MSME Award Appeal here we mean and discuss Appeal against the order, decree or Award arising out of the statutory arbitration proceeding under MSME Act. There have been challenges to this provision in courts, where the contentions were raised that this provision is not mandatory and there can be deviation by the Appellate court. Thus, the Supreme Court has made it clear that the provision of section 19 of the MSME Act is mandatory in nature..             
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MSME Complaint – MSME Complaint Mechanism


Author- admin
Date:April 1, 2023

MSME Complaint – MSME Complaint Mechanism

Law Articles by NB Associates

Micro, Small and Medium Enterprises (MSMEs) play a significant role in the Indian economy, contributing to employment generation and promoting inclusive growth.

However, MSMEs face various challenges such as lack of access to finance, infrastructure, technology, and market linkages, which affect their growth and sustainability.

In addition to these challenges, MSMEs also face issues related to delayed payments, the quality of goods and services, and disputes with customers and suppliers.

In such situations, MSMEs can file an MSME complaint to seek redressal of their grievances.

This article aims to provide an overview of the MSME complaint mechanism and its significance for MSMEs.

MSME Complaint Mechanism

The MSME complaint mechanism is a grievance redressal mechanism established under the MSMED (Micro, Small and Medium Enterprises Development) Act, 2006, to address the issues faced by MSMEs.

The Act provides for the establishment of Micro and Small Enterprises Facilitation Councils (MSEFCs) at the district and state levels to facilitate the resolution of disputes between MSMEs and their buyers or suppliers.

The MSEFCs are tasked with the responsibility of receiving and examining the complaints filed by MSMEs and their buyers or suppliers, and to pass appropriate orders for their resolution.

The complaints can be filed by MSMEs against buyers or suppliers who have delayed payments or provided sub-standard goods or services, or by buyers or suppliers against MSMEs who have not fulfilled their contractual obligations.

MSME complaint process

The process of filing an MSME complaint involves the following steps:

Filing of the Complaint:

The aggrieved party can file an online complaint through MSME Samadhan.

The aggrieved party can also file the complaint with the MSEFC in the prescribed format.

The complaint should contain details such as the name and address of the parties involved, the nature of the dispute, the amount involved, and any supporting documents.

Examination of the Complaint:

The MSEFC examines the complaint and sends a copy of the same to the other party involved.

The other party is given an opportunity to file a reply to the complaint within a specified time period.

Conciliation:

The MSEFC may initiate conciliation proceedings between the parties to resolve the dispute amicably. If the parties reach a settlement, the same is recorded and signed by both parties.

Arbitration:

If the parties are unable to reach a settlement through conciliation, the MSEFC may refer the matter to arbitration and pass appropriate orders to resolve the dispute.

Significance of MSME Complaint Mechanism

The MSME complaint mechanism is significant for MSMEs for the following reasons.

The MSME complaint mechanism is a significant tool for MSMEs in India to raise their grievances and seek redressal.

Here are some of the key reasons why the MSME complaint mechanism is significant:

Timely Redressal of Grievances:

The MSME complaint mechanism provides MSMEs with a formal platform to raise their grievances and seek redressal.

The mechanism is designed to ensure that the complaints are examined and resolved in a timely and effective manner, thereby preventing any further financial or operational losses to the MSMEs.

This can help MSMEs to maintain their cash flow and avoid any potential bankruptcy or insolvency proceedings.

Protection of MSMEs:

The MSME complaint mechanism provides MSMEs with protection against unfair practices such as delayed payments, sub-standard goods or services, and contractual breaches.

It enables MSMEs to assert their rights and seek justice in situations where they may otherwise feel helpless.

This can help to promote a fair and just business environment, where MSMEs are able to compete on a level playing field with larger companies.

Promotion of Business Confidence:

The MSME complaint mechanism promotes business confidence by creating a level playing field for MSMEs and their buyers or suppliers.

It ensures that disputes are resolved through a fair and transparent process, thereby creating a conducive business environment for MSMEs.

This can help to promote business growth and create more employment opportunities.

Promotion of Ease of Doing Business:

The MSME complaint mechanism is aligned with the government’s objective of promoting ease of doing business in India.

By providing a formal mechanism for redressal of grievances, it enables MSMEs to resolve disputes with their buyers or suppliers in a hassle-free and efficient manner.

This can help to reduce the compliance burden on MSMEs and promote a more business-friendly environment.

Facilitation of MSME Growth:

The MSME complaint mechanism can facilitate the growth of MSMEs by enabling them to focus on their core business activities rather than getting bogged down in disputes with their buyers or suppliers.

It can help to create a more supportive ecosystem for MSMEs, where they can thrive and grow without having to worry about unfair or unethical business practices.

Conclusion

In conclusion, the MSME complaint and MSME complaint mechanism is a crucial tool for MSMEs in India to protect their rights and seek justice in situations where they face unfair or unethical business practices.

It is important for MSMEs to be aware of the mechanism and to use it whenever necessary to ensure their continued growth and success.

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Whether mere notice of conciliation by the MSME facilitation council wipe out the legal defence of limitation?

Whether the condition of a 75% deposit under sec 19 MSME act is mandatory?

Can a deposit of 75% u/s 19 of the MSME Act be in Instalments?

Can the Bank guarantee be accepted as 75% pre-deposit u/s 19 MSME Act?

Law articles on MSME claim – Read more

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Frequently Asked Questions

What is MSME? 

What are the benefits of MSME registration? 

What is the MSME Facilitation council? 

How does MSME Facilitation Council work?

Where can an MSME claim be filed? Jurisdictions

Why is filing of claim before the MSME Facilitation Council beneficial?

Whether Limitation Act applies to claims under MSME Act?

MSME Frequently Asked Questions – Read more

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Read : MSME case Study