Jammu & Kashmir High Court – Srinagar Bench
Through Its Partner vs K And Others on 31 July, 2026
Author: Moksha Khajuria Kazmi
Bench: Moksha Khajuria Kazmi
S.No. 10
Regular Cause list
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT SRINAGAR
WP(C) 1723/2026 CM 4560/2026
Reserved on : 27.07.2026
Pronounced on : 31.07.2026
Uploaded on : 31.07.2026
Whether the operative part or full
judgment is pronounced: Full
M/S MASHAD STEEL INDUSTRIES
THROUGH ITS PARTNER
...Appellant(s)/Petitioner(s)
Through: Mr. Azhar Ul Amin, Adv with
Mr. Shahid Ashraf, Advocate
Vs.
UNION TERRITORY OF J AND
K AND OTHERS ...Respondent(s)
Through: Mr. Waseem Gul, GA
CORAM:
HON'BLE MS. JUSTICE MOKSHA KHAJURIA KAZMI, JUDGE.
JUDGMENT
1. Petitioner herein is seeking extraordinary jurisdiction under Article 226
of Constitution of India, the petitioner, a micro enterprise registered under
Micro, Small and Medium Enterprises Development (MSMED) Act, 2006,
(hereinafter for short to be referred as “Act of 2006”), is seeking writ in the
nature of mandamus directing the respondents 1 to 3 to pay the amount of
Rs. 5,93,137/- along with interest in terms of Sections 15 and 16 of the Act
of 2006.
FACTUAL MATRIX
2. It is stated in the petition that the petitioner in the year 2011 and 2012 was
allotted work orders by respondent No.4 as a nodal agency for the
WP(C) 1723/2026 Page | 1
construction of various panchayat ghars across Kashmir division on the
basis of 13th Finance Scheme to various micro and small- scale industry
holders including the petitioner. Subsequent thereto, the petitioner carried
out certain works between 2013 and 2017 @ Rs. 20 lacs per panchayat
ghar. The construction of each steel roof truss was fixed at 7.20 lacs per
panchayat ghar. The scope of original work as per work orders was only the
cost of steel roof truss, the site engineers directed the petitioner to install
eaves boards & soffits which were not the part of the work, as such the
work was executed at an enhanced cost.
3. It is further stated in the writ petition that the amount due to the petitioner
on account of construction of the afore-stated works was not
released in its favour, although the factum of the execution of works and
the amount due therefor is not disputed. The withholding of the payment
due against the works allegedly executed by the petitioner has constrained
the petitioner to approach this court by filing the instant petition for release
of an amount of Rs. 5,93,137/- along with interest in terms of Sections 15
and 16 of the Act of 2006.
4. The learned counsel for the petitioner was pointedly asked, as to
how the writ petition in hand is maintainable in view of express statutory
remedy available to the petitioner under the Act of 2006. The learned
counsel for the petitioner in response has submitted that the jurisdiction of
this court in terms of Article 226 of the Constitution of India is not barred
and the writ courts have shown their indulgence in similar matters earlier in
time also. In support of such contention, learned counsel for the petitioner
referred to the judgment of this court passed in a petition filed in terms of
Article 227 of the Constitution of India bearing CM(M) No. 287/2023
WP(C) 1723/2026 Page | 2
decided on 14.12.2023 titled “Union Territory of J&K
and Anr. vs. Aibak Electric Industries‖ and WP(C) 2686/2024 decided on
25.02.2026 titled “M/S Northern Engineers vs. UT of J&K and Ors.‖
5. Heard learned counsel for the petitioner and perused the material on record.
6. The Act of 2006 has been enacted by the Parliament for the purpose of
facilitation, promotion, development and enhancing the competitiveness
of Micro, Small and Medium Enterprises and for the matters
connected therewith and incidental thereto. The object of the Act of 2006 is
to protect and promote the interests of micro, small and
medium enterprises. The definition of “buyer” in terms of Section 2(d) and
“supplier” in terms of Section 2(n) reads as follows respectively:
Section 2(d) states that a “buyer” means whoever buys any goods or
receives any services from a supplier for consideration.
