Allowed

M/S Shilpa Medicare Ltd., v. the Micro and Small Enterprises Fecilitation Council Department of Industries and Commerce

Karnataka HC18 Jun 2026WP/759/2024

Case brief

AI extract

What is this about?

Petitioner challenged a Micro and Small Enterprises Facilitation Council award passed after failed conciliation without reference to arbitration. Relying on its earlier decision in Enmas Gb Power Systems Projects Ltd, the Court held this contrary to Section 18(3), quashed the award and remitted the matter to the Council to terminate conciliation and decide on arbitration.

What did the court decide?

Award dated 09.02.2023 passed by respondent No.1 (Annexure-A) quashed; matter remitted to the Karnataka MSE Facilitation Council with directions to be passed within 30 days.

M/S Shilpa Medicare Ltd., Vs the Micro and Small Enterprises… — Arbitration | Karnataka HC (2026)

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NC: 2026:KHC:30151 WP No. 759 of 2024

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 18^TH DAY OF JUNE, 2026

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BEFORE

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THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

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WRIT PETITION NO. 759 OF 2024 (GM-RES)

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BETWEEN:

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M/S SHILPA MEDICARE LTD., HAVING ITS REGISTERED OFFICE AT #12-6-214/A1 HYDERABAD ROAD, RAICHUR, KARNATAKA INDIA 584 135 REGISTERED UNDER COMPANIES ACT, 1956

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ALSO HAVING BRANCH OFFICE AT PLOT NO. 29 A5 4^TH PHASE , AVVERAHALLI SOMPURA INDUSTRIAL AREA, DABASPETE RURAL DISTRICT 562 111

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Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA

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REPRESENTED BY ITS AUTHORISED SIGNATORY MR. DEEPAK KUMAR INANNI, S/O MR. OMPRAKASH INANNI AGED ABOUT 43 YEARS, OCC: PROJECT GENERAL MANAGER.

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(BY SRI. PRAVEEN H P.,ADVOCATE)

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…PETITIONER

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AND:

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THE MICRO AND SMALL ENTERPRISES FECILITATION COUNCIL DEPARTMENT OF INDUSTRIES AND COMMERCE ESTABLISHED BY THE STATE GOVT. U/S 20 OF MSME ACT, 2006 NO.49, FIRST FLOOR, SOUTH BLOCK, KHANIJA BHAVAN RACE COURSE ROAD, BANGALORE 560 001

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NC: 2026:KHC:30151 WP No. 759 of 2024

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HC-KAR

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REP BY ITS CHAIRMAN

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M/S ACCOR ENGINEERING SOLUTIONS NO. 1597, GROUND FLOOR, BDA LAYOUT, 2^ND BLOCK 8^TH PHASE, J P NAGAR BANGALORE 56 083 REGISTERED UNDER PARTNESHIP ACT, 1932

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…RESPONDENTS

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(BY SRI. C.H. DEVARAJ., GA FOR R1; SRI. ADARSH GANGAL., ADVOCATE FOR R2)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT, ORDER, OR DIRECTION IN THE NATURE OF CERTIORARI QUASHING THE IMPUGNED AWARD DTD. 09.02.2023 PASSED BY THE R-1 IN CASE NO.195/2020, VIDE ANNX-A AGAINST THE PETITIONER, IN THE INTEREST OF JUSTICE AND EQUITY AND ETC.

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THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

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ORAL ORDER

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1. The petitioner is before this Court seeking for the following reliefs;

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a) Issue a writ , order or direction in the nature of certiorari quashing the impugned award dated 09.02.2023 passed by the 1^st respondent, in Case No.195/2020, vide Annexure-A against the petitioner, in the interest of justice and equity.

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b) Grant such other relief or reliefs as this Hon’ble Court deems fit under the facts and circumstances of the case.

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NC: 2026:KHC:30151 WP No. 759 of 2024

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HC-KAR

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The grievance of the petitioner is that the Micro and Small Enterprises Facilitation Council had taken up the dispute between the petitioner and respondent No.2 for conciliation. When the conciliation failed, passed an award which it could not have done so without reference to arbitration. In this regard, reliance is placed on the decision of this Court in the case of M/S Enmas Gb Power Systems Projects Ltd vs. Micro and Small Enterprises Facilitation Council and another¹ more particularly Para 13, which is reproduced hereunder for easy reference:

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“13. In terms of Sub-Section (3) of Section 18, which is reproduced herein above, it is clear that when the conciliation initiated under sub-section (2) of Section 18 is not successful i.e. there is no settlement arrived at between the parties then the conciliation would have to be terminated and thereafter the Council shall either take up the dispute for arbitration or refer it to any institution or centre providing alternate dispute resolution services for such arbitration under the provisions of the Arbitration and Conciliation Act, 1996 as if the arbitration was in pursuance of an arbitration agreement referred to in sub-section (1) of section 7 of that Act.”

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This Court has dealt with the applicability of subsection (3) of Section 18 in the said decision and categorically held that when there is no settlement arrived at between parties, then the conciliation

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1 WP No.29610/2017 dated 19.3.2025

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NC: 2026:KHC:30151 WP No. 759 of 2024

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HC-KAR

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proceedings would have to be terminated and thereafter the Council could either take up the dispute for arbitration or refer it to any institution or centre providing alternate dispute resolution services for such arbitration under the provisions of Arbitration and Conciliation Act, 1996.

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In the present case, the conciliation having failed, the action taken up by the Council in passing an award is contrary to subsection (3) of Section 18. As such, this Court passes the following:

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ORDER

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i) The Writ Petition is allowed . ii) The award dated 09.02.2023 passed by respondent No.1 at Annexure-A is quashed.

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iii) The matter is remitted to the Karnataka Micro and Small Enterprises Facilitation Council to formally terminate the cancellation proceedings and thereafter take a decision whether it intends to conduct the arbitral proceedings by itself or refer the matter for arbitration to be held by an institution. The said orders to be passed within a period of 30 days on receipt of a copy of this order.

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