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

Sharma Fabricators, a micro enterprise in Pune, has an unpaid bill from a buyer in Chennai and wants to refer the dispute to a Micro and Small Enterprises Facilitation Council. Under the MSMED Act, 2006, which Council has jurisdiction to act as arbitrator or conciliator in this dispute?

The Facilitation Council within whose jurisdiction the supplier is located has jurisdiction, and the buyer may be located anywhere in India. Section 18(4) ties jurisdiction to the supplier's location, so the supplier's local Council can handle the dispute.

  1. AOnly the Council in Tamil Nadu, where the buyer is located
  2. BThe Council within whose jurisdiction the supplier is located, even though the buyer is elsewhere in IndiaCorrect
  3. COnly the Council at the national level in New Delhi
  4. DAny Council chosen jointly by the buyer and supplier, regardless of the supplier's location

Explanation

Section 18(4) gives the Council or the ADR centre jurisdiction in a dispute between a supplier located within its jurisdiction and a buyer located anywhere in India. So Pune's Council can act. The Chennai option wrongly bases jurisdiction on the buyer's location.

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