Section 2(n) states that a “supplier” means a micro or small enterprise,
which has filed a memorandum with the authority referred to in sub-
section (1) of Section 8, and includes,–
(i) the National Small Industries Corporation, being a
company, registered under the Companies Act, 1956 (1 of 1956);
(ii) the Small Industries Development Corporation of a State or a
Union territory, by whatever name called, being a
company registered under the Companies Act, 1956 (1 of 1956);
(iii) any company, co-operative society, trust or a body, by whatever
name called, registered or constituted under any law for the time
being in force and engaged in selling goods produced by micro or
small enterprises and rendering services which are provided by such
enterprises;
7. Chapter V of the Act of 2006 deals with the delayed payments to micro and
small enterprises:
15. Liability of buyer to make payment.–Where any supplier
supplies any goods or renders any services to any buyer, the buyer
shall make payment therefor on or before the date agreed upon
between him and the supplier in writing or, where there is no
agreement in this behalf, before the appointed day: Provided that in
no case the period agreed upon between the supplier and the buyerWP(C) 1723/2026 Page | 3
in writing shall exceed forty-five days from the day of acceptance or
the day of deemed acceptance.
16.Date from which and rate at which interest is payable.–Where
any buyer fails to make payment of the amount to the supplier, as
required under section 15, the buyer shall, notwithstanding anything
contained in any agreement between the buyer and the supplier or
in any law for the time being in force, be liable to pay compound
interest with monthly rests to the supplier on that amount from the
appointed day or, as the case may be, from the date immediately
following the date agreed upon, at three times of the bank rate
notified by the Reserve Bank.
17. Recovery of amount due.–For any goods supplied or services
rendered by the supplier, the buyer shall be liable to pay the amount
with interest thereon as provided under section 16.
18.Reference to Micro and Small Enterprises Facilitation
Council.–(1) Notwithstanding anything contained in any other law
for the time being in force, any party to a dispute may, with regard
to any amount due under section 17, make a reference to the Micro
and Small Enterprises Facilitation Council. (2) On receipt of a
reference under sub-section (1), the Council shall either itself
conduct conciliation in the matter or seek the assistance of any
institution or centre providing alternate dispute resolution services
by making a reference to such an institution or centre, for
conducting conciliation and the provisions of sections 65 to 81 of
the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply
to such a dispute as if the conciliation was initiated under Part III of
that Act. (3) Where the conciliation initiated under sub-section (2) is
not successful and stands terminated without any settlement between
the parties, the Council shall either itself take up the dispute for
arbitration or refer it to any institution or centre providing alternate
dispute resolution services for such arbitration and the provisions of
the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then
apply to the dispute as if the arbitration was in pursuance of an
arbitration agreement referred to in sub-section(1) of section 7 of
that Act. (4) Notwithstanding anything contained in any other law
for the time being in force, the Micro and Small Enterprises
Facilitation Council or the centre providing alternate
dispute resolution services shall have jurisdiction to act as an
Arbitrator or Conciliator under this section in a dispute between the
supplier located within its jurisdiction and a buyer located
anywhere in India. (5) Every reference made under this section shall
be decided within a period of ninety days from the date of making
such a reference.
8. The Micro and Small Enterprises Facilitation Council is a creation of
Chapter V of Act of 2006 and is governed by rules framed under Section 30
WP(C) 1723/2026 Page | 4
of MSMED Act issued vide SRO 251 dated 19.06.2017. Rules 7 and 8 of
„The Jammu and Kashmir Micro and Small Enterprises Facilitation Council
Rules, 2017‟ prescribes the mechanism for making a reference before the
council, which are reproduced as under:
7. Objective. –To provide a structured mechanism for recovery
of dues of a supplier MSE from any buyer firm or MSE and to
deal with the issue of delayed payments as prescribed in Chapter
V of the Act.
8. Procedure to be followed in the discharge of functions of the
Council. –(1) An aggrieved MSE unit can move a reference to
the Council having jurisdiction of the area in the format provided
in Schedule-I to these rules. The reference must have
the Udyog Aadhaar Memorandum (UAM) provided in Schedule-I.
