Delhi High Court – Orders
M/S Larsen And Toubro Ltd vs M/S Navnirman Highway Projects Pvt. Ltd on 13 April, 2026
$~36
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (COMM) 182/2026 & I.A. 9963/2026, I.A. 9964/2026, I.A.
9965/2026
M/S LARSEN AND TOUBRO LTD. .....Petitioner
Through: Dr. Amit George, Mr. K.G.
Gopalakrishnan, Ms. Medhavi Bhatia
and Mr. Kartikay Puneesh, Advs.
M: 9717752282
versus
M/S NAVNIRMAN HIGHWAY PROJECTS PVT.
LTD. .....Respondent
Through: Mr. Pardeep Dahiya, Ms. Mahima
and Mr. Rakshit, Advs.
CORAM:
HON'BLE MS. JUSTICE MINI PUSHKARNA
ORDER
% 13.04.2026
I.A. 9964/2026 (For Exemption)
1. Exemption allowed, subject to all just exceptions.
2. Application stands disposed of.
I.A. 9965/2026
3. The present application has been filed under Section 151 of Code of
Civil Procedure (“CPC“), seeking permission to file long and lengthy list of
dates and synopsis.
4. Considering the submissions made in the present application, the
present application is allowed and the same is disposed of.
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O.M.P. (COMM) 182/2026 & I.A. 9963/2026
5. The present petition has been filed under Section 34 of the Arbitration
and Conciliation Act, 1996 (“Arbitration Act“), challenging the Arbitral
Award dated 13th January, 2026, and order dated 24th March, 2025, passed
by the Arbitral Tribunal.
6. Learned counsel appearing for the petitioner submits that vide the
impugned order dated 24th March, 2025, the learned Arbitrator erroneously
dismissed the application under Section 16 of the Arbitration Act filed by
the petitioner. Thus, it is submitted that by way of the impugned Award
dated 13th January, 2026, the Arbitral Tribunal has erroneously allowed the
claims of the respondent and has directed the petitioner to pay sum of Rs.
10,78,13,204/- together with interest @18% per annum, from 28th
November, 2023, till realization, as well as cost.
7. Learned counsel appearing for the petitioner submits that the work
was completed by the respondent in May, 2018, and that the registration
under the Micro Small and Medium Enterprises Development Act, 2006
(“MSME Act“), was obtained by the respondent only on 01st September,
2020, which is post the completion of the work.
8. Further, he submits that vide the impugned order dated 24th March,
2025, the learned Arbitrator has rejected the application under Section 16 of
the Arbitration Act filed on behalf of the petitioner on the basis of the
judgment of the Supreme Court in the case of NBCC (India) Limited
Versus State of West Bengal and Others, (2025) 3 SCC 440.
9. He submits that however, the learned Arbitrator failed to take into
account of the fact that the issue whether the registration under the MSME
Act would have retrospective effect, has now been referred to a three judge
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bench of the Supreme Court.
10. Learned counsel appearing for the petitioner draws the attention of
this Court to Paras 48 to 53, 55 and 56 of the said judgment, which are
reproduced as under:
“xxx xxx xxx
48. In view of the above submission, the Court proceeded to rely on Silpi
Industries [Silpi Industries v. Kerala SRTC, (2021) 18 SCC 790] , and
allowed the prayer. The relevant portion is as under : (Mahakali Foods
case [Gujarat State Civil Supplies Corpn. Ltd. v. Mahakali Foods (P)
Ltd., (2023) 6 SCC 401 : (2023) 3 SCC (Civ) 7] , SCC pp. 432-33, paras
50-51)“50. At this juncture, very pertinent observations made by this
Court in Silpi Industries case on this issue are required to be
reproduced ….
***
51. Following the abovestated ratio, it is held that a party who was
not the “supplier” as per Section 2(n) of the MSMED Act, 2006 on
the date of entering into the contract, could not seek any benefit as
a supplier under the MSMED Act, 2006. A party cannot become a
micro or small enterprise or a supplier to claim the benefit under
the MSMED Act, 2006 by submitting a memorandum to obtain
registration subsequent to entering into the contract and supply of
goods or rendering services. If any registration is obtained
subsequently, the same would have the effect prospectively and
would apply for the supply of goods and rendering services
subsequent to the registration. The same cannot operate
retrospectively. However, such issue being jurisdictional issue, if
raised could also be decided by the Facilitation
Council/Institute/Centre acting as an Arbitral Tribunal under the
MSMED Act, 2006.”
