Holding

The Court referred the three questions to a larger Bench for resolution.

Summary

The appeal concerned whether a writ petition under Article 226 of the Constitution can be filed against an order of the Micro and Small Enterprises Facilitation Council (MSEFC) made under Section 18 of the MSMED Act, 2006, and if so, under what circumstances. The Supreme Court examined earlier conflicting judgments, notably Jharkhand Urja Vikas Nigam Ltd. and Gujarat State Civil Supplies Corp. Ltd., as well as the three‑Judge decision in M/s India Glycols Ltd., which held that such writs are not maintainable because a statutory remedy under Section 34 of the Arbitration and Conciliation Act is available. The Court reiterated the basic‑structure doctrine that writ jurisdiction is plenary and may be exercised where there is a violation of natural justice, lack of jurisdiction, or a challenge to the vires of a statute, even if an alternative remedy exists. It noted that the rule of exhaustion of statutory remedies is discretionary and may yield in exceptional cases. To resolve the conflicting authority, the Court referred the three specific questions raised by the parties to a larger five‑Judge Bench. The matter was therefore referred for further consideration.

Issues considered

Whether the ratio in M/s India Glycols Ltd. that a writ petition cannot be entertained against any order/award of the MSEFC completely bars maintainability of such writ petitions before the High Court
If the bar is not absolute, under what circumstances the principle of adequate alternative remedy does not apply
Whether members of the MSEFC who conduct conciliation proceedings, upon failure, can themselves act as arbitrators of the arbitral tribunal under Section 18 of the MSMED Act read with Section 80 of the Arbitration and Conciliation Act

Legislation cited

Arbitration and Conciliation Act, 1996s. 16, s. 20, s. 23, s. 24, s. 25, s. 34, s. 65, s. 66, s. 67, s. 68, s. 69, s. 70, s. 71, s. 72, s. 73, s. 74, s. 75, s. 76, s. 77, s. 78, s. 79, s. 80, s. 81
Code of Civil Procedure, 1908
Micro, Small and Medium Enterprises Development Act, 2006s. 16, s. 17, s. 18, s. 19
Tamil Nadu Transparency in Tenders Act, 1998
Tamil Nadu Transparency in Tenders Rules, 2000

Headnote

Issue for Consideration Whether a writ petition under Article 226 of the Constitution would be maintainable against an order passed by the Micro and Small Enterprises Facilitation Council (MSEFC) in exercise of power under Section 18 of Medium Enterprises Development Act, 2006, and if yes, under what circumstances. Headnotes† Constitution of India – Art.226 – Micro, Small and Medium Enterprises Development Act, 2006 – s.18 – Existence of the statutory remedy and Writ jurisdiction of the High

Subjects

Article 226 of the ConstitutionSection 18 of the MSMED ActSection 34 of the Arbitration and Conciliation ActWrit jurisdiction of the High CourtExistence of the statutory remedyRule of availability of alternative remedyJudicial RestraintPower to issue prerogative writsM/s India Glycols LimitedPrinciples of Natural JusticeFundamental RightsAlternative remedy

Judgment

[2025] 1 S.C.R. 880 : 2025 INSC 91

M/s Tamil Nadu Cements Corporation Limited
v.
Micro and Small Enterprises Facilitation Council
and Another
(Civil Appeal No. 1016 of 2025)
22 January 2025
[Sanjiv Khanna,* CJI, Sanjay Kumar and Manmohan, JJ.]

Issue for Consideration
Whether a writ petition under Article 226 of the Constitution
would be maintainable against an order passed by the Micro
and Small Enterprises Facilitation Council (MSEFC) in exercise
of power under Section 18 of the Micro, Small and Medium
Enterprises Development Act, 2006, and if yes, under what
circumstances.

Headnotes†
Constitution of India – Art.226 – Micro, Small and Medium
Enterprises Development Act, 2006 – s.18 – Existence of the
statutory remedy and Writ jurisdiction of the High Court:
Held: In the opinion of this Court, there is a direct confrontation
between the judgment of the two Judges Bench of this Court
in Jharkhand Urja Vikas Nigam Limited and Gujarat State Civil
Supplies Corporation Limited – A three-Judges Bench of this
Court in M/s India Glycols Limited and Another v. Micro and Small
Enterprises Facilitation Council, Medchal - Malkajgiri and Others,
referring to the judgment in Gujarat State Civil Supplies Corporation
Limited, held that a writ petition under Articles 226/227 of the
Constitution was not maintainable as Section 18 of the MSMED
Act provides for recourse to a statutory remedy for challenging
an award under Section 34 of the Arbitration and Conciliation
Act, 1996 – This Court have reservations on the dictum in M/s
India Glycols Limited – In the light of the various Supreme Court
decisions, it is deemed appropriate to refer the following questions
raised in the present appeal to a larger Bench of five Judges,
namely: (i) Whether the ratio in M/s India Glycols Limited that a
writ petition could never be entertained against any order/award
* Author
[2025] 1 S.C.R. 881

M/s Tamil Nadu Cements Corporation Limited v.
Micro and Small Enterprises Facilitation Council and Another

of the MSEFC, completely bars or prohibits maintainability of the
writ petition before the High Court; (ii) If the bar/prohibition is not
absolute, when and under what circumstances will the principle/
restriction of adequate alternative remedy not apply; (iii) Whether
the members of MSEFC who undertake conciliation proceedings,
upon failure, can themselves act as arbitrators of the arbitral tribunal
in terms of Section 18 of the MSMED Act read with Section 80 of
the A&C Act. [Paras 7, 10, 11, 15, 19]

