# In the matter of Sonali Power Equipments Pvt. Ltd. vs. Chairman Maharashtra State Electricity Board Mumbai and Ors.

> SC judgment dated 2025-07-17. Citation: TCN-2025-SC-00068. The appeals concern the applicability of the Limitation Act, 1963 to conciliation and arbitration…

- **Court:** SC
- **Order date:** 17 Jul 2025
- **Citation:** TCN-2025-SC-00068
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/sonali-power-equipments-pvt-ltd-vs-chairman-maharashtra-state-electricity-board-452a4089

## Summary

### Background

The appeals concern the applicability of the Limitation Act, 1963 to conciliation and arbitration proceedings initiated under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). The High Court held that the Limitation Act applies to arbitration but not conciliation, and that time-barred claims are not included in 'amount due' under the MSMED Act.

## Facts

The appellants are small-scale industries registered with the District Industries Centre, Nagpur.

The appellants supplied transformers to respondent no. 1 under various purchase orders between 1993 to 2004.

Due to delay in payments, the appellants filed references in 2005-06 before the Industry Facilitation Council established under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993.

The Facilitation Council allowed the appellants' claims and awarded interest on the delayed payments on 28.01.2010.

Respondent nos. 1 and 2 challenged the award under Section 34 of the ACA, and the Commercial Court set aside the award on 26.10.2017 on the ground that the claims were barred by limitation.

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## Issues and analysis

### Issue 1: Whether the Limitation Act applies to conciliation proceedings under Section 18(2) of the MSMED …

**Ratio:** The Limitation Act does not apply to conciliation proceedings under Section 18(2) of the

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**Reasoning:** Conciliation is a non-adjudicatory and non-coercive process. The MSMED Act does not

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**Interpretation:** The term 'amount due' in the MSMED Act is interpreted to include time-barred

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**Application:** Time-barred claims can be referred to conciliation under Section 18(2) of the

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## Parties

- **Judges:** Pamidighantam Sri…; JOYMALYA…
- **Appellants:** M/S SONALI POWER…
- **Respondents:** CHAIR…; MAHARASHTRA STATE…
- **Other parties:** Modif…
- **Advocates:** Abhishek Manu…; Jayant Bh…; +1 more

## Timeline

- **N/A — 1993-200…**: Appellants supplied transformers to…
- **2005-2006 — References…**: Appellants filed references before…

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