49. It is evident from the above that even in Mahakali Foods [Gujarat
State Civil Supplies Corpn. Ltd. v. Mahakali Foods (P) Ltd., (2023) 6
SCC 401 : (2023) 3 SCC (Civ) 7] , the issue which has arisen for our
consideration never arose. There was neither an issue, discussion, nor
analysis on the applicability of Section 18 for enterprises that have not
filed a memorandum. The decision in Mahakali Foods [Gujarat State
Civil Supplies Corpn. Ltd. v. Mahakali Foods (P) Ltd., (2023) 6 SCC 401
: (2023) 3 SCC (Civ) 7] is certainly an authority on the issues that were
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formulated in para 11 of the said judgment, which have already been
extracted hereinabove. Even the concluding paragraph in Mahakali
Foods [Gujarat State Civil Supplies Corpn. Ltd. v. Mahakali Foods (P)
Ltd., (2023) 6 SCC 401 : (2023) 3 SCC (Civ) 7] clearly establishes the
fact that the Court was only considering the issue of whether the
MSMED Act, being a special legislation, overrides the Arbitration and
Conciliation Act, 1996 or not. The relevant portion of the judgment is as
under : (Mahakali Foods case [Gujarat State Civil Supplies Corpn. Ltd.
v. Mahakali Foods (P) Ltd., (2023) 6 SCC 401 : (2023) 3 SCC (Civ) 7] ,
SCC pp. 439-40, para 77)
“77. The issues raised and the submissions made by the learned
counsel appearing for the appellant with regard to the overriding
effect of the MSMED Act, 2006 over the Arbitration Act, 1996,
jurisdiction of Facilitation Council, the parties autonomy to enter
into an agreement qua the statutory provisions, the issue of casus
omissus, etc. have been discussed and decided hereinabove which
need not be reiterated or repeated. Accordingly, it is held that the
reference made to the Facilitation Council would be maintainable
in spite of an independent arbitration agreement existing between
the parties to whom the MSMED Act, 2006 is applicable, and such
Council would be entitled to proceed under sub-section (2) of
Section 18 of the MSMED Act, 2006 as also to act as an arbitrator
or to refer the disputes to the institution or centre as contemplated
under Section 18(3) of the MSMED Act, 2006. As held earlier, such
Facilitation Council/Institute/Centre acting as an Arbitral Tribunal
would have the jurisdiction to rule over on its own jurisdiction as
per Section 16 of the Arbitration Act, 1996. In that view of the
matter, the present appeal also deserves to be dismissed and is,
accordingly, dismissed.”
50. Apart from Silpi Industries [Silpi Industries v. Kerala SRTC, (2021)
18 SCC 790] , Mahakali Foods [Gujarat State Civil Supplies Corpn. Ltd.
v. Mahakali Foods (P) Ltd., (2023) 6 SCC 401 : (2023) 3 SCC (Civ) 7] ,
Mr Sankaranarayanan also relied on two orders of this Court in Vaishno
Enterprises v. Hamilton Medical AG [Vaishno Enterprises v. Hamilton
Medical AG, (2024) 12 SCC 214 : 2022 SCC OnLine SC 355] and Nitesh
Estates Ltd. v. Outsourcing Xperts [Nitesh Estates Ltd. v. Outsourcing
Xperts, (2024) 12 SCC 221 : 2022 SCC OnLine SC 1198] . These short
orders do not lay down the law but follow the decision of this Court in
Silpi Industries [Silpi Industries v. Kerala SRTC, (2021) 18 SCC 790].
51. In Vaishno Enterprises [Vaishno Enterprises v. Hamilton Medical
AG, (2024) 12 SCC 214 : 2022 SCC OnLine SC 355] , the contract was
entered into on 24-8-2020, but as the registration was made on 28-8-
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2020, the Court held that the appellant was not an MSME and, therefore,
the Act will not apply. The order seems to have been made in the facts
and circumstances of the case. There was neither an issue about the
supply of goods nor a formulation of the question as to whether the filing
of a memorandum is mandatory for invocation of reference under Section
18.