Constitution of India – Art.226 – Access to the High Courts
u/Art.226 of Constitution is a part of basic structure:
Held: The access to High Courts by way of a writ petition under
Article 226 of the Constitution of India, is not just a constitutional
right but also a part of the basic structure – It is available to every
citizen whenever there is a violation of their constitutional rights
or even statutory rights – This is an inalienable right and the rule
of availability of alternative remedy is not an omnibus rule of
exclusion of the writ jurisdiction, but a principle applied by the High
Courts as a form of judicial restraint and refrain in exercising the
jurisdiction – The power to issue prerogative writs under Article
226 of the Constitution is plenary in nature and the same is not
limited by any provision of the Constitution and cannot be restricted
or circumscribed by a statute – It has been well settled through a
legion of judicial pronouncements of this Court that the writ courts,
despite the availability of alternative remedies, may exercise writ
jurisdiction at least in three contingencies – i) where there is a
violation of principles of natural justice or fundamental rights; ii)
where an order in a proceeding is wholly without jurisdiction; or
iii) where the vires of an Act is challenged. [Para 13]

Case Law Cited
Himmatlal Harilal Mehta v. State of Madhya Pradesh and Others
[1954] 1 SCR 1122 : (1954) 1 SCC 405; Govind Parameswar
Nair and Others v. Municipal Corporation of Greater Bombay and
Other (2001) 9 SCC 166 – followed.
Jharkhand Urja Vikas Nigam Limited v. State of Rajasthan and
Others [2021] 9 SCR 497 : (2021) 19 SCC 206; Gujarat State Civil
Supplies Corporation Limited v. Mahakali Foods Private Limited
(Unit 2) and Another [2022] 19 SCR 1094 : (2023) 6 SCC 401;
882 [2025] 1 S.C.R.

Supreme Court Reports

M/s India Glycols Limited and Another v. Micro and Small
Enterprises Facilitation Council, Medchal - Malkajgiri and Others,
2023 SCC OnLine SC 1852; Harbanslal Sahnia and Another v.
Indian Oil Corporation and Others (2003) 2 SCC 107; Whirlpool
Corporation v. Registrar of Trade Marks, Mumbai and Others [1998]
Supp. 2 SCR 359 : (1998) 8 SCC 1; Radha Krishan Industries v.
State of Himachal Pradesh and Others [2021] 3 SCR 406 : (2021)
6 SCC 771; Shyam Kishore and Others v. Municipal Corporation
of Delhi and Another [1992] Supp. 1 SCR 349 : (1993) 1 SCC
22; Tecnimont Private Limited (Formerly known as Tecnimont ICB
Private Limited) v. State of Punjab and Others [2019] 12 SCR
229 – referred to.

List of Acts
Micro, Small and Medium Enterprises Development Act, 2006;
Arbitration and Conciliation Act, 1996; Code of Civil Procedure,
1908; Tamil Nadu Transparency in Tenders Act, 1998; Tamil Nadu
Transparency in Tenders Rules, 2000.

List of Keywords
Article 226 of the Constitution; Section 18 of the Micro, Small and
Medium Enterprises Development Act, 2006; Section 34 of the
Arbitration and Conciliation Act, 1996; Writ jurisdiction of the High
Court; Existence of the statutory remedy; Rule of availability of
alternative remedy; Judicial Restraint; Power to issue prerogative
writs; M/s India Glycols Limited; Principles of Natural Justice;
Fundamental Rights; Alternative remedy.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1016 of 2025
From the Judgment and Order dated 07.12.2022 of the High Court
of Judicature at Madras in WA No. 2079 of 2022

Appearances for Parties
K. Radhakrishnan, Sr. Adv., K.V. Jagdishvaran, Ms. G. Indira,
P. Gandepan, Ashwini Kumar, Advs. for the Appellant.
Senthil Jagadeesan, E. Om Prakash, Sr. Advs., Kaushitaki Sharma,
Ms. Hima Bhardwaj, Ms. Mrinal Kanwar, Vaibhav, Puneet Agarwwal,
Advs. for the Respondents.
[2025] 1 S.C.R. 883

M/s Tamil Nadu Cements Corporation Limited v.
Micro and Small Enterprises Facilitation Council and Another

Judgment / Order of the Supreme Court

Judgment

Sanjiv Khanna, CJI

Leave granted.
2. The seminal issue which arises for consideration in the present appeal
is whether a writ petition under Article 226 of the Constitution would
be maintainable against an order passed by the Micro and Small
Enterprises Facilitation Council1 in exercise of power under Section
18 of the Micro, Small and Medium Enterprises Development Act,
2006,2 and if yes, under what circumstances.
3. Section 18 of the MSMED Act reads as under:
“Reference to Micro and Smal enterprises Facilitation
Council.— (1) Notwithstanding anything contained in any
other law for the time being in force, any party to a dispute
may, with regard to any amount due under section 17,
make a reference to the Micro and Small Enterprises
Facilitation Council.
(2) On receipt of a reference under sub-section (1),
the Council shall either itself conduct conciliation in the
matter or seek the assistance of any institution or centre
providing alternate dispute resolution services by making
a reference to such an institution or centre, for conducting
conciliation and the provisions of sections 65 to 81 of the
Arbitration and Conciliation Act, 1996 (26 of 1996) shall
apply to such a dispute as if the conciliation was initiated
under Part III of that Act.
(3) Where the conciliation initiated under sub-section (2)
is not successful and stands terminated without any
settlement between the parties, the Council shall either
itself take up the dispute for arbitration or refer it to any
institution or centre providing alternate dispute resolution
services for such arbitration and the provisions of the

