The Jammu and Kashmir High Court has held that a judgment of the Supreme Court remains binding law even if it is referred to a larger bench, unless the referring court directs otherwise.
Justice Moksha Khajuria Kazmi stated:
“Till the reference made by the Supreme Court in Tamil Nadu Cements Corporation Ltd. vs MSEFC is decided by a larger bench, the judgment passed in M/s India Glycols Ltd. shall remain binding and continue to hold the field.”
The case arose when the Jal Shakti Department of J&K challenged an arbitral award passed by the Micro & Small Enterprises Facilitation Council (MSEFC), Punjab. The Council had awarded ₹2.75 crore as principal and ₹8.77 crore as interest to M/S JTL Infra Ltd. for delayed payments under supply contracts from 2018.
The petitioner filed a writ petition under Articles 226/227 of the Constitution, arguing that the Supreme Court’s decision in India Glycols Ltd., which disallowed writ jurisdiction in such matters, was referred to a larger bench, and therefore not applicable.
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However, the High Court rejected this argument, affirming the principle that:
“Mere reference of a judgment to a larger bench does not unsettle the law already declared unless such direction is expressly made.”
The Court also emphasized that Section 19 of the MSMED Act mandates a 75% pre-deposit of the awarded amount before challenging an award under Section 34 of the Arbitration and Conciliation Act. Since the petitioner had not complied, the writ petition was dismissed.
“The petition under Article 226/227 challenging the award is not maintainable. The petitioner must take appropriate legal remedy under the MSMED Act and Arbitration and Conciliation Act.”
Background:
The dispute began when the Jal Shakti Department awarded supply contracts to M/S JTL Infra Ltd. in 2018. After partial payments, a dispute over delayed dues arose. The company sought ₹19.38 crore before the MSEFC, which passed an award on June 1, 2023. It included ₹2.75 crore as principal, ₹8.77 crore as interest, and directed future interest until realization.
The petitioner challenged this award without following the statutory pre-deposit requirement, prompting the Court’s refusal to entertain the writ.
Quote from Judgment:
“High Courts must decide matters based on existing law. Unless directed by the Supreme Court, they cannot await a reference or review outcome.”
Case Title: Union Territory of J&K & Ors vs M/S JTL Infra Limited, 2025
