Date:April 7, 2023
MSME Facilitation Council Jurisdiction
Law Article by NB Associates
The MSME Facilitation Council is a statutory body established under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. The primary objective of the MSME Facilitation Council is to facilitate the resolution of disputes between MSMEs and other entities, including other MSMEs, large enterprises, and government agencies. The Council aims to provide a speedy and cost-effective mechanism for dispute resolution.
The MSME Facilitation Council has jurisdiction over disputes related to delayed payments, quality of goods or services, and any other matter arising out of or in connection with the conduct of business. The Council has the power to make recommendations, issue directions, and award compensation to the aggrieved party.
The MSME Facilitation Council has been established at the district level, state level, and national level. The district-level Council is headed by the District Magistrate, while the state-level Council is headed by the Commissioner of Industries. The national-level Council is headed by the Secretary of the Ministry of MSME.
The MSME Facilitation Council has a three-tier structure. The first tier is the conciliation stage, where the parties involved in the dispute attempt to resolve the matter through mutual discussions. If the dispute is not resolved at the conciliation stage, the matter proceeds to the second tier, which is the arbitration stage. The arbitration proceedings are conducted in accordance with the Arbitration and Conciliation Act, 1996. The third tier is the appellate stage, where an aggrieved party can appeal against the award of the arbitrator.
The MSME Facilitation Council has been instrumental in resolving disputes between MSMEs and other entities. The Council has been successful in reducing the number of disputes that go to court, thereby reducing the burden on the judicial system. The Council has also been successful in providing timely and cost-effective resolution of disputes, thereby reducing the financial burden on MSMEs.
The MSME Facilitation Council has also been instrumental in promoting a culture of entrepreneurship and innovation. By providing a mechanism for dispute resolution, the Council has given MSMEs the confidence to engage in business with other entities. This has encouraged MSMEs to innovate and develop new products and services, thereby contributing to the growth and development of the economy.
The territorial jurisdiction of the Micro and Small Enterprises Facilitation Council (MSEFC) is limited to the state or union territory where the supplier (MSME) is located.
For example, if an MSME located in Delhi has a dispute with a buyer located in some other state over delayed payment, the MSME can file a claim with the MSEFC in Delhi.
In conclusion, the MSME Facilitation Council has played a vital role in promoting and supporting MSMEs in India.
The Council has provided a mechanism for the timely and cost-effective resolution of disputes, thereby reducing the financial burden on MSMEs.
The Council has also been instrumental in promoting a culture of entrepreneurship and innovation.
The MSME Facilitation Council is a testament to the government’s commitment to promoting and supporting MSMEs, and its success should inspire other countries to follow suit.