(2) Such references should be attached with fee or processing
charges as notified by the Government as per rule 3(4) above and
with an undertaking from aggrieved MSE unit that it has not
moved a reference before any Civil Court regarding the same
dispute.
(3) Upon receipt of references from the Supplier MSE unit, the
Secretariat of the Council shall enter the data in the web portal
created for this purpose.
(4) After entering the data, acknowledgement of the receipt of
reference shall be issued by the Secretariat to the applicant MSE
unit through registered post including e-mail & SMS.
(5) The Council shall examine the reference at preliminary stage
to check the fee or competency of MSE unit to file the reference.
(6) In case, the reference or the particulars entered in it are not
found to the satisfaction of Council, it may return the reference.
(7) The Council shall either itself conduct conciliation in the
matter or seek the assistance of any institute for conducting the
same and if it decides to do so, shall refer the parties to the
institute.
(8) The institute to which the issue is referred shall make efforts
to bring about conciliation between the parties and shall submit
its report to the Council as soon as possible, preferably within a
period of 15 days from the date of reference.
(9) Where the conciliation between the parties does not lead to
settlement of the dispute, the Council shall either itself take up the
dispute for further action, i. e. arbitration or refer it to an
―Institute‖ for the same in terms of Jammu and Kashmir
Arbitration and Conciliation Act, 1997.
(10) If the matter is referred for arbitration, the institute shall
arbitrate the issue as per the provisions of Jammu and Kashmir
WP(C) 1723/2026 Page | 5
Arbitration and Conciliation Act, 1997 and refer the award to the
Council
(11) The Council after finalizing the award or receiving the
award from the institute shall consider the case and pass
appropriate final orders in the matter.
9. The MSE Scheme on Online Dispute Resolution for Delayed Payments
issued by Ministry of Micro, Small and Medium Enterprises launched on
27.06.2025 seeks to address the issue of delayed payments faced by Micro
and Small Enterprises, the relevant guidelines of the scheme, more
particularly, 11 and 12 are reproduced as under:
11.1. NATURE AND JURISDICTION OF DISPUTE
11.1.1. Disputes between the Micro and Small Enterprises (MSE) seller,
and any buyer, arising out of failure of payment for supply of goods or
rendering of services by the MSE seller, on or before the date agreed
upon between the supplier and the buyer, in writing, and where there is
no agreement in this behalf, after the expiry of fifteen (15) days from the
day of acceptance or deemed acceptance of goods or services by a buyer,
and in no case, beyond forty-five (45) days from the day of acceptance or
deemed acceptance of goods or services by a buyer, will be resolved
through MSME ODR Portal. The nature and jurisdiction of the dispute
shall be as mandated under the MSMED Act, 2006, and its amendments
thereof.
11.1.2. Disputes between Micro and Small Enterprises (MSE) seller, and
any buyer, arising out of failure of payment for supply of goods or
rendering of services by the MSE seller, can be resolved, at the option of
the Micro and Small Enterprises (MSE) seller: (i) By leveraging Digital
Guided Pathway (DGP) and Unmanned Negotiation under
the preMSEFC phase through MSME ODR Portal; and/or (ii) By
leveraging mediation and arbitration as per the MSMED Act, 2006
through Micro and Small Enterprises Facilitation Council (MSEFC), or
any institution or centre providing alternative dispute resolution services
in India and to whom a reference has been made by the respective
MSEFC having jurisdiction over the subject matter, through the MSME
ODR Portal.
11.2. MSME ODR PORTAL
11.2.1. The Ministry of MSME had launched the MSME Delayed
Payment Portal – MSME SAMADHAAN to facilitate the online filing and
registration of applications for the recovery of delayed payments by MSE
suppliers having a valid registration.
11.2.2. The MSME SAMADHAAN Portal is presently working as a case
tracker and an e-filing portal. Once an application for delayed payments
is filed on the Portal, the rest of the dispute resolution process requires
manual intervention. The traditional dispute resolution process is thereby
costly and time-consuming which may cause delay in the recovery ofWP(C) 1723/2026 Page | 6
payments by MSEs. A delay in disposal of delayed payment applications
may impact the working capital availability for MSEs, pose risk to
associated business relationships, and may result in loss of business
opportunity, etc.
