# NBCC (India) Ltd v. The State of West Bengal & Ors - **Citation:** 2025 INSC 54 - **Court:** Supreme Court of India - **Decided:** 2025-01-10 - **Case number:** Civil Appeal No. 3705 of 2024 - **Bench:** Pamidighantam Sri Narasimha, Pankaj Mithal - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/nbcc-india-ltd-v-the-state-of-west-bengal-ors-38852 - **Pages:** 39 ## Headnote Whether an MSME cannot make a reference to the Facilitation Council for dispute resolution under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 if it is not registered under Section 8 of the 2006 Act before the execution of the contract with the buyer. Headnotes† Micro, Small and Medium Enterprises Development Act, 2006 - s.18 - MSME seeks to refer the dispute that it has with the buyer regarding payment of its dues to the Facilitation Council for arbitration u/s. 18 of the Act - The appellant opposes this prayer by contending that 'any party' can only be a 'supplier' and that supplier should have been registered u/s. 8 of the Act even before execution of the contract, if not, the reference is impermissible: Held: After examining the text, context, and purpose of the Act, this Court arrives at the decision that s.18 is not restrictive and is a remedy for the resolution of disputes, and as such, it is kept open-ended to enable 'any party' to refer the dispute to seek redressal - The submission that 'any party to a dispute' is confined to a 'supplier' who has filed a memorandum u/s. 8 of the Act is rejected - The issue(s) that have arisen in the decisions of this Court in Silpi Industries v. Kerala State Road Transport Corporation and Gujarat State Civil Supplies Corporation Limited v. Mahakali Foods Private Limited were very different from the issue that has arisen for consideration in the instant case - Though it is possible for this Court to follow the precedents to arrive at the * Author [2025] 1 S.C.R. 611 NBCC (India) Ltd. v. The State of West Bengal & Ors. conclusion that the judgments in the case of Silpi Industries and Mahakali Foods coupled with the subsequent orders in Vaishno Enterprises and M/s Nitesh Estates cannot be considered to be binding precedents on the issue that has arisen for consideration, taking into account the compelling need to ensure clarity and certainty about the applicable precedents on the subject, it is deemed appropriate to refer this appeal to a three Judge Bench. [Paras 1.1, 29] Interpretation of Statutes - Interpretation of Statutory Remedies by Constitutional Courts: Held: When a statutory remedy falls for consideration, it is the duty of the Constitutional Court to adopt an interpretation which would not only reduce the hiatus between a right and a remedy, but also to ensure that the remedy is effective - If rights are recognition of a claim, remedies are their actualization - While the rights regime receives broad recognition under constitutional framework, it is imperative that remedies must keep pace and be strengthened - One of the core functions of the higher judiciary is to bridge the gap between rights and remedies, and this would immediately give rise to the legislative, executive and judicial obligations for their provision, implementation, and declaration, respectively. [Para 10] Justice - Access to justice - Right to an effective judicial remedy: Held: The right to an effective judicial remedy is an integral part of access to justice - An effective judicial remedy under a constitutional scheme must be (i) accessible, (ii) affordable, (iii) expeditious and (iv) cohesive - Accessibility requires the remedy to be easily available, physically and informationally - Affordability is an aspect that is related to the cost of availing the remedy, it must be at a reasonable price with a provision for legal aid, if need be - The expeditious nature of a remedy is concerned with the quick disposal of the case and abhors unreasonable delays - Yet another facet of effective judicial remedy is its cohesiveness - The cohesiveness of a remedy simply means that a person must have one specified forum for the redressal of grievances. [Para 10.1] 612 [2025] 1 S.C.R. Digital Supreme Court Reports Micro, Small and Medium Enterprises Development Act, 2006 - s.18 - Words employed "any party to a dispute" - Golden Rule of Interpretation: Held: The text of Section 18 is clea ## Text _Characters 0–38,279 of 85,831. This is a partial read: ask again with offset=38279 for what follows._ [2025] 1 S.C.R. 610 : 2025 INSC 54 NBCC (India) Ltd. v. The State of West Bengal & Ors. (Civil Appeal No. 3705 of 2024) 10 January 2025 [Pamidighantam Sri Narasimha* and Pankaj Mithal, JJ.] Issue for Consideration Whether an MSME cannot make a reference to the Facilitation Council for dispute resolution under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 if it is not registered under Section 8 of the 2006 Act before the execution of the contract with the buyer. Headnotes† Micro, Small and Medium Enterprises Development Act, 2006 - s.18 - MSME seeks to refer the dispute that it has with the buyer regarding payment of its dues to the Facilitation Council for arbitration u/s. 18 of the Act - The appellant opposes this