1 For short, ‘MSEFC’.
2 For short, ‘MSMED Act’.
884 [2025] 1 S.C.R.

Supreme Court Reports

Arbitration and Conciliation Act, 1996 (26 of 1996) shall then
apply to the dispute as if the arbitration was in pursuance
of an arbitration agreement referred to in sub-section(1)
of section 7 of that Act.
(4) Notwithstanding anything contained in any other law for
the time being in force, the Micro and Small Enterprises
Facilitation Council or the centre providing alternate dispute
resolution services shall have jurisdiction to act as an
Arbitrator or Conciliator under this section in a dispute
between the supplier located within its jurisdiction and a
buyer located anywhere in India.
(5) Every reference made under this section shall be
decided within a period of ninety days from the date of
making such a reference.”
4. A two Judges Bench of this Court in Jharkhand Urja Vikas Nigam
Limited v. State of Rajasthan and Others,3 after interpreting the
provisions of the MSMED Act, including the powers of the MSEFC
under sub-section (2) and (3) of Section 18, had observed:
“14. From a reading of Sections 18(2) and 18(3) of the
Msmed Act it is clear that the Council is obliged to conduct
conciliation for which the provisions of Sections 65 to 81
of the Arbitration and Conciliation Act, 1996 would apply,
as if the conciliation was initiated under Part III of the
said Act. Under Section 18(3), when conciliation fails and
stands terminated, the dispute between the parties can be
resolved by arbitration. The Council is empowered either
to take up arbitration on its own or to refer the arbitration
proceedings to any institution as specified in the said
section. It is open to the Council to arbitrate and pass an
award, after following the procedure under the relevant
provisions of the Arbitration and Conciliation Act, 1996,
particularly Sections 20, 23, 24 and 25.
15. There is a fundamental difference between conciliation
and arbitration. In conciliation, the conciliator assists the
parties to arrive at an amicable settlement, in an impartial
and independent manner. In arbitration, the Arbitral

3 (2021) 19 SCC 206.
[2025] 1 S.C.R. 885

M/s Tamil Nadu Cements Corporation Limited v.
Micro and Small Enterprises Facilitation Council and Another

Tribunal/arbitrator adjudicates the disputes between the
parties. The claim has to be proved before the arbitrator,
if necessary, by adducing evidence, even though the rules
of the Civil Procedure Code or the Evidence Act may not
apply. Unless otherwise agreed, oral hearings are to be
held.
16. If the appellant had not submitted its reply at the
conciliation stage, and failed to appear, the Facilitation
Council could, at best, have recorded the failure
of conciliation and proceeded to initiate arbitration
proceedings in accordance with the relevant provisions of
the Arbitration and Conciliation Act, 1996, to adjudicate the
dispute and make an award. Proceedings for conciliation
and arbitration cannot be clubbed.”
5. Thereupon, referring to the facts in the case, this Court struck down
the order dated 06.08.2012 passed by the MSEFC as being nullity
and contrary to the provisions of the MSMED Act and the mandatory
provisions of the Arbitration and Conciliation Act, 1996.4 This court
observed that the order under challenge was not an award in the
eyes of law and hence the recourse to Section 34 of the A&C Act
was not required. The writ petition was held to be maintainable
notwithstanding the objections on account of delay and laches.
6. Another Division Bench of this Court in Gujarat State Civil Supplies
Corporation Limited v. Mahakali Foods Private Limited (Unit 2)
and Another,5 without noticing the judgment in Jharkhand Urja
Vikas Nigam Limited (supra), observed that the specific non-obstante
clauses in sub-sections (1) and (4) of Section 18 of the MSMED Act
have the effect of overriding any other law for the time being in force,
including the A&C Act, and, consequently, the MSEFC can act as
a conciliator, and thereupon itself take up the dispute for arbitration
or refer it to any institution or centre for such arbitration. This would
be valid, despite Part III of the A&C Act comprising Sections 65
to 81 being applicable to conciliation in terms of sub-section (2) of
Section 18 of the MSMED Act. In other words, there is no bar on the
MSEFC acting as a conciliator and, thereupon, acting as an arbitrator

4 For short, “A&C Act”.
5 (2023) 6 SCC 401.
886 [2025] 1 S.C.R.

Supreme Court Reports

even when Section 80 of the A&C Act states that unless otherwise
agreed by the parties, the conciliator shall not act as an arbitrator
or as a representative or counsel of a party in any arbitral or judicial
proceeding in respect of a dispute that is the subject matter of the
conciliation proceedings; and the conciliator shall not be presented
by the parties as a witness in the arbitral or judicial proceedings.6
It was also held that the provisions relating to conciliation, and
thereupon, arbitration in the MSMED Act being statutory in nature,
would override an arbitration agreement as contracted by the parties.
The MSEFC/Arbitral Tribunal under Section 18(3) of the MSMED Act
is competent to rule on its own jurisdiction as also the other issues
in view of Section 16 of the A&C Act. This observation was made in
the context of the objections raised that the party being subjected to
arbitration was not a ‘supplier’ as per the definition in Section 2(n) of
the MSMED Act or on the ground that any subsequent registration
obtained under the MSMED Act would be prospective and, therefore,
statutory arbitration under Section 18 of the MSMED Act could not
be invoked.7
7. A three-Judges Bench of this Court in M/s India Glycols Limited
and Another v. Micro and Small Enterprises Facilitation Council,
Medchal - Malkajgiri and Others,8 referring to the judgment in
Gujarat State Civil Supplies Corporation Limited (supra), held
that a writ petition under Articles 226/227 of the Constitution was not
maintainable as Section 18 of the MSMED Act provides for recourse
to a statutory remedy for challenging an award under Section 34 of
the A&C Act. A particular reference was made to Section 19 of the
MSMED Act which states that no application for setting aside a decree,
award or order made by the MSEFC/institution/centre providing for
alternate dispute resolution services shall be entertained by a court
unless the appellant (not being a supplier) has deposited with it
seventy-five per cent of the amount in terms of the decree, award or

6 80. Role of conciliator in other proceedings.—Unless otherwise agreed by the parties,—
(a) the conciliator shall not act as an arbitrator or as a representative or counsel of a party in
any arbitral or judicial proceeding in respect of a dispute that is the subject of the conciliation
proceedings;
(b) the conciliator shall not be presented by the parties as a witness in any arbitral or judicial
proceedings.
7 A two Judges Bench of this Court Bench in NBCC (India) Ltd. v. The State of West Bengal and Others,
2025 INSC 54, has referred this issue to a larger Bench.
8 2023 SCC OnLine SC 1852
[2025] 1 S.C.R. 887

