Topic
The MSMED Act governs dispute resolution for micro, small, and medium enterprises in India, ensuring timely payment and providing a statutory forum through Micro and Small Enterprises Facilitation Councils.
The Madras HC ruled that a writ petition under Article 226 cannot challenge an MSMED Council award under Section 18 after a failed Section 34 petition, as Section 37 appeal is the exclusive remedy. The court barred the party from approbating and reprobating on the award's nature.
The Calcutta High Court ruled that an exclusive jurisdiction clause in the arbitration agreement overrides the statutory venue of the West Bengal Micro Small Enterprises Facilitation Council for post-award extensions under Section 29A. This decision limits parties’ ability to seek extensions at the WBMSEFC, reinforcing the primacy of contractual forum selection in MSME arbitrations.
ITAT Mumbai rules that discounts and margins earned by pharmaceutical distributors on resale are trading income, not commission, exempting them from TDS under Section 194H. This clarifies a widespread industry practice and shields distributors from wrongful TDS demands, impacting thousands of pharma supply chain entities nationwide.
Madras High Court reinforces that statutory remedies under Section 34 of the Arbitration Act, coupled with the 75% pre-deposit requirement under Section 19 of the MSMED Act, are exclusive. Writ jurisdiction under Article 226 cannot bypass these conditions, even if conciliation procedures are allegedly flawed.
The Delhi High Court holds that invoking Section 11(6) of the Arbitration Act for arbitrator appointment under the MSMED Act is barred unless the MSEFC has formally concluded conciliation proceedings. This prevents parties from bypassing mandatory conciliation and reinforces the statutory hierarchy, directly impacting MSMEs seeking faster dispute resolution without procedural shortcuts.
The Bombay High Court has held that registration under the MSMED Act does not bar MSMEs from pursuing ad hoc arbitration under the Arbitration and Conciliation Act, 1996. Section 18's remedy is discretionary, not mandatory, empowering businesses to choose faster dispute resolution without forfeiting substantive rights under contract law.
Bombay High Court holds that writ petitions under Article 226 cannot be invoked to bypass mandatory pre-deposit under Section 19 of the MSMED Act, reinforcing exhaustion of statutory remedies.
Delhi High Court holds that MSMED Act overrides private arbitration agreements; jurisdiction vests in Facilitation Council where supplier is located, not as per contract.
Madras High Court holds that Arbitral Tribunals under MSMED Act lack jurisdiction over composite works contracts involving erection and commissioning, setting aside award.