LexM/S HARCHARAN DASS GUPTA versus UNION OF INDIA
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[2025] 6 S.C.R. 422 : 2025 INSC 689 M/s Harcharan Dass Gupta v. Union of India (Civil Appeal No. 6807 of 2025) 14 May 2025 [Pamidighantam Sri Narasimha* and Joymalya Bagchi, JJ.] Issue for Consideration In a case covered under the Micro, Small and Medium Enterprises (Development) Act, 2006, whether the High Court erred in holding that the Delhi Arbitration Centre lacked jurisdiction to conduct arbitral proceedings on the ground that the contract between the appellant- supplier (located in Delhi) and the respondent (based in Bengaluru) provided that the seat for arbitration shall be at Bengaluru. Headnotes† Micro, Small and Medium Enterprises (Development) Act, 2006 – s.18(4) – Arbitration and Conciliation Act, 1996 – Overriding effect of MSMED Act over Arbitration Act – Seat of arbitration in cases covered under the MSMED Act: Held: s.18(4), MSMED Act vests jurisdiction for arbitration in the Facilitation Council where the supplier is located – A private agreement between the parties cannot obliterate the statutory provisions – Thus, the agreement between the parties stands overridden by the statutory provisions under the MSMED Act – Appellant supplier- MSME is located in Delhi and as such the Facilitation Council, Delhi in exercise of its power, entrusted the conduct of arbitration through the institutional aegis of the Delhi Arbitration Centre – Impugned order set aside – Arbitral proceedings restored under the aegis of Delhi Arbitration Centre. [Paras 2, 9, 10, 11, 13] Case Law Cited Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd. [2022] 19 SCR 1094 : (2023) 6 SCC 401 – relied on. List of Acts Micro, Small and Medium Enterprises (Development) Act, 2006; Arbitration and Conciliation Act, 1996. * Author [2025] 6 S.C.R. 423 M/s Harcharan Dass Gupta v. Union of India List of Keywords Section 18(4) of Micro, Small and Medium Enterprises (Development) Act, 2006; Cases covered under the Micro, Small and Medium Enterprises (Development) Act, 2006; Seat of arbitration; Overriding effect of MSMED Act over Arbitration Act; Facilitation Council; Jurisdiction where the supplier is located; Location of supplier; Private agreement between the parties; MSMED Act; MSME; Agreement between the parties overridden by the statutory provisions; Delhi Arbitration Centre; Institutional aegis; Arbitral proceedings restored; Indian Space and Research Organisation (ISRO); Registered supplier under the MSMED Act; Construction of staff quarters. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6807 of 2025 From the Judgment and Order dated 22.04.2024 of the High Court of Karnataka at Bengaluru in WP No. 27269 of 2023 Appearances for Parties Advs. for the Appellant: Ms. Priya Kumar, Sr. Adv., Ms. Renuka Arora, Nishant Kumar. Advs. for the Respondent: Vikramjit Banerjee, A.S.G., Abhishek Singh, Raghav Sharma, Ishaan Sharma, C.K. Sharma, Ms. Archana Shurve Shinde, Dr. N. Visakamurthy. Judgment / Order of the Supreme Court Judgment Pamidighantam Sri Narasimha, J. 1. Delay condoned, leave granted. 2. The present appeal is directed against the order dated 22.04.2024 passed by the Karnataka High Court whereby the writ petition1 filed by the respondent has been allowed, and it has been held that the Delhi 1 Writ Petition No. 27269 of 2023 (GM-RES). 424 [2025] 6 S.C.R. Supreme Court Reports Arbitration Centre lacks jurisdiction to manage arbitral proceedings as the contract between the appellant and the respondent provides that the seat for arbitration shall be at Bengaluru. For the reasons to follow and in view of the overriding effect of Micro, Small and Medium Enterprises (Development) Act, 20062 over the Arbitration and Conciliation Act, 19963 as affirmed by this Court in Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd.,4 we have allowed the appeal and restored the arbitral proceedings under the aegis of Delhi Arbitration Centre. We will first indicate the facts to the extent they are necessary for the determination of the issue, which are as follows. 3. The respondent herein, the Indian Space and Research Organisation (ISRO), based in Bengaluru, invited bids for construction of staff quarters in New Delhi by way of the tender notice5 dated 16.01.2017. Appellant, a registered supplier under the MSMED Act was selected, leading to an agreement dated 11.09.2017 for the execution of the project. 4. In view of certain disputes
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