prayer by contending that 'any party' can only be a 'supplier' and that supplier should have been registered u/s. 8 of the Act even before execution of the contract, if not, the reference is impermissible: Held: After examining the text, context, and purpose of the Act, this Court arrives at the decision that s.18 is not restrictive and is a remedy for the resolution of disputes, and as such, it is kept open-ended to enable 'any party' to refer the dispute to seek redressal - The submission that 'any party to a dispute' is confined to a 'supplier' who has filed a memorandum u/s. 8 of the Act is rejected - The issue(s) that have arisen in the decisions of this Court in Silpi Industries v. Kerala State Road Transport Corporation and Gujarat State Civil Supplies Corporation Limited v. Mahakali Foods Private Limited were very different from the issue that has arisen for consideration in the instant case - Though it is possible for this Court to follow the precedents to arrive at the * Author [2025] 1 S.C.R. 611 NBCC (India) Ltd. v. The State of West Bengal & Ors. conclusion that the judgments in the case of Silpi Industries and Mahakali Foods coupled with the subsequent orders in Vaishno Enterprises and M/s Nitesh Estates cannot be considered to be binding precedents on the issue that has arisen for consideration, taking into account the compelling need to ensure clarity and certainty about the applicable precedents on the subject, it is deemed appropriate to refer this appeal to a three Judge Bench. [Paras 1.1, 29] Interpretation of Statutes - Interpretation of Statutory Remedies by Constitutional Courts: Held: When a statutory remedy falls for consideration, it is the duty of the Constitutional Court to adopt an interpretation which would not only reduce the hiatus between a right and a remedy, but also to ensure that the remedy is effective - If rights are recognition of a claim, remedies are their actualization - While the rights regime receives broad recognition under constitutional framework, it is imperative that remedies must keep pace and be strengthened - One of the core functions of the higher judiciary is to bridge the gap between rights and remedies, and this would immediately give rise to the legislative, executive and judicial obligations for their provision, implementation, and declaration, respectively. [Para 10] Justice - Access to justice - Right to an effective judicial remedy: Held: The right to an effective judicial remedy is an integral part of access to justice - An effective judicial remedy under a constitutional scheme must be (i) accessible, (ii) affordable, (iii) expeditious and (iv) cohesive - Accessibility requires the remedy to be easily available, physically and informationally - Affordability is an aspect that is related to the cost of availing the remedy, it must be at a reasonable price with a provision for legal aid, if need be - The expeditious nature of a remedy is concerned with the quick disposal of the case and abhors unreasonable delays - Yet another facet of effective judicial remedy is its cohesiveness - The cohesiveness of a remedy simply means that a person must have one specified forum for the redressal of grievances. [Para 10.1] 612 [2025] 1 S.C.R. Digital Supreme Court Reports Micro, Small and Medium Enterprises Development Act, 2006 - s.18 - Words employed "any party to a dispute" - Golden Rule of Interpretation: Held: The text of Section 18 is clear and categoric - The words employed herein are "any party to a dispute" - The age-old principle, referred to as the Golden Rule of Interpretation, is that "words of a statute have to be read and understood in their natural, ordinary and popular sense" - The choice of the words 'any party to a dispute' in Section 18 of the Act is deliberate - If the Parliament had intended that 'any party' must be confined only to a "supplier", or even a buyer, which expression is also defined, it would as well have used that or those very expressions - The Court cannot substitute the expression "any party" with "supplier" and change the text and, consequently, the scope and ambit of Section 18 altogether. [Para 14.1] Micro, Small and Medium Enterprises Development Act, 2006 - s.18 - Purpose and Object: Held: Apart from the text and context in which Section 18 of the Act employs the expression "any party to the dispute", it is also to be seen that the section is provisioning a remedy for resolution of disputes - This remedy is provided by the statute, not by an agreement between the parties - It is therefore, necessary to keep it unrestricted and open-ended, enabling any party to a dispute to access the remedy - When statutory provision incorporation remedies for resolution of disputes fall for consideration, constitutional courts must interpret such remedies in a manner that would effectuate access to justice. [Para 14.3] Micro, Small and Medium Enterprises Development Act, 2006 - s.18 - Whether filing of memorandum u/s.8 is mandatory: Held: Section 8(1)(a) provides that, "a micro or a small enterprise may, at his discretion" and even a medium enterprise engaged in providing or rendering services, also "may at his discretion" file a