Case Note & Summary
The petitioner, Gujarat State Petronet Ltd., a company incorporated under the Companies Act, 1956 with its registered office in Gandhinagar, Gujarat, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court. The petitioner challenged an order dated 29th April 2015 passed by the Micro and Small Enterprises Facilitation Council, Konkan Division (Respondent No.1) in Petition No.39A/2011. The respondent No.3, Krunal Engineering Works, a sole proprietary concern based in Thane, Maharashtra, had filed a reference under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) before the Council seeking recovery of certain amounts from the petitioner. The petitioner contended that the Council lacked territorial jurisdiction to entertain the reference as the petitioner's registered office was in Gujarat, outside the territorial limits of the Konkan Division. The Court heard arguments from Mr. Marwendra Kane for the petitioner, Mr. Suhas M. Oak for respondent No.3, and Mr. A. P. Vanarse for the State. The Court examined the provisions of the MSMED Act, particularly Section 18, and noted that the Act does not confer extra-territorial jurisdiction on the Facilitation Councils. The Court held that the Council's jurisdiction is limited to its territorial area and cannot extend to buyers located outside that area. Since the petitioner's registered office was in Gandhinagar, Gujarat, the Council at Konkan Division had no jurisdiction to entertain the reference. Consequently, the impugned order was quashed and set aside. The Court also noted that the petitioner had not participated in the proceedings before the Council and had raised the jurisdictional issue at the earliest opportunity. The writ petition was allowed, and the rule was made absolute.
Headnote
A) Micro, Small and Medium Enterprises Development Act, 2006 - Jurisdiction of Facilitation Council - Territorial Limits - Section 18 - The Micro and Small Enterprises Facilitation Council, Konkan Division lacked jurisdiction to entertain a reference under Section 18 of the MSMED Act, 2006 against a buyer whose registered office is in Gandhinagar, Gujarat, outside the territorial limits of the Council. The Court held that the Council's jurisdiction is confined to its territorial area and cannot extend to buyers located elsewhere. (Paras 2-10) B) Constitutional Law - Writ of Certiorari - Article 226 of Constitution of India - Quashing of Order - The High Court under Article 226 can quash an order passed by a statutory authority without jurisdiction. The impugned order dated 29th April 2015 passed by Respondent No.1 was quashed and set aside as it was without jurisdiction. (Paras 3, 10)
Issue of Consideration
Whether the Micro and Small Enterprises Facilitation Council, Konkan Division had jurisdiction to entertain a reference under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 when the buyer (petitioner) is located outside its territorial jurisdiction.
Final Decision
The impugned order dated 29th April 2015 passed by Respondent No.1 in Petition No.39A/2011 is quashed and set aside. The writ petition is allowed. Rule is made absolute.
Law Points
- Jurisdiction of Micro and Small Enterprises Facilitation Council
- Territorial jurisdiction under MSMED Act
- 2006
- Section 18 of MSMED Act
- Article 226 of Constitution of India
- Writ of Certiorari