11.2.3. The MSME ODR Portal will provide a twofold solution to
delayed payment applications filed by Micro and Small Enterprises in
two stages: (i) PreMSEFC, and (ii) MSEFC.
12. ONLINE DISPUTE RESOLUTION PROCESS
12.1. INITIATION OF DELAYED PAYMENT APPLICATION
PROCEEDINGS
12.1.1. The proceedings for delayed payment applications will initiate
with an e-filing for the recovery of the delayed payment application by
the MSE seller on the MSME ODR Portal.
12.2. COMMENCEMENT OF DELAYED PAYMENTS
APPLICATIONS PROCEEDINGS
12.2.1. In the case of pre-MSEFC stage, the online dispute resolution
proceedings will commence, when following the filing of a delayed
payment application on the MSME ODR Portal, an automated
communication has been sent to the MSE seller and the buyer/s through
text message and email, if any, provided through the MSME ODR Portal.
12.2.2. Conciliation/ Mediation under the MSEFC stage will be deemed
to have commenced on the date of the appointment of the conciliator/
mediator for mediating a dispute between the parties. Arbitral
proceedings in respect of a dispute commence as per the provisions of the
Arbitration and Conciliation Act, 1996.
12.5.8. ARBITRATION UNDER THE MSEFC STAGE
(i) If the conciliation/ mediation process fails, that is, it does not result in
the settlement of the dispute between the parties, the parties will be
referred for statutory arbitration mandated under the MSMED Act, 2006.
The arbitration proceedings will be facilitated through the MSME ODR
Portal.
(ii) Arbitration proceedings under the MSEFC stage will be deemed to
have commenced as per the procedure laid down under the Arbitration
and Conciliation Act, 1996. The arbitration proceedings shall be
conducted as per the provisions of the Arbitration and Conciliation Act,
1996.
10. It has been held by Hon‟ble Supreme Court in case titled “Gujarat State
Civil Supplies Corpn. Ltd. Vs. Mahakali Foods Pvt. Ltd.
and Anr.‖, reported as (2023) 6 SCC 401.
―37. Sections 15 to 25 contained in Chapter V of the
MSMED Act, 2006 pertain to the “delayed payments to
micro and small enterprises”. A bare perusal of the
said provisions contained in Chapter V shows that a
strict liability is fastened on the buyer to make payment
to the supplier who supplies any goods or renders any
WP(C) 1723/2026 Page | 7
services to the buyer, prescribing the time-limit in
Section 15. Section 16 further fastens the liability on
the buyer to pay compound interest if any buyer fails to
make payment to the supplier as required under
Section 15. Such compound interest is required to be
paid at three times of the bank rate notified by the
Reserve Bank, notwithstanding contained in any
agreement between the buyer and supplier or in any
law for the time being in force. An obligation to make
payment of the amount with interest thereon as
provided under Section 16 has been cast upon the
buyer and a right to receive such payment is conferred
on the supplier in Section 17. Thus, Section 17 is the
ignition point of any dispute under the MSMED Act,
2006. Section 18 thereof provides for the mechanism to
enable the party to the dispute with regard to any
amount due under Section 17, to make a reference to
the Micro and Small Enterprises Facilitation Council.
