 0]

Madhya Pradesh High Court

M/S Bisleri International Pvt Ltd. ... vs M/S Sunpet Pack, Jabalpur Pvt. Ltd, on 15 January, 2026

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011

IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE

HON'BLE SHRI JUSTICE VIVEK JAIN

ON THE 15th OF JANUARY, 2026

ARBITRATION APPEAL No. 21 of 2011

M/S BISLERI INTERNATIONAL PVT. LTD. AND OTHERS
Versus
M/S SUNPET PACK JABALPUR AND OTHERS

WITH

ARBITRATION APPEAL No. 22 of 2011

M/S BISLERI INTERNATIONAL PVT LTD. WESTERN EXPRESS
HIGHWARY AND OTHERS
Versus
M/S SUNPET PACK, JABALPUR PVT. LTD, AND OTHERS

ARBITRATION APPEAL No. 23 of 2011

M/S BISLERI INTERNATIONAL PVT LTD. WESTERN EXPRESS
HIGHWARY AND OTHERS
Versus
M/S SUNPET PACK, JABALPUR PVT. LTD, AND OTHERS

Appearance:
Shri Jaideep Sirpurkar - Advocate for the appellant in all the appeals.

ORDER

These appeals arise out of dispute between same parties but in

relation to different supply orders. As identical issues arise in these appeals,

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011

therefore they are being decided by this common order. For the sake of

convenience, facts are being taken from AA No.21 of 2011.

2. The facts in brief for the purpose of disposal of these appeals is that

the appellant is a packaged drinking water manufacturing company and

entered into a trademark agreement dated 06.09.2002 with the respondent

No.2 to use the appellant's trademark and sell packaged drinking water

under the label and brand name of appellant.

3. Certain supplies were made by the respondent No.1-claimant before

the Micro and Small Enterprises Facilitation Council ("MSME Council"

for short) under Micro, Small and Medium Enterprises Development Act,

2006 ('MSME Act' for short) alleging that the claimants supplied various

empty water bottles to the respondent No.2 for the purpose of selling

packaged drinking water and since there was an agreement between the

appellant and the respondent No.2, the appellant was also impleaded as

party also alleging that certain transactions were made directly with the

appellant and therefore irrespective of Clause-5 of the agreement between

the appellant and the respondent No.2 whereby the appellant was not liable

for any third party claims against respondent No.2, in view of certain direct

transactions between the appellant and the respondent No.1-claimant, the

appellant was also impleaded.

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011

4. The claim before the MSME Council was filed on 05.10.2007 and in

the claim application the supplies were stated to have been made in the year

2002 and certain payments were made up to the year 2004. Even as per

claim application all the supplies were made prior to enforcement of

MSME Act, 2006 and neither the agreement with the claimant was entered

into after enforcement of MSME Act, nor any supply was made after

enforcement of MSME Act.

5. The learned counsel for the appellant has argued this case on various

grounds on merits like the claim before the MSME Council being barred by

limitation, there being no privity of contract between the appellant and the

claimant and the award being non-speaking, etc. However, he also raised a

preliminary ground that the very claim before the MSME Council was

without any jurisdiction and the MSME Council did not have any

jurisdiction to entertain the claim and enter into reference in the said claim

because the said claim did not fall within the purview of MSME Act, 2006.

It is argued that even the appellate Court has scuttled the said objections on

the ground that no such objection was taken before the MSME Council and

such objection cannot be taken before the court for the first time.

6. As this ground goes to the root of the jurisdiction of the MSME

Council, therefore this Court proceeds to adjudicate this ground first and

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011

only if this ground is not sustained, then the other grounds shall be taken

up.

7. The District Court while dealing with the application under section

34 of Act of 1996 against the award of MSME Council has held that this

objection regarding jurisdiction of MSME Council could not have been

taken for the first time before the Court.

8. The counsel for the appellant submits that such objection was duly

contained in the reply filed by the present appellant before the MSME

Council. However this dispute is not germane because it is settled in law

that objection as to subject matter jurisdiction can be raised at any point of

time. Upon perusal of the award, it is seen that this objection was duly

taken before the MSME Council by the appellant that since cause of action

arose in the year 2004 prior to enactment of MSME Act 2006, therefore the

claimant cannot claim benefits under the MSME Act 2006. Therefore, this

objection was duly there before the MSME Council as well as before the

District Court. Therefore, as the objection was duly there, this Court need

not delve on the question, whether the objection as to jurisdiction can be

taken for the first time in application u/s 34 of the Act of 1996.

