Section 18(5) of the Micro, Small and Medium Enterprises Development Act, 2006, which provides for the payment of interest on delayed payments, is mandatory and not merely directory.

HIGH COURT OF JUDICATURE FOR RAJASTHAN

BENCH AT JAIPUR

S.B. Civil Writ Petition No. 18575/2022

M/s Kishna Exports International, A Proprietorship Firm Having

Its Registered Office At G-361, Epip, Riico Industrial Area,

Sitapura, Jaipur- 302022 Through Authorized Signatory Shri

Satyanarayan Tiwari Son Of Late Shri Madan Mohan Sharma,

Age 40 Years, Resident Of 11, Near Community Centre, Opposite

Senior Secondary School, Vatika, Jaipur.

----Petitioner

Versus

1.

Chairman, Rajasthan Micro And Small Enterprises

Facilitation Council, Office Of Commissioner Industries,

Udyog Bhawan, Tilak Marg, C-Scheme, Jaipur-302005.

2.

M/s Dukaan Resources Private Limited, Having Its

Registered Office At 775, Four Storey Raghubir Nagar

Near Vishal Enclave New Delhi, West Delhi-110027

Through Manager.

----Respondents

For Petitioner(s)

:

Mr. Mohit Tantia

For Respondent(s)

:

HON'BLE MR. JUSTICE INDERJEET SINGH

Order

04/01/2023

Heard learned counsel for the petitioner.

Counsel for the petitioner submitted that the issue involved

in this writ petition is covered by the judgment passed by a Co-

ordinate Bench of this Court in S.B. Civil Writ Petition

No.2247/2018, decided on 07.02.2018 wherein this Court has

held as under:-

“Without addressing the question as to

whether Section 18(5) of the Act of 2006

can be construed mandatory or as merely

directory, taken in the context of the Act of

2006, the object and purpose of the Act is

(2 of 2)

[CW-18575/2022]

that MSME’s cannot be suffocated/ derailed

in their businesses by non-payment of

amounts due for goods supplied/ service

rendered within time and payment of

interest is specifically provided for at rates

set out in the event of delay in payment by

the buyer. Resultantly the intent of the Act

of 2006 for expeditious disposal of the

references made to the MSME Facilitation

Council by a micro, small and medium

enterprise is clearly evident. In the instant

case about ten references have been made

as detailed hereinabove by the petitioner-

Company between the years 2012-2015 for

reason of non payment of interest

statutorily provided for reason of delays in

payment of the principal amounts due by

the buyer for goods received and

consumed. Yet as of today in the month of

February 2018 the said references have

not been decided. This situation of pending

references for upto five years is wholly

unreasonable cannot be countenanced as it

is starkly contrary to Section 18(5) of the

Act of 2006.”

In that view of the matter, the MSME Facilitation Council is

directed to dispose of the petitioner’s reference application, after

registration and due notice to the opposite party-if not already

served, within a period of three months from the date of

presentation of a certified of this order.

This writ petition stands disposed of. All the pending

applications also stand disposed of.

(INDERJEET SINGH),J

ANAND TANWAR /93