The High Court of Jammu & Kashmir and Ladakh Single Bench of Justice Moksha Khajuria Kazmi has held that a writ petition under Article 226/227 of the Constitution challenging an arbitral award passed by the Micro and Small Enterprises Facilitation Council is not maintainable. The Court dismissed the petition on grounds of statutory bar under Section 19 of the MSMED Act, 2006, and granted liberty to the petitioner to pursue the remedy under the Arbitration and Conciliation Act, 1996. The decision was pronounced on 21 April 2025.

The dispute arose from a contract for the supply of ISI-marked GMS tubes of various diameters invited through e-NIT No. PHE/M&P/01 of 2018-19 by the Jal Shakti Department, Union Territory of Jammu & Kashmir. Among six bidders, M/s JTL Infra Limited was declared the lowest bidder and was issued three supply orders for both light and medium class categories. As per the contract, supplies were made and payments disbursed periodically in accordance with the terms and conditions.

The department later claimed that delays in finalising the contract occurred due to the supplier’s own delay in supplying materials, which in turn impacted settlement of the contract. It was submitted that after final confirmation, penalties were applied and net payable amounts were settled and paid accordingly.

Subsequently, the supplier, M/s JTL Infra Limited, approached the Micro and Small Enterprises Facilitation Council, SAS Nagar, Punjab, under Section 18 of the MSMED Act, 2006, for recovery of ₹19,38,92,339, including a principal claim of ₹16,89,79,714.26 and interest of ₹2,49,12,624.74 up to 31 December 2019. The Council passed an award on 1 June 2023, granting the claimant ₹2,75,65,355 as principal and ₹8,77,32,279 as interest up to 20 April 2023, totalling ₹11,52,97,635, along with future interest on delayed payments.

Challenging the award, the petitioner contended that the Council acted beyond its jurisdiction, especially in the absence of any contractual clause regarding delayed payment interest. It was further argued that the ex-parte award was passed without providing a fair opportunity of hearing and that the Facilitation Council lacked jurisdiction due to territorial constraints. The petition was filed directly before the High Court without depositing 75% of the awarded amount as mandated under Section 19 of the MSMED Act.

The petitioner relied on multiple precedents, including Gammon Engineers and Contractors Private Limited v. Rohit Sood, Tamil Nadu Cements Corporation Limited v. MSEFC and Another, and UT of J&K v. Aibak Electric Industries Barzulla, to argue that the Council had exceeded its authority.

Responding to the petition, the supplier maintained that the Council followe