The High Court of Judicature at Allahabad has dismissed a writ petition challenging an award passed by the Micro, Small and Medium Enterprises Facilitation Council (MSME Council), Kanpur. A Division Bench comprising Justice Saral Srivastava and Justice Garima Prashad held that a party cannot bypass the statutory remedy provided under the Arbitration and Conciliation Act, 1996, particularly to avoid the mandatory pre-deposit requirements under the MSME Act.
Background
The case involved a challenge to an award dated July 15, 2021, passed by the MSME Council under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (2006 Act). The award directed the petitioner, Shri Krishna Nutriton India Pvt Ltd, to pay a sum of ₹9,62,610 along with interest of ₹14,53,225, totaling ₹24,15,835. The petitioner claimed they became aware of the award only in the third week of April 2025 and subsequently approached the Executing Court with recall applications and objections before filing the present writ petition.
Arguments of the Petitioner
The petitioner argued that the impugned award was passed ex parte and without due service of notice. Furthermore, they contended that the MSME Council lacked jurisdiction because the claim was barred by limitation—asserting the last supply was made in February 2017 while the reference was filed in September 2020. The petitioner’s counsel maintained that the proceedings were conducted in violation of the principles of natural justice and cited several authorities to argue that the High Court may exercise jurisdiction under Article 226 in cases of fundamental jurisdictional infirmity.
Court’s Analysis
The Court observed that the petitioner’s grounds for challenge—absence of proper service and the plea of limitation—are not pure questions of law but are “mixed questions of fact and law.” The Bench noted:
“Determination of proper service would require examination of mode of service, acknowledgment, addresses and related material, while the plea of limitation would depend upon factual aspects such as date of supply, invoices, acknowledgments and course of dealings between the parties.”
The Court emphasized that Section 18 of the 2006 Act leads to an arbitral award, for which the statute provides a specific remedy under Section 34 of the Arbitration and Conciliation Act, 1996. Referring to the Supreme Court’s ruling in India Glycols Ltd. v. Micro and Small Enterprises Facilitation Council (2018), the Bench held that writ jurisdiction cannot be invoked to bypass statutory remedies, especially when doing so avoids the pre-deposit requirement under Section 19 of the 2006 Act.
Addressing the petitioner’s reliance on Serosoft Solutions Pvt. Ltd. and Sonali Power Equipments Pvt. Ltd., the Court remarked that interference under Article 226 in arbitral matters is extremely limited and that factual determinations regarding limitation cannot be adjudicated in writ jurisdiction.
The Court further observed:
“Acceptance of the petitioner’s submission would result in every arbitral award being subjected to writ scrutiny on allegations of procedural irregularity, thereby rendering the statutory mechanism under Section 34 redundant, which is impermissible in law.”
Decision
The High Court concluded that the writ petition was not maintainable as no exceptional circumstances were demonstrated. The Court dismissed the petition but directed the Executing Court to consider the petitioner’s pending applications expeditiously and in accordance with the law. The Bench also noted that the petitioner remains at liberty to avail other available statutory remedies.
Case Details
- Case Title: Shri Krishna Nutriton India Pvt Ltd Versus The Micro Small and Medium Enterprises and another
- Case No.: WRIT-C No. 8895 of 2026
- Bench: Justice Saral Srivastava, Justice Garima Prashad
- Date: April 30, 2026