memorandum with the authority as may be specified by the Government - Further, sub-section (4) of Section 8 relates to micro or small enterprises, the State Government shall by notification, specify the authority with which such micro or small enterprise [2025] 1 S.C.R. 613 NBCC (India) Ltd. v. The State of West Bengal & Ors. may file a memorandum - Considering the choice and discretion specifically provided to these enterprises, it becomes very clear that there is no mandatory prescription of filing a memorandum. [Para 14.5] Case Law Cited Silpi Industries v. Kerala State Road Transport Corporation [2021] 3 SCR 1044 : (2021) 18 SCC 790; Gujarat State Civil Supplies Corporation Limited v. Mahakali Foods Private Limited [2022] 19 SCR 1094 : (2023) 6 SCC 401 - distinguished. Kone Elevator India Private Limited v. State of Tamil Nadu [2014] 5 SCR 912 : (2014) 7 SCC 1; Shanti Conductors Private Ltd. v. Assam State Electricity Board [2019] 1 SCR 489 : (2019) 19 SCC 529; Anita Kushwaha v. Pushap Sudan [2016] 9 SCR 560 : (2016) 8 SCC 509; State of Andhra Pradesh v. Linde (India) Ltd. [2020] 5 SCR 838 : (2020) 16 SCC 335; Grid Corpn. of Orissa Ltd. v. Eastern Metals & Ferro Alloys [2010] 10 SCR 779 : (2011) 11 SCC 334; GE T&D India Ltd. v. Reliable Engg. Projects & Mktg., 2017 SCC OnLine Del 6978; Re: Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd. [2022] 19 SCR 1094 : (2023) 6 SCC 401; Shanti Conductors (P) Ltd. v. Assam SEB [2019] 1 SCR 489 : (2019) 19 SCC 529 : (2020) 4 SCC (Civ) 409; Vaishno Enterprises v. Hamilton Medical AG and Anr. [2022] 1 SCR 771 : 2022 SCC OnLine SC 355; M/s Nitesh Estates Ltd. v. Micro and Small Enterprises Facilitation Council of Haryana & Ors., C.A. No. 5276/2022@ SLP (C) No. 26682/2018; State of U.P. v. Synthetics and Chemicals Ltd. [1991] 3 SCR 64 : (1991) 4 SCC 139; Municipal Corporation of Delhi v. Gurnam Kaur [1988] Supp. 2 SCR 929 : (1989) 1 SCC 101; Arnit Das v. State of Bihar [2000] Supp. 1 SCR 69 : (2000) 5 SCC 488; Union of India v. All Gujarat Federation of Tax Consultants (2006) 13 SCC 473; Francis Stanly v. Intelligence Officer, Narcotic Control Bureau, Thiruvananthapuram [2006] Supp. 10 SCR 977 : (2006) 13 SCC 210; Bharat Petroleum Corporation Ltd. v. P. Kesavan [2004] 3 SCR 811 : (2004) 9 SCC 772; Vishnu Dutt Sharma v. Manju Sharma [2009] 3 SCR 891 : (2009) 6 SCC 379; Chandigarh Housing Board v. Narinder Kaur Makol [2000] Supp. 1 SCR 487 : (2000) 6 SCC 415; Allen v. Flood (1893) AC 1 - referred to. 614 [2025] 1 S.C.R. Digital Supreme Court Reports Books and Periodicals Cited '2024 Theme: MSMEs and the SDGs' (United Nations) (2024); 'A microscope on small businesses: The productivity opportunity by country' (McKinsey Global Institute) (July 22, 2024); 'The MSME Revolution: Transforming India's Economic Landscape' (Press Information Bureau) (Dec 23, 2024); 'MSMEs: The Backbone of India's Economic Future' (Invest India); 'Women-led Enterprises' (Lok Sabha Digital Library) (June 28, 2024); 'Participation of Females in MSMEs' (Lok Sabha Digital Library) (Feb 8, 2024); 'Economic Survey 2023-24'; Report of the Expert Committee on Micro, Small and Medium Enterprises (June, 2019); 'Commentary on Constitution of India' (9th Edition, Vol. IX). List of Acts Small Scale and Ancillary Industrial Undertakings Act, 1993; Micro, Small and Medium Enterprises Development Act, 2006; Small Scale and Ancillary Industrial Undertakings Act, 1993; Arbitration and Conciliation Act, 1996; Limitation Act, 1963; Constitution of India. List of Keywords Micro, Small and Medium Enterprises Development Act, 2006; MSME; Facilitation Council; Golden Rule of Interpretation; Interpretation of Statutes; Precedent making; Decision-making; Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006; Article 141 of the Constitution. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3705 of 2024 From the Judgment and Order dated 18.05.2022 of the High Court at Calcutta in APO No. 11 of 2022 Appearances for Parties Gopal Sankaranarayanan, Sr. Adv., Nagarkatti Kartik Uday, Ms. Shivani Vij, Advs. for the Appellant. Ms. Madhumita Bhattacharjee, Ms. Debarati Sadhu, Ms. Srija Choudhury, Anant, Sudarshan Rajan, Satyam Dwivedi, Mahesh Kumar, Roshan Santhalia, Advs. for the Respondents. [2025] 1 S.C.R. 615 NBCC (India) Ltd. v. The State of West Bengal & Ors. Judgment / Order of the Supreme Court Judgment Pamidighantam Sri Narasimha, J. Table of Contents* 1. Introduction ......................................................................... 2 2. Facts ................................................................................... 4 3. Decisions of the Single Judge and the Division Bench .................................................................................. 6 4. Submissions ......................................................................... 7 5. Issue for our consideration ............................................. 8 6. The repealed Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 and the judgment in Shanti Conductors v. Assam State Electricity Board ................................................................ 8 7. The Micro, Small and Medium Industry in our Country ................................................................................ 