[MSMED Act] Statutory Authority Can Only Entertain Dispute If Supplier Was Registered Under The Act During Relevant Period: Madras HC
The Madras High Court recently ruled that the statutory authority under the Micro, Small, Medium, Enterprises Development Act, 2006 would have jurisdiction to entertain disputes only when the supplier had been registered under the Act at the relevant point of time.
Justice K Kumaresh Babu thus allowed an application filed by Swiss Garniers Genexiaa Sciences Pvt Ltd to waive off the requirement to pay 75% pre-deposit amount under Section 19 of the Act.
“..having been prima facie satisfied with the claim made by the petitioner that the statutory authority under the MSMED Act, 2006 would only have the jurisdiction to entertain a dispute when the supplier had been registered under the MSMED Act, 2006 at that relevant point of time, I am inclined to order these applications as prayed for,” the court said.
Swiss Garniers had contended that the purchase orders related to the year 2016-17 during which time the respondent Avant Garde was not a supplier registered under the MSMED Act. The petitioner informed the court that the respondent had only registered themselves under the Act in 2018 and thus the reference to the statutory authority as per the Act was bad in law as it did not have jurisdiction. The petitioner also relied upon judgments of the Supreme Court to argue that for initiation of arbitration proceedings under the Act, the claimant should have been registered under the Act during the relevant point of time.
Per contra, the respondent argued that the statutory authority under the Act had jurisdiction to deal with the disputes. The respondent also argued that the present petition moved before the High Court was not maintainable as the statutory arbitration was available to the parties under the Act.
The court, however, agreed with the petitioner and noted that since the respondent was not registered under the Act during the relevant point of time, the statutory authority did not have jurisdiction to deal with the issue.
Counsel for the Petitioner: Mr.Sricharan Rangarajan, Senior Counsel for Ms.Krithika Jaganathan
Counsel for the Respondents: Mr.P.V.Balasubramanian, for Mr.J.Lenin
Citation: 2024 LiveLaw (Mad) 350
Case Title: Swiss Garniers Genexiaa Sciences Pvt Ltd v. Avant Garde Healthcare and Engg Solutions Pvt Ltd
Case No: A.Nos.2059 & 2060 of 2024