Allowed

Oyo Hotels and Homes Pvt. Ltd. and Anr. v. Micro and Small Enterprises Facilitation Council, South West Delhi & Ors.

Delhi HC16 May 2024W.P.(C)/1180/2024

Case brief

AI extract

What is this about?

The Delhi High Court dismissed a petition challenging a DIAC reference, applying Gujarat State Civil Supplies Corp. to hold that post-contract MSME registration has no retrospective effect. The petition allowing the challenge to the reference was permitted.

What did the court decide?

The Reference dated 25.05.2023 passed by Respondent No.1 referring the dispute to DIAC was held bad and the challenge to the same was allowed.

Oyo Hotels and Homes Pvt. Ltd. and Anr. Vs Micro and Small… — Arbitration | Delhi HC (2024)

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$~63

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- W.P.(C) 1180/2024

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OYO HOTELS AND HOMES PVT. LTD. AND ANR .... Petitioners

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Through: Mr. Harsh Kaushik, Advocate.

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versus

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MICRO AND SMALL ENTERPRISES FACILITATION COUNCIL, SOUTH WEST DELHI & ORS. ..... Respondents Through: Mr. Avishkar Singhvi, Mr. Naved Ahmed, Mr. Vivek Kumar and Mr. Shubham Kumar, Advocates for R-1. Mr. M.C. Dhingra and Mr. Gaurav Dhingra, Advocates for R-2. Mr. Adhishwar Suri, Advocate for Dr. Amit George, Advocate for R-3.

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CORAM:

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HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD

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O R D E R

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% 16.05.2024

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CM APPL. 28462/2024 (Exemption)

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Allowed, subject to all just exceptions.

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W.P.(C) 1180/2024 & CM APPLs. 4954/2024, 28461/2024

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The Petitioner has approached this Court challenging a Reference dated 25.05.2023 passed by Respondent No.1 referring the dispute to the Delhi International Arbitration Centre (DIAC) on the ground that since the Respondent No.2 has got himself registered as an MSME after termination of contract, Respondent No.2 cannot take the benefit of Micro, Small and Medium Enterprises Development Act.

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The facts in brief are that an agreement was entered into between the

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Page 1 of 3

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W.P.(C) 1180/2024

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/05/2024 at 11:40:39

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Petitioner and Respondent No.2 by which the Petitioner was to run the premises bearing Plot No.2, Sector-10, Dwarka, Delhi, for Respondent No.2. 3. It seems that disputes have arisen between the parties and the contract was finally terminated in April, 2020. This Court on 08.05.2024 had directed the learned Counsel for Respondent No.1 to verify the date on which Respondent No.2 was registered as an MSME. 4. Learned Counsel for Respondent No.1, on instructions, states that Respondent No.2 was registered as MSME on 23.08.2022. 5. The Apex Court in Gujarat State Civil Supplies Corporation v. Mahakali Foods Pvt. Ltd., (2023) 6 SCC 401, after considering the decisions in Silpi Industries & Ors. v. Kerala State Road Transport Corporation & Anr., has observed as under:-

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“ 51 . Following the abovestated ratio, it is held that a party who was not the “supplier” as per Section 2(n) of the Msmed Act, 2006 on the date of entering into the contract, could not seek any benefit as a supplier under the Msmed Act, 2006. A party cannot become a micro or small enterprise or a supplier to claim the benefit under the Msmed Act, 2006 by submitting a memorandum to obtain registration subsequent to entering into the contract and supply of goods or rendering services. If any registration is obtained subsequently, the same would have the effect prospectively and would apply for the supply of goods and rendering services subsequent to the registration. The same cannot operate retrospectively. However, such issue being jurisdictional issue, if raised could also be decided by the Facilitation Council/Institute/Centre acting as an Arbitral Tribunal under the Msmed Act, 2006.”

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In view of the above, the said Reference is bad. However, it is always

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Page 2 of 3

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W.P.(C) 1180/2024

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/05/2024 at 11:40:39

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open for the parties to take such recourse to the steps as available to them including filing applications under Section 11 of the Arbitration & Conciliation Act for appointment of an Arbitrator.

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It is made clear that this Court has not made any observation on the merits of the case.

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The writ petition is allowed. Pending application(s), if any, stand disposed of.

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SUBRAMONIUM PRASAD, J

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MAY 16, 2024 hsk

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Page 3 of 3

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W.P.(C) 1180/2024

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/05/2024 at 11:40:39

Oyo Hotels and Homes Pvt. Ltd. and Anr. v. Micro and Small Enterprises Facilitation Council, South West Delhi & Ors.

Case brief

What is this about?

What did the court decide?

Oyo Hotels and Homes Pvt. Ltd. and Anr. v. Micro and Small Enterprises Facilitation Council, South West Delhi & Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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