MSME Facilitation Council Cannot Assume Civil Court Powers; Reference Cannot Be Rejected On Limitation At Conciliation Stage: HP High Court
The Himachal Pradesh High Court held that a Micro and Small Enterprises Facilitation Council functions within the statutory framework of the MSMED Act, 2006 and cannot equate itself with a civil court. The Court further clarified that the Facilitation Council has no authority to invoke or exercise powers vested in civil courts under Section 9 of the Code of Civil Procedure.Justice Ajay Mohan...
The Himachal Pradesh High Court held that a Micro and Small Enterprises Facilitation Council functions within the statutory framework of the MSMED Act, 2006 and cannot equate itself with a civil court.
The Court further clarified that the Facilitation Council has no authority to invoke or exercise powers vested in civil courts under Section 9 of the Code of Civil Procedure.
Justice Ajay Mohan Goel remarked that: “By no stretch of imagination, the Council constituted under the 2006 Act is comparable to a Civil Court at all. It is just a statutory Council which has to perform the duties which have been encompassed upon it under the provisions of the 2006 Act and it cannot enshrine upon itself the powers which are conferred upon a Civil Court under Section 9 of the Code of Civil Procedure.”
The petitioner, M/s RK Products, a micro/small enterprise, approached the Himachal Pradesh Micro and Small Enterprises Facilitation Council seeking recovery of ₹2,55,96,949 along with interest for delayed payments from the respondent.
However, the Facilitation Council rejected the reference on the ground that it was barred by limitation under Article 137 of the Limitation Act, 1963.
The major issue before the court was whether “a reference filed under Section 18(1) of the MSMED Act can be rejected by the Facilitation Council on the ground of limitation”.
The Court reiterated that limitation act does not apply to conciliation proceedings under Section 18(2) of the MSMED Act, and even time-barred claims can be taken up for conciliation.
Thus, the High Court allowed the writ petition and set aside the Council's order.
Case Name: M/s RK Products through its proprietor Smt. Kusum Mahajan V/s The Chairman Himachal Pradesh
Date of Decision: 29.10.2025
Case No.: CWP No.8072 of 2025
For the Petitioner: Mr.Varun Rana, Advocate.
For the Respondent: Mr. Pranjal Munjal, Advocate for respondent No.2