Viraj Profiles Private Limited vs Eastern Metec Private Limited

CNR No : HCBM010246372026

2026:BHC-AS:44815

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LSP 1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
Arbitration Petition No. 125 of 2026

Viraj Profiles Pvt. Ltd.
G-34, MIDC, Tarapur Industrial
Area, Boisar, Maharashtra 401506. … Petitioner
V/s.
Eastern Metec Pvt. Ltd.
121, Harish Mukherjee Road,
st
1 floor, Kolkata 700026. … Respondents.
Ms. Shilpa Kapil Advocate for the Petitioner
Ishan Agrawal, Ms. Rasika
Ghate, Mr. Prakashal Jain i/b.
Nyaayam Associates LLP
Advocate for the Respondent
CORAM : S.M. MODAK, J
th
DATE : 28 October 2026.
ORAL JUDGMENT :
Digitally
signed by
LATA
SUNIL
PANJWANI
Date:
2026.11.03
18:41:36
+0530
1. I have heard learned Advocate for the Petitioner and learned
LATA
SUNIL
PANJWANI
Advocate for the Respondent.
2. This is a petition filed under Section 11 of the Arbitration and
Conciliation Act for appointment of sole Arbitrator. The Petitioner
has relied upon arbitration clause No.35 from the purchase
th
agreement dated 27 September 2022 (Page-60). As per the said
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agreement the Petitioner has agreed to purchase certain goods from
the Respondents. It is in respect of 7.5 MVA Submerged Arc Furnace
(Para-9)(Page-3). Even though the furnace is installed, there are
certain dispute amongst the parties about its functioning. That is
why after issuing notice under Section 21 of the said Act, the
Petitioner has filed this petition.
2. There is a preliminary objection taken about maintainability of
the petition in view of the fact that the Respondent has already
availed the statutory remedy under Section 18 of Micro and Small
Enterprises Act before the Facilitation Council. The Respondent has
also duly informed the Petitioner about the said proceedings vide
rd
email dated 23 March 2026. On this background it is submitted on
behalf of the Respondent that the present petition is not
maintainable.
3. Whereas according to learned Advocate for the Petitioner there
is no dispute about the arbitration clause and once there is
arbitration clause and once there is a notice, the Reference Court is
required to appoint an Arbitrator without conducting a detail
enquiry. She relied upon certain judgments by way of compilation
whereas learned Advocate for the Respondent also relied upon
certain judgments by way of compilation.
4. One of such judgments is delivered in case of Gujarat State
Civil Supplies Corporation Ltd. v/s. Mahakali Foods Pvt.Ltd. (Unit-
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1
2) and anr . wherein Supreme Court has dealt with various appeals
filed arising out of the Award passed by the Facilitation Council and
it was challenged before the High Court, however, failed. The
Hon’ble Supreme Court has considered the provisions of Micro,
Small and Medium Enterprises Development Act 2006 on one hand
and provisions of Arbitration and Conciliation Act on the other
hand. Considering the Non-obstant clause in the Act of 2006,
Supreme Court held that it will override the provisions of Arbitration
and Conciliation Act. Few of the observations are relevant. Learned
Advocate for the Respondents relied upon few other judgments
given by various High Courts.
4. I have gone through the observations in the judgment relied
upon by the Petitioner. It is true in case of National Textile
2
Corporation Ltd. v/s. Elixir Engineering Pvt.Ltd. this Court has
dealt with the petition filed under Section 34 of 1996 Act thereby
challenging the award given by the Facilitation Council. This Court
has set aside the awards for the reason set out in Para No.35. It was
observed if there is a works contract, then Facilitation Council is not
having jurisdiction. The observations in case of M/s.P.L. Adke v.
3
Wardha Municipal Corporation is relied upon.
5. She also relied upon the observations of Orissa High Court in
4
case of Indian Oil Corporation v/s. Adarsh Nobel Corporation Ltd. .
1 (2023) 6 Supreme Court Cases 401
2 Commercial Arbitration Petition (L) No.326/2018
3 Arbitration Appeal (st) No.30508 of 2019
4 Writ Petition (Civil) No.20210/2025
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There was an issue about the meaning of the word supplier as per
Section 18. It was held that expression ‘Supplier’ is not confined to
micro or small enterprises. On facts it was held as a contract
involving goods and service and hence it is a works contract. The
award by Facilitation Council was set aside. The observations of the
Supreme Court are also noted in Para No.29. The Supreme Court
interpreted the legal character of ‘works contract’. The award by the
Facilitation Council was set aside.
5. She also relied upon the observations of Delhi High Court in
case of Tata Power Company Ltd. v/s. Genesis Engineering
5
Company . There was a petition filed under Section 11(6) of 1996
Act (Page No.9). In para-20 it is observed works orders executed by
the parties in that case fall within the category – A (as it comprises of
2 contracts which include supply of goods and labour for its
installation). There is a factual finding that both supply of goods and
element of labour and service was involved in the works order. It is
further observed it is also a settled principle of law that dispute
arising from works contract are not amenable to the jurisdiction of
