# Morarjee Textiles Ltd. vs. Union of India & Ors.

> SC judgment dated 2025-02-13. Citation: TCN-2025-SC-00050. The case involves an appeal against an interim order by the High Court, which required the…

- **Court:** SC
- **Order date:** 13 Feb 2025
- **Citation:** TCN-2025-SC-00050
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/morarjee-textiles-ltd-vs-union-of-india-ors-04263379

## Summary

### Background

The case involves an appeal against an interim order by the High Court, which required the appellant to deposit 75% of the awarded amount as a condition for stay. The appellant had filed a writ petition under Article 226 of the Constitution of India instead of availing the remedy under Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006. The High Court's order was challenged on the grounds of jurisdiction, arguing that the third respondent was not an MSME. The Supreme Court initially granted a stay subject to the appellant furnishing a bank guarantee.

## Facts

Morarjee Textiles Ltd., represented by its Interim Resolution Professional, appealed a High Court order. The High Court had directed Morarjee Textiles to deposit 75% of an awarded amount as a condition for stay, after Morarjee Textiles filed a writ petition under Article 226 of the Constitution of India, instead of pursuing remedies under Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006. The appellant argued that the third respondent was not an MSME, thus questioning the High Court's jurisdiction. The Supreme Court initially granted a stay subject to furnishing a bank guarantee. The High Court had reserved judgment on the underlying writ petition. The second respondent, the Micro and Small Enterprises Facilitation Council, Nagpur, had made an

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## Issues and analysis

### Issue 1: Whether the High Court erred in imposing a condition of deposit for stay when the appellant had an …

**Ratio:** The principle is that a party should exhaust statutory remedies before invoking the

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**Reasoning:** The Supreme Court reasoned that the High Court had not dismissed the writ petition

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**Interpretation:** This interprets the scope of Article 226 of the Constitution of India,

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**Application:** The ratio and reasoning apply to the specific facts because the appellant

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## Parties

- **Judges:** ABHAY S…; UJJAL B…
- **Respondents:** Morarjee Textiles…; Union of…
- **Other parties:** Affir…
- **Advocates:** Rajes…; Dcosta Ivo Manuel…; +10 more

## Timeline

- **2012-07-05 — Impugned…**: The High Court passed an interim order directing the appellant to deposit 75% of the…
- **2012-09-28 — Supreme Cour…**: The Supreme Court issued notice and granted a stay subject to the appellant furnishing a…

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