12 8. Interpretation of Statutory Remedies by Constitutional Courts .................................................................................. 15 9. Statutory Scheme of the MSMED Act, 2006 ................... 17 10. Whether registration is a necessary precondition to referring a dispute under Section 18 of the Act ............ 20 11. Re: Silpi Industries v. Kerala State Road Transport Corporation ......................................................................... 31 12. Re: Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd. ................................................ 35 13. Conclusion and reference to larger Bench .................... 42 * Ed. Note: Pagination as per the original Judgment. 616 [2025] 1 S.C.R. Digital Supreme Court Reports 1. Introduction: The old value of 'Small is beautiful' 1 has not lost its relevance. Recognising the contribution of micro, small and medium enterprises towards economic development, the United Nations declared June 27th as MSME day. MSMEs are said to be the backbone of many economies, including India. This resonates with the statement of the father of our nation, Mahatma Gandhi, declaring that the 'salvation of India lies in cottage and small scale industries'. The Parliament enacted the Micro, Small and Medium Enterprises Development Act, 20062 for facilitating the promotion and development of the enterprises by creating certain rights and duties and establishing a Board, Advisory Committee, and Facilitation Council. Importantly, the Act provided a mechanism for dispute resolution. 1.1 The MSME before us has a simple prayer. It seeks to refer the dispute that it has with the buyer regarding payment of its dues to the Facilitation Council for arbitration under Section 18 of the Act, which provides that "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". The appellant opposes this prayer by contending that 'any party' can only be a 'supplier' and that supplier should have been registered under Section 8 of the Act even before execution of the contract, if not, the reference is impermissible. The High Court did not answer this question. Instead, it permitted the parties to raise such objections before the Arbitral Tribunal. The buyer is in appeal before us, raising the same question as a jurisdictional issue. 1.2 We have examined the text, context, and purpose of the Act to arrive at the decision that Section 18 is not restrictive and is a remedy for the resolution of disputes, and as such, it is kept open-ended to enable 'any party' to refer the dispute to seek 1 E.F. Schumacher, 'Small Is Beautiful: A Study of Economics as if People Mattered' (1973) "We need the freedom of lots and lots of small, autonomous units, and, at the same time, the orderliness of largescale, possibly global, unity and co-ordination. When it comes to action, we obviously need small units, because action is a highly personal affair, and one cannot be in touch with more than a very limited number of persons at any one time." 2 Hereinafter referred to as 'the Act'. [2025] 1 S.C.R. 617 NBCC (India) Ltd. v. The State of West Bengal & Ors. redressal. For the reasons to follow, we rejected the submission that 'any party to a dispute' is confined to a 'supplier' who has filed a memorandum under Section 8 of the Act. We have also explained that the issue(s) that have arisen in the decisions of this Court in Silpi Industries v. Kerala State Road Transport Corporation3 and Gujarat State Civil Supplies Corporation Limited v. Mahakali Foods Private Limited4 were very different from the issue that has arisen for our consideration. However, for clarity and legal certainty, we have directed the appeal be placed before the Hon'ble Chief Justice of India for referring the matter to a bench of three Judges for an authoritative pronouncement. 1.3 We will first state the necessary facts before considering the submissions, followed by our reasons and conclusions. 2. Facts: The appellant, National Buildings Construction Corporation, granted four work orders between July 2015 to August 2016 to M/s Saket Infra Developers Private Limited, respondent No. 4 5 for undertaking construction work at different places in West Bengal. Pursuant to the work orders, contracts were executed on 27.08.2015, 17.11.2015, 28.07.2016 and 20.08.2016. The Enterprise filed a memorandum under Section 8 of the Act on 19.11.2016 as a 'small enterprise'. Thereafter, on 15.09.2017, the appellant also executed a fifth contract in favour of the Enterprise. 2.1 Work is said to have commenced on various dates, supplies continued, and bills were raised from time to time by the Enterprise, even after filing of the memorandum under Section 8 of the Act. The Table showing dates of the work orders, contract and particulars of the work awarded and details of bills raised after registration is as under: 3 [2021] 3 SCR 1044 : (2021) 18 SCC 790, hereinafter referred to, in short as Silpi Industries. 4 [2022] 19 SCR 1094 : (2023) 6 SCC 401, hereinafter referred to, in short as Mahakali Foods. 5 Hereinafter referred to as the 'Enterprise'. 