SRP MINERALS PVT LTD v. UNION OF INDIA & ORS
The MSMED Act makes no distinction between works contracts and other contracts, and a party who consented to the constitution of the arbitral tribunal and took part cannot later challenge the reference by writ; objections can be raised before the tribunal under section 16 of the Arbitration and Conciliation Act, 1996.
By CA Nikhil Gupta · Reviewed against the retained judgment 2026-10-10
SRP Minerals, the buyer, sought to set aside a reference made by the Telangana MSME Facilitation Council to the Hyderabad arbitration centre on a supplier's claim, arguing that a works contract is outside the MSMED Act. The Division Bench rejected the argument on merits, held that India Glycols did not help, and found the writ an afterthought, given the buyer's consent to the tribunal.
What happened
The writ petition challenged the reference made by the Facilitation Council (respondent 2) to the International Arbitration and Mediation Centre (IAMC), Hyderabad, by a letter dated 22 July 2023, on an application by the supplier (respondent 4), Sai Teja Construction Ltd. The petitioner, the buyer, argued that the contract was a works contract that is excluded from the MSMED Act, 2006. The supplier said the objection was contrary to the petitioner's own consent to the constitution of the tribunal. The record showed the petitioner's counsel appeared before the sole arbitrator on 19 March 2024 and 9 April 2024, the procedural order of 9 April 2024 recorded that both parties had no objection on any ground to the constitution of the tribunal and set dates for the petitioner's statement of defence, and the IAMC's e-mail of 21 February 2024 recorded that both parties had indicated a preference for a retired judge as arbitrator.
Questions before the court
- Can the buyer challenge by writ the reference of a supplier's claim to arbitration on the ground that the contract is a works contract, after consenting to the tribunal?
Why the court ruled this way
A coordinate Bench in A.A. No. 55 of 2025, following Hindustan Petroleum Corporation Ltd. v. West Bengal State Micro, Small Enterprises Facilitation Council (Calcutta High Court, 2023), had held that the MSMED Act does not distinguish works contracts and the Council can conciliate and arbitrate in respect of them (paragraph 6). Section 18 makes no such distinction and the Act overrides other laws (paragraph 8). India Glycols Limited v. Micro and Small Enterprises Facilitation Council, (2025) 5 SCC 780, dealt only with whether the Division Bench could decide limitation after holding the writ not maintainable and did not touch the Council's jurisdiction over works contracts (paragraphs 9 and 10). The challenge was devoid of any statutory basis (paragraph 11). The buyer had appeared repeatedly and consented to the tribunal (paragraphs 12 and 13), and the writ was an afterthought to scuttle the arbitration; an effective alternative remedy under section 16 of the 1996 Act was available (paragraph 14).
Controlling point
Works contracts are not excluded from the MSMED Act, and in any event the petitioner, having consented to the tribunal, could not challenge the reference by writ.
Order and next steps
The writ petition and all connected applications were dismissed. There was no order as to costs, and interim orders, if any, were vacated.
Practical implications
A buyer that objects to jurisdiction of an MSME Facilitation Council reference should raise the objection promptly before the arbitrator under section 16 of the Arbitration and Conciliation Act, 1996, and avoid consenting to the tribunal's constitution without reserving it.
Limits of this ruling
- The ruling follows an earlier Bench decision and records the buyer's consent; it does not decide the underlying claim and is not authority on every question of the Facilitation Council's powers.
Law and judgment source
- Micro, Small and Medium Enterprises Development Act, 2006, sections 18 and 24
- Arbitration and Conciliation Act, 1996, section 16
The linked PDF is a complete public court-copy document. The official court portal is provided for independent verification; a stable judgment-specific official link was not independently established.
Source checked: 2026-10-10 · Judgment paragraphs: paragraphs 1–15 · Later case history: not verified. Verify appeals, stays and subsequent orders before reliance.
This page is informational. Verify the current official court record, subsequent history and applicable law, and obtain professional advice for a specific matter.