Delhi High Court Indian Highways Management Company ... vs Sowil Limited on 14 February, 2022 NEUTRAL CITATION NO: 2022/DHC/000815 $~1 * + Date of Decision: 14.02.2022 % FAO(OS) (COMM) 23/2022 & CM APPLs. 58855886/2022 INDIAN HIGHWAYS MANAGEMENT COMPANY LIMITED ..... Appellant Through: Ms. Aishwarya Bhati, ASG with Mr.A P Singh, Ms. Padma Priya and Ms. Shreya Sethi, Advs. versus SOWIL LIMITED ..... Respondent Through: Ms. Manmeet Arora, Ms. Samapika Biswal and Ms. Pavitra Kaur, Advs. HON'BLE MR. JUSTICE VIPIN SANGHI HON'BLE MR. JUSTICE JASMEET SINGH VIPIN SANGHI, J. (ORAL) 1. The present appeal under Section 37 of the Arbitration & Conciliation Act (the Act) is directed against the judgment dated 21.12.2021 passed by the learned Single Judge in O.M.P. (COMM.) NO. 376/2021. The learned Single Judge has dismissed the objections preferred by the appellant under Section 34 of the Act against the Arbitral Award dated 11.10.2021 rendered by the learned Sole Arbitrator appointed to adjudicate the claims of the respondent/claimant. 2. The respondent who is admittedly a small enterprise under the Micro, Small, Medium Enterprises Development Act, 2006 (hereinafter FAO(OS) (COMM) 23/2022 Page 1 of 23 This is a digitally signed Judgement. NEUTRAL CITATION NO: 2022/DHC/000815 "MSMED Act"), is engaged in the business of providing consultancy services to various organizations for development works, railway works, bridges, structures and tunnelling. The parties entered into a contract dated 28.10.2014 whereunder the respondent rendered its services for "Conducting Traffic Surveys on National Highways in Zone5 (in the States of Odisha, West Bengal and North Eastern States) using Portable Automatic Traffic Counter & Classified (ATCC) Systems". 3. Disputes arose between the parties under the contract, which were referred to Arbitration before the learned Sole Arbitrator. Amongst the claims that the respondent raised, was the claim for interest on the principle dues, under Section 16 of the MSMED Act. The Arbitral Tribunal dealt with the said claim and while doing so, rejected the submission of the appellant/nonclaimant that since the Arbitration was not invoked under Section 18 of the aforesaid Act, the respondentclaimant was not entitled to raise its claim for interest under Section 15 of the MSMED Act. The consideration of the said issue by the Arbitrator reads as follows: ―78. There is, therefore, no dispute that the Claimant is a small enterprise and is covered by the MSME Act. On this basis the Claimant has claimed interest as computed under section 16 of the MSME Act. However, the learned counsel for the Respondent has contended that any interest, if at all payable by the Respondent, would have to be reasonable interest and not interest under section 16 of the MSME Act as the present arbitration is not under section 18 of that act. It was contended that interest under section 16 can only be awarded in arbitration proceedings under the MSME Act. Reliance was placed on a decision of the Hon'ble High Court of Delhi in AVR Enterprises v. Union of India: MANU/ DE/ 1024/ FAO(OS) (COMM) 23/2022 Page 2 of 23 This is a digitally signed Judgement. NEUTRAL CITATION NO: 2022/DHC/000815 2020. However, that decision was on an entirely different context. The question there was whether a petition to set aside an award which had not been made in an arbitration under the MSME Act would require the deposit of 75% of the awarded amount? The Court held that section 19 of the MSME Act applied only in respect of, inter alia, an award made under the said act and not in respect of awards which were made outside the act. There was no discussion with regard to the provisions of section 16, with which we are concerned in the present case. The said decision is, therefore, clearly inapplicable. 79. Sections 15 to 17 of the MSME Act are relevant and they are reproduced below: "15.