15.Liability of buyer to make payment.—Where any supplier supplies any goods or renders any
services to any buyer, the buyer shall make payment therefor on or before the date agreed upon between
him and the supplier in writing or, where there is no agreement in this behalf, before the appointed day:
Provided that in no case the period agreed upon between the supplier and the buyer in writing shall
exceed forty-five days from the day of acceptance or the day of deemed acceptance.
16.Date from which and rate at which interest is payable.—Where any buyer fails to make
payment of the amount to the supplier, as required under section 15, the buyer shall, notwithstanding
anything contained in any agreement between the buyer and the supplier or in any law for the time being
in force, be liable to pay compound interest with monthly rests to the supplier on that amount from the
appointed day or, as the case may be, from the date immediately following the date agreed upon, at three
times of the bank rate notified by the Reserve Bank.
17. Recovery of amount due.—For any goods supplied or services rendered by the supplier, the
buyer shall be liable to pay the amount with interest thereon as provided under section 16.
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18.Reference to Micro and Small EnterprisesFacilitation Council.—(1) Notwithstanding anything
contained in any other law for the time being in force, any party to a dispute may, with regard to any
amount due under section 17, make a reference to the Micro and Small Enterprises Facilitation Council.
(2) On receipt of a reference under sub-section (1), the Council shall either itself conduct conciliation
in the matter or seek the assistance of any institution or centre providing alternate dispute resolution
services by making a reference to such an institution or centre, for conducting conciliation and the
provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to
such a dispute as if the conciliation was initiated under Part III of that Act.
(3) Where the conciliation initiated under sub-section (2) is not successful and stands terminated
without any settlement between the parties, the Council shall either itself take up the dispute for
arbitration or refer ittoany institution or centre providing alternate dispute resolution services for such
arbitration and the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then apply
to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in
sub-section(1) of section 7 of that Act.
(4) Notwithstanding anything contained in any other law for the time being in force, the Micro and
Small Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall
have jurisdiction to act as an Arbitrator or Conciliator under this section in a dispute between the supplier
located within its jurisdiction and a buyer located anywhere in India.
(5) Every reference made under this section shall be decided within a period of ninety days from the
date of making such a reference.
19.Application for setting aside decree, award or order.—No application for setting aside any
decree, award or other order made either by the Council itself or by any institution or centre providing
alternate dispute resolution services to which a reference is made by the Council, shall be entertained by
any court unless the appellant (not being a supplier) has deposited with it seventy-five per cent. of the
amount in terms of the decree, award or, as the case may be, the other order in the manner directed by
such court:
Provided that pending disposal of the application to set aside the decree, award or order, the court
shall order that such percentage of the amount deposited shall be paid to the supplier, as it considers
reasonable under the circumstances of the case, subject to such conditions as it deems necessary to
impose.
20.Establishment of Micro and Small Enterprises Facilitation Council.—The State Government
shall, by notification, establish one or more Micro and Small Enterprises Facilitation Councils, at such
places, exercising such jurisdiction and for such areas, as may be specified in the notification.
21. Composition of Micro and Small Enterprises Facilitation Council.—(1) The Micro and Small
Enterprise Facilitation Council shall consist of not less than three but not more than five members to be
appointed from amongst the following categories, namely:—
(i) Director of Industries, by whatever name called, or any other officer not below the rank of
such Director, in the Department of the State Government having administrative control of the small
scale industries or, as the case may be, micro, small and medium enterprises; and
(ii) one or more office-bearers or representatives of associations of micro or small industry or
enterprises in the State; and
(iii) one or more representatives of banks and financial institutions lending to micro or small
enterprises; or
(iv) one or more persons having special knowledge in the field of industry, finance, law, trade or
commerce.
(2) The person appointed under clause (i) of sub-section (1) shall be the Chairperson of the Micro and
Small Enterprises Facilitation Council.
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(3) The composition of the Micro and Small Enterprises Facilitation Council, the manner of filling
vacancies of its members and the procedure to be followed in the discharge of their functions by the
members shall be such as may be prescribed by the State Government.
22.Requirement to specify unpaid amount with interest in the annual statement of accounts.—
Where any buyer is required to get his annual accounts audited under any law for the time being in force,
such buyer shall furnish the following additional information in his annual statement of accounts,
namely:—
(i)the principal amount and the interest due thereon (to be shown separately) remaining unpaid to
any supplier as at the end of each accounting year;
(ii) the amount of interest paid by the buyer in terms of section 16, along with the amount of the
payment made to the supplier beyond the appointed day during each accounting year;
(iii) the amount of interest due and payable for the period of delay in making payment (which
have been paid but beyond the appointed day during the year) but without adding the interest
specified under this Act;
(iv) the amount of interest accrued and remaining unpaid at the end of each accounting year; and
(v) the amount of further interest remaining due and payable even in the succeeding years, until
such date when the interest dues as above are actually paid to the small enterprise, for the purpose of
disallowance as a deductible expenditure under section 23.
23.Interest not to be allowed as deduction from income.—Notwithstanding anything contained in
the Income-tax Act, 1961 (43 of 1961), the amount of interest payable or paid by any buyer, under or in
accordance with the provisions of this Act, shall not, for the purposes of computation of income under the
Income-tax Act, 1961, be allowed as deduction.
24.Overriding effect.—The provisions of sections 15 to 23 shall have effect notwithstanding
anything inconsistent therewith contained in any other law for the time being in force.
25.Scheme for closure of business of micro, small and medium enterprises.—Notwithstanding
anything contained in any law for the time being in force, the Central Government may, with a view to
facilitating closure of business by a micro, small or medium enterprise, not being a company registered
under the Companies Act, 1956 (1 of 1956), notify a Scheme within one year from the date of
commencement of this Act.