38. Section 18 starts with a non obstante clause i.e.
“notwithstanding anything contained in any other law
for the time being in force”. It means that the said
provision has been enacted with the aim to supersede
other laws for the time being in force. Further a
dedicated statutory forum i.e. the Micro and Small
Enterprises Facilitation Council (as established under
Section 20 of the MSMED Act, 2006), has been
provided to which a reference could be made by any
party to the dispute. Sub-section (2) of Section 18
empowers the Facilitation Council, on receipt of such
reference made under sub-section (1), to conduct
conciliation in the matter or seek assistance of any
institution or centre providing alternate dispute
resolution services by making a reference to such an
institution or centre, for conducting conciliation, as
contemplated in Sections 65 to 81 of the Arbitration
Act, 1996. If the conciliation initiated under sub-
section (2) is not successful and stands terminated
without any settlement between the parties, the Council
is further empowered under sub-section (3) to either
itself take up the dispute for arbitration or refer to it
any institution or centre providing alternate dispute
resolution services for such arbitration. The provisions
of the Arbitration Act, 1996 are then made applicable
to the dispute as if the arbitration was in pursuance of
an arbitration agreement referred to in sub-section (1)
of Section 7 of the Arbitration Act, 1996. Sub-section
(4) of Section 18 again starts with a non obstante
clause i.e. “notwithstanding anything contained in any
other law for the time being in force” and confers
jurisdiction upon the Facilitation Council to act as an
arbitrator or a conciliator in a dispute between the
WP(C) 1723/2026 Page | 8
supplier located within its jurisdiction and a buyer
located anywhere in India. Sub-section (5) of Section
18 fixes the time-limit of ninety days to decide such
reference.‖
11. In view of the aforesaid judgment, Section 15, 16 and 17 are interlinked
with each other and also part of the chapter V, which deals with the delayed
payments to micro and small enterprises. Thus, the entire chapter V applies
only in respect of the delayed payments to micro and small enterprise.
Section 15 to 17 also makes it clear that the obligation is on the buyer to
make the payment promptly in terms of Section 15 failing which an
increased rate of interest would be liable to be paid by the buyer to the
supplier. Section 16 lays down the procedure for recovery of interest and
dues payable to the Micro, Small and Medium Enterprises. Section 16
further passes the liability of the buyer to pay the compound interest, if any
buyer fails to make the payment to the supplier as required under Section
15 of the Act. Section 17 of the Act of 2006 creates an obligation on the
buyer to pay an amount due to the supplier along with interest thereon.
Section 18 lays down the procedure to be followed for the purpose of
making a reference to micro, small and medium enterprises facilitation
council. Rules of 2017 and scheme of MSE for online dispute resolution
lays down the mechanism to approach the competent authority in terms of
chapter V of Act of 2006.
12. Petitioner herein has approached this court by way of the instant petition,
seeking direction upon respondents 1 to 3 to pay an amount of Rs.
5,93,137/- along with interest in terms of Section 15 and 16 of the Act of
2006, on the ground that the petitioner‟s rights have been violated by not
making payments in terms of the Act of 2006, as such, respondents are
WP(C) 1723/2026 Page | 9
under legal obligation to make the payment in terms of the Act. He has
further stated that the failure of the respondents to release the payment of
the petitioner after accepting the goods or services within 15 days in terms
of Act of 2006 and denial of remedy to accept the reference is in violation
of legal and constitutional rights of India. It is nowhere stated that the
petitioner has ever approached in terms of Act of 2006 and rules of 2017 by
following the mechanism envisaged in the scheme (supra). Petitioner has
opted to approach this court directly by way of filing the instant writ
petition.
13. Perusal of the record would reveal that an amount of Rs. 5,93,137/-, which
the petitioner is claiming by way of the instant petition has not been
admitted by the respondents in any of the documents annexed with the
petition except annexure-I which is supposedly drafted by the petitioner in a
tabulated form the said document has neither signature nor seal of any of
the office of respondents.
14. Petitioner herein has relied upon the judgment passed in CM(M) No.
287/2023 titled Union Territory of J&K and Anr. Vs. Aibak Electrical
Industries, the relevant paragraph is as under:
11. In the instant case, I am surprised to find that when
the supplies made by the respondent to the petitioners
were not disputed and the payment due to the
respondent was also not in dispute, where was the
occasion for the respondent to seek a reference before
the Council under Section 18 of the Act of 2006. From
plain reading of Sub Section (2) of Section 18 it clearly
transpires that reference can be made by the aggrieved
party to the Council only where there is a dispute with
regard to any amount due under Section 17 of the Act.
Ordinarily, in the present case the petitioners should
have acted fairly and in the true spirit of the MSMED
Act, 2006 and made payment to the respondent along
with statutory interest envisaged under Section 16.
