Supreme Court Dismisses Plea Seeking Inclusion Of Advocates Under Msme Act, 2006

KEY TAKEAWAYS

The Supreme Court dismissed an appeal seeking the inclusion of Advocates under the definition of ‘profession’ under the Micro, Small and Medium Enterprises Development Act, 2006, on Friday. Petitioner Abhijit Mishra, a legal aspirant, had filed a PIL before the Delhi High Court, seeking inclusion of advocates under the welfare schemes provided by the MSME Act. The High Court, however, refused to consider the appeal as a Public Interest Litigation, stating that such a PIL can only be entertained if the affected persons are unable to access courts.

The Delhi High Court observed that advocates are capable enough to approach courts in case of any grievances, and when approached, the Court would take a decision on the basis of legality, and rules and regulations applicable to the facts and circumstances of the case. The High Court however dismissed the review petition emphasising on the lack of apparent error on the face of record in its previous order.

AMBIT OF MSME ACT, 2006

The MSME sector of India contributed to about 45% of the country’s total industrial employment, 50% of India’s total exports, and 95% of all industrial units of the country, along with manufacturing over 6000 types of products through these industries. The MSME Act came into operation on October 2, 2006, in order to promote, facilitate and develop the competitiveness of micro, small and medium enterprises.

The MSME classification is based on the criteria of investment in the plant and machinery. Therefore, to seek MSME benefits, the enterprises ought to limit their investment to a comparatively lower limit. The manufacturing & services sectors with investments less than Rs. 1 crore and turnover less than Rs. 5 crores come under Micro enterprises, with less than Rs. 10 crore investments and turnover up to Rs. 50 crores under Small enterprises, and less than Rs. 50 crore investments and turnover up to Rs. 250 crores fall under Medium enterprises.

However, the lower limits within each of these categories limit the scope of growth these enterprises as they are unable to scale their businesses further. Further, there has been a long-pending demand for the revision of MSME categorisation to further expand their operations while continuing to avail MSME benefits.

Due to MSME registrations, bank loans are cheaper and easier to avail as the interest rate is as minimal as 1-1.5%, which is much lower than rates on regular loans. It also allows credit for minimum alternate tax (MAT) to be extended to up to 15 years instead of 10. The expenditure of setting up the industry and obtaining a patent also reduces due to the rebates and concessions provided once registered. It also provided for a one-time settlement fee for non-paid amounts of MSME. MSME registration also provides with assistance to acquire government tenders with ease as the Udyam Registration Portal is integrated with the Government e-Marketplace and various other State government portals, that provide easy access to their marketplace and e-tenders. 

The Ministry of MSME mainly works towards the welfare of artisans and workers, provides credit limit or funding support from banks, along with promoting entrepreneurship development and skill upgradation through specialised training centres. It also supports technology upgradation, infrastructural development and modernisation, and offers assistance for improved access to domestic and export markets, while providing modern testing facilities and quality certification and support to packaging and product development and design intervention. 

MSMEs produce and manufacture a wide range of products for domestic and international markets. They help in the promotion of growth and development of khadi, village and coir industries, in cooperation with concerned ministries, state government and stakeholders. It was launched to become an integral part of the supply chain for products and services and to become a creator of a large-scale employment opportunities in rural India. MSMEs continue to contribute to about 8% of India’s GSP, providing employments to over 60 million people with an enormous share of 40% in the exports market and 45% in the manufacturing sector. 

CONCLUSION

The three-judge bench of the Supreme Court consisting of Chief Justice S.A. Bobde, Justice Bopanna and Justice Ramasubramaniam, however, issued directives on entertaining the petitioner’s contention to the Delhi High Court refusing the consider the petition seeking the inclusion of Advocates under the definition of ‘professionals’ under the Act.

Observing the objective of the MSME Act, it seems valid that advocates do not fall under the scope of ‘professionals’ as defined in the act, as the aim of the Act is to promote and provide assistance and ease to those who are unable to access courts and funds for the growth of their businesses.

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