M/s Kashmir Confectionary Store & Ors.; M/s Mehak Trading Co.; M/s Naugraein Traders v. M/s Mother Choice Health Care India

What happened

The respondent had three transactions with the petitioners for the supply of goods and, for the unpaid amounts, applied to the Himachal Pradesh Micro and Small Enterprises Facilitation Council at Shimla. The Council found conciliation under section 18(2) of the Micro, Small and Medium Enterprises Development Act, 2006 not possible and referred the disputes to arbitration under section 18(3). The arbitrator passed three awards, two dated 19 October 2023 and one dated 22 April 2023. The respondent filed execution petitions before the District Judge, Solan, which were transferred to the District Judge, Jammu. The petitioners filed applications under section 47 read with section 151 of the Code of Civil Procedure objecting to execution, and the Principal District Judge, Jammu dismissed them by three orders of 20 July 2026. The only ground in the revisions was that the awards were nullities because the respondent was not registered under the Act when the supplies were made, so that the Council could not take cognizance. The petitioners relied on the Supreme Court's decisions in Silpi Industries v. Kerala State Road Transport Corporation, Vaishno Enterprises v. Hamilton Medical AG and Gujarat State Civil Supplies Corporation v. Mahakali Foods. The respondent produced an Udyog Aadhaar Memorandum certificate showing registration from 1 April 2010.

Questions before the court

• Are MSMED arbitral awards nullities, defeating execution, if the supplier was allegedly not registered when it made the supplies?

Why the court ruled this way

The Court found that the respondent was registered from 2010 and had re-registered in 2020 under the Ministry's notification of 26 June 2020, which required existing enterprises to re-register, so the petitioners' premise that its registration dated only from 2020 was a misconception (paragraph 9). Even if the respondent had not been registered at the relevant time, the awards would not be nullities: the Supreme Court in NBCC (India) Ltd. v. State of West Bengal, 2025 INSC 54, had noticed the three decisions relied upon by the petitioners and, having regard to the definition of supplier, the separate legal regimes for micro, small and medium enterprises and the discretion vested in enterprises to file a memorandum under section 8, rejected the contention that the Facilitation Council cannot entertain a reference under section 18(3) if the enterprise is not registered. The reference to the Council and then to the arbitrator was therefore in accordance with law (paragraphs 10–11).

Controlling point

A supplier's alleged lack of registration under section 8 of the MSMED Act when it supplied the goods does not make the Facilitation Council's reference or the resulting arbitral award a nullity.

Order and next steps

The Court found no ground to interfere with the orders of the Principal District Judge, Jammu, and dismissed the three petitions.

Practical implications

A buyer facing execution of an MSMED award should not rely on the supplier's registration date as a ground of nullity; the Supreme Court's decision in NBCC (India) Ltd. treats the absence of registration as no bar to a reference under section 18(3).

Limits of this ruling

• The Court dealt only with the plea that the awards were nullities for want of registration, which was the sole ground urged; it did not examine the merits of the awards.