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Navigating MSME Arbitration: Consent to Normal Mode Forfeits Statutory Benefits

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The Supreme Court disposed of a civil appeal arising from a dispute concerning the maintainability of arbitration under the Micro, Small and Medium Enterprises Development Act, 2006. Because the core legal question regarding the requirement of filing a memorandum under Section 8 of the Act (as established in Silpi Industries) was pending before a larger three-judge bench, and to prevent prolonged delays in resolving the small-scale industry’s claims, the parties consented to pursue regular independent arbitration. The Supreme Court appointed a Sole Arbitrator to adjudicate the disputes, explicitly ruling that by choosing to opt out of the Facilitation Council mechanism and proceed via normal arbitration by consent, the appellant forfeits any statutory benefits provided under the MSMED Act, 2006.

  • Background and Initial Dispute: The appellant (a small-scale industry) approached the Andhra Pradesh Micro and Small Enterprises Facilitation Council for arbitration under the MSMED Act, 2006. The respondent challenged this via a writ petition, which a learned Single Judge allowed on the grounds that it was a works contract and the appellant had not filed a memorandum under Section 8 of the Act.
  • Reference to a Larger Bench: A Division Bench of the High Court kept the matter in abeyance because the applicability of the Silpi Industries precedent regarding Section 38 memorandum filings had been referred to a larger three-judge bench.
  • Consent for Normal Arbitration: To avoid further delays caused by the pending larger bench reference, the Supreme Court suggested—and the parties consented to—referring the dispute to a regular independent arbitration mode outside the purview of the 2006 Act.
  • Forfeiture of MSMED Act Benefits: The Court clarified that because notice was issued and proceedings were shifted to the normal mode purely on the basis of consent to bypass the Facilitation Council, the appellant cannot claim any statutory benefits, protections, or advantages provided under the MSMED Act, 2006.
  • Appointment of Arbitrator: The Supreme Court appointed Hon’ble Mr. Justice R. Raghunandan Rao (Former Judge of the Andhra Pradesh High Court) as the Sole Arbitrator to resolve the disputes. The merits of the case were left entirely open for the parties to argue before the arbitrator.

2026 INSC 874

M/S Indo Engineering Works v. Rashtriya Ispat Nigam Limited (RINL) & Ors. (D.O.J. 13.08.2026)

2026 INSC 874 click here to view full text of judgment

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High Court Upholds Eviction Order in Rent Control Revision

August 21, 2026 No Comments

In this rent control revision petition filed under Section 25-B(8) of the Delhi Rent Control Act, 1958, the Delhi High Court upheld an Additional Rent Controller’s (ARC) order dismissing the tenant’s leave to defend application and passing an eviction order. The petitioner-tenant challenged the eviction on the grounds of available alternative accommodation, pointing to other family-owned commercial properties and vacant upper floors in the subject building. Justice Harish Vaidyanathan Shankar dismissed the revision petition, ruling that the High Court’s supervisory jurisdiction is narrow and cannot be used to conduct a roving inquiry, introduce fresh factual pleas not raised before the ARC, or re-appreciate evidence when the trial court’s findings are legally sound and free from perversity.

Scope of Revisional Jurisdiction

  • Supervisory Nature: The High Court reiterated that its jurisdiction under Section 25-B(8) of the DRC Act is strictly supervisory and revisional, preventing it from acting as a regular first appellate court or substituting its own view.
  • Limited Grounds for Interference: Revisional scrutiny is confined to checking the decision-making process for jurisdictional errors, manifest illegality, material irregularities, or perversity.

Alternative Accommodation and Triable Issues

  • Vague General Assertions: The Court noted that the tenant’s leave to defend application contained only a general, omnibus assertion regarding various properties owned by the landlord and his family members without identifying specific premises or showing how they suited the landlord’s needs.
  • Inadmissibility of New Pleas: The specific argument concerning the vacancy of the first and second floors was not properly pleaded or urged before the ARC as an alternative accommodation, and new factual controversies cannot be introduced for the first time at the revision stage.
  • Unsuitability of Upper Floors: The landlord had explicitly explained in the eviction petition that the vacant upper floors lacked a proper staircase and were accessible only via damaged temporary iron ladders, meaning they did not constitute reasonably suitable alternative accommodation.

Final Outcome

  • No Triable Issue Found: Finding no perversity or legal error in the ARC’s conclusion that the landlord’s requirement was bona fide and that no triable issue was raised, the Court dismissed the revision petition along with all pending applications.

2026 DHC 6831

M/s Bhola Nath and Sons v. Vinay Sahu (D.O.J. 18.08.2026)

2026 DHC 6831 click here to view full text of judgment

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High Court Grants Bail in Ganja Recovery Case Lacking Admissible Evidence

August 21, 2026 No Comments

In this regular bail application, the Delhi High Court granted bail to an accused person implicated under Sections 20, 61, and 85 of the NDPS Act following the recovery of 10.750 kg of ganja from a co-accused named Arif. Justice Girish Kathpalia allowed the petition after noting that no incriminating material was recovered directly from the applicant, and his implication relied solely on the disclosure statement of the co-accused. Furthermore, the state conceded the absence of legally admissible evidence, as claims regarding telephonic connectivity were unsupported by any Customer Application Form (CAF) linking the phone numbers to the applicant. Consequently, the Court found no justification to prolong his detention and ordered his release on regular bail.

Prosecution Case and Arrest Background

  • Secret Information and Recovery: The Anti-Narcotic Squad arrested co-accused Arif from Bhogal based on secret information, recovering 10.750 kg of ganja from his possession.
  • Disclosure Statement Implication: Based exclusively on Arif’s subsequent disclosure statement alleging that he procured contraband from Odisha through the applicant and another co-accused (Jagannath), the present applicant was arrested.
  • Zero Direct Recovery: The prosecution admitted that no contraband or incriminating items were recovered from the applicant’s person.

