NBCC (INDIA) LTD Vs. STATE OF WEST BENGAL

JUDGEMENT

(1.) Introduction: The old value of 'Small is beautiful' [1] has not lost its relevance. Recognising the contribution of micro, small and medium enterprises towards economic development, the United Nations declared June 27th as MSME day. MSMEs are said to be the backbone of many economies, including India. This resonates with the statement of the father of our nation, Mahatma Gandhi, declaring that the 'salvation of India lies in cottage and small scale industries'. The Parliament enacted the Micro, Small and Medium Enterprises Development Act, 2006 [2] for facilitating the promotion and development of the enterprises by creating certain rights and duties and establishing a Board, Advisory Committee, and Facilitation Council. Importantly, the Act provided a mechanism for dispute resolution.

(2.) Facts: The appellant, National Buildings Construction Corporation, granted four work orders between July 2015 to August 2016 to M/s Saket Infra Developers Private Limited, respondent No. 4 [5] for undertaking construction work at different places in West Bengal. Pursuant to the work orders, contracts were executed on 27/8/2015, 17/11/2015, 28/7/2016 and 20/8/2016. The Enterprise filed a memorandum under Sec. 8 of the Act on 19/11/2016 as a 'small enterprise'. Thereafter, on 15/9/2017, the appellant also executed a fifth contract in favour of the Enterprise.

(3.) Decisions of the Single Judge and the Division Bench: The learned Single Judge dismissed the Writ Petition on 16/12/2021 by simply holding that "the question of jurisdiction can be raised before the Arbitral Tribunal, which shall decide the same before entering into other questions." The decision of the Single Judge was challenged unsuccessfully before the Division Bench of the High Court by the order impugned before us. The Division Bench also referred the decision of this Court in Kone Elevator India Private Limited v. State of Tamil Nadu, (2014) 7 SCC 1 to hold that a works contract is an indivisible contract and also that the Act, being a special legislation, overrides other statutes. The Division Bench agreed with the finding of the Single Judge that all objections, including those relating to maintainability, can be raised and contested before the arbitrator. Thus, the appellant is in appeal before us.