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2022 (7) TMI 1560 - HC - Indian LawsRejection of Application by Micro and Small Enterprises Facilitation Council on the ground that the Petitioner is a Medium Enterprise and cannot invoke the Jurisdiction of the Council under section 18 of Micro Small and Medium Enterprises Development Act 2006 - Interpretation of the definition of supplier - HELD THAT - Section 2(n)(iii) 17 and 18 of the Act 2006 will have to be read harmoniously. The provisions in a statute cannot be read in a manner to render a particular provision otiose or superfluous. If it is held that a supplier engaged in selling goods produced by micro or small enterprise and rendering services which are provided by such enterprise cannot invoke the forum provided under section 18 of the Act 2006 then it would be doing violence to section 2(n) read with section 17 and 18(1) of the Act 2006. Reading the provision of section 2(n)(iii) section 17 and 18(1) harmoniously the only irresistible conclusion that can be drawn is that the enterprise other than the Micro and Small Enterprise may also be entitled to take recourse to section 18 of the Act 2006. Provided it is a supplier of the goods produced by the micro or small enterprise and rendering service which are provided by such enterprises. The fundamental rule of construction of the provisions is to read the provision literally i.e. by giving to the words their ordinary and natural meaning. Every provision of the statute has to be construed with reference to the context and other clauses of the Act. The definition of the supplier is precise and unambiguous. The words in the definition of the supplier will have to be expounded in the natural and ordinary sense - Under the impugned order the Council has failed to take into consideration the definition of the term supplier as defined under the Act 2006 and thereby has misdirected itself in holding that a medium enterprise cannot invoke its jurisdiction. The Respondent no.1 was required to consider the definition of supplier as enumerated in section 2(n)(iii) of the Act 2006. Thus it was necessary for the Council to first come to the conclusion whether the Petitioner is a supplier of goods produced by micro or small enterprises and rendering services which are provided by such enterprises. It is only thereafter Council could have arrived at a conclusion of jurisdiction under section 18. The impugned order is quashed and set aside. Council shall consider the factual matrix of the case and if it comes to the conclusion that the Petitioner is a supplier of the goods produced by the micro or small enterprises and rendering services which are provided by such micro and small enterprise then consider the claim of the Petitioner on its own merits - petition disposed off.
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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