Case Note & Summary
The petitioners, Maharashtra State Electricity Distribution Company Limited and others, successors of the erstwhile Maharashtra State Electricity Board (MSEB), challenged an award passed by the Micro and Small Enterprises Facilitation Council, Konkan Division, Thane under Section 18(3) of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). The respondent, M/s Deltron Electronics, a small scale enterprise registered under the MSMED Act, had supplied transformers against purchase orders placed between 1 August 1994 and 10 October 2000. The contract stipulated payment within 60 days from receipt of materials. The respondent supplied materials and received payment for the principal amounts but later, by letter dated 9 June 2004, claimed interest on delayed payments totaling Rs.83,54,695/-. The petitioners refused to pay. On 21 September 2005, the respondent filed a reference before the Industries Facilitation Council under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, which was later deemed to be under the MSMED Act. The council awarded interest. The petitioners challenged the award on the ground that the reference was barred by limitation under the Limitation Act, 1963. The court considered whether the Limitation Act applies to references under Section 18(3) of the MSMED Act. The court held that the MSMED Act is a complete code and the Limitation Act does not apply, as the Act provides its own limitation period of three years from the date of cause of action under Section 24 read with Section 18(3). The court found that the reference was filed within three years from the date of the respondent's letter claiming interest (9 June 2004) and thus was not barred. The court dismissed the petition and upheld the award.
Headnote
A) Limitation Act - Applicability to MSMED Act - Section 18(3) Micro, Small and Medium Enterprises Development Act, 2006 - The court considered whether the Limitation Act, 1963 applies to references under Section 18(3) of the MSMED Act. The court held that the MSMED Act is a complete code and the Limitation Act does not apply to such references, as the Act provides its own limitation period of three years from the date of cause of action under Section 24 read with Section 18(3). (Paras 4-10) B) Micro, Small and Medium Enterprises Development Act - Interest on Delayed Payments - Section 15, 16, 18(3) - The respondent claimed interest on delayed payments for supplies made between 1994 and 2000. The Facilitation Council awarded interest. The court upheld the award, finding that the claim was not barred by limitation and that the council had jurisdiction. (Paras 2-3, 11-12)
Issue of Consideration
Whether the reference filed by the respondent under Section 18(3) of the Micro, Small and Medium Enterprises Development Act, 2006 was barred by limitation under the Limitation Act, 1963.
Final Decision
The court dismissed the arbitration petition and upheld the award of the Facilitation Council, holding that the reference was not barred by limitation.
Law Points
- Interest on delayed payments
- Limitation Act not applicable to MSMED Act references
- Micro and Small Enterprises Facilitation Council jurisdiction
- Complete code principle
- Section 18(3) MSMED Act
