In Kashmir Confectionary Store v. M/s Mother Choice Health Care India, CR Nos. 34–36/2026 (decided 30 September 2026, reported in late October), Justice Sanjay Dhar of the High Court of Jammu & Kashmir and Ladakh dismissed three civil revisions by buyers who had resisted execution of arbitral awards rendered under the MSMED Act, 2006. Their sole objection — that the supplier held no MSME registration when the supplies were made a decade earlier — failed twice over: on the facts, because the supplier’s registration dated back to 2010 and the 2020 Udyam filing was only a re-registration; and in law, because the Supreme Court’s recent reading of the Act means an award does not become a nullity on that ground at all.
How the dispute travelled from Shimla to Jammu
The supplier, a health-care products enterprise, had three separate supply transactions with three Jammu trading firms. When payments did not come, it moved the Micro and Small Enterprises Facilitation Council of Himachal Pradesh at Shimla under the MSMED Act. The Council took up the references, attempted conciliation under Section 18(2), and on its failure referred the disputes to arbitration under Section 18(3). Three awards followed — two dated 19 October 2023 and one dated 22 April 2023.
The supplier then filed execution petitions before the District Judge, Solan, which were transferred to the District Judge, Jammu — the buyers’ home forum. There, for the first time, the buyers filed objections under Section 47 read with Section 151 of the Code of Civil Procedure, contending that the awards were nullities incapable of execution. Their single ground: the supplier was not registered under the MSMED Act when the supplies were made around 2014–15, so the Council could never have entertained the references. On 20 July 2026 the executing court dismissed all three sets of objections, and the buyers carried civil revisions to the High Court.
The factual answer: the registration was always there
The objection failed first on its own premise. The supplier produced an Udyog Aadhaar Memorandum certificate showing registration effective from 1 April 2010 — years before the transactions. What the buyers had seized upon was the enterprise’s 2020 filing on the Udyam portal, made because the Ministry’s notification of 26 June 2020 required all existing enterprises to re-register under the new system. Justice Sanjay Dhar held the buyers’ premise misconceived: a mandatory re-registration is not a first registration, and the supplier’s status predated every supply in question.
The legal answer: no nullity even if unregistered
The Court did not stop at the facts. Even assuming the supplier had been unregistered at the relevant time, the awards would not be nullities. The buyers had built their case on the earlier line of authority on registration timing, but the High Court applied the Supreme Court’s 2025 decision in NBCC (India) Ltd. v. State of West Bengal, which considered those very precedents and read the statute through three features: Section 18 is available to any party to a dispute; the definition of “supplier” in Section 2(n) is not confined to enterprises that have filed a memorandum; and the filing of a memorandum under Section 8 is itself discretionary for most enterprises. On that reading, the Council’s reference and the ensuing arbitration were lawful, and the awards could not be branded void for want of registration.
Why the forum mattered as much as the ground
Seen through that sequence, the buyers’ strategy — sitting out the arbitration and the challenge window, then deploying the registration point as a plea of nullity in execution — asked the executing court to do what the statute reserves for the Section 19 court, and to do it without the 75% deposit. The High Court’s refusal keeps the MSMED Act’s recovery machinery from being derailed at its final and most valuable stage.
Takeaways for suppliers and buyers in Delhi practice
- Suppliers: preserve the full registration chain — EM-II or Udyog Aadhaar certificates and the 2020 Udyam re-registration — and exhibit it in the Council proceedings, so a later “no registration” objection dies on the record.
- Buyers: contest status and merits inside the Section 18 proceeding and, if needed, through a deposit-backed Section 19 challenge. Execution-stage objections face both the nullity threshold and growing judicial impatience.
- Both sides: remember that MSEFC awards execute as decrees wherever the judgment-debtor resides or holds assets — these Himachal references were enforced through the Jammu courts, and Delhi’s commercial courts routinely receive transferred executions the same way.
Practice note: The decision pairs with the 75% pre-deposit jurisprudence: courts will not let Section 47 CPC become a toll-free bypass around Section 19 MSMED. Advise award-debtor clients that every month of delay compounds the Section 16 interest — and that the cheapest point to fight an MSME claim is the earliest one.
Frequently Asked Questions
Can an executing court treat an MSME council award as a nullity?
Only where the award suffers from a defect that goes to the root of jurisdiction in the strict sense. The executing court cannot re-examine the merits or entertain grounds that belonged in a Section 19 MSMED / Section 34 challenge. In this case the registration objection was raised through Section 47 CPC objections at execution; the High Court found it misconceived on facts and insufficient in law to render the awards nullities.
Does Udyam re-registration in 2020 mean the enterprise was unregistered before?
No. The Udyam regime introduced by the Ministry's notification of 26 June 2020 required existing enterprises to re-register on the new portal. An enterprise holding an earlier Entrepreneurs Memorandum or Udyog Aadhaar Memorandum did not become "newly registered" in 2020. The buyers' argument collapsed because the supplier produced an Udyog Aadhaar certificate showing registration effective from 1 April 2010, well before the supplies.
What should a buyer who disputes the supplier's MSME status actually do?
Raise the objection at the earliest — before the Facilitation Council during the Section 18 proceedings, then before the arbitral tribunal, and if an adverse award follows, challenge it under Section 19 of the MSMED Act read with Section 34 of the Arbitration Act, depositing 75% of the award as the statute requires. Holding the point back for execution is a strategy courts increasingly refuse to reward.
Is registration at the time of the transaction essential for a Section 18 reference?
Relying on the Supreme Court's 2025 ruling in NBCC (India) Ltd. v. State of West Bengal, the High Court noted that Section 18 opens with "any party to a dispute", the supplier definition is not confined to enterprises that filed a memorandum, and Section 8 filing is discretionary — so a council reference is not invalid merely for want of registration. Timing can still matter to the merits, which is exactly why the point must be fought in the arbitration, not in execution.