9. Though the learned counsel for the appellant referred to the

judgement of the Hon'ble Supreme Court as far as back in the year 1954 in

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011

the case of Kiran Singh Vs. Chaman Paswan reported in (1954) 1 SCC

710, that objection as to subject matter jurisdiction can be raised at any

point of time. However, this objection being taken before the MSME

Council, there is no question as to stage of taking objection as to

jurisdiction involved in the matter.

10. Therefore this Court proceeds to adjudicate on the question of

jurisdiction of MSME Council.

11. The MSME Act provides vide section 18 for reference of disputes to

MSME Council and the dispute would be one under section 17, which

would be dispute in the matter of recovery of amount due for any goods

supplied or services rendered by the supplier. The word supplier is defined

in section 2(n) of the Act. For ready reference, relevant Sections 2(n), 17

and 18 of MSME Act are as under:-

"2(n) "supplier" means a micro or small enterprise, which has filed a memorandum with the authority referred to in sub-section (1) of section 8, and includes,-- (i) the National Small Industries Corporation, being a company, registered under the Companies Act, 1956 (1 of 1956); (ii) the Small Industries Development Corporation of a State or a Union territory, by whatever name called, being a company registered under the Companies Act, 1956 (1 of 1956); (iii) any company, co-operative society, trust or a body, by whatever name called, registered or constituted under any law for the time being in force and engaged in selling goods produced by micro or small enterprises and rendering services which are provided by such enterprises;

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011

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.

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 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 ittoany 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 dispute 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."

12. The definition of supplier as per Section 2(n) makes it imperative

that micro or small enterprise would be one which has filed a memorandum

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011

with the authority referred to in Section 8(1). Enterprise would be a

supplier in terms of MSME Act. Section 8 is also relevant which is as

under:-

"8. Memorandum of micro, small and medium enterprises. --

(1) Any person who intends to establish,--

(a) a micro or small enterprise, may, at his discretion; or

(b) a medium enterprise engaged in providing or rendering of services may, at his discretion; or

(c) a medium enterprise engaged in the manufacture or production of goods pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951), shall file the memorandum of micro, small or, as the case may be, of medium enterprise with such authority as may be specified by the State Government under sub-section (4) or the Central Government under sub-section (3):

Provided that any person who, before the commencement of this Act, established--

(a) a small scale industry and obtained a registration certificate, may, at his discretion; and

(b) an industry engaged in the manufacture or production of goods pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951),having investment in plant and machinery of more than one crore rupees but not exceeding ten crore rupees and, in pursuance of the notification of the Government of India in the erstwhile Ministry of Industry (Department of Industrial Development) number S.O. 477(E), dated the 25th July, 1991 filed an Industrial Entrepreneur's Memorandum, shall within one hundred and eighty days from the commencement of this Act, file the memorandum, in accordance with the provisions of this Act.

(2) The form of the memorandum, the procedure of its filing and other matters incidental thereto shall be such as may be notified by the Central Government after obtaining the recommendations of the Advisory Committee in this behalf.

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011

(3) The authority with which the memorandum shall be filed by a medium enterprise shall be such as may be specified, by notification, by the Central Government.

(4) The State Government shall, by notification, specify the authority with which a micro or small enterprise may file the memorandum.

(5) The authorities specified under sub-sections (3) and (4) shall follow, for the purposes of this section, the procedure notified by the Central Government under sub-section (2)."

13. From a perusal of section 8, it is clear that where a small scale

industry is established before commencement of MSME Act then the entity

has to file the memorandum in accordance with the MSME Act within 180

days from the commencement of the Act which stood commenced w.e.f.

02.10.2006. It had been pleaded by the Claimant before the MSME Council

that such memorandum was filed within 180 days from 02.10.2006 by the

claimant.

14. However, this issue is not relevant that whether the claimant filed the

memorandum within 180 days from 02.10.2006 because it is imperative

that the memorandum has to be filed before the supply contract has been

entered into.

15. In Silpi Industries v. Kerala SRTC, (2021) 18 SCC 790 the

Hon'ble Supreme Court has held as under:-

"42. Though the appellant claims the benefit of provisions under the MSMED Act, on the ground that the appellant was also supplying as on the date of making the claim, as provided under Section 8 of the MSMED Act, but same is not based on any acceptable material. The appellant, in support of its case placed

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011

reliance on a judgment of the Delhi High Court in GE T&D India Ltd. v. Reliable Engg. Projects & Mktg. [GE T&D India Ltd. v. Reliable Engg. Projects & Mktg., 2017 SCC OnLine Del 6978] , but the said case is clearly distinguishable on facts as much as in the said case, the supplies continued even after registration of entity under Section 8 of the Act. In the present case, undisputed position is that the supplies were concluded prior to registration of supplier. The said judgment of the Delhi High Court relied on by the appellant also would not render any assistance in support of the case of the appellant. In our view, to seek the benefit of provisions under the MSMED Act, the seller should have registered under the provisions of the Act, as on the date of entering into the contract. In any event, for the supplies pursuant to the contract made before the registration of the unit under provisions of the MSMED Act, no benefit can be sought by such entity, as contemplated under the MSMED Act.