618 [2025] 1 S.C.R. Digital Supreme Court Reports S. No. Dates of Work Orders Dates of Construction Contracts Bills raised after Registration on 19.11.2016 1. Contract-I 30.07.2015 27.08.2015 Office Building for National Jute Board, Rajarhat, Kolkata 10 Bills for 34.71 crores 2. Contract-II 26.10.2015 17.11.2015 Residential Quarters for ISI, Kolkata 8 Bills for 14.18 crores 3. Contract-III 19.01.2016 28.07.2016 ITI Campus, Darjeeling 10 Bills for 10.49 crores 4. Contract-IV 19.08.2016 20.08.2016 Regional Centre for Lalit Kala Academy, Kolkata 8 Bills for 12.46 crores 19.11.2016 Registration of Respondent No. 4 as Small Undertaking 5. Contract-V 15.09.2017 11.10.2017 MSTC Office, Rajarhat, Kolkata 5 Bills for 15.72 crores 2.2 During the subsistence of the contract, disputes arose between the parties in connection with all five contracts. It may be mentioned here itself that, with respect to the fifth contract, the Enterprise instituted a commercial suit [(Comm.) No. 229 of 2021] before the High Court of Delhi, which is said to be pending consideration. However, this fact does not have any bearing on the issues before this Court. 2.3 Seeking resolution of disputes, on 28.03.2019, the Enterprise made a reference under Section 18 of the Act for recovery of [2025] 1 S.C.R. 619 NBCC (India) Ltd. v. The State of West Bengal & Ors. the amounts due to it to the West Bengal State Micro and Small Enterprises Facilitation Council6. The Facilitation Council initiated action, and with the failure of the conciliation proceedings under Section 18(2) of the Act, the dispute was referred to arbitration under Section 18(3) on 19.01.2021. A further notice of the arbitral proceedings was also issued, and it was received by the appellant on 30.09.2021. 2.4 The appellant objected to the Facilitation Council entertaining the reference, firstly on the ground that the Enterprise was not registered before the execution of the contracts and, as such, the Facilitation Council does not have jurisdiction under Section 18. Secondly, it was also argued that the subject matter of the contract relates to the execution of the works contracts, which falls outside the scope and ambit of the Act. Carrying these objections further, the appellant filed a Writ Petition under Article 226 of the Constitution of India before the High Court of Calcutta, raising the jurisdictional question of the Facilitation Council entertaining the reference. 3. Decisions of the Single Judge and the Division Bench: The learned Single Judge dismissed the Writ Petition on 16.12.2021 by simply holding that "the question of jurisdiction can be raised before the Arbitral Tribunal, which shall decide the same before entering into other questions." The decision of the Single Judge was challenged unsuccessfully before the Division Bench of the High Court by the order impugned before us. The Division Bench also referred the decision of this Court in Kone Elevator India Private Limited v. State of Tamil Nadu7 to hold that a works contract is an indivisible contract and also that the Act, being a special legislation, overrides other statutes. The Division Bench agreed with the finding of the Single Judge that all objections, including those relating to maintainability, can be raised and contested before the arbitrator. Thus, the appellant is in appeal before us. 4. Submissions: Mr. Gopal Sankaranarayanan, learned senior counsel, appearing for the appellant, challenged the jurisdiction of the Facilitation Council in entertaining the reference under Section 18 of 6 Hereinafter referred to as the 'Facilitation Council'. 7 [2014] 5 SCR 912 : (2014) 7 SCC 1 620 [2025] 1 S.C.R. Digital Supreme Court Reports the Act by the Enterprise for the simple reason that it registered itself after the contracts were executed and not before. His submission is based on the decision of this Court in Silpi Industries (supra) and Mahakali Foods (supra). Though the impugned decision of the High Court was on 18.05.2022, almost a year after the judgment of this Court in Silpi Industries (supra), it has not taken note of the judgment of this Court. Mr. Gopal Sankaranarayanan also referred to certain subsequent orders of this Court, which we will be examining while considering the issue. 4.1 Ms. Madhumita Bhattacharjee and Mr. Roshan Santhalia, learned counsels for respondents, opposed the appellant's arguments and contended that these questions can always be raised before the Arbitral Tribunal as directed by the Single as well as the Division Bench of the High Court. 5. Issue for our consideration: The question of law for our consideration is whether an MSME cannot make a reference to the Facilitation Council for dispute resolution under Section 18 of the Act if it is not registered under Section 8 of the Act before the execution of the contract with the buyer. 