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Section 24: Overriding effect of Chapter V

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

MSME Law
3x Compound Interest
MSEFC Facilitation Council
Act 27 of 2006
Section 23 All 32 Sections of MSMED Act Section 25
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Legal Commentary & Landmark Judgments: Section 24

Section 24 of the MSMED Act gives overriding effect to the provisions of Sections 15 to 23 over any inconsistent provision in any other law or contractual instrument.

  • Core Legal Standard: Section 24 contains an expansive non-obstante clause providing that Sections 15 to 23 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.
  • Procedural Mechanism: This supremacy clause elevates the recovery and interest framework of Chapter V above conflicting general statutes, such as the Arbitration and Conciliation Act, 1996, the Indian Contract Act, 1872, or the Code of Civil Procedure, 1908, ensuring that special protective welfare measures for MSMEs cannot be circumvented by legal sophistry or unequal bargaining power.
Key Landmark Precedents:
  • Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd. (2023) 6 SCC 401: The Supreme Court ruled that Section 24 provides unequivocal supremacy to the dispute resolution mechanism under Section 18, ensuring that private arbitration agreements must yield to statutory arbitration before the MSEFC.
  • Silpi Industries v. Kerala State Transport Corporation (2021) 18 SCC 790: The Supreme Court reiterated that by virtue of Section 24, the special statutory provisions governing recovery, interest, and pre-deposit override all inconsistent general laws.
Legal Commentary:

Section 24 is the constitutional bedrock of MSME legal protection. It ensures that standard form boilerplate clauses in government tenders or corporate procurement contracts—such as clauses prohibiting interest or forcing arbitration in distant jurisdictions—are rendered null and void to the extent of their inconsistency with Chapter V.

Section 23 All 32 Sections of MSMED Act Section 25