However, the failure on the part of the petitioners to
WP(C) 1723/2026 Page | 10
carry out the mandate of Section 15 and 16 did provide
a cause of action to the respondent to directly
approach this Court by invoking its extraordinary writ
jurisdiction under Article 226 of the Constitution of
India.
Though it is referred in the judgment supra that the failure on part of the
petitioners therein to carry out the mandate of Section 16 and 17 provides a
cause of action to the respondent therein to directly approach the court
by invoking its extraordinary jurisdiction under Article 226 of the
Constitution of India, however, this is a mere passing reference made by the
court. The dispute before the court was with regard to the award which was
being passed against the UT of J&K in terms of the Act of 2006. It was held
that since the amount which was being claimed by the respondent therein
was not disputed by UT government as such, the award could not have been
passed against respondent therein in terms of Act of 2006, the award was set
aside. The question of maintainability of writ petition under 226 of
constitution of India seeking release liability under section 15 and 16 of the
Act of 2006, was neither raised nor pleaded by any of the parties in the
petition.
15. In WP(C) No. 2686/2024 titled “M/S Northern Engineers vs. UT of J&K
and Ors.‖, this Court has held :
―5.Mr. Azhar Ul Amin, appearing counsel for the
petitioner while making his submissions in line with the
case setup in the petition, invited the attention of this
Court to the judgment passed by the Coordinate Bench
in case titled as ―Union Territory of J&K & Anr.
Vs. Aibak Electric Industries being CM(M) No.
287/2023‖ and would submit that the said judgment
squarely covers the case of the petitioner rendering the
respondents liable to make the payments due to the
petitioner for the supplies made along with the
compound interest in terms of Section 16 of Act of
2006.
WP(C) 1723/2026 Page | 11
6. On the contrary Mr. Faheem Shah, appearing
counsel for respondent 3 while opposing the
submissions of Mr. Amin would submit that the
petitioner is not entitled to the grant of relief sought in
the petitioner in general and in particular the grant of
compound interest in terms of the Act of 2006, as
according to Mr. Shah the petitioner has never invoked
the provisions of the Act of 2006 before ―the council‖
under the Act and has directly approached this Court
invoking extraordinary writ jurisdiction.
7.Insofar as the aforesaid plea of Mr. Shah is
concerned, the Coordinate Bench in the judgment of
Union Territory of J&K supra has specifically ruled
that the failure on the part of the department to carry
out the mandate of sections 15 & 16 of the Act would
provide a cause of action to the supplier to directly
approach this Court by invoking its extra ordinary writ
jurisdiction under Article of the 226 of the
Constitution. Thus, in view of the facts in hand and
having regard to the aforesaid position of law this
bench has no reason to take a view different than what
has been taken by the Coordinate Bench in the case
supra.‖
16. The ratio laid down in the aforesaid judgment is that the failure on the part
of the department to carry out the mandate of Section 15 and 16 of the Act
would provide a cause of action to the supplier to directly approach this
court by invoking writ jurisdiction under Article 226 of the constitution of
India despite the objection being raised by the learned counsel for the
respondent therein that the petitioner is not entitled to any compound
interest in terms of the Act of 2006 on the ground that he had never invoked
the provisions of Act of 2006 before the council under the Act.
17. The provisions of Section 15 to 23 of the Act of 2006 are having an
overriding effect under Section 24 of the Act, which states that these
sections shall have effect notwithstanding anything inconsistent therewith
contained in any other law for the time being in force. The act of 2006 is a
beneficial legislation to small medium and micro enterprises. As such, if a
WP(C) 1723/2026 Page | 12
seller would be allowed to approach this court directly, it would defeat the
very object of the Act and would also bypass the mechanism set up by the
statute, Rules and scheme in vogue.
