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2022 (7) TMI 1560 - HC - Indian Laws


Issues:
Interpretation of the definition of "supplier" under the Micro, Small and Medium Enterprises Development Act, 2006 for invoking jurisdiction of the Council under section 18.

Analysis:
The judgment dealt with a case where a Company registered under the Companies Act, categorized as a Medium Enterprise, filed an Application under section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 against a small enterprise for payment. The dispute arose when the Micro and Small Enterprises Facilitation Council rejected the Application, stating that the Petitioner, being a Medium Enterprise, could not invoke the Council's jurisdiction under section 18 of the Act. The key contention was whether the Petitioner, as a medium enterprise, could avail the remedy under section 18 of the Act.

The Court analyzed the relevant provisions of the Act, particularly sections 2(n), 17, and 18. It focused on the definition of "supplier" under section 2(n)(iii) of the Act, which includes companies engaged in selling goods produced by micro or small enterprises and providing services by such enterprises. The Court emphasized that the Petitioner, even as a Medium Enterprise, could be considered a "supplier" if it sells goods produced by micro or small enterprises and renders services provided by such enterprises. The Court stressed the need for a harmonious interpretation of sections 2(n)(iii), 17, and 18 to avoid rendering any provision redundant.

The Court highlighted the importance of interpreting statutes literally and giving words their ordinary meaning. It criticized the Council for not considering the definition of "supplier" while concluding that a medium enterprise cannot invoke its jurisdiction under section 18. The Court directed the Council to reassess whether the Petitioner qualifies as a supplier under the Act and decide the matter accordingly. The Court quashed the impugned order and instructed the Council to evaluate the factual circumstances to determine the Petitioner's status as a supplier of goods produced by micro or small enterprises.

Additionally, the Court addressed the Petitioner's concern regarding the lack of an online application facility for micro and small enterprises and advised the Council to consider providing such a facility. The Court disposed of the Writ Petition, making the rule absolute with no order as to costs. The judgment clarified the interpretation of the Act's provisions regarding the eligibility of medium enterprises to seek redressal under section 18 based on their role as suppliers of goods and services produced by micro or small enterprises.

 

 

 

 

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