High Court of Punjab and HaryanaCWP/33412/2024dismissed

M/S Whiteland Corporation Pvt Ltd v. State Of Karnataka And Others

2025-11-10Mr. Justice Jasgurpreet Singh Puri13 pages

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Both the above mentioned cases are being taken up together for final disposal with the consent of learned counsel for the parties

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* !% %* * Learned counsel appearing on behalf of the petitioner submitted that there was an agreement between the petitioner and respondent No.3 with respect to a works contract, pursuant to which a dispute arose between the parties. Respondent No.3 was a supplier and the petitioner was a buyer. After a dispute arose between the parties, the respondent No.3 filed an application under Section 18 of the Micro, Small, and Medium Enterprises Development Act, 2006 (hereinafter to be called as MSMED Act) vide Case No. 113 of 2023 before the Micro and Small Enterprises Facilitation Council, Bengaluru (hereinafter to be called as 'Facilitation Council'). 7!

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4 Learned counsel for the petitioner further asserted that the reason as to why the aforesaid impugned order (Annexure P

12) is bad in law, is that under the provisions of Sections 17 and 18 of the MSMED Act, a work contract cannot be the subject matter of a dispute and no reference in this regard can be made. Despite this, the Facilitation Council, Bengaluru, proceeded with the matter, recorded that conciliation had failed and thereafter referred the case to arbitration. He submitted that after the filing of the present petition, by way of an interim order dated 22.01.2025 by this Court, the Arbitrator was requested to keep the proceedings pending and in this way the arbitration proceedings are still pending and on the

4 petitioner's application for rejection of the proceedings no order has been served upon the petitioner in this regard.

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He submitted that since the seat of arbitration is provided to be at Gurgaon, the present writ petition under Article 226 of the Constitution of India has been filed in this Court as the cause of action has arisen within the territorial jurisdiction of this Court. . 1

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9 On the other hand, learned counsel appearing on behalf of respondent No.3 has strongly objected to the maintainability of the present petition on the ground of lack of territorial jurisdiction of this Court. In this regard, he submitted that the Facilitation Council under the MSMED

5 Act, at Bengaluru is also seized of the matter and that the matter is before the aforesaid council.

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1 B While responding to the argument raised by learned counsel for the petitioner that the subject matter of the dispute being a works contract and therefore the MSMED Facilitation Council was not competent to initiate the proceedings, it is submitted that the same is only a subject matter of the MSMED Facilitation Council or while acting as an arbitrator under the provisions of Section 18 of the MSMED Act but the same itself

7 cannot become a ground for conferring jurisdiction to this Court which otherwise, it is contended, does not have jurisdiction under Article 226 of the Constitution of India. . 1

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9 As to whether the aforesaid MSME Facilitation Council was within its jurisdiction to process the reference pertaining to a work contract, if any, is a matter to be examined and decided by the aforesaid Facilitation Council itself. In case the petitioner was aggrieved by the action of the Facilitation Council at Bengaluru, or by the initiation of the proceedings, or by the impugned order (Annexure P

12) passed by it, the petitioner could have challenged the same before Hon'ble High Court of Karnataka, which has the territorial jurisdiction in the matter. Therefore, it is clear that this Court does not have jurisdiction to entertain the present petition under Article 226 of the Constitution of India.

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In view of the aforesaid facts and circumstances, the present petition is accordingly dismissed.

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