The MSME SAMADHAAN – Solution to the Micro and Small Industries on Delayed Payment -Hemant Deshpande

MSME Samadhaan is a Portal created by Office of DC(MSME), Ministry of Micro, Small and Medium Enterprises (MSME) where Micro and Small Enterprises (MSEs) can file their applications online regarding delayed payments.

MSME SAMADHAAN online portal is developed by Ministry of MSME only to facilitate MSEs filing of their applications regarding delayed payments online. The application once filed is forwarded automatically online to the concerned Micro and Small Enterprise Facilitation Council (MSEFC) established by the State/UTs as per the provisions of MSMED-Act 2006. Action on the applications regarding delayed payment is taken by the concerned MSEFC only and not by the Ministry.

Salient Features of MSME Samadhan :

1. Uddyam Registration is mandatory to file applications online on MSME Samadhaan Portal. Uddyam registration is an online process useful for manufacturing and allied services sector. (No Govt. Fees).
2. MSME Samadhaan Portal has been created only to facilitate online applications regarding delayed payments. Physical applications can also be filed at the concerned MSEFC.
3. These applications are converted into Petition/Claim case by the concerned MSEFC.
4. After submission, the application is automatically forwarded online to concern MSEFC. Therefore, concerned MSEFC is to be contacted after filing the application online on MSME Samadhaan Portal. The contact address of concerned MSEFC is mentioned on the acknowledgement sent on the registered email of the applicant.
5. Work order is compulsory. In case purchase order is verbal, an affidavit to that effect is to be submitted.
6. Multiple invoices can be combined into single PDF and can be uploaded. The affidavit of oral purchase order is to be included in single PDF.
7. Categories admitted in MSEFCs are in respect of goods manufacturing and service rendering sector for which Uddyam has been obtained. The Services/trading sector categories cannot be challenged by the respondent/buyer under this mode.
8. Non-response from the buyer indicates confirmation of liabilities upon him.
9. The time period of 90 days begins only after notice of Arbitration under Section 18(3) of MSMED Act, 2006.
10. It is called award by mutual consent. It is valid award and buyer cannot make appeal against it.
11. A legal notice by the supplier to buyer is NOT necessary before filling the case in the Council.
12. Only the claim under Section 6 of “Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertaking Act, 1993”, if pending, before IFC or Civil Courts, they can be considered. However, to approach the MSEFC, liberty of court is to be obtained on earlier claims.
13. The receivables from buyer such as advance deposit, Earnest Money Deposit, Statutory deposits as other than supply of goods and services can be claimed in the claim before the Council.
14. Breach of contract is not within scope of MSMED Act, 2006. Rejection of goods should be genuine within 15 days of the receipt of goods and its immediate communication to supplier.
15. The penal interest is calculated on monthly compounded basis.
16. State Government under Section 20 of MSMED Act, 2006, is empowered to constitute additional Councils.
17. Procedure is carried out under Section 36 of Arbitration and Conciliation Act, 1996.
18. A Government Department as a buyer can also be proceeded against in the Council.
19. The MSFC Council is not required to appear in any court as it is only a formal party.

Procedural :

1. If amount is claimed in the Civil Court, then it cannot be claimed before MSEFC.
2. If an Appellate Court reverts back the case to the Council it should be decided as per instructions of the Higher Court.
3. Supplier sleeping over his legal rights for longer period cannot get assistance of Council.
4. The time is the essence of contract – The MSMED Act, 2006 is set in motion after supplies of goods and services made by supplier and buyer accepts them but does not pay the bill within 45 days.
5. The claim should be submitted in hard copy also. (Duly signed and verified)
6. The order is binding on foreign buyer as well. When the supplier is a micro or small enterprises and agreement is made between Micro/ Small Enterprises in India, Goods are purchased /taken by foreign buyer and he returns to his country without making payment. Under these circumstances, matter can be filed before the Council. After following due procedure of law, the Council can issue award and same could be sent to both Consulates i.e. Foreign buyers Consulate in that country. It can be enforced.
7. The Claim preparation is the responsibility of the claimant.(Advisable to get it certified by C.A.)
8. Deceased buyer is liable through his legal heirs, but dissolved company is always under some authority and claim is maintainable.
9. A Company through its M.D. with resolution of Board of Directors and Partnership firms through its Managing Partner/s can appear.
10. It is absolutely not necessary to have purchase/work order as evidence – Acknowledgement on invoice, delivery challans or part payment, email etc. all are accepted.

MSME Samadhan is one of the best tools that have been devised for the Micro and Small Entrepreneurs by the Government i.e. to deal with the Cash Crunch and with notorious buyers.