Rights accrued under MSMED Act when classified as a Small Enterprise must be upheld despite subsequent reclassification as Medium, ensuring fair access to benefits.

THE HONOURABLE MRS. JUSTICE N.MALA W.P.No.14618 of 2025 M/s.Leer Chem India Pvt Ltd., Rep by its Authorized Signatory Mr.P.Prabhakaran, Regd Office No.1A, Old No.96/2, Anna Salai, Nagalkeni, Chrompet, Chennai – 600 044. ... Petitioner vs

1.The Chairperson Micro Small Enterprises Facilitation Council, Chennai Region The Industries Commissioner and Director of Industries and Commerce, Guindy, Chennai – 600 032.

2.The Secretary Micro Small Enterprises Facilitation Council, Chennai Region Regional Joint Director of Industries and Commerce Guindy, Chennai – 600 032.

3.The State of Tamil Nadu Rep by its Principal Secretary Department oF MSME Fort St.George, Chennai – 600 009.

4.M/s.Vision Leather Impex Rep by its Authorized Signatory No.76, New Eidgah Street Melvisharam, Ranipet – 632 401. … Respondents Prayer : Writ Petition is filed under Article 226 of the Constitution of India, praying to issue a Writ of Certiorarified Mandamus to quash the MSEFC order dated 23.02.2024 in MSEFC/CR/317/2023 and directing the Council to re-hear the dispute on merits retaining the petitioner's status as “Small” (for continuing “non-tax benefits” for 3 years from upward change) for the relevant periods, in accordance with the MSMED Act , 2006 and the 2002 notification No.4926(E) dated 18.10.2022.

For Petitioner : M/s.A.Hasika For Respondents : M/s.P.Aishwarya, GA.

O R D E R

This writ petition has been filed to quash the MSEFC order dated 23.02.2024 in MSEFC/CR/317/2023 and directing the Council to re-hear the dispute on merits retaining the petitioner's status as “Small” (for continuing “non-tax benefits” for 3 years from upward change) for the relevant periods, in accordance with the MSMED Act , 2006 and the 2002 notification No.4926(E) dated 18.10.2022.

2. The learned counsel for the petitioner would submit that the Petitioner/M/s.Leer Chem India Pvt Ltd is a Chemical Manufacturer originally registered as “Small Enterprise” under the MSMED Act , 2006, it supplied chemicals to the 4th respondent/M/s.Vision Leather Impex which did not paid, despite repeated reminders. The learned counsel would submit that the petitioner filed its claim (MSEFC/CR/317/2023) with the Micro and Small Enterprises Facilitation Council (MSEFC), it still qualified as a Small Enterprises. However, in the council meeting held on 23.02.2024, the petitioner had been reclassified as “Medium” and solely on this ground, the MSEFC dismissed the claim for lack of jurisdiction. It is further submitted that the application was filed as the petitioner's company was Small and later reclassified as medium unit under section 24 of MSMED Act and further clarified by Government Notification No.S.O.4926(E) dated 18.10.2022, subsequent reclassification does not extinguish the benefits or remedies that arose when an enterprise was still “Small”. Therefore, the petitioner is entitled to proceed before the MSEFC for its unpaid dues and statutory interest.

3. The learned Government Advocate takes notice for the respondents. The learned Government Advocate would submit that since the unit was small at the time of filing the claim before the Micro and Small Enterprises Facilitation Council (MSEFC), which was classified as small enterprises. Subsequently, it has been reclassified as medium enterprises. Hence, the petitioner is not entitled to claim any benefits of MSME rights.

4. Heard the learned counsel for the petitioner and the learned Government Advocate appearing for the respondents and perused the materials available on record.

5. In this case on hand, initially the petitioner's enterprise was small enterprises and thereafter in the Council meeting held on 23.02.2024, the petitioner enterprise had been reclassified as Medium enterprise. Hence, the claim of the petitioner was rejected on the