FAQs about the Micro and Small Enterprise Facilitation Coucil (MSEFC) Portal

FAQs of the HPMSEFC-Delayed Payment Monitoring System

• Q.1 Can Government intervene in the matter of MSEFC?

  Ans : No, only the MSEFCs have been empowered as per MSMED Act, 2006 for taking decisions regarding its reference made with the,. Government does not intervene in the matters of MSEFC and cannot interfere with judicial functioning of MSEFC.

• Q.2 Is filing of Udyam Registration (UR), Mandatory to file applications on HPMSEFC Portal?

  Ans : Yes, Udyam Registration (UR) to file applications online on HPMSEFC Portal.

• Q.3 How can I get Udyam Registration (UR) Number?

  Ans: Registration for Udyam Registration (UR) can be done online on the official website of Ministry of MSME free of cost at following address: https://udyamregistration.gov.in/UdyamRegistration.aspx

• Q.4 Is work order compulsory to file application on HPMSEFC Portal?

  Ans: Yes, work order is compulsory. In case purchase order is oral an affidavit to that effect is to be submitted.

• Q.5 How to upload multiple invoices?

  Ans: 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.

• Q.1 Whether the claim from a supplier engaged in services/trading sector can be admitted by Council?

  Ans: Categories admitted in MSEFCs are in respect of good manufacturing and services rendering sector for which Udyam Registration has been obtained. These categories cannot be challenged by the respondent/buyer.

• Q.2 Whether an appellate court can allow an appeal against Award of Council without depositing of 75% of Award amount? How the amount is released?

  Ans: Application under Section 19 of the MSMED Act, 2006 cannot be entertained by any court. Deposited amount can be released to the applicant as per the directions to the Court.

• Q.3 Is there any legal disqualification, if a case is decided after 90 days as stipulated in the Act?

  Ans: No, it is the act of court for which applicant cannot suffer.

• Q.4 Whether the silence of the buyer after physical receipt of goods can make a claim ineligible for admission by the Council?

  Ans : No. The silence of buyer is confirmation of liabilities upon him.

• Q.5 Whether 90 days period for settlement of claim starts from the date of filing the case or issue of notice to buyer?

  Ans: No. This time period begins only after notice of Arbitration under Section 18(3) of MSMED Act, 2006.

• Q.6 Whether council should deliver a conciliation award after the successful conciliation?

  Ans: Yes, it is called award by mutual consent, it is valid award and buyer cannot make appeal against it.

• Q.7 What are the responsibilities and powers of council members?

  Ans: They are judges having equal power. They should be well-versed in factual aspect of the case before them.

• Q.8 Under administrative exigencies whether the Chairperson can delegate the presiding power to another Subordinate official or another member?

  Ans: No, But the meeting/proceeding can take place, if Coram of three members is complete, members can elect the Chairperson and take further proceedings. It is necessary to mention why Chairperson could not attend the hearing.

• Q.9 Is there any legal disqualification, if a case is decided after 90 days as stipulated in the Act?

  Ans: No. It is the act of court for which applicant cannot suffer.

• Q.10 Whether there is provision for a Member Secretary as council Member and whether he can Act as a Member in case of any exigency?

  Ans: Yes, Member secretary is acting as Registrar of HPMSEFC and judge also when he sits in Council.

• Q.11 Whether a legal notice by the supplier to buyer is necessary before filing the case in the Council?

  Ans: No.

• Q.12 Whether a claim can be filed for interest alone where the claimant has received principal of dues already?

  Ans: Yes.

• Q.13 If there is a false claim from the applicant whether penalty can be imposed by Council?

  Ans: No. The petition is to be rejected summarily.

• Q.14 Whether receivables from buyer such as advance deposit. EMD, Statutory deposits as other than supply of goods and services can be claimed in the claim before the Council?

  Ans:Yes, it includes in the total due amount.

• Q.15 Whether Council should decide on breach of contract between buyer and supplier? Such as rejection of goods for quality deficiencies by buyer as a ground for refusal of dues to supplier?

  Ans : 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.

• Q.16 How the penal interest is calculated whether on monthly or quarterly rests?

  Ans : On a monthly compounding basis.

• Q.17 Is there the power of dissent to a member of Council in the proceedings and insisting on recording in minute?

  Ans: Yes, the member can dissent. It is to be recorded. But majority decision prevails.

• Q.18 Whether the Council has power to review, revise or amend its own award?

  Ans: No.

• Q.19 Whether a Government Department as a buyer can be proceeded against in the Council?

  Ans: Yes.

• Q.20 Whenever a notice is received by Council from an appellate Court to represent as witness. What procedure is to be followed by the Council?

  Ans: The Council is not required to appear in any court as it is only a format party.

• Q.1 What are legal implications for claimant in case of inordinate delay between the pronouncement of judgment and delivery of copies to concerned parties?

  Ans: The date of receipt of the copy of award is only effective date.

• Q.2 If the same or related subject matter is under other court proceedings, whether a claim is admissible in Council?

  Ans: If amount is claimed in the Civil Court, then it cannot be claimed before HPMSEFC.

• Q.3 If an Appellate Court reverts back the case to the Council how it should be dealt with?

  Ans: It is to be decided as per instructions of the Higher Court.

• Q.4 Whether an Award holder from HPMSEFC can gain any preference as creditor in insolvency proceedings?

  Ans: Yes, the Award Holder is considered as a secured creditor.

• Q.5 Whether Council cal deal with criminal offences related to subject matter of claim?

  Ans: No.

• Q.6 Whether the request of any party to have representation by an attorney or any other authorized agent can be allowed by Council? If so what are the conditions to be fulfilled?

  Ans: Yes, By way of irrevocable power of Attorney. His Commitment must be binding upon buyer. Resolution is required for this.

• Q.7 If time is the essence of contract, how the Council should treat the rejection of goods by buyer?

  Ans: 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.

• Q.8 Whether notices can be served by e-mail/SMS/Whattsapp?

  Ans: Yes, Email is legal documents and even Whattsapp.

• Q.9 How many notices are to be served to opposite party if notices are not acknowledgement? What are next steps for declaring ex-parte proceedings?

  Ans: The notice of Council is to be published in daily Newspaper of the area where the Respondent is located, with the orders of Council after 3 notices are issued.

• Q.10 How the Council should react, if the applicant abstains from the proceedings of the Council?

  Ans: It is at the description of the HPMSEFC and it can exercise it own diligence by giving opportunity to the applicant since he has to prove his claim before Council.

• Q.11 Whether a claim against deceased buyer or dissolved company of buyer is maintainable in Council?

  Ans: Deceased buyer is liable through his legal heirs: But dissolved company is always under some authority and claim is maintainable.

• Q.12 How company and partnership entitles can be represented in the proceedings?

  Ans: A company through its M.D. with resolution of Board of Directors and Partnership firms through its Managing Partner/s.

• Q.13 Is it absolutely necessary to have purchase/work order as evidence? Can Council allow secondary and corroborated evidence?

  Ans: No, Acknowledgement on invoice, delivery challans or part payment, email etc. all are accepted.

• Q.14 Whether Members of Council are liable for prosecution if inadvertently an erroneous judgment is delivered by the Council?

  Ans: No, On the contrary they are expected to act without fear and favour.

• Q.15 Whether Chairman has veto power in judging a case?

  Ans: No.

• Q.16 Whether an Award should be with seal of the Council? Who should preserve the original?

  Ans: Original is to be retained by the HPMSEFC and only certified copies to be delivered. Award should bear round seal on every page, Yes.