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Section 14: Administration and utilisation of National Fund

Micro, Small and Medium Enterprises Development Act, 2006 • Official Statutory Text & Practice Guide

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Section 13 All 32 Sections of MSMED Act Section 15
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Legal Commentary & Landmark Judgments: Section 14

Section 14 regulates the administrative management, accounting procedures, and mandatory statutory audit by the Comptroller and Auditor-General of India (CAG) of all funds established under the MSMED Act.

  • Meticulous Accounts Maintenance: Mandates maintenance of proper accounts and financial records by fund administrators in formats prescribed in consultation with the CAG.
  • Compulsory CAG Audit: Directs that fund accounts be audited annually by the Comptroller and Auditor-General of India at prescribed intervals.
  • Parliamentary Accountability: The audited accounts, together with the CAG audit report, must be laid annually before each House of Parliament under Section 14(4).
Key Landmark Precedents:
  • Arvind Gupta v. Union of India (2013) 1 SCC 393: The Supreme Court held that the constitutional audit mandate of the CAG under Article 149 extends to statutory funds and bodies to ensure public accountability and fiscal transparency.
  • Centre for Public Interest Litigation v. Union of India (2012) 3 SCC 1: Affirmed that audit reports submitted by CAG pursuant to statutory mandates serve as vital institutional instruments of financial scrutiny and public integrity.
Courtroom Practice & Strategic Litigation Guidance:

When seeking discovery or cross-examining state authorities regarding the under-allocation or diversion of MSME developmental funds, summon the CAG audit reports laid before Parliament under Section 14 to prove statutory non-compliance.

Section 13 All 32 Sections of MSMED Act Section 15