Court Under Section 19 Of MSMED Act, 2006 Empowered To Allow Predeposit In Installments: Allahabad High Court

The Allahabad High Court division bench of Chief Justice Arun Bhansali and Justice Jaspreet Singh held that expression “in the manner directed by such court” in Section 19 of the Micro, Small And Medium Enterprises Development Act, 2006 gives the discretion to the court to allow the predeposit to be made, if felt necessary, in installments also. Section 19 of the MSME Act: “Application for setting aside decree, award or order.— No application for setting aside any decree, award or...

Award By MSEF Council Cannot Be Challenged In Writ, Remedy Under Section 34 Of A&C Act Must Be Availed: Gujarat High Court

The bench of Justice Vaibhavi D. Nanavati of Gujarat High Court has held that an award passed by MSEF Council under Section 18 of the MSMED Act cannot be directly challenged in a writ petition and the aggrieved party has to challenge it under Section 34 of the A&C Act. The Court relied upon the judgment of the Supreme Court in India Glycols Ltd., Vs. Micro and Small Enterprises Facilitation Council 2023 LiveLaw (SC) 992 wherein the Apex Court held that a writ against an award by...

Jurisdiction Of MSEF Council Wrongly Invoked, Time Spent Therein Excluded From Limitation: Delhi High Court

The High Court of Delhi has held that when the jurisdiction of the MSEF Council is wrongly invoked due to uncertainty in law, the time spent before the Council would not be counted while calculating limitation. The bench of Justice Pratibha M. Singh held that benefit of Section 14 of Limitation Act, which exempts the bond fide time spent before the wrong forum, would be given in such a situation. Facts The parties entered into an agreement dated 14.10.2011 for execution of work...

Notice Of Dispute To MSEF Council Under Section 18 Of MSMED Act Can Be Considered As Notice Of Arbitration Under Section 21 Of The A&C Act: Delhi High Court

The High Court of Delhi has held that a notice given by a party invoking jurisdiction of MSEF Council under Section 18 of the MSMED Act can be considered to be a notice of arbitration required under Section 21 of the A&C Act. The bench of Justice Pratibha M. Singh held that prior to the judgment of the Supreme Court in Gujarat State Civil Supplies Corporation and M/S Silpi Industries, the position of law with respect to an entity not registered under the MSMED Act at the time of...

MSMED Act | Imposition Of Three Times Bank Interest By MSME Facilitation Council Is Violation Of Principles Of Reasonableness And Fairness: Madras High Court

The Madras High Court single bench of Justice R. N. Manjula held that the imposition of three times of the bank rate of interest on the award amount by the Micro Small and Medium Enterprises, Facilitation Council is violation of fundamental principles of reasonableness and fairness. It held that the Petitioner is indirectly deprived of his appeal remedy in view of such high rate of interest. Brief Facts: The Petitioner had a dispute with M/s Unicon Engineers (“Second respondent”),...

MSMED Act | Service Supplier Registered During Ongoing Contract Can Avail Benefits For Services Provided After Registration: Delhi High Court

The Delhi High Court single bench of Justice Subramonium Prasad held that a service supplier, upon registering during an ongoing contract, is eligible to avail benefits under the MSMED Act for services provided after registration. It held that it is always open to the arbitrator to decide this issue even as a preliminary issue. Brief Facts: A Notice Inviting Tender (NIT) was released by the Petitioner for the construction of a 200 bedded hospital in Ambedkar Nagar, New Delhi....

MSMED Act | Conciliation Mechanism Under Section 18 Shall Be Followed To Resolve Payment Dispute: Gauhati High Court Dismisses Writ Petition

The Gauhati High Court single bench of Kaushik Goswami dismissed a writ petition noting that when a dispute arises regarding payment under Micro, Small and Medium Enterprises Development Act, 2006, the mechanism under Section 18 shall be followed to resolve the dispute by way of a conciliation proceeding, failing which arbitration proceeding as prescribed under Section 18 to be conducted. Brief Facts: The Petitioner filed writ petition in the Gauhati High Court and challenged...

MSMED Act | No Bar In 'filing' Petition Under Section 34 A&C Without Pre-deposit of 75% Award Amount, but Will Not Be 'Entertained' Without Pre-Deposit: Delhi High Court

The Delhi High Court single bench of Justice Jasmeet Singh held that there is no bar in filing a petition under Section 34 of the Arbitration and Conciliation Act, 1996 and the same can be filed without pre deposit of 75% of the awarded amount under the Micro, Small and Medium Enterprises Development Act, 2006. However, the bench held that the petition will not be “entertained” under Section 19 of MSMED Act without the deposit of 75 % of the awarded amount. Brief Facts: The...

MSME Act | Council Cannot Entertain Application For Maintainability Of Reference At Conciliation Stage: Orissa High Court

The Orissa High Court single bench of Justice KR Mohapatra held that Micro & Small Enterprises Facilitation Council doesn't have power to entertain an application with regard to the maintainability of the reference at the conciliation stage under Micro, Small And Medium Enterprises Development Act, 2006. It held that question of maintainability can only be adjudicated if arbitration is taken up by the Council. “The question of maintainability can only be adjudicated if arbitration...

MSME Facilitation Council Can't Arbitrate Matters Pertaining To Individual Service Providers Outside The Scope Of MSME Act: Delhi High Court

The Delhi High Court single bench of Justice Prateek Jalan held that the MSME Facilitation Council does not have the jurisdiction to arbitrate matters pertaining to individual service providers who do not fall under the definition of 'supplier' under the MSME Act. The same would be violative of Section 34 of the Arbitration and Conciliation Act, 1996. Brief Facts:The matter pertained to an agreement between the parties which outlined the provision of toll management services by the...