The jurisdiction of the Micro Small and Medium Enterprises Facilitation Council is determined by the supplier's registered office location, overriding any contractual jurisdiction clauses.

JUDGMENT :

(G.R. Swaminathan, J.)

Heard the learned senior counsel for the appellant and the learned standing counsel for Usilampatti Municipality.

2.This writ appeal is directed against the order dated 01.10.2019 allowing W.P.(MD)No.10002 of 2019 filed by the Commissioner, Usilampatti Municipality by the learned Single Judge.

3.The Commissioner of Usilampatti Municipality and the appellant entered into an agreement on 26.02.2016. It was a solid waste management agreement. The appellant was to supply certain machineries / equipment and install them. Dispute arose between the parties. The appellant who is a registered MSME filed an application under Section 18 of the Micro Small and Medium Enterprise Development Act, 2006 before the Chairman, Micro and Small Enterprises Facilitation Council, Haryana at Chandigarh. The said Facilitation Council issued notice along with Claim Application No.954 of 2019 to the Commissioner, Usilampatti Municipality. The Commissioner, Usilampatti Municipality questioned the said notice on the ground that Micro and Small Enterprises Facilitation Council, Haryana lacks the territorial jurisdiction to entertain the claim lodged by the appellant. The writ petition was allowed vide order dated 01.10.2019 in the following terms:-

“11. In the instant case, the project itself is for supply, delivery and erection of pre-processing unit and refinement unit. There are disputes between the petitioner and the second respondent in respect of quantum of supply, delivery and erection of the unit. Section 15 mandates that the buyer, on completion of supply, shall make payment on or before the date agreed between them. From the peculiar circumstances of the present contract, it could be seen that it is not mere supply of goods, but also coupled with service to be rendered by a supplier. Admittedly, communications reveal that only 80% of supply of goods were made and service was not completed by the supplier. The supplier insists that as per the contract, they are entitled to payment of money on supply of 80% of the materials and 20% on completion of erection of the unit. The very same agreement specifies the jurisdiction of Courts at Chennai. If that being so, Council which is within the jurisdiction of Chennai only will have power to issue notice. The judgment in Fleetguard Filters Private Limited (supra) dealt with a situation where the supplier was situated at Haryana. It is true to state that Section 18(4) overrides the all other laws and confers jurisdiction to the Facilitation Council where the supplier is located. In that case, the supplier was located in Haryana within its jurisdiction. But, in the instant case, it could be seen from the agreement and invoices that the registered office at New Delhi and the Factory at Haryana. The contract entered between the parties and other communications disclose the place of business of the second respondent only at New Delhi. In that view of the matter, the second respondent, having entered into a contract within the State of Tamil Nadu and having registered office at New Delhi, can make reference to the appropriate Micro and Small Enterprises Facilitation Council within these two places. It cannot be at every place, where it has a factory or branch office. Then it will amount to forum shopping. The object of the Act is to promote the Micro, Small and Medium Entrepreneurs. The non obstante clause has been incorporated for the purpose of avoiding delay, to expedite the payment process and to protect the entrepreneurs from protracted litigations and from financial crisis. But it will not entail the supplier to abuse the process, and pressurise the buyer to budge to illegal and exorbitant demands and to run to places of supplier's choice.

12. There shall be limitations for the Council to exercise jurisdiction. The word 'location under Section 18(4) of the Act' means that the place from where the supplier runs his business or in other words, where he has the registered office or