SREE INFRATECH INDIA PRIVATE LIMITED Vs. CHAIRMAN (MSEFC) & DIRECTOR (IND. & COM), MICRO AND SMALL ENTERPRISES FACILITATION COUNCIL

JUDGEMENT

(1.) The petitioner claims to be a reputed infrastructure company. It engages in road construction and infrastructure development. It was awarded a contract by M/s.DRAI Private Limited. A sub-contract for electrical utility shifting under NH-844 project was awarded to the petitioner. The petitioner, in turn, appointed the second respondent for execution of the electrical utility shifting works. The sub contract was preceded by a Letter of Intent (hereinafter referred to as 'LOI') dtd. 1/10/2021. A Memorandum of Understanding (hereinafter referred to as 'MOU') dtd. 23/2/2022 was entered into by both the parties. The petitioner alleges that the sub contract had to be executed on a back-to-back basis. In terms of the LOI and MOU, the second respondent was responsible for execution, coordination, certification and obtaining approvals.

(2.) The petitioner states that the payment to be made was subject to certification by TANGEDCO and NHAI and consequential release of funds by the Principal Contractor/NHAI, to the petitioner. The petitioner alleges that midway through the work, the second respondent abandoned the same, which resulted in cost escalation, contractual breaches and safety incidents. Though the second respondent is the defaulter, it filed a claim petition invoking Sec. 18 of the Micro, Small, and Medium Industries Development Act, 2006 (hereinafter referred to as MSME Act). The claim petition was initially for a sum of Rs.3.34 crores and later, escalated to Rs.12,46,53,375.69. Along with the claim, interest under Sec. 16 of the MSME Act was also sought for. The claim of the second respondent was not supported by any tax invoices, completion certificate or other tangible evidences to justify the claim.

(3.) Summons was served on the petitioner by the first respondent. Between 28/12/2023 and 13/5/2025, the petitioner participated in the same. On coming to know about a clarification issued by the Union of India through its MSME Ministry, that 'works contract' is not covered under the National Industrial Classification (hereinafter referred to as 'NIC') codes for Udyam Registration, the petitioner raised an objection before the first respondent on 23/5/2025. It called upon the Council to examine and determine its jurisdiction before proceeding further in the matter.