6. Before we examine the provisions of the Act and the ratio of the judgment of this Court in Silpi Industries (supra) and Mahakali Foods (supra), it is necessary to take note of the statute (repealed Act) that preceded the Act and also the important judgment of this Court in Shanti Conductors Private Ltd. v. Assam State Electricity Board,8 which also has a direct bearing on the decision in Silpi Industries (supra) and for interpreting the provisions of the Act. 7. The repealed Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 9 and the judgment in Shanti Conductors v. Assam State Electricity Board : The decision of this Court in Shanti Conductors (supra), a three-Judge Bench Judgment, was necessitated because of the difference of opinion between two Judges. The relevant facts of Shanti Conductors (supra) are that the Small-Scale Industry therein entered into a contract for supply of goods and services to the buyer before the said 1993 8 [2019] 1 SCR 489 : (2019) 19 SCC 529, hereinafter referred to, in short as Shanti Conductors. 9 Hereinafter referred to as the repealed statute. [2025] 1 S.C.R. 621 NBCC (India) Ltd. v. The State of West Bengal & Ors. repealed statute came into force. However, the supplies under the contract were rendered after the said statute came into force. Of the seven questions of law that were formulated by the three-judge bench, the first two questions, relevant to our purpose, are extracted for ready reference. It is necessary to mention here that filing of a memorandum by any MSME was never an issue there, as, in fact, there was no such requirement under the repealed statute. The issues in Shanti Conductors (supra) are as follows: "34.1.(1) Whether the 1993 Act is not applicable when the contract for supply was entered into between the parties prior to the enforcement of the Act i.e., 23-9-1992? 34.2. (2) Whether in the event it is found that the Act is applicable also with regard to contract entered prior to the 1993 Act in pursuance of which contract, supplies were made after the enforcement of the 1993 Act, the 1993 Act can be said to have retrospective operation?" 7.1 The repealed statute comprised of 11 provisions, of which Section 3 related to the liability of the buyer to make payment, Section 4 related to the date and rate of interest payable, Section 5 related to the liability to pay compound interest, and Section 6 related to the right of recovery of the amount payable to the supplier. 7.2 Having considered the statutory scheme, the Court came to the conclusion that the incidence of applicability of the liability under that statute is supply of goods or rendering of services. The Court categorically held that the liability of the buyer for payment under the Act arises even if the agreement of sale is prior to the Act (repealed) but if the supplies were made after the Act. 7.3 Answering the first question, this Court held as under: - "61. We have noticed above that the incidence of applicability of the liability under the Act is supply of goods or rendering of service. In event the supply of goods and rendering of services is subsequent to the Act, can liability to pay interest on delayed payment be denied on the ground that agreement in pursuance of which supplies were made were entered prior to enforcement of the Act? Entering into an agreement being not expressly 622 [2025] 1 S.C.R. Digital Supreme Court Reports or impliedly referred to in the statutory scheme as an incident for fastening of the liability, making the date of agreement as date for imposition of liability does not conform to the statutory scheme. This can be illustrated by taking an example. There are two small scale industries which received orders for supply of materials. 'A' received such orders prior to the enforcement of the Act and 'B' received the order after the enforcement of the Act. Both supplied the goods subsequent to enforcement of the Act and became entitled to receive payment after the supply, on or before the day agreed upon between the supplier and buyer or before the appointed day. Payments were not made both to 'A' and 'B' as required by Section 3. Can the buyer who has received supplies from supplier 'A' escape from his statutory liability to make payment of interest under Section 3 read with Section 4? The answer has to be No. Two suppliers who supply goods after the enforcement of the Act, become entitled to receive payment after the enforcement of the Act one supplier cannot be denied the benefit of the statutory protection on the pretext that the agreement in his case was entered prior to enforcement of the Act. When the date of agreement is not referred as material or incidence for fastening the liability, by no judicial interpretation the said date can be treated as a date for fastening of the liability. The 1993 Act being beneficial legislation enacted to protect small scale industries and statutorily ensure by mandatory provision for payment of interest on the outstanding money, accepting the interpretation as put by the learned counsel for the Board that the day of agreement has to be subsequent to the enforcement of the Act, the entire beneficial protection of the Act shall be defeated. The existence of statutory liability depends on the statutory factors as enumerated in Section 3 and Section 4 of the 1993 Act. Factor for liability to make payment under Section 3 being the supplier supplies any goods or renders services to the buyer, the liability of buyer cannot be denied on the ground that the agreement entered into between the parties for supply was prior to the 1993 Act. To hold that liability of buyer for payment shall arise only when agreement for supply [2025] 1 S.C.R. 623 NBCC (India) Ltd. v. The State of West Bengal & Ors. was entered into subsequent to enforcement of the Act, it shall be adding words to Section 3 which is not permissible under the principles of statutory construction. 