Micro, Small and Medium Enterprises Development (Recovery of dues with compound interest)
1. Under Micro, Small and Medium Enterprises Development Act, the National Board for Micro, Small and Medium Enterprises would be established within its head office at New Delhi for examining and making recommendations for promotion and development of Micro, Small and Medium Enterprises.
2. Under the said Micro, Small and Medium Enterprises Development Act, the Government may from time to time for promotion and development and enhancing the competitiveness of such enterprises, upgradation etc., they specify such programs, guidelines, instructions etc.
3. Further, the policies and practices in respect of credit in such enterprises shall be progressive to minimize the incidence of sickness.
4. Under this law any buyer who buys goods or avails any services shall make payment as agreed otherwise within 45 days to the supplier, failing which the buyer shall become liable with compound interest at monthly rest at three times the bank rate notified by RBI.
5. The State Government may establish Micro, Small and Medium Enterprises Facilitation Council.
6. That for recovery of amounts due, any enterprise can make reference to the Facilitation Council then on such references the Council shall conduct Conciliation or shall refer it to Conciliation.
7. If the Conciliation fails, the dispute shall be taken up for Arbitration by Council itself or refer it to Arbitration. The reference shall be decided within 90 days.
8. No application for setting aside any award, order made in such Arbitration shall be entertained by any court unless the Appellant deposits 75% of the Award amount. Out of such amount deposited, the court shall order that such percentage of amount deposited to be paid to the Supplier Enterprise.
9. Under Section 22 of the Act it requires every defaulting buyer should specify unpaid amount with interest in the Annual Statement of accounts. If such buyers violate this provision, they shall be liable to be penalized with fine amounting to Rs. 10,000/-.