Allahabad High Court
M/S AMREE PHARMACEUTICALSversusMICRO AND SMALL ENTERPRISES FACILITATION COUNCIL SAHARANPUR DIVISION, SAHARANPUR AND ANOTHER
- Decided
Holding
The award includes statutory interest under Section 16 of the MSMED Act, 2006, and the petitioner must deposit 75% of the total amount including such interest.
Summary
The petitioner, M/s Amree Pharmaceuticals, filed a petition under Article 226 challenging a Commercial Court order that rejected its application to deposit 75% of a award because it had not deposited interest. The award issued by the Micro and Small Enterprises Facilitation Council specified only the principal amount of Rs. 32,23,968, with the interest column left blank, but the award language indicated that interest under Section 16 of the MSMED Act, 2006 was applicable. The petitioner argued that interest was not part of the award and therefore could not be required for the deposit, while the respondent contended that statutory interest is automatically payable. The High Court held that the phrase "award is made accordingly" includes both principal and statutory interest, which can be readily calculated at the prescribed rate. Consequently, the court upheld the lower court’s order and directed the petitioner to deposit 75% of the total award, including interest, within four weeks, warning of recovery proceedings if compliance fails. The petition was thereafter disposed of.
Issues considered
- Whether interest under Section 16 of the MSMED Act, 2006 forms part of the award despite being left uncalculated in the award document
- Whether the petitioner is required to deposit 75% of the total award including statutory interest
Legislation cited
Subjects
- Article 226
- Article 227
- MSMED Act
- statutory interest
- award calculation
- deposit requirement
- commercial court
- recovery proceedings
Judgment
HIGH COURT OF JUDICATURE AT ALLAHABAD
MATTERS UNDER ARTICLE 227 No. - 5545 of 2026
M/S Amree Pharmaceuticals
.....Petitioner(s)
Versus
Micro And Small Enterprises Facilitation Council
Saharanpur Division, Saharanpur And Another .....Respondent(s)
Counsel for Petitioner(s) : Sanjay Agrawal
Counsel for Respondent(s) : Amod Tripathi
Court No. - 1
HON'BLE AJIT KUMAR, J.
HON'BLE INDRAJEET SHUKLA, J.
1. Heard Sri Sanjay Agrawal, learned counsel appearing for the petitioner
and Sri Amod Tripathi, learned counsel appearing for the respondent no.
2.
2. By means of this petition filed under Article 226 of the Constitution,
petitioner has questioned the order passed by the Presiding Judge,
Commercial Court, Meerut dated 20th March, 2026 whereby his
application to deposit 75% of the award, vide application no. 33C, has
come to be rejected on the ground that petitioner did not deposit 75% of
the award taking the interest also as part of the award.
3. It is sought to be contended by Sri Sanjay Agarwal, learned counsel
appearing for the petitioner that the final award that was passed by the
MSME Council included only the principal amount of Rs. 32,23,968/-
whereas no interest was added thereto, though the interest should have
been calculated at the rate of 18% in terms of Section 16 of the MSMED
Act, 2006.
4. Per contra, it is submitted by Sri Amod Tripathi, learned counsel for
respondent no. 2 that the award means not only the principal amount but
the interest also and even if the Council finally did not calculate the
interest, it is a statutory interest which can be calculated and the petitioner
is required to pay the amount accordingly.
A227 No. 5545 of 2026
2
5. Having heard learned counsel for the respective parties and having
perused the records, we find that the operative portion records as under :
"The reference is hereby allowed. The respondent-
buyer/opposite party shall pay Rs. 32,23,968/-+interest
Rs........... u/s 16 of MSMED Act, 2006, total Rs............to the
applicant-claimant/supplier till the date of order. The amount
paid by the respondent-buyer/opposite party, if any during
pendency of the reference shall be deducted from the "Amount
Due".
The respondent-buyer/opposite party shall also pay future
interest to the applicant/supplier as per provisions of section-
16 of MSMED Act, 2006 till the final payment.
Parties to bear their own costs.
This award is made accordingly.
The order made on 13.03.2024 and draft approved on
05.07.2024."
6. Though we find that the interest part column is blank as the interest has
not been calculated but finally the Council records this award is made
accordingly. This award is made accordingly is a phrase and expression
which includes the principal amount abovestated plus interest. Statutory
interest is 16% under Section 16 of the Act and, therefore, it can be easily
calculated.
7. Thus, we do not find any merit in the submission advanced by Sri
Sanjay Agarwal and we uphold the order passed by the Presiding Judge,
Commercial Court, Meerut dated 20th March, 2026.
8. At this Stage, counsel for the petitioner submits that he may be granted
some more time so that he may deposit 75% of the total award amount
including interest in compliance of the order of this Court.
9. Counsel for the respondent does not have any objection.
A227 No. 5545 of 2026
3
10. In view of the above, petitioner is directed to make deposit of 75% of
the entire award through a demand draft which will include principal
amount as well as statutory interest within four weeks from today on or
before 30th May, 2026.
11. It is made clear that if the petitioner complies with this order, no
recovery proceedings shall be pursued.
12. It is also made clear that if the aforesaid deposit is not made as
directed hereinabove, no further time extension application shall be
entertained and the recovery proceedings shall be pursued in accordance
with law.
13. With the aforesaid observations/directions, this petition stands
disposed of.
(Indrajeet Shukla,J.) (Ajit Kumar,J.)
May 5, 2026
Pratima
Digitally signed by :-
PRATIMA AGRAHARI
High Court of Judicature at Allahabad
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