Food Corporation Of India vs Ace Integrated Solutions & Ors.

PURUSHAINDRA KUMAR KAURAV, J. (ORAL)

The present petition seeks for the setting aside of order dated 17.11.2022 (“Impugned Order”) passed by respondent no.2-Micro and Small Enterprises Facilitation Council, New Delhi (“Council”), under Section 18(3) of the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter “Act”), whereby the dispute raised by respondent no.1 has been referred to the Delhi International Arbitration Centre („DIAC‟).

The sole ground raised by the petitioner to assail the Impugned Order is that the contract was entered into between the petitioner and respondent no. 1, prior to the date on which respondent no. 1 registered itself as an MSME. It is his case that the Impugned Order referring the parties to arbitration is impermissible in law.

The issue raised in this petition is no longer res integra. The Supreme Court in the case of NBCC (India) Ltd. v. The State of West Bengal & Ors.^{11.2025 INSC 54.} in paragraph no.5 has framed the following question:-

The aforesaid question has been answered in paragraph no.15 thereof, which reads as under:

It is clear that the fact of an MSME being unregistered, at the time the contract was entered into, or when the alleged invoices were issued, is immaterial to the jurisdiction and powers exercisable by the Council under Section 18 of the MSMED Act. Same was the view taken by this Court in Sadbhav Engineering Ltd. v. KGTS Engineering India Pvt. Ltd.,^{22.W.P.(C)13095/2023; order dated 13.01.2026.} NTPC Ltd. v. Micro and Small Enterprises Facilitation Council and Ors.,^{33.W.P.(C) 5195/2021; order dated 22.01.2026.} Bharatiya Rail Bijlee Company Ltd. v. Micro and Small Enterprises Facilitation Council and Ors.,^{44.W.P.(C) 8669/2021; order dated 22.01.2026.} Environment Planning and Coordination Organization Virology v. M/s Suresh Goel and Associates and Ors.,^{55.W.P.(C) 12469/2024; order dated 11.02.2026} Lalit Narayan Mithila University v. Delhi International Arbitration Centre and Ors.,^{66.W.P.(C) 2249/2026; order dated 17.02.2026} Sugam Technocrats Pvt. Ltd. v. Micro and Small Enterprises Facilitation Council and Ors.,^{77.W.P.(C) 2603/2026 ; order dated 25.02.2026} Municipal Corporation of Delhi v. M/s Vijay Bansal,^{88.W.P.(C) 12308/2023; order dated 25.02.2026} Sadbhav Infrastructure Project Ltd. v. VCS Enterprises Pvt. Ltd. and Ors.,^{99.W.P.(C) 13030/2023; order dated 18.03.2026} MNV Industries Ltd. v. Chairman Micro and Small Enterprises Facilitation Council and Anr.,^{1010.W.P.(C) 10895/2024; order dated 21.04.2026} and Municipal Corporation of Delhi v. M/s Vijay Bansal,^{1111.W.P.(C) 12308/2023; order dated 25.02.2026.} Richa Global Exports Pvt. Ltd. v. Delhi International Arbitration Centre and Ors.^{1212.W.P.(C) 14435/2024; order dated 28.04.2026.} Importantly, the order of this Court in M/s Vijay Bansal (supra) was affirmed by the Division Bench in Municipal Corporation of Delhi v. M/s Vijay Bansal.^{1313.L.P.A 267/2026; order dated 15.04.2026.}

In view of the aforesaid, this Court does not find any reason to interfere with the Impugned Order.

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.

So far as the submission made by the petitioner that fraud vitiates everything and in the instant case, an FIR has been registered by the CBI is concerned, it is pointed out by learned counsel for the respondents that the petitioner has taken all those pleas before the Arbitrator. The Court finds that all aspects, including those aforenoted, will have to be looked into by the concerned Arbitrator.

Leaving all those objections open, the instant petition stands dismissed.