M/s Tamil Nadu Cements Corporation Limited v.
Micro and Small Enterprises Facilitation Council and Another

order in the manner as directed by the court. Proviso to the Section
19 of the MSMED Act states that pending disposal of the application
for setting aside of the decree, award or order, the court shall order
that such percentage of the amount deposited shall be paid to the
supplier, as it considers reasonable under the circumstances of the
case and on such conditions as it deems necessary to impose.9
This judgment of three Judges Bench does not refer to the earlier
judgment of two Judges Bench of this Court in Jharkhand Urja
Vikas Nigam Limited (supra).
8. Section 18 of the MSMED Act provides for statutory and mandatory
conciliation on the reference being made to the MSEFC by any party
to a dispute with regard to an amount due under Section 17 of the
MSMED Act. Section 17 states that for the goods supplied or services
rendered by the supplier, the buyer shall be liable to pay the amount
with interest thereon as provided in Section 16. Section 16 states that
where a buyer fails to make payment of the amount to the supplier, as
required under Section 15, the buyer shall, notwithstanding anything
contained in any agreement between the buyer and the supplier or in
any other law for the time being in force, be liable to pay compound
interest with monthly rests to the supplier from the appointed date or
from the date immediately following the date agreed upon, at three
times of the bank rate notified by the Reserve Bank.10

9 19. Application for setting aside decree, award or order.—No application for setting aside any
decree, award or other order made either by the Council itself or by any institution or centre providing
alternate dispute resolution services to which a reference is made by the Council, shall be entertained
by any court unless the appellant (not being a supplier) has deposited with it seventy-five per cent of the
amount in terms of the decree, award or, as the case may be, the other order in the manner directed by
such court: Provided that pending disposal of the application to set aside the decree, award or order,
the court shall order that such percentage of the amount deposited shall be paid to the supplier, as
it considers reasonable under the circumstances of the case, subject to such conditions as it deems
necessary to impose.
10 Sections 15, 16 and 17 of the MSMED Act, read as under:
15. Liability of buyer to make payment.—Where any supplier supplies any goods or renders any
services to any buyer, the buyer shall make payment therefor on or before the date agreed upon between
him and the supplier in writing or, where there is no agreement in this behalf, before the appointed day:
Provided that in no case the period agreed upon between the supplier and the buyer in writing shall
exceed forty-five days from the day of acceptance or the day of deemed acceptance.
16. Date from which and rate at which interest is payable.—Where any buyer fails to make payment
of the amount to the supplier, as required under Section 15, the buyer shall, notwithstanding anything
contained in any agreement between the buyer and the supplier or in any law for the time being in
force, be liable to pay compound interest with monthly rests to the supplier on that amount from time the
appointed day or, as the case may be, from the date immediately following the date agreed upon, at three
times of the bank rate notified by the Reserve Bank.
17. Recovery of amount due.—For any goods supplied or services rendered by the supplier, the buyer
shall be liable to pay the amount with interest thereon as provided under Section 16.
888 [2025] 1 S.C.R.

Supreme Court Reports

9. It would be appropriate at this stage to refer to the basic facts of
the present case.
• The appellant – Tamil Nadu Cements Corporation Limited11 is
a wholly-owned undertaking of the Government of Tamil Nadu.
It is registered under the Companies Act, 1956 and has two
cement manufacturing units at Alangulam and Ariyalur. For the
units at Ariyalur, TANCEM had called for tender on 27.01.2010
on turnkey basis for design, supply, erection and commissioning
of two Electrostatic Precipitators12 for clinker coolers at a total
contract value of Rs.7.50 crores under the provisions of Tamil
Nadu Transparency in Tenders Act, 1998 and the Tamil Nadu
Transparency in Tenders Rules, 2000.
• On 16 April 2010, TANCEM issued a work order in favour of M/s
Unicon Engineers for design, supply, erection and commissioning
of two ESPs for clinker coolers at Ariyalur Cement Works on
turnkey basis for the total value of Rs.7,50,60,543/- as per
drawing and specification mentioned in tender documents. It
is averred that M/s Unicon Engineers failed to deliver on its
promise to build and commission the ESPs as undertaken.
• From 16.05.2012 till 08.10.2012, TANCEM issued several
warning letters to M/s Unicon Engineers for delay in execution of
civil works. TANCEM also sent a letter dated 16.11.2013 to M/s
Unicon Engineers requesting to complete all the works before
30.11.2013. It also raised concerns regarding the substandard
quality of work done for the ESPs, which on inspection were
found not to be in accordance with the contractual stipulations.
• Thereafter, M/s Unicon Engineers, on 17.01.2014, filed the
petition under Section 18 of the MSMED Act before the MSEFC
claiming an amount of Rs.2,66,80,157 /- with interest.
• On 20.01.2014, the MSEFC wrote a letter to TANCEM stating
that M/s Unicon Engineers had filed a plea before it to facilitate
the realization of the pending payment of Rs.50,08,801/-
and Rs.2,16,71,296 towards the cost overrun, totalling
Rs.2,66,80,157/- and requested TANCEM to give its comments
on the petition filed by M/s Unicon Engineers.

11 For short, ‘TANCEM’.
12 For short, ‘ESP’.
[2025] 1 S.C.R. 889

M/s Tamil Nadu Cements Corporation Limited v.
Micro and Small Enterprises Facilitation Council and Another

• On 26.01.2014, TANCEM, citing the poor performance of the
ESPs commissioned by M/s Unicon Engineers, issued a work
order amounting to Rs.3,07,800/- to one V. Sundararajan,
contractor, to carry out modification work at those ESPs.
• Thereafter, M/s Unicon Engineers sent a demand letter dated
14.02.2014 to TANCEM seeking payment of Rs.14,15,167
immediately, extension of delivery period of ESPs up to
30.07.2014 and for issuance of amended work order with the
revised price.
• On 27.03.2014, TANCEM sent a letter to its Ariyalur Unit and
marked a copy to M/s Unicon Engineers. TANCEM directed its
Ariyalur Unit for exploring possibility of amicable settlement with
M/s Unicon Engineers to resolve the various issues raised in
respect of smooth functioning of ESPs and the excess payment
being claimed by them through MSEFC towards design, supply,
erection and commissioning of the ESPs.
• Thereafter, on 08.04.2014, TANCEM sent a letter to M/s Unicon
Engineers stating that cooler ESPs commissioned by it were
not running to its full efficiency and requested it to submit an
action plan for rectification.
• On 27.05.2014, 19.06.2014 and 01.10.2014, TANCEM had sent
letters to M/s Unicon Engineers to attend to the problems being
faced with the ESPs. It is alleged that M/s Unicon Engineers
failed to rectify the issues cropping up in the ESPs and hence,
TANCEM issued a work order in favour of M/s Perfect Engineers
to repair ESP insulation amounting to Rs.4,02,417/-.
• On 14.10.2014, MSEFC, M/s Unicon Engineers was directed
to produce documentary evidence in support of its case and
to rectify the issues with the ESPs.
• MSEFC on 04.06.2016, held that this was the fourth hearing
of the case, and adequate opportunities had been given to
TANCEM, and the council was of the opinion that the conciliation
proceedings had failed. Accordingly, M/s Unicon Engineers
was free to approach the MSEFC for arbitration. Sections 15
and 16 of the MSMED Act are simply quoted by the MSEFC to
issue directions to TANCEM to pay Rs.39,66,144, along with
890 [2025] 1 S.C.R.

