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Section 19 of MSM Enterprises Development Act, 2006 –

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The petitioner is a GoI enterprise incorporated to promote, aid and foster the growth of Micro, Small and Medium Enterprises in the country.

The petitioner and the respondent no.1 entered into an agreement dated 14.5.2013 under marketing scheme.

Facilitation Council passed the Award on 3.11.2022 in favour of the respondent no.1 on the disputes between the parties.  This was challenged in section 34 AA petition.   In the said petition, the petitioner deposited Rs.50,23,828 which was kept in the fixed deposit.

By the order dated 23.4.2024, the Commercial Court permitted withdrawal of the amount by the respondent no.1.

HELD that the proviso to Section 19 of the MSMED Act, 2006, empowers the Court to release such percentage of deposited amount to the supplier as it considers reasonable under the circumstances of the case subject to such conditions.  The Court has to assign the reasons for releasing such deposited amount.   However, in the instant case, the petition under Section 36 of the AA for stay of the award was also pending and propriety demands that the Commercial Court ought to have dealt with both the applications together.  Moreover, the Commercial Court has not assigned any reason for releasing the whole amount by the petitioner to the respondent no.1.

Order dated 19.6.2024 of the Division Bench of the Telangana High Court in Civil Revision Petition No.1543 of 2024 of the National Small Industries Corporation Ltd NSIC  Vs. M/s. Brahma Teja Paper Products

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