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Section 18 of MSMED Act – Council has powers to decide question of its jurisdiction

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By the notice dated 4.1.2024, the Nodal Officer of Goa Micro and Small Enterprises Facilitation Council informed that conciliation is not possible and the Council invoked its powers under Section 18(3) of MSMED Act, 2006, to refer the matter for arbitration.

This was challenged in the writ petition on the ground that the Council had no jurisdiction even to entertain the conciliation proceedings on behalf of respondent no.2 and to refer the matter for arbitration.

The petitioner and the respondent no.2 entered the service contract on 1.6.2018 and it was terminated on 20.12.2018.  At the time of contract, the respondent no.2 was not registered under MSMED Act.  The application for registration was made on 17.12.2018, the contract was terminated on 20.12.2018 and there were no services rendered by the respondent no.2 between 17.12.2018 to 20.12.2018.

HELD that the impugned notice shows that it was simple failure report of the Nodal Officer.   There is no provision in the Act that even at the conciliation stage Conciliator or Nodal Officer is not empowered to decide about the jurisdiction to take the matter for conciliation, and then refer to arbitration.   Judgment dated 11.7.2024 in W.P.555 of 2024 (F) (High Court of Bombay at Goa)

 

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