Supreme Court Reports

the interest. The relevant portion of the order dated 04.06.2016
reads:
“This is 4th hearing in this case. Since adequate
opportunities were given to the respondent, the
Council recorded the failure of conciliation between
the petitioner and the respondent. In view of above
facts and circumstances, the council ordered that the
applicant is free to approach the council for arbitration
as conciliation between them has failed.
Section 15 of the MSMED Act 2006 is extracted
hereunder:
“Where any supplier supplies any goods or renders
any services to any buyer, the buyer shall make
payment there for on or before the date agreed upon
between him and the supplier in writing or where there
is no agreement in this behalf, before the appointed
day: Provided that in no case the period agreed upon
between the supplier and the buyer in writing shall
exceed forty-five days from the day of acceptance
or the day of deemed acceptance.
Section 16 of the MSMED Act 2006 is extracted
hereunder:
“Where any buyer fails to make payment of the
amount to the supplier, as required under section 15,
the buyer shall, notwithstanding anything contained in
any agreement” between the buyer and the supplier
or in any law for the time being. Being in force be
liable to pay compound interest with monthly rests, to
the supplier on that amount from the appointed day
or, as the case may be, from the date immediately
following the date agreed upon, at three times of the
bank rate notified by the Reserve Bank.
The council directs that the petitioner is entitled to
recover the balance retention amount of Rs. 39,66,144/-
along with interests due to piecemeal releases of
the total retention money, of Rs.1,17,57,399/- with
effect from 31.03.2011 (2) Rs.1,57,59,537/- along
with interests, with effect from 17.01.2014 towards
[2025] 1 S.C.R. 891

M/s Tamil Nadu Cements Corporation Limited v.
Micro and Small Enterprises Facilitation Council and Another

additional expenditures incurred by, the petitioner due
to the delay of 3 years in execution of civil works by
the respondent.
Therefore, the Respondent shall be liable to pay the
balance retention amount of Rs.39,66,144/- along
with interests due to piece meal releases of the
total retention money of Rs.1,17,57,399/-with effect
from 31.03.2011 & (2) Rs.1,57,59,537/- along with
interests with effect from 17.01.2014 towards additional
expenditures incurred by the petitioner due to the delay
of 3 years in execution of civil works by the respondent,
together with compounded interest with monthly rest,
at three times of the Bank rate notified by the Reserve
Bank of India as stipulated in the MSMED Act 2006
from the appointed due dates respectively as above,
to, the petitioner, till the date of settlement.
With this order, the petition filed before the council
on 17.01.2014 by the petitioner stands disposed.”
• On 30.06.2016, M/s Unicon Engineers herein sent a letter
to TANCEM to release the payment as per the order dated
04.06.2016 passed by the MSEFC.
• On 19.09.2016, TANCEM filed a petition under Section 33 of the
A&C Act to recall/set aside the order/award dated 04.06.2016
passed in favour of M/s Unicon Engineers.
• On 26.09.2016, M/s Unicon Engineers sent a letter to MSEFC
requesting to reject the petition filed by TANCEM on the grounds
that it was barred by limitation and that TANCEM had not
furnished 75% of the amount as pre-deposit, as mandated by
Section 19 of the MSMED Act.
• TANCEM filed a detailed reply on 06.10.2016 qua the objections
raised by M/s Unicon Engineers. Similar objections were
again raised by M/s Unicon Engineers to the response filed
by TANCEM.
• Thereafter, MSEFC passed an order dated 25.10.2016
dismissing the recall petition on grounds of delay, objections
raised by M/s Unicon Engineers and lack of provision to recall
the award.
892 [2025] 1 S.C.R.

Supreme Court Reports

• On 16.12.2016, M/s Unicon Engineers filed an execution petition
before the High Court of Judicature at Madras claiming an
amount of Rs.5,88,88,591/- in terms of the order passed by
the MSEFC.
• On 31.12.2016, TANCEM filed a petition under Section 34 of the
A&C Act before the High Court of Judicature at Madras to set
aside the award passed by MSEFC and to direct M/s Unicon
Engineers to pay the amount due for the loss incurred towards
various heads including interest and damages.
• TANCEM also filed a counter affidavit in the execution
proceedings initiated by M/s Unicon Engineers.
• TANCEM filed a writ petition before the High Court of Judicature
at Madras in 2017 challenging the vires of Sections 16 to 19
of MSMED Act.
• The objections of TANCEM in the execution proceedings before
the High Court of Judicature at Madras were dismissed vide
order dated 10.10.2017 and it was held that an executing
court cannot go beyond a final and binding decree even if it
is erroneous until the same is set aside in appeal or revision.
• TANCEM filed an Application for waiver of pre-deposit of 75%
of the award amount as stipulated under Section 19 MSMED
Act, which was disposed of vide order dated 20.07.2018 by the
Single Judge of the High Court of Judicature at Madras directing
TANCEM to pre-deposit the amount as per the MSMED Act
within eight weeks from the date of the order.
• Meanwhile, the High Court of Judicature at Madras vide order
dated 25.02.2019 directed attachment of the movables of
TANCEM in the execution proceedings. TANCEM sought a stay
against the attachment order. The High Court of Judicature at
Madras vide order dated 11.03.2019 granted an interim stay on
the condition that TANCEM deposit an amount of Rs. 3 crores.
• The High Court of Judicature at Madras vide order dated
29.04.2019 noted that there were 7 Special Leave Petitions13
pending before this Court challenging the vires of Section 16
to 19 of the MSMED Act and hence, the writ petition filed by

