Marine Electricals India Ltd., engaged in the manufacturing of meteorological instruments and other electronic automation equipment, filed a writ petition challenging their exclusion from the Vivad Se Vishwas I-Relief for MSMEs Scheme. The issue arose when the company was denied the scheme's benefits due to reclassification as "not an MSME" in May 2023, even though it was previously classified as a Medium Enterprise. The Bombay High Court ruled that the company was not eligible under the scheme at the time of its claim in February 2024, as it was no longer an MSME. The court upheld the Respondents' decision, citing that eligibility under the VSV Scheme requires the enterprise to be registered as an MSME on the claim date.

1. Introduction and Issue:

• The court addressed whether Marine Electricals India Ltd. could avail benefits under the "Vivad Se Vishwas I-Relief for MSMEs Scheme," despite being reclassified as "not an MSME" after initial registration as a Medium Enterprise.

2. Background of the Case:

• Marine Electricals was registered as a Medium Enterprise under the MSME Act on May 10, 2021.
• The company faced liquidated damages for project delays during the COVID-19 lockdown and sought relief under the VSV Scheme, which offers refunds on such damages.

3. Reclassification and Scheme Eligibility:

• On May 9, 2023, the company was reclassified as "not an MSME."
• The petitioner claimed that per the MSME Notification dated June 26, 2020, as amended in 2022, they should retain the benefits of MSME status for three years post-reclassification.

4. Court's Decision:

• The court held that eligibility for the VSV Scheme required MSME status on the claim date.
• Marine Electricals was not eligible, as it was reclassified before making the claim in February 2024.

5. Conclusion:

• The court dismissed the petition, upholding the government’s decision that Marine Electricals could not benefit from the VSV Scheme due to its status change.