Bombay High Court Bridge And Roof Co India Ltd vs Welcome Hiring Works on 17 December, 2025 2025:BHCOS:25225 Megha 902_carbpl_19549_2024.docx ORDINARY ORIGINAL CIVIL JURISDICTION COMMERCIAL ARBITRATION PETITION (L) NO.19549 OF 2024 WITH INTERIM APPLICATION (L) NO.20354 OF 2024 IN COMMERCIAL ARBITRATION PETITION (L) NO.19549 OF 2024 M/s. Bridge and Roof Co. (I) Ltd. ...Petitioner V/s. Welcome Hiring Works ...Respondent ______________ Mr. Atharva Dandekar with Mr. Hitendra Parab & Ms. Khurshida Shaikh for the Petitioner. Mr. M.S. Kadu for the Respondent. ______________ DATED: 17 DECEMBER 2025. P.C.: 1) By this Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, the Petitioner challenges Award dated 26 March 2024 passed by the Micro and Small Enterprises Facilitation Council, Mumbai. By the impugned Award the Facilitation Council has allowed the claim of the Respondent in the sum of Rs.2,06,00,746/ alongwith interest in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 (the MSMED Act). 2) Petitioner is a Government of India enterprise. It has issued purchase orders to the Respondent for supply of equipment. The Page No. 1 of 6 17 December 2025 Megha 902_carbpl_19549_2024.docx Respondent raised invoices from time to time on the Petitioner and it appears that amount to the tune of Rs.2,06,00,746/ in respect of 396 invoices remained unpaid by the Petitioner. 3) During the course of hearing of the Petition, it transpired that the only reason why the Petitioner did not pay the said amount of Rs.2,06,00,746/ was cancellation of GST registration of the Respondent. Otherwise Petitioner does not really dispute its liability to pay the amount of the said 396 invoices or the quantum of the liability. Arguments in the Petition were heard on 12 December 2025 and the judgment was reserved. However, at the instance of the Court, the Arbitration Petition is listed for directions today. I have once again heard Mr. Dandekar, the learned counsel appearing for the Petitioner and Mr. Kadu, the learned counsel appearing for the Respondent. 4) During the course of elaborate hearing of the present Petition it has transpired that Respondent's entitlement to receive amount of Rs.2,06,00,746/ from the Petitioner is not really under dispute. Petitioner has raised only two objections to the impugned Award. Its first objection is that the Petitioner was right in withholding payment of Rs.2,06,00,746/ on account of cancellation of GST registration of the Respondent. It is contended that Petitioner had made payments towards previous invoices to the Respondent inclusive of amount of GST and it was the Respondent, who had failed to deposit the collected amount of GST with GST department, which led to cancellation of its registration. This appears to be the only reason why Petitioner did not make further payments out of apprehension that it would not receive the input credit in respect of GST paid by it if Page No. 2 of 6 17 December 2025 Megha 902_carbpl_19549_2024.docx Respondent commits further default in depositing the GST amount with the Department. The second objection raised by the Petitioner is that the most of the work orders and invoices are prior to registration of the Respondent as Micro enterprise. 5) Both the objections raised by the Petitioner are essentially aimed at avoiding the liability to pay interest on the principal amount of Rs.2,06,00,746/ under Section 16 of the MSMED Act. Petitioner believes that since the Respondent is responsible for Petitioner not releasing the amount of Rs.2,06,00,746/, it cannot be saddled with responsibility of paying interest under Section 16 of the MSMED Act, which provides for compound interest with monthly rests at three times the bank rate notified by the Reserve Bank of India. Otherwise Petitioner does not have any object