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CS Executive · Setting Up of Business, Industrial and Labour Laws · Micro, Small and Medium Enterprises

A small supplier located in Coimbatore (Tamil Nadu) has a dispute with a buyer located in Punjab. Which statement about the jurisdiction of the Facilitation Council is correct under the MSMED Act, 2006?

The Council with jurisdiction over the supplier's location can act. Section 18(4) gives the Council or ADR centre jurisdiction in a dispute between a supplier located within its jurisdiction and a buyer located anywhere in India, notwithstanding any other law.

  1. AOnly a Council in Punjab has jurisdiction, as the buyer is located there
  2. BThe dispute must be heard by a Council notified by the Central Government
  3. CThe Council or ADR centre has jurisdiction in a dispute between a supplier located within its jurisdiction and a buyer located anywhere in IndiaCorrect
  4. DThe Council has jurisdiction only if both parties are located within its State

Explanation

Section 18(4) gives the Council or the ADR centre jurisdiction over a dispute between a supplier located within its jurisdiction and a buyer located anywhere in India. So the Tamil Nadu Council can act even though the buyer is in Punjab. Options requiring the buyer's location or both parties in one State contradict this.

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