Delhi High Court Upholds MSME Council's Jurisdiction in Mumbai Dispute.
18 October 2024
MSME (Micro, Small & Medium Enterprises) >> Business & Commercial Law
The petitioner, a New Delhi-based garment manufacturer, filed a writ petition challenging the territorial jurisdiction of the MSME Facilitation Council, Mumbai. The dispute arose from an agreement dated November 15, 2022, between the petitioner and Respondent No. 2, a Mumbai-based entity. The petitioner alleged that Respondent No. 2 failed to fulfill its contractual obligations and initiated proceedings before the MSME Council without addressing counterclaims. The petitioner sought a transfer of proceedings to Delhi, citing logistical convenience, Section 20 of the CPC, and a clause in the agreement allowing concurrent jurisdiction in both cities.
The court, however, dismissed the petition, ruling that Section 18(4) of the MSMED Act overrides the general jurisdictional provisions under CPC. The court noted that the MSME Facilitation Council in Mumbai has jurisdiction since Respondent No. 2, as the supplier, is located within its territory. The court emphasized that the MSMED Act contains a non-obstante clause granting priority to its provisions over other laws. Additionally, the governing law and jurisdiction clause in the agreement permitted proceedings in either Delhi or Mumbai. Accordingly, the petition was found to lack merit and was dismissed.
Micro, Small and Medium Enterprises Development Act, 2006