62. We, thus, are of the view that the judgments in Purbanchal Cables & Conductors,10 Assam Small Scale Industries11 and Shakti Tubes Ltd.12 which held that the 1993 Act shall be applicable only when the agreement to sale/contract was entered into prior/subsequent to the enforcement of the Act, does not lay down the correct law. We accept the submission of the learned counsel for the appellants that even if agreement of sale is entered into prior to enforcement of the Act, liability to make payment under Section 3 and liability to make payment of interest under Section 4 shall arise if supplies are made subsequent to the enforcement of the Act." (emphasis supplied) 7.4 The ratio of the decision in Shanti Conductors can be formulated as follows: i) Even if contracts are entered into before the commencement of the repealed statute, the liability to make payment under Section 3, and to pay interest thereon under Sections 4 and 5 and to recover the amount under Section 6 will arise if the supplies are made subsequent to the enforcement of the statute. The incidence of liability under the repealed statute is 'supply of goods or rendering of services', ii) when the date of contract is neither referred to nor made an incident for fastening the liability under the statute, by way of judicial interpretation, courts cannot treat the said date as the date for fastening the liability. The existence of the statutory liability depends on the language employed in Sections 3 to 6 of the statute, iii) to hold that the liability of the buyer to make payment shall arise only when the contract for supply was entered into 10 Purbanchal Cables & Conductors (P) Ltd. v. Assam SEB (2012) 7 SCC 462 11 Assam Small Scale Industries Development Corpn. Ltd. v. J.D. Pharmaceuticals (2005) 13 SCC 19 12 Shakti Tubes Ltd. v. State of Bihar (2009) 7 SCC 673 624 [2025] 1 S.C.R. Digital Supreme Court Reports subsequent to the enforcement of the Act will defeat the purpose and object of the beneficial legislation intended to protect small-scale and ancillary industrial undertakings. 8. The Micro, Small and Medium Industry in our Country: After the repeal of the 1993 Act, the present Act came into force with effect from 02.10.2006. The Act is a comprehensive legislation that recognises and seeks to rejuvenate the importance of MSMEs, whose importance and contribution is accepted in contemporary economies across the globe, and accredited by the United Nations13. United Nations, commenting on the significance of MSMEs observes that: "MSMEs help reduce levels of poverty through job creation and economic growth; they are key drivers of employment, decent jobs and entrepreneurship for women, youth and groups in vulnerable situations. They are the majority of the world's food producers and play critical roles in closing the gender gap as they ensure women's full and effective participation in the economy and in society". 8.1 In the statement of object and reasons of the Act, it is mentioned that "many Expert Groups and Committees appointed by the Government from time to time as well as small scale industry sector itself has emphasised the need for a comprehensive central enactment to provide an appropriate framework for the sector to facilitate its growth and development, emergence of a large service sector assisting the small scale industry in the last two decades also warrants a composite view of the sector encompassing both industrial units and related service entities. The world over, the emphasis has now been shifted from industries to Enterprises." 8.2 The rights, incentives and remedies provisioned under the Act are the backbone of our economy. Statistics indicate that MSMEs provide employment to 62% of the country's workforce, contribute 30% to India's GDP,14 and account for around 45% of 13 '2024 Theme: MSMEs and the SDGs' (United Nations) (2024). 14 'A microscope on small businesses: The productivity opportunity by country' (McKinsey Global Institute) (May 29, 2024); 'Contribution Of MSMEs to the GDP' (Press Information Bureau) (July 22, 2024). [2025] 1 S.C.R. 625 NBCC (India) Ltd. v. The State of West Bengal & Ors. India's total exports15. The Indian MSME sector is projected to grow to $1 trillion by 202816. Moreover, MSMEs play a crucial role in promoting rural development, women's employment, and inclusive growth. 19.5% of total MSMEs17 and 70% of informal micro-enterprises are owned by women18. There is undoubtedly a global consensus regarding the indispensable importance of MSMEs. 