52. The order in Nitesh Estates [Nitesh Estates Ltd. v. Outsourcing
Xperts, (2024) 12 SCC 221 : 2022 SCC OnLine SC 1198] , also relied
on, observed that the issue involved is squarely covered against the
respondents in view of the decision in Silpi Industries [Silpi Industries v.
Kerala SRTC, (2021) 18 SCC 790] holding that filing of a memorandum
is mandatory for initiation of proceedings under Section 18.
53. A decision where the issue was neither raised nor preceded by any
consideration, in State of U.P. v. Synthetics & Chemicals Ltd. [State of
U.P. v. Synthetics & Chemicals Ltd., (1991) 4 SCC 139 : (1992) 87 STC
289] this Court held : (SCC p. 163, para 41)
“41. … the Court did not feel bound by earlier decision as it was
rendered without any argument, without reference to the crucial
words of the rule and without any citation of the authority.”
Further, approving the decision of this Court in MCD v. Gurnam Kaur
[MCD v. Gurnam Kaur, (1989) 1 SCC 101] which held that “precedents
sub silentio and without argument are of no moment” this Court held
[State of U.P. v. Synthetics & Chemicals Ltd., (1991) 4 SCC 139 : (1992)
87 STC 289] that : (Synthetics & Chemicals case [State of U.P. v.
Synthetics & Chemicals Ltd., (1991) 4 SCC 139 : (1992) 87 STC 289] ,
SCC p. 163, para 41)
“41. … A decision which is not express and is not founded on
reasons nor it proceeds on consideration of issue cannot be deemed
to be a law declared to have a binding effect as is contemplated by
Article 141.”
xxx xxx xxx
55. In this context, it is also important to note that, as an institution, our
Supreme Court performs the twin functions of decision-making and
precedent-making. A substantial portion of our jurisdiction under Article
136 is reflective of regular appellate disposition of decision-making.
Every judgment or order made by this Court in disposing of these
appeals is not intended to be a binding precedent under Article 141.
Though the arrival of a dispute for this Court’s consideration, either for
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decision-making or precedent-making is at the same tarmac, every
judgment or order which departs from this Court lands at the doorstep of
the High Courts and the subordinate courts as a binding precedent. We
are aware of the difficulties that the High Courts and the subordinate
courts face in determining whether the judgment is in the process of
decision-making or precedent-making, particularly when we have also
declared that even an obiter of this Court must be treated as a binding
precedent for the High Courts and the courts below. In the process of
decision-making, this Court takes care to indicate the instances where
the decision of the Supreme Court is not to be treated as precedent.
[Union of India v. All Gujarat Federation of Tax Consultants, (2006) 13
SCC 473 : (2008) 2 SCC (L&S) 457; Francis Stanly v. Narcotic Control
Bureau, (2006) 13 SCC 210 : (2007) 2 SCC (Cri) 618; Bharat Petroleum
Corpn. Ltd. v. P. Kesavan, (2004) 9 SCC 772; Vishnu Dutt Sharma v.
Manju Sharma, (2009) 6 SCC 379 : (2009) 2 SCC (Civ) 897; Chandigarh
Housing Board v. Narinder Kaur Makol, (2000) 6 SCC 415; Also refer to
the commentary citing catena of judgments where this Court has
enumerated the “events when decision-making is not to be treated as a
precedent” in Durga Das Basu, Commentary on Constitution of India
(9th Edn., Vol. IX), p. 9858; See also, Allen v. Flood, 1898 AC 1 (HL):”a
case is only an authority for what it actually decides” [Ed. : Quoted from
Quinn v. Leathem, 1901 AC 495 (HL).].] It is therefore necessary to be
cautious in our dispensation and state whether a particular decision is to
resolve the dispute between the parties and provide finality or whether
the judgment is intended to and in fact declares the law under Article
141.
56. On the interpretation of the provisions of the Act we have arrived at a
clear opinion and have expressed the same. Though it is possible for us
to follow the precedents referred to in paras 53 and 54 to arrive at the
conclusion that the judgments in Silpi Industries [Silpi Industries v.
