The Kerala High Court has directed the Micro and Small Enterprise Facilitation Council to dispose of a pending claim petition within three months after conciliation proceedings failed. The Court emphasized the need for expeditious resolution of disputes under the MSME framework.
Background & Facts
The Genesis
The petitioner, Gain Infosystems Pvt. Ltd., is a registered Micro, Small and Medium Enterprise (MSME) under the Udyam Registration system with a certificate dated 31.08.2021. The petitioner entered into a purchase agreement with a buyer for the supply of IT services, evidenced by a purchase order dated 15.11.2024 and a GST invoice dated 28.12.2024.
The Dispute
The petitioner filed a claim petition (OA No. 6/2025) before the 1st respondent, the Micro and Small Enterprise Facilitation Council, Thiruvananthapuram, seeking recovery of the outstanding amount due under the purchase order. The petitioner alleged that despite repeated follow-ups, the buyer had not settled the payment, prompting the filing of the claim petition.
Procedural History
- 26.11.2025: The petitioner received an email from the MSME portal intimating the filing diary number for the claim petition.
- 12.06.2026: The writ petition (WP(C) No. 13882 of 2026) was listed before the Kerala High Court, which directed the Registry to obtain a status report on the pending claim petition.
- 27.06.2026: During conciliation proceedings, the respondent undertook to clear the amount within one week.
- 15.07.2026: The Registry submitted a report stating that the conciliation had failed and no payment had been made.
Relief Sought
The petitioner sought a writ of mandamus directing the 1st respondent to consider and dispose of the claim petition (Ext.P5) within a fixed time frame.
The Legal Issue
The central question was whether the Kerala High Court could intervene to direct the MSME Facilitation Council to dispose of a pending claim petition within a specific time frame, given the failure of conciliation proceedings.
Arguments Presented
For the Petitioner
The petitioner’s counsel argued that the claim petition had been pending for an inordinate length of time, causing undue hardship. The petitioner relied on the statutory mandate under the Micro, Small and Medium Enterprises Development Act, 2006 to ensure expeditious resolution of disputes involving MSMEs.
For the Respondent
The learned Government Pleader appearing for the 2nd respondent (Directorate of Industries & Commerce) did not contest the relief sought. There was no representation for the 1st respondent (MSME Facilitation Council).
The Court's Analysis
The Court noted that the petitioner had exhausted the conciliation process, which had failed to resolve the dispute. The Court observed that the MSME Facilitation Council is statutorily mandated to dispose of such claims expeditiously. The Court relied on the principle that writ jurisdiction under Article 226 of the Constitution of India can be invoked to ensure that statutory bodies discharge their duties without undue delay.
The Court acknowledged the Registry’s report, which confirmed the failure of conciliation and the non-payment of the amount. The Court emphasized that the MSME framework is designed to protect the interests of small enterprises, and delays in disposal of claims defeat the very purpose of the legislation.
"In the light of the submissions made at the Bar and considering the facts and circumstances of this case, without delving into the merits of the matter, this writ petition is disposed of directing the 1st respondent to finally decide Ext.P5 claim petition as per law, within a period of three months from the date of receipt of a copy of this judgment."
The Verdict
The petitioner succeeded in part. The Kerala High Court directed the 1st respondent, the Micro and Small Enterprise Facilitation Council, to dispose of the claim petition (Ext.P5) within three months from the date of receipt of the judgment. The Court did not adjudicate on the merits of the claim but ensured expeditious disposal.
What This Means For Similar Cases
Statutory Timelines Are Mandatory
- The judgment underscores that statutory bodies like the MSME Facilitation Council must adhere to prescribed timelines for dispute resolution.
- Delays in disposal of claims under the MSME framework are not acceptable and can be remedied through writ jurisdiction.
Conciliation Failure Triggers Writ Jurisdiction
- Once conciliation proceedings fail, MSMEs can approach the High Court for a mandamus to ensure timely disposal of their claims.
- The Court’s intervention is not based on the merits of the claim but on the failure of the statutory body to act within a reasonable time.
Writ Jurisdiction as a Remedy for MSMEs
- The judgment reinforces the role of Article 226 as a tool for MSMEs to seek expeditious resolution of disputes.
- Practitioners should note that writ petitions for mandamus are maintainable where statutory bodies fail to discharge their duties, even in the absence of a specific statutory timeline.