43. While interpreting the provisions of Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, this Court, in the judgment in Shanti Conductors (P) Ltd. v. Assam SEB [Shanti Conductors (P) Ltd. v. Assam SEB, (2019) 19 SCC 529 : (2020) 4 SCC (Civ) 409] has held that date of supply of goods/services can be taken as the relevant date, as opposed to date on which contract for supply was entered, for applicability of the aforesaid Act. Even applying the said ratio also, the appellant is not entitled to seek the benefit of the Act.

There is no acceptable material to show that, supply of goods has taken place or any services were rendered, subsequent to registration of the appellant as the unit under the MSMED Act, 2006. By taking recourse to filing memorandum under sub- section (1) of Section 8 of the Act, subsequent to entering into contract and supply of goods and services, one cannot assume the legal status of being classified under the MSMED Act, 2006, as an enterprise, to claim the benefit retrospectively from the date on which the appellant entered into contract with the respondent.

44. The appellant cannot become micro or small enterprise or supplier, to claim the benefits within the meaning of the MSMED Act, 2006, by submitting a memorandum to obtain registration subsequent to entering into the contract and supply of goods and services. If any registration is obtained, same will be prospective and applies for supply of goods and services subsequent to registration but cannot operate retrospectively. Any other interpretation of the provision would lead to absurdity

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011

and confer unwarranted benefit in favour of a party not intended by legislation".

16. It has been categorically and conclusively held by the Hon'ble

Supreme Court that any subsequent filing of memorandum after entering

into the contract would not make the entity a MSME within the meaning of

MSME Act, 2006.

17. In Gujarat State Civil Supplies Corpn. Ltd. v. Mahakali Foods (P)

Ltd., (2023) 6 SCC 401, the Hon'ble Supreme Court has held as under:-

"52.4. The proceedings before the Facilitation Council/institute/centre acting as an arbitrator/Arbitral Tribunal under Section 18(3) of the MSMED Act, 2006 would be governed by the Arbitration Act, 1996.

52.6. A party who was not the "supplier" as per the definition contained in Section 2(n) of the MSMED Act, 2006 on the date of entering into contract cannot seek any benefit as the "supplier"

under the MSMED Act, 2006. If any registration is obtained subsequently the same would have an effect prospectively and would apply to the supply of goods and rendering services subsequent to the registration."

18. In the above judgment also the Hon'ble Apex Court has conclusively

held that the supplier would be one who should be the supplier on the date

of entering into contract and any subsequent registration is irrelevant.

19. In Vaishno Enterprises v. Hamilton Medical AG, (2024) 12 SCC

214 the Hon'ble Apex Court has held as under:-

"20. Considering the relevant provisions of the MSME Act more particularly Section 2(n) read with Section 8 of the MSME Act, the provisions of the MSME Act shall be applicable in case of

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011

supplier who has filed a memorandum with the authority referred to in sub-section (1) of Section 8. Therefore, the supplier has to be a micro or small enterprise registered as MSME, registered with any of the authority mentioned in sub-section (1) of Section 8 and Section 2(n) of the MSME Act.

21. It is admitted position that in the present case the appellant is registered as MSME only on 28-8-2020. Therefore, when the contract was entered into the appellant was not MSME and therefore the parties would not be governed by the MSME Act and the parties shall be governed by the laws of India applicable and/or prevailing at the time of execution of the contract. If that be so the Council would have no jurisdiction to entertain the dispute between the appellant and Respondent 1, in exercise of powers under Section 18 of the MSME Act."

20. In the aforesaid case also the Hon'ble Apex Court has held that when

there was no registration as MSME on the date of entering into contract,

there would be no question of the entity being considered MSME under

MSME Act, 2006.

21. In the present case, not only the contract is alleged to have been

entered into between the claimant and the respondent No.2 sometime in the

year 2002, but all the supplies were made during the year 2002-03 and the

last payment was also made in the year 2004-2005. Therefore, in view of

section 2(n) and section 18 of MSME Act 2006, the application before the

MSME Council was clearly not maintainable and the Council has

erroneously entertained the said application.

AA Nos.21 of 2011, 22 of 2011 and 23 of 2011