The Calcutta High Court has quashed proceedings initiated before the Haryana Micro and Small Enterprises Facilitation Council (HMSEFC) by an architectural services contractor against the Board of Major Port Authority for the Syama Prasad Mookerjee Port, Kolkata.
The court observed that the Council was not the authority to decide disputes concerning termination of a contract.
A single-judge bench of Justice Krishna Rao observed that the contractor had neither challenged the termination order before any court nor submitted a final running account (RA) bill. The court held:
“...the MSMED Council is not the authority to decide with regard to the termination of the contract.”
The dispute arose from a contract awarded to an architectural services contractor for the modification and beautification of Jawahar Tower Complex and other areas at Haldia Township for ₹12.5 lakh plus GST.
The Port Authority paid the contractor's first RA bill of ₹2.95 lakh, representing 20% of the contract value. However, disputes arose over incomplete deliverables, following which the Port Authority terminated the contract on March 25, 2025. The contractor subsequently approached the HMSEFC, claiming ₹18.40 lakh under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.
The Port Authority argued that the contractor had failed to complete the work and submit several deliverables despite repeated requests. It also submitted that the contractor had refused to revise an estimate for the lock area after deficiencies were pointed out. The authority contended that no further or final RA bill had been submitted before the show-cause notice was issued. It maintained that no amount was due to the contractor.
Examining the provisions of the MSMED Act concerning buyers, suppliers, and recovery of amounts due, the court noted that the contractor had neither completed the assigned work nor supplied any goods to the Port Authority. It also observed that the contractor had not raised any claim before the Port Authority before approaching the Council.
The court further noted that the contractor had not challenged the termination order before any court and that there were no outstanding dues payable by the Port Authority. It accordingly allowed the writ petition and quashed the proceedings before the HMSEFC.
For Petitioner: Senior Advocate Kishore Datta, and Ashok Kumar Jena