18. In “Godrej Sara Lee Limited versus Excise and Taxation Officer-cum-
Assessing Authority and Others” reported as 2023 SCC online SC
95, Apex Court discussed the concept of entertainability and
maintainability of a petition and held that these are distinct concepts and
held as under:
―4. Before answering the questions, we feel the urge to
say a few words on the exercise of writ powers
conferred by article 226 of the Constitution having
come across certain orders passed by the
High Courts holding writ petitions as “not
maintainable” merely because the alternative remedy
provided by the relevant statutes has not been pursued
by the parties desirous of invocation of the writ
jurisdiction. The power to issue prerogative writs
under article 226 is plenary in nature. Any limitation
on the exercise of such power must be traceable in the
Constitution itself. Profitable reference in this regard
may be made to article 329 and ordainments of other
similarly worded articles in the Constitution. Article
226 does not, in terms, impose any limitation or
restraint on the exercise of power to issue writs. While
it is true that exercise of writ powers despite
availability of a remedy under the very statute which
has been invoked and has given rise to the action
impugned in the writ petition ought not to be made in a
routine manner, yet, the mere fact that the petitioner
before the High Court, in a given case, has not pursued
the alternative remedy available to him/it cannot
mechanically be construed as a ground for its
dismissal. It is axiomatic that the High Courts (bearing
in mind the facts of each particular case) have a
discretion whether to entertain a writ petition or not.
One of the self-imposed restrictions on the exercise of
power under article 226 that has evolved through
judicial precedents is that the High Courts should
normally not entertain a writ petition, where an
effective and efficacious alternative remedy is
available. At the same time, it must be remembered
that mere availability of an alternative remedy of
appeal or revision, which the party invoking the
WP(C) 1723/2026 Page | 13
jurisdiction of the High Court under article 226 has
not pursued, would not oust the jurisdiction of the High
Court and render a writ petition “not maintainable”. In
a long line of decisions, this court has made it clear
that availability of an alternative remedy does not
operate as an absolute bar to the “maintainability” of a
writ petition and that the rule, which requires a party
to pursue the alternative remedy provided by a statute,
is a rule of policy, convenience and discretion rather
than a rule of law. Though elementary, it needs to be
restated that “entertainability” and “maintainability” of
a writ petition are distinct concepts. The fine but real
distinction between the two ought not to be lost sight
of. The objection as to “maintainability” goes to the
root of the matter and if such objection were found to
be of substance, the courts would be rendered
incapable of even receiving the lis for adjudication. On
the other hand, the question of “entertainability” is
entirely within the realm of discretion of the High
Courts, writ remedy being discretionary. A writ
petition despite being maintainable may not be
entertained by a High Court for very many reasons or
relief could even be refused to the petitioner, despite
setting up a sound legal point, if grant of the claimed
relief would not further public interest. Hence,
dismissal of a writ petition by a High Court on the
ground that the petitioner has not availed
the alternative remedy without, however, examining
whether an exceptional case has been made out for
such entertainment would not be proper.‖
19. It is held in the judgment (supra) that the writ petition, though being
maintainable, may not be entertained by a court for many reasons and a
relief could also be refused to the petitioner despite setting up a sound legal
issue. The court further held that dismissal of a petition by High Court on
the ground that the petitioner has not availed the alternative remedy
without, however, examining whether an exceptional case has been made
out for such entertainment would not be proper.
20. Since the petitioner has approached this court directly without availing
statutory remedy which is available to the petitioner in terms the Act of
2006, as such, in the opinion of this court, if this writ petition under
WP(C) 1723/2026 Page | 14
Article 226 is accepted, the purpose of the Act of 2006 would become
redundant. The intent of the legislature is reflected in chapter V of the Act
of 2006 that it is a welfare legislation exclusively for the suppliers,
therefore, it is incumbent upon the petitioner to approach appropriate
forum in terms of Act of 2006, rules and scheme meant for MSME
suppliers like petitioner herein.
21. In the instant petition, petitioner has approached this court without availing
an alternate remedy available to him under the Act of 2006, thereby seeking
relief in terms of section 15 and 16 of the act of 2006, which is available
to the petitioner in terms of the Act of 2006. The mechanism which is
prescribed in the statute is interlinked with respect to different stages as per
Section 15 to 23 in chapter V of the Act of 2006. Moreso, petitioner herein
has not been able to make out a case on the basis of any of the document,
annexed with the petition, where respondents have admitted the liability
of 5,93,137/-. Therefore, petitioner has failed to make out any
exceptional circumstance so as to entertain this petition so as to avail this
extraordinary jurisdiction under article 226 of the constitution.
