Supreme Court of India M/S Sonali Power Equipments Pvt. Ltd vs Chairman, Maharashtra State ... on 17 July, 2025 2025 INSC 864 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 95249532 OF 2025 ARISING OUT OF SLP (C) NOS. 69126920 OF 2024 M/S SONALI POWER EQUIPMENTS PVT. LTD. ...APPELLANT(S) VERSUS CHAIRMAN, MAHARASHTRA STATE ELECTRICITY BOARD, MUMBAI & ORS. …RESPONDENT(S) JUDGMENT PAMIDIGHANTAM SRI NARASIMHA, J. Table of Contents I. Introduction.........................................................................2 II. Brief Facts ...........................................................................3 III. High Court order dated 24.08.2018: ..........................................4 IV. Impugned order: ....................................................................6 V. Submissions: ...................................................................... 11 VI. Issues ............................................................................... 15 VII. Relevant statutory provisions: ................................................ 17 VIII. Whether timebarred claims can be referred to conciliation under Section 18(2) of the MSMED Act: ...................................................... 26 IX. Signature Not Verified Whether timebarred claims can be referred to arbitration under Digitally signed by KAPIL TANDON Date: 2025.07.17 Section 18(3) of the MSMED Act: ...................................................... 35 15:50:44 IST Reason: X. Conclusion ......................................................................... 49 1 1. Leave granted. I. Introduction: 2. The issue arising in the present appeals are whether the provisions of the Limitation Act, 19631 are applicable to conciliation and arbitration proceedings initiated under Section 18 of the Micro, Small and Medium Enterprises Development Act, 20062. Further, even if the Limitation Act is not applicable, whether a supplier can recover a timebarred debt by taking recourse to the remedies provisioned under Section 18 of the MSMED Act. In the order impugned before us in the present appeals, a full bench of the High Court has held that the Facilitation Council cannot entertain timebarred claims for conciliation, and that the provisions of the Limitation Act are applicable to arbitration proceedings under the MSMED. On considering the statutory scheme and provisions of the MSMED Act, the Arbitration and Conciliation Act, 19963, and the Limitation Act, along with the precedents of this Court as well the submissions of the parties, we have partly allowed the present appeals as follows. We have upheld the decision of the High Court 1 Hereinafter “Limitation Act”. 2 Hereinafter “MSMED Act”. 3 Hereinafter “ACA”. 2 to the extent of the Limitation Act being applicable to arbitration proceedings under the MSMED Act and have provided our reasons for the same. With respect to conciliation proceedings on the other hand, we are of the opinion that they do not attract the applicability of the Limitation Act. Further, there is no legal bar in the Limitation Act, the MSMED Act, the ACA, or the legal precedents laid down by this Court that proscribes conciliation with respect to timebarred debts. II. Brief Facts: 3. The appellants are smallscale industries registered with the District Industries Centre, Nagpur. The appellants supplied transformers to respondent no. 1 under various purchase orders between 1993 to 2004. Due to delay in payments, the appellants filed references in 200506 before the Industry Facilitation Council established under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 19934. The 1993 Act came to be repealed by the MSMED Act, 20065, and the proceedings initiated by the appellants were taken up by the Micro 4 Hereinafter “1993 Act”. 5 Section 32 of the MSMED Act, which reads: “32. Repeal of Act 32 o