Facilitation Council and hence Arbitrator under Section 11(6) was
appointed.
6. Both the learned Advocates have invited my attention to
certain documents, invoices. They are as follows:
th
5 Arbitration Petition No.1415/2022 decided on 12 April 2023
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a) offer given by the Petitioner (Page-23)
b) Purchase orders given by the Petitioner (Page 25, 34)
th
c) Purchase agreement dated 27 September 2022 (Page-
44)
d) Notice under Section 21 of 1996 Act (Page-81)
th
e) Reply of Respondent dated 6 April 2026 (Page-94)
f) Udyam registration certificate in the name of
Respondent (Page-102). Except for the year 2024-25
Respondent is classified as a small enterprises. For the
year 2024-25 they are classified as medium
enterprises.
g) Tax invoice issued by Respondent (Page-102, 104 and
106)
7. On the basis of these invoices the submission on behalf of the
Petitioner is the contract in between the Petitioner and Respondent
is a works contract. Whereas learned Advocate for the Respondent
submitted that it is not a works contract. Learned Advocate for the
Respondent also relied upon a Circular issued by Dy. Director
th
(Policy) dated 4 January 2023 wherein it is clarified that an
enterprise who is having Udayam registration can avail of the
benefits of the scheme of Ministry of Micro, Small and Medium
Enterprises. He also relied upon the observations by the High Court
of Andhra Pradesh on Page-120 in case of Vijaylaxmi Enterprises v/s.
th
M/s. K.V. Projects Ltd. The said Circular dated 4 January 2023 is
referred in Para No.36. Court has taken a note that there is inclusion
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of works contract as per micro, small and medium enterprises and
hence Council has got jurisdiction. This submission is made by the
learned Advocate for the Respondent by way of alternate submission.
If this Court comes to conclusion that the agreement between the
parties is a works contract, even then the Faciliation Council can
adjudicate the dispute. Whereas there is a challenge to this Circular
on behalf of the Petitioner for the reason it cannot take place of the
provisions of the law.
8. Now the issue is what is true nature of transaction in between
the Petitioner and Respondent, whether it is plain contract for the
sale of goods or whether it involves the sale of goods alongwith
execution so as to treat it as a works contract. There are two aspects.
There are judgments given by the various High Courts holding that
Facilitation Council is not having a jurisdiction to deal with the
dispute arising out of the works contract. At the same time Hon’ble
Supreme Court in case of Gujarat State Civil Supplies Corporation
Ltd. (cited supra) has elaborately dealt with the provisions of both
the Acts and concluded that the provisions of 2006 Act overrides the
provisions of 1996 Act. It is undisputed fact that the Respondent
has firstly approached the Facilitation Council at Calcutta.
9. Now the issue is whether the issue about the true nature of the
contract whether it can be decided by this reference Court or
whether it should be relegated to other forums that is to say the
arbitral Tribunal appointed as per the Arbitration and Conciliation
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Act or to Facilitation Council as per 2006 Act. The observations
made by the Supreme Court in case of Gujarat State Civil Supplies
Corporation are relevant. Para No.48 reads thus:
“48. When the Facilitation Council or the institution or
the centre acts as an Arbitrator, it shall have all powers to
decide the dispute referred to it as if such arbitration was
in pursuance of the arbitration agreement referred to in
sub- section (1) of Section 7 of the Arbitration Act,
1996 and then all the trappings of the Arbitration Act,
1996 would apply to such arbitration. It is needless to
say that such Facilitation Council/institution/centre
acting as an Arbitral Tribunal would also be competent
to rule on its own jurisdiction like any other Arbitral
Tribunal appointed under the Arbitration Act, 1996
would have, as contemplated in Section 16 thereof.”
11. In view of these observations this Court feels that while
deciding a petition under Section 11(6) of the Act, this Court cannot
go into the issue about the true nature of the contract. Even though
there are certain judgments relied upon by the Petitioner wherein the
reference Court has dealt with the issue about true nature of the
contract and appointed an Arbitrator, but I do not find that in that
judgment the observations by Supreme Court in case of Gujarat State
Civil Supplies Corporation (cited supra) are referred.
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12. Hence, I am not inclined to allow this petition. In fact the
invoices filed by the Respondents are sufficient enough to make
observation that the Facilitation Council can deal with the objection
by the Petitioner that “it is not a works contract”.
13. In view of that no case for appointment of an Arbitrator is
made out. The Facilitation Council at Calcutta is at liberty to deal
with the issue about the true nature of contract whether it is works
contract or otherwise. The Petitioner is at liberty to put forth their
case before the Council once they will appear there.
14. With these observations, petition is dismissed.
(S.M. MODAK, J.)
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