Kerala SRTC, (2021) 18 SCC 790] and Mahakali Foods [Gujarat State
Civil Supplies Corpn. Ltd. v. Mahakali Foods (P) Ltd., (2023) 6 SCC 401
: (2023) 3 SCC (Civ) 7] coupled with the subsequent orders in Vaishno
Enterprises [Vaishno Enterprises v. Hamilton Medical AG, (2024) 12
SCC 214 : 2022 SCC OnLine SC 355] and Nitesh Estates [Nitesh Estates
Ltd. v. Outsourcing Xperts, (2024) 12 SCC 221 : 2022 SCC OnLine SC
1198] cannot be considered to be binding precedents on the issue that
has arisen for our consideration, taking into account the compelling need
to ensure clarity and certainty about the applicable precedents on the
subject, we deem it appropriate to refer this appeal to a three-Judge
Bench.
xxx xxx xxx”
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11. By referring to the aforesaid, it is submitted by learned counsel
appearing for the petitioner that the learned Arbitrator completely ignored
the Para 56 of the aforesaid judgment, wherein, the issue in question has
been referred to a three judge bench. This Court is informed that the three
judge bench of the Supreme Court is still seized with the matter and there is
no finality as such to the issue.
12. By relying upon the aforesaid judgment, he further submits that there
is a three judge bench judgment of the Supreme Court, which holds to the
contrary, i.e., Tamil Nadu Cements Corporation Limited Versus Micro and
Small Enterprises Facilitation Council and Another, (2025) 4 SCC 1,
which has been taken into account the case of NBCC (Supra), and has also
made a reference of question before a five judge bench.
13. Learned counsel appearing for the petitioner further draws the
attention of this Court to Para 22 of the present petition, wherein, the
petitioner has stated as follows:
“xxx xxx xxx
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xxx xxx xxx”
14. Learned counsel appearing for the petitioner submits that though the
petitioner challenges the arbitration having been conducted under the
MSME Act as not being maintainable, however, as amended by Section 19
of the MSME Act, the petitioner is ready to deposit 75% of the awarded
amount, without prejudice to their rights and contentions.
15. Per contra, learned counsel for the respondent appearing on advance
notice submits that in the NBCC (Supra) judgment, the Supreme Court
relied upon two other judgments also, i.e., Silpi Industries and Others
Versus Kerala State Road Transport Corporation and Another, (2021) 18
SCC 790 and Gujarat State Civil Supplies Corporation Limited Versus
Mahakali Foods Private Limited (Unit 2) and Another, (2023) 6 SCC 401,
which held in similar lines as the NBCC (Supra), which is Coordinate
Bench judgment, i.e., two judge bench judgment.
16. He further submits that the petitioner did not appear before the
MSME Council upon the complaint by the respondent and that even the
order of the MSME Council for referring the matter to Arbitrator was not
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challenged by the petitioner.
17. He submits that it is only before the Arbitrator that for the first time
an application under Section 16 of the Arbitration Act was filed. He thus,
submits that the petitioner did not raise the objection with regard to the
jurisdiction regarding the Arbitration under the MSME Act in the first
instance, which was available to the petitioner, and such plea by the
petitioner raised subsequently, under Section 16 of the Arbitration Act,
would not be maintainable.
18. Per contra, learned counsel appearing for the petitioner submits that
the occasion to raise the objection arose only when the matter was referred
to the Arbitrator, as in Delhi, the MSME Council itself does not hear the
matter and simply refers the matter to Arbitration.
19. The matter requires consideration.
20. Accordingly, issue notice. Notice is accepted by learned counsel
appearing for the respondent.
21. Let reply be filed, within a period of four weeks, from today.
22. Rejoinder thereto, if any, be filed within two weeks, thereafter.
23. Considering the submissions made before this Court, it is directed that
the operation of the Arbitral Award dated 13th January, 2026, shall remain
stayed, till the next date of hearing, subject to the petitioner depositing 75%
of the awarded amount.
24. Let the needful be done by the petitioner, within a period of one week,
from today.
25. Since the petitioner has already placed on record the photocopy of the
Demand Draft dated 04th April, 2026, the petitioner is granted liberty to
deposit the same with the Registry of this Court.
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26. As and when the said amount is deposited by the petitioner with the
Registry of this Court, the same shall be kept in an interest bearing account.
27. Re-notify on 06th August, 2026.
MINI PUSHKARNA, J
APRIL 13, 2026/KR
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