Kolkata, Oct. 2 -- The West Bengal government's Public Health Engineering department has lost its bid to revive a challenge against an MSME Facilitation Council award after the Calcutta High Court held that it could not get the challenge heard without depositing 75 per cent of the awarded amount.
A division bench of Justice Debangsu Basak and Justice Aryak Dutt held that the pre-deposit requirement under Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006, is mandatory.
A challenge under the Arbitration and Conciliation Act can be filed, but cannot be entertained without compliance with the requirement.
The case arose after Mohindra Tubes Ltd approached the West Bengal MSME Facilitation Council over non-payment of its bills by the department under the Gorkha Territorial Administration, Darjeeling. The council passed an award in favour of the company in January 2023.
The department challenged the award in September 2023. In December that year, a Single Judge directed it to secure the entire awarded amount within five weeks, failing which Mohindra Tubes could enforce the award.
The department did not comply and execution proceedings followed.
The Section 34 challenge was dismissed for default in April 2024 after the department failed to appear. It later sought restoration. The Single Judge condoned the delay in March 2026 and restored the challenge in May.
The division bench set aside both orders, holding that the department had never invoked Section 19.
It said a supplementary affidavit seeking permission to secure the amount could not substitute a substantive application under the provision.
The court dismissed the Section 34 challenge as "not entertainable" and refused to stay its judgment.
Published by HT Digital Content Services with permission from Millennium Post.