Nbcc India Limited vs Micro And Small Enterprises Facilitation Council New Delhi Government Of Nct Of Delhi & Anr.

Court
Delhi High Court

$~55
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 7788/2025 and CM APPL. 34425/2025

Date of decision: 22.04.2026

IN THE MATTER OF:-
NBCC INDIA LIMITED .....Petitioner
Through: Mr. Kartik Nagarkatti, Mr Shevaaz
Khan, Advocates.

versus

MICRO AND SMALL ENTERPRISES FACILITATION COUNCIL
NEW DELHI GOVERNMENT OF NCT OF DELHI & ANR.
.....Respondents
Through: Mr. Raghvendra Upadhyay, Panel
Counsel (GNCTD), Ms. Purnima
Jain, Mr. Madhur, Ms. Shivpa Taneja,
Advocates for R-1.
Ms. Payal Chawla, Mr. Maneesh
Gumber, Mr. Tarun Gumber,
Advocates for R-2.
CORAM:
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV
J U D G E M E N T

PURUSHAINDRA KUMAR KAURAV, J. (ORAL)

1. The present petition is seeking to set aside impugned orders dated
08.04.2021 and 27.05.2022 passed by respondent no.1/Micro and Small
Enterprises Facilitation Council, New Delhi, under Section 18 of the
Micro, Small and Medium Enterprises Development Act, 2006
(hereinafter referred to as „the Act‟). The dispute raised by respondent
Signature Not Verified
Signed By:PRIYA
Signing Date:07.05.2026
09:39:30
Signature Not Verified
Signed
By:PURUSHAINDRA
KUMAR KAURAV

no.2 has been referred to the Delhi International Arbitration Centre
(DIAC).
2. The principal grievance raised by the petitioner is that respondent
no.2, had invoked the jurisdiction of the Council, without being
registered under the Act, on the date of the contract, date of rendering of
services, or on the dates, where, the invoices in question were raised.
The petitioner, therefore, contends that respondent no.2 was not entitled
to invoke the mechanism under Section 18 of the Act against the
petitioner.
3. The issue at hand fell for the consideration before the Supreme
1
Court in NBCC (India) Ltd. vs. The State of West Bengal & Ors . The
Supreme Court therein, held that remedy under Section 18 of the Act is
not confined to suppliers who have filed a memorandum under Section
8(1) prior to the contract. The reasoning followed was that Section 18
uses the wider expression “any party to a dispute,” and that the definition
of “supplier” is not to be confined only to micro and small enterprises
that have filed a memorandum. The Court was of the opinion that filing
of the memorandum under Section 8(1) is at the discretion of the micro
and small enterprises. The relevant paragraphs of the judgement in
NBCC ( Supra) are extracted below for better clarity:-
“ 38. We have noted three clear features in the statutory regime. To start
with, Section 18 of the Act does not use the expression “supplier”,
instead employs the phrase, “any party to a dispute, may”. We have also
noted that the definition of the expression “supplier” is not confined to a
micro or a small enterprise which has filed a memorandum under Section
8(1) but also includes companies or other entities engaged in selling
goods or rendering services by an enterprise. Thirdly, Section 8 grants a
discretion to a micro or a small enterprise in filing a memorandum with

1
2025 INSC 54
Signature Not Verified
Signed By:PRIYA
Signing Date:07.05.2026
09:39:30
Signature Not Verified
Signed
By:PURUSHAINDRA
KUMAR KAURAV

the authority.

39. Further, it is noteworthy that a “micro” [Section 2(h)], “small”
[Section 2(m)] or “medium enterprises” [Section 2(g)], formation and
existence is simply on the basis of their investment as provided in Section
7 relating to classification of an Enterprise. They subsist without any
formal “recognition”, “consent” or “registration”. The Act uses the
expression filing of a “memorandum”. That is all. That too, at the
discretion of the micro and small enterprises. The cumulative account of
these four features is compelling and leads us to the conclusion that an
application by a micro or a small enterprise to the Facilitation Council
under Section 18 cannot be rejected on the ground that the said
enterprise has not registered itself in Section 8.

40. Having considered the definition of the expression “supplier”, and
also having considered the classification of enterprises into micro, small
and medium with respect to each of which there is a separate legal
regime to be suggested by the Advisory Committee and notified by the
Central and State Governments, and in view of the discretion specifically
vested with the micro and small enterprises for filing a memorandum
under Section 8 of the Act, the submission that the Facilitation Council
cannot entertain a reference under Section 18 if the enterprise is not
registered under Section 8 must be rejected.”

4. This Court is conscious of the fact that the matter has been
referred to a larger bench of the Supreme Court, and is pending
consideration. However, the view expressed by the Supreme Court in
NBCC ( Supra) has been followed by this Court in number of cases, one
such case is that of Municipal corporation of Delhi v M/S Vijay
2
Bansal , wherein a similar challenge had been raised, on the ground that
relevant work orders had been issued prior to the registration of the
respondent therein under the Act as an MSME. This Court, relying on
the reasoning followed in NBCC ( Supra) dismissed the petition, and
held that the said objection could not be accepted. The said order has

2
WP(C) 12308/2023 dated 25.02.2026
Signature Not Verified
Signed By:PRIYA
Signing Date:07.05.2026
09:39:30
Signature Not Verified
Signed
By:PURUSHAINDRA
KUMAR KAURAV

3
been upheld by the divisional Bench vide order dated 15.04.2026 .
4
5. This is the position that this Court has been taking consistently .
This consistent approach proceeds on the premise that the objection with
respect to the date of registration cannot, by itself, be treated as a ground
to interdict the statutory mechanism under Section 18 of the Act at the
threshold.
6. The Impugned orders herein do not decide the entitlement of
respondent no.2 on merits. It is merely referring the dispute to DIAC, in
terms of the statutory mechanism contemplated in Section 18 of the Act.
7. In view of the aforesaid, this Court does not find any reason to
interfere with the impugned order.
8. The rights of the petitioner and the respondents with respect to all
other submissions stand reserved. They shall be entitled to contest the
matter on merits.
9. The instant petition stands dismissed.

(PURUSHAINDRA KUMAR KAURAV)
JUDGE
APRIL 22, 2026
Nc


3
LPA 267/2026 dated 15.04.2026
4
WP(C)13095/2023 dated 13.01.2026
WP(C)5195/2021 dated 22.01.2026
WP(C)8669/2021 dated 22.01.2026
WP(C)12469/2024 dated 11.02.2026
WP(C)2249/2026 dated 17.02.2026
WP(C)2603/2026 dated 25.02.2026
WP(C)12308/2023 dated 25.02.2026
WP(C)13030/2023 dated 18.03.2026
WP(C)10895 dated 21.04.2026
WP(C)11799 dated 21.04.2026
WP(C)11838 dated 21.04.2026
Signature Not Verified
Signed By:PRIYA
Signing Date:07.05.2026
09:39:30
Signature Not Verified
Signed
By:PURUSHAINDRA
KUMAR KAURAV