Imposition Of Three Times Bank Interest By MSME Facilitation Council Is Violation Of Principles Of Reasonableness And Fairness: Madras High Court

MSMED Act | Imposition Of Three Times Bank Interest By MSME Facilitation Council Is Violation Of Principles Of Reasonableness And Fairness: Madras High Court

Case Title: M/s Bagalkot Cement & Industries Ltd vs The Chairperson, Micro Small and Medium Enterprises and Anr.

Citation: 2024 LiveLaw (Mad) 144

The Madras High Court single bench of Justice R. N. Manjula held that the imposition of three times of the bank rate of interest on the award amount by the Micro Small and Medium Enterprises, Facilitation Council is violation of fundamental principles of reasonableness and fairness. It held that the Petitioner is indirectly deprived of his appeal remedy in view of such high rate of interest.The High Court emphasized the importance of ensuring that the right to challenge the award remains realistic and accessible. It criticized the imposition of excessive interest, which effectively closes the door to challenging the award, thereby indirectly depriving the petitioner of their appeal remedy. The High Court condemned such actions as contrary to the fundamental principles of justice