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

Sunrise Textiles Pvt Ltd, a buyer in Chennai, delays payment to Kavya Handlooms, a micro enterprise supplier located in Jaipur. Kavya wishes to approach a Micro and Small Enterprises Facilitation Council. Under the MSMED Act, 2006, which Council has jurisdiction to act as conciliator or arbitrator in this dispute?

The Council having jurisdiction over the supplier's location, here Jaipur, can act as conciliator or arbitrator. The Act allows it to hear a dispute between a supplier within its jurisdiction and a buyer located anywhere in India, so the buyer's place in Chennai is irrelevant.

  1. AThe Council within whose jurisdiction the supplier, Kavya Handlooms, is locatedCorrect
  2. BThe Council within whose jurisdiction the buyer, Sunrise Textiles, is located
  3. COnly a Council at the place where the goods were delivered
  4. DOnly the Council established by the Central Government in New Delhi

Explanation

Section 18(4) gives the Facilitation Council jurisdiction in a dispute between a supplier located within its jurisdiction and a buyer located anywhere in India. Kavya is in Jaipur, so the Jaipur Council has jurisdiction. The buyer's location in Chennai does not decide the matter, so the second option is wrong.

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