8.3 However, while the United Nations and even the Expert Groups and Committees appointed by the Government from time to time have underscored the importance of MSMEs, and that has led to the Parliament enacting the present legislation, MSMEs in India have been facing many challenges which are reflected in their performance. A recent report records that, "MSMEs in India contribute 30% to value-addition and 62% to employment", as against "49% and 77%, in other emerging economies".19 The 2023-2024 Economic Survey also recorded the concerns faced by MSME's.20 9. It is in the above-referenced context that we need to comprehend, interpret and construct the remedies contemplated under the Act. 10. Interpretation of Statutory Remedies by Constitutional Courts: When a statutory remedy falls for consideration, it is the duty of the Constitutional Court to adopt an interpretation which would not only reduce the hiatus between a right and a remedy, but also to ensure that the remedy is effective. If rights are recognition of a claim, 15 'The MSME Revolution: Transforming India's Economic Landscape' (Press Information Bureau) (Dec 23, 2024). 16 'MSMEs: The Backbone of India's Economic Future' (Invest India) (June 28, 2024). 17 'Women-led Enterprises' (Lok Sabha Digital Library) (Aug 10, 2023). 18 ''Participation of Females in MSMEs' (Lok Sabha Digital Library) (Feb 8, 2024). 19 'A microscope on small businesses: The productivity opportunity by country' (McKinsey Global Institute) (May 29, 2024). 20 'Economic Survey 2023-24' (2024) "Licensing, Inspection, and Compliance requirements that MSMEs have to deal with, imposed particularly by sub-national governments, hold them back from growing to their potential and being job creators of substance...Further, many MSMEs struggle to secure the necessary funds to start, operate, or expand their business due to a variety of reasons including lack of collateral or credit history, high interest rates, complex documentation requirements, and long processing times, etc." (emphasis supplied). 626 [2025] 1 S.C.R. Digital Supreme Court Reports remedies are their actualization. While the rights regime receives broad recognition under our constitutional framework, it is imperative that remedies must keep pace and be strengthened. One of the core functions of the higher judiciary is to bridge the gap between rights and remedies, and this would immediately give rise to the legislative, executive and judicial obligations for their provision, implementation, and declaration, respectively. 10.1 The right to an effective judicial remedy is an integral part of access to justice.21 An effective judicial remedy under a constitutional scheme must be (i) accessible, (ii) affordable, (iii) expeditious and (iv) cohesive. Accessibility requires the remedy to be easily available, physically and informationally. Affordability is an aspect that is related to the cost of availing the remedy, it must be at a reasonable price with a provision for legal aid, if need be. The expeditious nature of a remedy is concerned with the quick disposal of the case and abhors unreasonable delays. Yet another facet of effective judicial remedy is its cohesiveness. The cohesiveness of a remedy simply means that a person must have one specified forum for the redressal of grievances. This requirement must be understood as an antithesis of fragmentation of remedies, i.e., a litigant ought not to be forced to approach multiple forums for the same cause of action. When a statute provisioning a judicial remedy falls for construction, the choice of interpretative outcome is not governed so much by the power or privileges under the Constitution, but by the constitutional duties to create effective judicial remedies in furtherance of the right to access to justice. A meaningful interpretation that furthers effective judicial access is a constitutional imperative and it is this duty that must inform the interpretative criteria. It is in the above referred context that we will now examine Section 18 of the Act. 11. Statutory Scheme of the MSMED Act, 2006: Sections 2(a), (c), (e), (n), 7, 8, 17, 18, 20 and 21, to the extent that they are relevant, are reproduced hereinbelow for ready reference. 21 See, generally, Anita Kushwaha v. Pushap Sudan, (2016) 8 SCC 509 "...Four main facets that, in our opinion, constitute the essence of access to justice are: (i) the State must provide an effective adjudicatory mechanism; (ii) the mechanism so provided must be reasonably accessible in terms of distance; (iii) the process of adjudication must be speedy; and (iv) the litigant's access to the adjudicatory process must be affordable...In order that the right of a citizen to access justice is protected, the mechanism so provided must not only be effective but must also be just, fair and objective in its approach..." [2025] 1 S.C.R. 627 NBCC (India) Ltd. v. The State of West Bengal & Ors. "2. Definitions- In this Act, unless the context otherwise requires, - (a) "Advisory Committee" means the committee constituted by the Central Government under sub-section (2) of section 7. (b) ... (c) "Board" means the National Board for Micro, Small and Medium Enterprises established under Section 3; (e) "Enterprise" means an industrial undertaking or a business concern or any other establishment, by whatever name called, engaged in the manufacture or production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951) or engaged in providing or rendering of any service or services; 7.