13 For short, ‘SLP’.
[2025] 1 S.C.R. 893

M/s Tamil Nadu Cements Corporation Limited v.
Micro and Small Enterprises Facilitation Council and Another

TANCEM raising a similar challenge, be listed after the disposal
of SLPs pending before this Court.
• Thereafter, on 04.07.2019, TANCEM was granted three weeks
to make the pre-deposit of 75% of the decretal amount for
maintaining the appeal as per Section 19 of the MSMED Act.
• TANCEM deposited the differential amount of Rs.1,41,66,443/-
as against the 75% of the decretal amount since it had already
remitted Rs.3 crores.
• M/s Unicon Engineers filed an application before the High Court
of Judicature at Madras to withdraw Rs. 3 crores which was
deposited by TANCEM. The Single Judge vide order dated
31.07.2019 allowed M/s Unicon Engineers to withdraw Rs.1.50
crores. On appeal by TANCEM, the Division Bench vide order
dated 06.08.2019 directed that M/s Unicon Engineers will furnish
an undertaking that if TANCEM succeeds before the executing
court it would refund the sum of Rs.1,50,00,000/- with interest
@ 6% per annum from the date of receipt to the date of refund.
The disbursement of Rs.1,50,00,000/- to the decree holder was
subject to the final decision of the executing court. The Master
of the Court vide order dated 16.08.2019 directed to issue a
cheque of Rs. 1.5 crore in favour of M/s Unicon Engineers.
• TANCEM filed an SLP against the order dated 06.08.2019 of
the Division Bench before this Court. This Court vide order
dated 11.01.2021, after recording the statement of TANCEM
that the amount deposited had not been withdrawn, directed
that the order of withdrawal of Rs.1,50,00,000/- shall remain
stayed.
• The SLP was subsequently disposed of by directing M/s Unicon
Engineers to furnish a security for Rs. 1,50,00,000/- and the High
Court was requested to expedite the hearing of the objections
and decide O.P. Nos. 692/2019 and 1030/2019 expeditiously,
and preferably within six months.
• TANCEM also filed a transfer petition before this Court seeking
transfer of the writ petition filed by it before the High Court of
Judicature at Madras challenging the vires of Sections 16 to
19 of the MSMED Act. The writ petition of TANCEM before
the High Court was tagged with the batch of petitions pending
before this Court vide order dated 15.10.2020.
894 [2025] 1 S.C.R.

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• By the order dated 09.09.2021 of the Single Judge, objections
filed by TANCEM under Section 34 of the A&C Act were held
to be not maintainable on account of being barred by limitation
and as being beyond the condonable period. The same were
also dismissed on account of the failure of TANCEM to make
mandatory deposit in terms of Section 19 of the MSMED Act.
• The appeal preferred against the same was dismissed as
withdrawn vide order dated 28.04.2022 by the Division Bench
of the High Court of Judicature at Madras. In the meanwhile,
M/s Unicon Engineers filed a calculation memo claiming
Rs.8,18,26,844/- as the balance amount due from TANCEM.
This amount was later revised to Rs.7,88,23,549/-. Objections
to the said calculation were filed by TANCEM.
• In these circumstances, TANCEM again preferred a fresh writ
petition assailing the order dated 04.06.2016 of the MSEFC in
which an interim order was passed in its favour. However, vide
order dated 13.07.2022, the Single Judge dismissed the writ
petition observing that the relief sought by TANCEM would be
governed by the fate of the proceedings challenging the vires of
Sections 16 to 19 of the MSMED Act, which was now pending
before this Court in a batch of matters. It was held that in case
TANCEM’s challenge to the vires of the aforesaid provisions
succeeded, the relief as sought by it may be granted and the
amount already disbursed/released to M/s Unicon Engineers
would be refunded.
• TANCEM being aggrieved by the said order preferred a writ
appeal before the High Court, which came to be dismissed by the
impugned judgment dated 07.12.2022 observing that TANCEM
had already exhausted all remedies and that the dismissal on
grounds of limitation cannot be challenged by contending that
the award was null and void.
• After the said judgment was pronounced, M/s Unicon Engineers
pursued the execution petition in the High Court of Judicature
at Madras and the executing court vide order dated 14.12.2022
directed to bring the property of TANCEM for sale.
In such circumstances referred to above, TANCEM has filed
the present SLP.
[2025] 1 S.C.R. 895

M/s Tamil Nadu Cements Corporation Limited v.
Micro and Small Enterprises Facilitation Council and Another

10. In our opinion, there is a direct confrontation between the judgment of
the two Judges Bench of this Court in Jharkhand Urja Vikas Nigam
Limited (supra) and Gujarat State Civil Supplies Corporation
Limited (supra).
11. We also have reservations on the dictum in M/s India Glycols Limited
(supra) which holds that a writ petition is not maintainable against
any order passed by the MSEFC and the only recourse available is
in terms of Section 34 of the A&C Act, and that too would require a
deposit in terms of Section 19 of the A&C Act.
12. This is a case of statutory arbitration that is mandatory. It is possible to
argue that it bars a party from moving the court of law under Section
9 of the Code of Civil Procedure, 1908.14 Section 18 also overrides
the principle of party autonomy when they enter into an arbitration
agreement which prescribes the procedure for the appointment of
an arbitrator and conduct of arbitral proceedings. The statute further
prescribes an undoubtedly high rate of interest – three times the
Reserve Bank rate of interest – presently 6.5 per cent i.e. 19.5 per
cent. The interest is compounded with monthly rests. Lastly, an
order or award can be challenged by ‘the buyer’15 only on deposit
of seventy-five per cent of the awarded amount, thereby restricting
the right to challenge the order/award passed except on compliance
of stringent conditions, which are not prescribed when an appeal is
preferred under the CPC. Pre-deposit is a condition for hearing a
decision on the objections to the award. The issue therefore which
arises and needs consideration is whether there would be an absolute
and complete bar to invoke writ jurisdiction under Article 226 of the
Constitution even in exceptional and rare cases where fairness, equity
and justice may warrant the exercise of writ jurisdiction.
13. The access to High Courts by way of a writ petition under Article 226
of the Constitution of India, is not just a constitutional right but also
a part of the basic structure. It is available to every citizen whenever
there is a violation of their constitutional rights or even statutory rights.
This is an inalienable right and the rule of availability of alternative
remedy is not an omnibus rule of exclusion of the writ jurisdiction, but a