22. It has been held by the Division Bench of Hon‟ble High Court of Gauhati,
in case titled “National Highways and Infrastructure Development
Corporation Ltd. And Ors. vs. Girin Deka and Ors”., reported as (2025)
1 Gauhati Law Reports 44:
“29. From a plain reading of the provisions of the Act
of 2006, it is, thus, apparent that the Act of 2006 is a
Special Statute, enacted by the Parliament with the
objective of protecting the right of the micro, small and
medium enterprises. The fact that section 18 of the Act
of 2006 begins with a non-obstante clause is sufficient
to indicate that the entitlement of the Micro, Small and
Medium Enterprises to recover its lawful dues by
taking recourse to the mechanism provided under theWP(C) 1723/2026 Page | 15
Act, would have an overriding effect over any other
law for the time being in force. Therefore, in the event,
any MSM Enterprise, coming within the ambit of the
Act of 2006, is wrongfully denied payment for the
goods delivered or services rendered by it, than in that
event, regardless of any other law for the time being in
force to the contrary, the enterprise will be entitled to
recover its dues by taking recourse to section 18.
Section 18 of the Act of 2006, in our view, not only
provides an adequate and efficacious remedy to the
MSM Enterprise to recover its legitimate dues but the
same also provides an opportunity to fast track the
resolution of all such disputes.
30. In the present case, as has been noted herein
above, the fact that the sub-contractor a micro, small
and medium enterprise and had supplied goods and/or
rendered services, which was availed by the appellant
No. 1 as a buyer, within the meaning of the Act of
2006, is not in dispute nor is there any controversy
regarding the fact that the value of the work executed
by the sub-contractor (writ petitioner Nos. 1 and 2) is
Rs. 11,06,85,770, which amount has been specifically
admitted. by the appellants by filing affidavit. In view
of the above, we are of the considered opinion that the
right of the sub-contractor under the Act of 2006 to
recover payments for the goods and services rendered
by it would be independent of the terms and conditions
contained in any contract agreement to the contrary. In
other words, the contract agreements dated 19.11.2014
or 31.5.2016, in our view, cannot create any legal
obstacle for the sub-contractor to recover its dues from
the “buyer” in accordance with the procedure
prescribed under the Act of 2006.
31. We, therefore, set aside the judgment and order
dated 12.6.2023 passed by the learned Single Judge.
32. This writ appeal is being disposed of by granting
liberty to the sub-contractor (respondent Nos. 1 and 2
here-in) to invoke section 18 of the Act of 2006 for
recovery of its dues. The matter be, accordingly,
referred to the Micro, Small and Medium Enterprises
Facilitation Council, having jurisdiction over the
dispute, for resolution of the same in accordance with
the scheme of the Act of 2006.‖
23. It is no more res-integra that under Article 226 of the Constitution of India,
the High Court having regard to the facts of the case has a discretion to
WP(C) 1723/2026 Page | 16
entertain or not to entertain a petition, but the High Court has imposed uponcertain restrictions, one of which is that, if an equally efficacious alternative
remedy is available, the High Court would not normally exercise its
jurisdiction. Petitioner in this case is seeking a remedy which is available to
him in terms of the Act of 2006, the grounds projected in the petitioner do
not carve out a case to invoke extraordinary jurisdiction in view of the
availability of an alternative remedy available to the petitioner. As such, on
account of the statutory remedy available in terms of the Act of 2006, rules
and scheme/mechanism provided exclusively for registered MSME
suppliers like the petitioner herein and the liability of the respondents not
clearly admitted in any of the documents annexed with this petition. This
petition, therefore, is neither maintainable nor liable to entertained. In case
this petition is entertained under article 226 of the Constitution of India, it
would render the statutory mechanism under Act of 2006, otiose.
24. In view of above, this petition is dismissed at the threshold, without costs.
(MOKSHA KHAJURIA KAZMI)
JUDGESRINAGAR:
31.07.2026
“Misba”
Whether the Judgment is Reportable? Yes/No
Whether the Judgment is Speaking? Yes/No
WP(C) 1723/2026 Page | 17
