Msme act 2006

shyam (Querist) 04 March 2012 This query is : Resolved
if A is giving a supply contract order to B. A and B are government undertaking establishments, B in turn add 4 private firms as constrium members and given the supply order equally to 4 firms and all the firms are indicated in the purchase order, Now there is a delay in payment in the contract. one of the constrium member say x is now filing delayed payment interest under msme act 2006 with first respondant as B and second respondent as A.
All cheque payments given by A is only to B. Under the circumstances , is it correct whether adding second respondent as A is legally correct?

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Guest (Expert) 05 March 2012
The authorities seem to intend to introduce some corrupt practices just to compel you to pay some bribe to get your bills cleared.

Contract conditions must be providing a clause of time for payment after supply. You can invoke such a clause and put your claim, along with the penalty/interest, accordingly before the authorities.

If there is no such clause, you may include a foot note below your invoice about charging of interest at some appropriate rate specifying some No. of days after which you can claim interest on the amount due. Include the interest amount for the No. of days of delay in each of your subsequent invoce.

When it comes the turn of payment of interest, no officer of the government organisation affords to pay more than the actual invoiced amount and become accountable for responsibility of delayed payment.

prabhakar singh (Expert) 08 March 2012
Provisions to Check Delayed Payments under The Micro Small & Medium Enterprises Development (MSMED) Act 2006 may be understood as follows.

Provisions related to delayed payments to micro & small enterprises (MSEs) strengthened

Period of payment to MSEs by the buyers reduced to forty five days Rate of interest on outstanding amount increased to three times the prevailing bank rate of Reserve Bank of India compounded on monthly basis

MSE Facilitation Council may utilise the services of any Institution or Centre for conciliation and alternate dispute resolution services

Reference made to the Council to be decided within ninety days from the date of reference

Declaration of payment outstanding to MSE supplier mandatory for buyers in their annual statement of accounts

Interest (paid or payable to buyer) disallowed to supplier for deduction for income tax purposes

No appeal against order of Facilitation Council to be entertained by any Court without deposit of 75% of the decreed amount payable by buyer

Appellate Court may order payment of a part of the deposit to the supplier MSE

get in touch of following:
Directorate of Industries and Commerce

District Industries Centers

Regional Joint Directors

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