14 For short, ‘CPC’.
15 Section 2(d) of the MSMED Act defines ‘buyer’ as - (d) “buyer” means whoever buys any goods or
receives any services from a supplier for consideration.
896 [2025] 1 S.C.R.

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principle applied by the High Courts as a form of judicial restraint and
refrain in exercising the jurisdiction. The power to issue prerogative
writs under Article 226 of the Constitution is plenary in nature and the
same is not limited by any provision of the Constitution and cannot
be restricted or circumscribed by a statute.16 It has been well settled
through a legion of judicial pronouncements of this Court that the writ
courts, despite the availability of alternative remedies, may exercise
writ jurisdiction at least in three contingencies – i) where there is
a violation of principles of natural justice or fundamental rights; ii)
where an order in a proceeding is wholly without jurisdiction; or iii)
where the vires of an Act is challenged. Noticeably, the MSEFC as
a statutory authority performs a statutory role and functions within
the four corners of the law.
14. Following the aforesaid dictum, this Court in Harbanslal Sahnia
and Another v. Indian Oil Corporation and Others17, had taken
notice of the fact that the High Court had referred to the arbitration
clause which the writ petitioner could take recourse to, to hold that
the rule of exclusion of writ jurisdiction is a rule of discretion and
not of compulsion. In an appropriate case, in spite of availability of
alternative remedy, the writ courts can exercise its jurisdiction at
least in three contingencies, as referred to above. In the facts of the
said case, this Court interfered observing that there were peculiar
circumstances as the dealership had been terminated on an irrelevant
and non-existence cause. Therefore, there was no need to drive the
parties to initiate arbitration proceedings. Following the judgments
in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai
and Others18 and Harbanslal Sahnia (supra), this Court in Radha
Krishan Industries v. State of Himachal Pradesh and Others19
laid down the following principles:
“27. The principles of law which emerge are that:
27.1. The power under Article 226 of the Constitution to
issue writs can be exercised not only for the enforcement

16 Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Others (1998) 8 SCC 1. See also, L.
Chandra Kumar v. Union of India and Others, (1997) 3 SCC 261; S.N.Mukherjee v. Union of India, (1990)
4 SCC 594; Union of India and Others v. Parashotam Dass, 2023 SCC OnLine SC 314.
17 (2003) 2 SCC 107
18 (1998) 8 SCC 1
19 (2021) 6 SCC 771
[2025] 1 S.C.R. 897

M/s Tamil Nadu Cements Corporation Limited v.
Micro and Small Enterprises Facilitation Council and Another

of fundamental rights, but for any other purpose as well.
27.2. The High Court has the discretion not to entertain a
writ petition. One of the restrictions placed on the power
of the High Court is where an effective alternate remedy
is available to the aggrieved person.
27.3. Exceptions to the rule of alternate remedy arise where:
(a) the writ petition has been filed for the enforcement of a
fundamental right protected by Part III of the Constitution;
(b) there has been a violation of the principles of natural
justice; (c) the order or proceedings are wholly without
jurisdiction; or (d) the vires of a legislation is challenged.
27.4. An alternate remedy by itself does not divest the High
Court of its powers under Article 226 of the Constitution
in an appropriate case though ordinarily, a writ petition
should not be entertained when an efficacious alternate
remedy is provided by law.
27.5. When a right is created by a statute, which itself
prescribes the remedy or procedure for enforcing the right
or liability, resort must be had to that particular statutory
remedy before invoking the discretionary remedy under
Article 226 of the Constitution. This rule of exhaustion of
statutory remedies is a rule of policy, convenience and
discretion.
27.6. In cases where there are disputed questions of
fact, the High Court may decide to decline jurisdiction in
a writ petition. However, if the High Court is objectively
of the view that the nature of the controversy requires
the exercise of its writ jurisdiction, such a view would not
readily be interfered with.”
15. Thus, it would be true to say that the existence of the statutory
remedy does not affect the jurisdiction of the High Court to issue a
writ. Nevertheless, the writ jurisdiction being discretionary by policy,
the writ courts generally insist that the parties adhere to alternative
statutory remedies, as this reinforces the rule of law. However, in
exceptional cases, writ jurisdiction can still be exercised as a power
to access the court for justice and relief. It is in this context, that a
Constitution Bench of five Judges way back in 1954 in Himmatlal
898 [2025] 1 S.C.R.

