Ms Kailas Engineering System vs Micro and Small Enterprises, Facilitation Council — Bombay HC (2025) — LawSathi Research

Ms Kailas Engineering System vs Micro and Small Enterprises, Facilitation Council — Bombay HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

Interim listing direction only: matter stood over to July 17, 2025, on which date an update is to be sought from Respondent No. 1 regarding commencement of arbitration; Contempt Petition remains pending, not finally disposed.

Issue for consideration

Whether arbitration under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 has actually commenced before the MSEFC, or whether only conciliation proceedings continue, notwithstanding the order dated October 4, 2023 and the direction dated February 13, 2025 to proceed to arbitration.

Court's answer

Taking on board the Learned AGP's confirmation, on instructions, that the hearing scheduled for July 7, 2025 is a hearing for arbitration proceedings, the Court stood the matter over to July 17, 2025, on which date an update shall be sought from Respondent No. 1. (Operative interim direction; no final adjudication of the contempt allegation.)

Key takeaways

All actions required to be taken pursuant to this order shall be taken upon receipt of a downloaded copy as available on the Court's website.obiter¶18

Detailed headnote1 paragraphs

Bombay High Court (OOCJ), Somasekhar Sundaresan, J. — Contempt Petition No. 94 of 2024 by Kailas Engineering System against the Micro and Small Enterprises Facilitation Council, Mumbai (MSEFC), alleging contempt of the order dated October 4, 2023 calling for the record and proceedings from the MSEFC, read with the direction dated February 13, 2025 that the matter proceed to arbitration under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006. At the listing on July 3, 2025, an MSEFC official indicated arbitration was underway (next hearing July 7, 2025), while Petitioner's counsel asserted only conciliation was continuing and formal arbitration had not commenced. The Learned AGP, on instructions, confirmed that the July 7, 2025 hearing was fixed for arbitration proceedings. Accepting that assurance, the Court stood the matter over to July 17, 2025 for an update from Respondent No. 1; interim direction, no final disposal, no quantum involved.

34-CP-94-2024(1).doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

CONTEMPT PETITION NO. 94 OF 2024

Digitally signed by SHRADDHA SHRADDHA KAMLESH KAMLESH TALEKAR TALEKAR Date: 2025.07.17 14:57:18 +0530

Ms Kailas Engineering System … Petitioner Vs. Micro And Small Enterprises, Facilitation Council .. Respondent

Mr. Aseem Naphade a/w. Rishab Tiwari i/b Vivekanand Vinod Krishnan, for Petitioners.

Ms. Shilpa G. Talhar, AGP, for Respondent No. 1. Mr. Sanjay D. Bangar, Member Secretary, MSEFC.

CORAM : SOMASEKHAR SUNDARESAN, J.

Date : July 3, 2025

Order :

This matter has been pending before the Micro and Small Enterprises Facilitation Council, Mumbai (MSEFC) since 2022. This Contempt Petition has been filed alleging contempt of the order dated October 4, 2023, by which a Learned Single Judge of this Court called for the record and proceedings in the matter from the MSEFC, to be placed with the registry. Thereafter, by an order dated February 13, 2025, this Bench directed that the matter must proceed to arbitration pursuant to Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006. Till date, there is no sign of the arbitration have been commenced.

Page 1 of 2 July 3, 2025

Shraddha

34-CP-94-2024(1).doc

Today, in the forenoon, an official of the MSEFC asked for the matter be stood over beyond the lunch recess to enable the Learned AGP to make submissions to the Court. He indicated that the arbitration is actually underway and the next date of hearing is scheduled for July 7, 2025.

However, in the post-lunch session, Learned Counsel for the Petitioner submits that conciliation proceedings have been carried on forever in the matter and even the next date of hearing is meant to conduct conciliation proceedings and formal arbitration is yet to commence. Learned AGP on behalf of the MSEFC submits that arbitration would be commenced forthwith and that Respondent No. 1 shall be advised that conciliation cannot carry on at this pace and for such length.

In these circumstances, the Learned AGP, on instructions, confirms that the hearing scheduled for July 7, 2025, is a hearing for arbitration proceedings. Consequently, taking such assurance on board, the matter is stood over to July 17, 2025, on which date an update shall be sought from the Respondent No. 1.

All actions required to be taken pursuant to this order, shall be taken upon receipt of a downloaded copy as available on this Court’s website.

[ SOMASEKHAR SUNDARESAN, J.]

Page 2 of 2 July 3, 2025

Shraddha