Embedded Files
Reach out to Advocate Prakhar Gupta on WhatsApp for fast legal support and quick guidance.
The Micro, Small and Medium Enterprise Development (MSMED) Act, 2006 creates a specialized legal framework for commercial transactions involving registered MSEs. As an Advocate in Kota with expertise in industrial disputes, I provide legal consultancy and representation for both Suppliers and Buyers appearing before the Micro and Small Enterprise Facilitation Council (MSEFC).
The MSMED Act: Legal Framework for Business
The MSMED Act: Legal Framework for Business
The Act (Sections 15–24) aims to maintain liquidity in the MSME sector by enforcing strict payment timelines. Whether you are a registered unit seeking dues or a corporate entity navigating a reference filed against you, understanding the statutory mandates of the MSEFC is critical for protecting your financial interests.
Statutory Provisions & Compliance
Statutory Provisions & Compliance
Payment Timelines: Under Section 16, payments must be made within the agreed period, not exceeding 45 days from the "day of acceptance."
Compound Interest Obligations: Delayed payments attract a mandatory penal interest at three times the RBI bank rate, compounded monthly.
Time-Bound Proceedings: The Act mandates that the MSEFC resolve references within 90 days through Conciliation and, if necessary, Arbitration.
Appellate Constraints (Section 19): No court shall entertain an appeal against an MSEFC award unless the appellant (buyer) deposits 75% of the awarded amount in court.
Consultation & Representation in Kota
Consultation & Representation in Kota
Navigating the MSME Samadhaan Portal or the MSEFC proceedings requires technical precision regarding interest calculations and the Limitation Act. We provide professional legal assistance for:
Filing and defending references at MSEFC Kota.
Execution of Awards in Civil Courts.
Legal Audits of purchase orders and invoices to ensure MSMED compliance.
MSME Legal FAQs: Insights for Suppliers and Buyers
MSME Legal FAQs: Insights for Suppliers and Buyers
Is Udyam Registration (UR) mandatory for Council jurisdiction?
Is Udyam Registration (UR) mandatory for Council jurisdiction?
Valid Udyam Registration is a prerequisite. The Hon’ble Supreme Court has clarified that registration must exist at the time of the transaction; benefits cannot be claimed retrospectively for invoices raised prior to registration.
What defines the Jurisdiction of a case?
What defines the Jurisdiction of a case?
Jurisdiction is determined by the location of the Supplier. A reference can be filed in the MSEFC of the state where the supplier’s corporate office or unit (as per Udyam Registration) is situated.
Can a claim be filed for interest alone?
Can a claim be filed for interest alone?
Yes. If the principal amount has been paid but was delayed beyond the statutory limit, the supplier is entitled to move the Council for the recovery of the accrued interest.
How is a "Breach of Contract" handled?
How is a "Breach of Contract" handled?
he scope of the MSMED Act is primarily centered on payment delays. While "quality rejection" can be a defense, such rejection must be genuine, documented, and communicated within 15 days of receipt of goods.
How are Awards enforced or challenged?
How are Awards enforced or challenged?
MSEFC Awards are executed under Section 36 of the Arbitration and Conciliation Act, 1996. Challenges to these awards are subject to the Limitation Act and the 75% pre-deposit requirement.
Page updated
Google Sites
Report abuse