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Harilal Mehta v. State of Madhya Pradesh and Others20 had
observed that the principle that the High Court should not issue a
prerogative writ when an alternative remedy is available may not apply
when the remedy under the statutes is onerous and burdensome in
character, such as when the party has to deposit the whole amount
of the tax before filing an appeal. An alternative remedy must be
equally efficacious and adequate. While examining the scope of the
right to file a writ petition when the statute requires a pre-deposit
of tax—an obligation argued as imposing an onerous condition on
the right to appeal—this Court in Shyam Kishore and Others v.
Municipal Corporation of Delhi and Another,21 after relying upon
several other decisions, observed that the validity of rigid provisions
banning entertainment of appeal when taxes are not paid have been
upheld so long as the conditions are not so onerous as to amount to
unreasonable restriction. In the alternative, the right is almost illusory.
Diluting the requirement to pay the disputed tax, this Court observed:
“44. (…)Sometimes, to compel the assessee to pay up
the demanded tax for several years in succession might
very well cripple him altogether. This apart, an assessee
may not be able to deposit the tax while filing the appeal
but may be able to pay it up within a short time, or at any
rate, before the appeal comes on for hearing in the normal
course. There is no reason to construe the provision so
rigidly as to disable him from doing this. Again, when
an appeal comes on for hearing, the appellate judge, in
appropriate cases, where he feels there is some great
hardship or injustice involved, may be inclined to adjourn
the appeal for some time to enable the assessee to pay
up the tax. Though it will not be expedient or proper to
encourage adjournment of an appeal, where it is ripe for
hearing otherwise, only on this ground and as a matter of
course, an interpretation which leaves some room for the
exercise of a judicial discretion in this regard, where the
equities of the case deserve it, may not be inappropriate.
The appellate judge’s incidental and ancillary powers
should not be curtailed except to the extent specifically

20 (1954) 1 SCC 405.
21 (1993) 1 SCC 22.
[2025] 1 S.C.R. 899

M/s Tamil Nadu Cements Corporation Limited v.
Micro and Small Enterprises Facilitation Council and Another

precluded by the statute. We see nothing wrong in
interpreting the provision as permitting the appellate
authority to adjourn the hearing of the appeal thus giving
time to the assessee to pay the tax or even specifically
granting time or instalments to enable the assessee to
deposit the disputed tax where the case merits it, so long
as it does not unduly interfere with the appellate court’s
calendar of hearings. His powers, however, should stop
short of staying the recovery of the tax till the disposal
of the appeal. We say this because it is one thing for the
judge to adjourn the hearing leaving it to the assessee
to pay up the tax before the adjourned date or permitting
the assessee to pay up the tax, if he can, in accordance
with his directions before the appeal is heard. In doing
so, he does not and cannot injunct the department from
recovering the tax, if they wish to do so. He is only giving
a chance to the assessee to pay up the tax if he wants
the appeal to be heard. It is, however, a totally different
thing for the judge to stay the recovery till the disposal of
the appeal; that would result in modifying the language
of the proviso to read: “no appeal shall be disposed of
until the tax is paid”. Short of this, however, there is no
reason to restrict the powers unduly; all he has to do is
to ensure that the entire tax in dispute is paid up by the
time the appeal is actually heard on its merits. We would,
therefore, read clause (b) of Section 170 only as a bar to
the hearing of the appeal and its disposal on merits and
not as a bar to the entertainment of the appeal itself.”
16. Equally important are the observations with reference to the right
to file a writ petition under Articles 226 and 227 of the Constitution
in certain situations. In this regard, this Court in Shyam Kishore
(supra) has observed:
“45. If the provision is interpreted in the manner above
suggested, one can steer clear of all problems of
constitutional validity. The contention on behalf of the
Corporation to read the provision rigidly and seek to soften
the rigour by reference to the availability of recourse
to the High Courts by way of a petition under Articles
226 and 227 in certain situations and the departmental
900 [2025] 1 S.C.R.

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instructions referred to earlier does not appear to be a
satisfactory solution. The departmental instructions may
not always be followed and the resort to Articles 226 and
227 should be discouraged when there is an alternative
remedy. A more satisfactory solution is available on the
terms of the statute itself. The construction of the section
approved by us above vests in the appellate authority
a power to deal with the appeal otherwise than by way
of final disposal even if the disputed tax is not paid. It
enables the authority to exercise a judicial discretion to
allow the payment of the disputed tax even after the appeal
is filed but, no doubt, before the appeal is taken up for
actual hearing. The interpretation will greatly ameliorate
the genuine grievances of, and hardships faced by, the
assessee in the payment of the tax as determined. Though
an assessee may not be able to acquire an absolute stay
of the recovery of the tax until the dispute is resolved, he
will certainly be able to get breathing time to pay up the
same where his case deserves it. If this interpretation is
placed on the provision, no question of unconstitutionality
can at all arise.”
17. In Govind Parameswar Nair and Others v. Municipal Corporation
of Greater Bombay and Others,22 a Constitution Bench of five
Judges agreed with the interpretation given by the three-Judges
Bench in Shyam Kishore (supra).
18. Recently, in Tecnimont Private Limited (Formerly known as
Tecnimont ICB Private Limited) v. State of Punjab and Others,23
in regard to the question relating to alternative remedy where the
disputed amount is required to be deposited to avail the statutory
remedy, this Court observed that there is some divergence of opinion,
albeit several cases like Shyam Kishore (supra) have attempted to
find a solution to provide some support in cases involving extreme
hardship where the writ petition would not be dismissed on the
ground of equally efficacious alternative remedy.

22 (2001) 9 SCC 166
23 (2021) 12 SCC 477.
[2025] 1 S.C.R. 901

M/s Tamil Nadu Cements Corporation Limited v.
Micro and Small Enterprises Facilitation Council and Another

19. In the light of the aforesaid decisions, we deem it appropriate to
refer the following questions raised in the present appeal to a larger
Bench of five Judges, namely:
(i) Whether the ratio in M/s India Glycols Limited (supra) that a
writ petition could never be entertained against any order/award
of the MSEFC, completely bars or prohibits maintainability of
the writ petition before the High Court?
(ii) If the bar/prohibition is not absolute, when and under what
circumstances will the principle/restriction of adequate alternative
remedy not apply?
(iii) Whether the members of MSEFC who undertake conciliation
proceedings, upon failure, can themselves act as arbitrators of
the arbitral tribunal in terms of Section 18 of the MSMED Act
read with Section 80 of the A&C Act?
The first and second question will subsume the question of
when and in what situation a writ petition can be entertained
against an order/award passed by MSEFC acting as an arbitral
tribunal or conciliator.
20. The Registry is directed to place the papers before the Chief Justice
so that an appropriate decision can be taken on the administrative
side for the constitution of a larger Bench in the present case.

Result of the case: Matter referred to Larger Bench.

†
Headnotes prepared by: Ankit Gyan