Delhi High Court Jkg Infratech Private Limited vs Larsen And Toubro Limited on 6 February, 2024 $~29 * Decided on: 06th February, 2024 + ARB. A. (COMM.) 8/2024 JKG INFRATECH PRIVATE LIMITED ..... Appellant Through: Mr. Parvesh Bansal & Mr. Rahul Bansal, Advocates. versus LARSEN AND TOUBRO LIMITED ..... Respondent Through: None. % HON'BLE MR. JUSTICE PRATEEK JALAN PRATEEK JALAN, J. (ORAL) I.A. 2604/2024(Exemption) Exemption allowed, subject to all just exceptions. The application stands disposed of. ARB. A. (COMM.) 8/2024 & I.A. 2605/2024(Condonation of delay in refiling) 1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 ["A&C Act"] is directed against an order dated 06.10.2023 of the learned arbitrator, allowing an application of the respondent under Section 16 of the A&C Act. 2. At the outset, it is recorded that I have disclosed to Mr. Parvesh Bansal, learned counsel for the appellant, that I hold some shares in the respondentcompany but Mr. Bansal has stated that he has no objection to the appeal being heard by this Bench. Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:08.02.2024 15:55:30 ARB. A. (COMM.) 8/2024 Page 1 of 9 3. The arbitral proceedings were instituted by the appellant under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 ["MSME Act"]. The appellant's claim before the learned arbitrator arose out of contracts dated 19.11.2013 and 03.03.2014 by which it supplied certain services to the respondent. The appellant claims that the respondent did not release its performance bank guarantee and retention money as required under the contracts even after the prescribed defect liability period. Both contracts also contained arbitration clauses, but the appellant proceeded to invoke arbitration under Section 18 of the MSME Act. 4. The respondent made an application under Section 16 of the A&C Act before the learned arbitrator, contending that the proceedings under the MSME Act were barred as the appellant was registered under Section 8 of the MSME Act only on 03.02.2017. The learned arbitrator has accepted this position relying, inter alia, upon the decisions of the Supreme Court in Silpi Industries Etc. vs. Kerala State Road Transport Corporation and Anr.1 and Vaishno Enterprises vs. Hamilton Medical AG and Anr.2 and upon three decisions of this Court3. The learned arbitrator has consequently dismissed the claims of the appellant, leaving the parties to adopt their respective remedies in law. 5. Mr. Bansal submits that the decision of the learned arbitrator proceeds on a misappreciation of the effect of registration under the 1 (2021) SCC OnLine 439 ("Silpi Industries"). 2 (2022) SCC OnLine SC 355 ("Vaishno Enterprises"). 3 JKS Infrastructure Pvt. Ltd. vs. MSME Facilitation Council and Ors. (2023) SCC OnLine Del 5873, Municipal Corporation of Delhi vs. Ram Prakash [order dated 16.03.2023 in WP (C) 16891/2022 and connected matters], Grand Mumtaz Hotel and Resort vs. Deputy Commissioner North East Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:08.02.2024 15:55:30 ARB. A. (COMM.) 8/2024 Page 2 of 9 MSME Act. He submits that the MSME Act, being a beneficial legislation, the benefits of its provisions should be extended to a registered MSME, even if the registration was obtained after the