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CS Professional · Arbitration, Mediation and Conciliation · Introduction to Conciliation and its Importance for MSMEs

A buyer, Shree Auto Ltd, objects that a reference by supplier Nanda Engineering to the MSE Facilitation Council is invalid because the buyer itself did not join in making it. Under Section 18(1) of the MSMED Act, what is the correct response?

The objection fails. Under Section 18(1), any party to a dispute may make a reference to the Council for an amount due under section 17, notwithstanding any other law, so the supplier can refer alone without the buyer's joining.

  1. AThe objection succeeds because both parties must jointly make the reference
  2. BThe objection succeeds because only the buyer may refer disputes
  3. CThe objection fails because any party to a dispute may make a reference regarding an amount due under section 17Correct
  4. DThe objection fails only if the amount is above a prescribed limit

Explanation

Section 18(1) allows any party to a dispute, notwithstanding any other law, to make a reference with regard to any amount due under section 17. A joint reference is therefore not required. The provision overrides other laws, so the absence of the buyer's participation does not invalidate the reference.

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