Lack of Admissible Evidence and Bail Relief

  • Inadmissibility of Disclosure: The state candidly conceded that there was currently no legally admissible evidence connecting the applicant to the crime other than the co-accused’s statement.
  • Unsubstantiated Call Records: Although the investigating officer pointed to potential telephonic connectivity between the applicant and Arif, it was admitted that no Customer Application Form (CAF) was verified or found to establish ownership of the numbers.
  • Release Order: Finding no grounds to keep the applicant further deprived of his liberty, the Court granted regular bail subject to a personal bond of Rs. 10,000 with one surety of the like amount, along with the disposal of the accompanying application.

2026 DHC 6829

Suraj Tamang v. The State NCT of Delhi (D.O.J. 18.08.2026)

2026 DHC 6829 click here to view full text of judgment

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Proximity Is Not Conspiracy: High Court Grants Bail to Wife in NDPS Case

August 21, 2026 No Comments

In this regular bail application, the Delhi High Court granted bail to a woman accused under Sections 21, 25, and 29 of the NDPS Act after her husband was intercepted with 303 grams of heroin. Justice Girish Kathpalia held that merely traveling together from Bareilly to Delhi as the wife of the main accused, or being visible in CCTV footage during the delivery of a packet, is insufficient to infer criminal conspiracy under Section 29, especially since no contraband was recovered from her person and other suspected items tested negative by the FSL. Emphasizing that proximity to an accused spouse does not automatically translate into a narcotics conspiracy, the Court ordered her release on regular bail.

Prosecution Allegations and Recovery Status

  • Vehicle Interception: The applicant was traveling in a car with her husband, Arif, when it was intercepted based on secret information, resulting in the recovery of 303 grams of heroin from Arif’s person.
  • Negative FSL Report: Although initial suspicions surrounded an additional 1,000+ grams of substance found in the car, the FSL later confirmed it was not any form of contraband.
  • No Direct Recovery: The state conceded that absolutely nothing incriminating was recovered directly from the applicant’s person.

Court’s Findings on Conspiracy and Bail

  • Inference of Spousal Proximity: The Court ruled that traveling together from Bareilly to Delhi cannot be stretched to imply a conspiracy under Section 29 of the NDPS Act simply because the applicant is married to the main accused.
  • CCTV Footage Context: Her appearance in CCTV footage while her husband delivered a packet to a co-accused (Jumman) cannot be used to establish criminal complicity, given her marital relationship.
  • Bail Relief: Noting that the applicant had been in custody since February 10, 2026, the Court allowed the application and directed her release on a personal bond of Rs. 15,000 with one surety of like amount, ensuring the trial court remains uninfluenced by preliminary observations.

2026 DHC 6826

Shikha Ali v. The State NCT of Delhi (D.O.J. 18.08.2026)

2026 DHC 6826 click here to view full text of judgment

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High Court Grants Bail in Alleged False Promise to Marry Case

August 21, 2026 No Comments

In this regular bail application, the Delhi High Court examined whether a long-standing consensual relationship between two adults constituted statutory rape under a false promise of marriage or a purely consensual relationship. The applicant sought regular bail in connection with an FIR registered under Section 376 and 506 of the IPC, wherein the adult prosecutrix alleged that the accused had engaged in sexual relations under the guise of a marriage promise despite being already married. Justice Girish Kathpalia granted bail to the accused, observing prima facie that the relationship was consensual and not tainted by initial deception, given that the timeline, text chats, and joint hotel visits involving fake identities contradicted claims of gullibility or continuous fraud. The Court emphasized that a marital relationship outside marriage may invite moral censure or constitute a matrimonial wrong, but it must be legally distinguished from a criminal offense.

Prosecution Case and Defense Arguments

  • Allegations of False Promise: The prosecutrix alleged that she developed a relationship with the accused in December 2023, entered into physical relations starting in April 2024 based on a marriage promise, stayed multiple times at a Mahipalpur hotel, and later discovered he was a married man with two children.
  • Defense Contentions: The counsel for the applicant argued that the relationship was entirely consensual and that the case was falsely instituted because the applicant demanded the repayment of a loan taken by the prosecutrix.
  • Impersonation Angle: The prosecution noted that during hotel visits, a fake identity card of another woman was presented, with the prosecutrix allegedly memorizing and using those particulars.

Court’s Observations on Consent and Criminality

  • Morality vs. Criminality: The Court clarified that while a married man engaging in extra-marital relations is unpardonable under societal morality or as a matrimonial wrong, it is legally distinct from a criminal offense unless tainted by an initial false promise.
  • Inconsistencies in Timeline: The Court noted that even if the prosecutrix learned of his marital status in October 2024, she continued the relationship and stayed at the hotel 11 more times over a prolonged period until filing the FIR in May 2026, defying logic if true fraud had occurred.
  • Lack of Gullibility: Given that the prosecutrix was a grown-up, working adult, the Court found it hard to believe she would continue a relationship for years without checking records or questioning motives, especially when text chats showed active disputes and threats between March and May 2026.

Bail Conditions

  • Prima Facie Findings: The observations were restricted strictly to deciding the bail application without prejudicing the trial court’s final evaluation of evidence.
  • Release Order: Noting that the chargesheet had been filed and the applicant had been in custody since May 15, 2026, the Court granted regular bail.
  • Conditions Imposed: The applicant was ordered to be released on a personal bond of Rs. 25,000 with one surety of like amount, and strictly warned not to contact any prosecution witnesses.

2026 DHC 6823

Vimal v. State NCT of Delhi (D.O.J. 18.08.2026)

2026 DHC 6823 click here to view full text of judgment

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