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M/s Patel Infrastructure Limited v. M/s Aditya Construction

Civil Appeal · 2026 INSC 804Decided 5 Aug 2026
C.A. No.-010057-010057 - 2026 (arising out of SLP (C) No. 3250 of 2026)
Justice Sanjay Kumar · Justice Sanjeev Sachdeva

Background

A dispute arose between M/s Patel Infrastructure Limited and M/s Aditya Construction, a proprietorship registered as an MSME under the Micro, Small and Medium Enterprises Development Act, 2006. Patel Infrastructure raised an important legal question in its appeal: whether a buyer of goods or services from an MSME can independently start arbitration proceedings under the Arbitration and Conciliation Act, 1996, rather than being limited to the statutory MSME facilitation council route.

Decision Breakdown

Instead of deciding the legal question, the respondent's counsel offered, on instructions, to resolve the dispute through arbitration under the Arbitration and Conciliation Act via the Delhi International Arbitration Centre, with the venue fixed at New Delhi for the convenience of both parties (who were based in Gujarat and Uttar Pradesh respectively). The Supreme Court accepted this consent arrangement and disposed of the appeal on those terms, directing the appellant to approach the arbitration centre within two weeks. The Court expressly left the underlying legal question about MSME buyers' arbitration rights open for decision in a future, appropriate case.

Lesson Learnt

Parties are free to resolve procedural or jurisdictional disputes by mutual agreement, and courts will readily accommodate a sensible settlement, but this means important, unsettled legal questions can remain open even after a case reaches the Supreme Court, to be decided only when a future case squarely requires an answer.

Official source (sci.gov.in)View Judgment (PDF)

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