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TMI Blog2022 (4) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 8 and Section 2(n) of the MSME Act. It is admitted position that in the present case the appellant is registered as MSME only on 28.08.2020. Therefore, when the contract was entered into the appellant was not MSME and therefore the parties would not be governed by the MSME Act and the parties shall be governed by the laws of India applicable and/or prevailing at the time of execution of the contract. If that be so the Council would have no jurisdiction to entertain the dispute between the appellant and the Respondent no.1, in exercise of powers under Section 18 of the MSME Act - the order passed by the learned Single Judge confirmed by the Division Bench holding the Council would have no jurisdiction with respect to Respondent No.1 is not required to be interfered with. Thus, with respect to the dispute the appellant and the Respondent No.1 the Council would have no jurisdiction under Section 18 of the MSME Act - appeal dismissed. - CIVIL APPEAL NO.1892 OF 2022 - - - Dated:- 24-3-2022 - M. R. SHAH AND B. V. NAGARATHNA, JJ. JUDGMENT Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court for the State of Telangana at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein got registered under the Micro, Small and Medium Enterprises Act, 2006 (hereinafter referred to as, 'MSME Act') on 28.08.2020. That thereafter the dispute arose between the parties. A legal notice dated 09.09.2020 was sent by the appellant calling upon the respondent to pay the amounts covered by Invoice No. 5 dated 22.06.2020 and Invoice No. 6 dated 07.09.2020 and one another along with damages of ₹ 50 lakhs. In the said notice, the appellants informed that it was registered under the MSME Act. The respondent terminated the Consulting Agreement dated 24.08.2020 vide termination letter dated 22.10.2020. That the appellant herein replied to the termination notice vide reply dated 16.11.2020. That as the dispute arose between the parties, the appellant herein approached the Council on 22.10.2020 which case was registered as Reference No.1581/MSEFC/2020. The appellant prayed for the following reliefs: (a) That the opposite party is liable to pay the petitioner a sum of USD 711,845/equivalent to ₹ 5,21,85,357/towards Invoice No.5 dated 22.6.2020, (b) that the Opposite Party is liable to pay the Petitioner a sum of USD 104,205/equivalent to ₹ 76,26, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case, both, the learned Single Judge as well as the Division Bench of the High Court have erred in holding that the Council has no jurisdiction to entertain the dispute between the appellant and the respondent. 4.1 It is submitted that, both, the learned Single Judge as well as the Division Bench have erred in holding that in the present case as the supplier was outside the territorial jurisdiction of India, considering Section 18 of the MSME Act, the Council has no jurisdiction to entertain a dispute between the supplier located outside the jurisdiction. It is submitted that as such the initial agreement dated 10.02.2020 between the parties was executed at Delhi, the second Agreement dated 24.08.2020 was also executed in New Delhi and the services were rendered by the appellant in India and even the respondent was conducting its business in India through its registered service centres at New Delhi, Mumbai, Kolkata, Bangalore and it had appointed a power of attorney holder/Special Agent who is based in Delhi, to act on his behalf, and therefore the cause of action can be said to have arisen in India and no part of cause of action has arisen in Switzerland, the Council is vest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement the parties to the Agreement shall not be governed by the MSME Act. It is submitted that in the present case the date of contract was 24.08.2020. The appellant herein is registered as MSME on 28.08.2020 i.e. after the execution of the contract on 24.08.2020. It is submitted that as per the Arbitration Agreement the parties shall be governed by the law applicable in India which shall be the law prevailing at the time of the execution of the contract. It is submitted that for that reason also the parties shall not be governed by the MSME Act and therefore the Council would have no jurisdiction to entertain the dispute between the appellant and the Respondent No.1. 6. In rejoinder learned counsel appearing on behalf of the appellant has submitted that as the dispute arose subsequently i.e. subsequent to 28.08.2020 and therefore at the time when the dispute arose the appellant was the registered MSME and therefore, for the dispute between the appellant and the respondent which has arisen subsequent to 28.08.2020, the Council would have jurisdiction. 7. Heard learned counsel for the respective parties at length. 8. The short question which is posed for consideration befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with Section 8 of the MSME Act, the provisions of the MSME Act shall be applicable in case of supplier who has filed a memorandum with the authority referred to in subsection (1) of Section 8. Therefore, the supplier has to be a micro or small enterprise registered as MSME, registered with any of the authority mentioned in sub-section (1) of Section 8 and Section 2(n) of the MSME Act. It is admitted position that in the present case the appellant is registered as MSME only on 28.08.2020. Therefore, when the contract was entered into the appellant was not MSME and therefore the parties would not be governed by the MSME Act and the parties shall be governed by the laws of India applicable and/or prevailing at the time of execution of the contract. If that be so the Council would have no jurisdiction to entertain the dispute between the appellant and the Respondent no.1, in exercise of powers under Section 18 of the MSME Act. Therefore, in the aforesaid peculiar facts and circumstances of the case, more particularly the terms of the Agreement, the order passed by the learned Single Judge confirmed by the Division Bench holding the Council would have no jurisdiction with respect to R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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