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Section 30: Power of State Government to make rules

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 29 All 32 Sections of MSMED Act Section 31
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Council Sec 2

Legal Commentary & Landmark Judgments: Section 30

Section 30 empowers State Governments to make rules to operationalize the constitution, administration, and adjudicatory procedures of the Micro and Small Enterprises Facilitation Councils (MSEFC).

  • State Subordinate Legislative Competence: Authorizes State Governments to frame rules regulating the administration and function of MSEFCs within their territorial boundaries.
  • Procedural & Quorum Regulation: Under Section 30(2), rules specifically govern the term of office, allowances of MSEFC members, composition of benches, and procedural mechanics of conciliation and arbitration under Section 21.
  • Harmony with Central Legislation: Rules framed by State Governments must operate harmoniously with Chapter V of the MSMED Act and the Arbitration and Conciliation Act, 1996 without diluting mandatory federal statutory safeguards.
Key Landmark Precedents:
  • Gujarat State Civil Supplies Corpn. v. Mahakali Foods (P) Ltd. (2023) 6 SCC 401: The Supreme Court held that state rules framed under Section 30 regulate the procedural mechanics of the Facilitation Council, but cannot curtail the overriding statutory arbitration mandate established under Sections 18 and 32.
  • Secur Industries Ltd. v. Godrej & Boyce Mfg. Co. Ltd. (2004) 3 SCC 447: Affirmed that procedural rules framed by states under delayed payment legislation must yield to the substantive statutory scheme and cannot restrict the jurisdiction of the statutory council.
  • Welspun Corp Ltd. v. MSEFC (2021 SCC OnLine Bom 4488): Invalidated Council orders where the proceedings violated the procedural requirements and quorum provisions notified under the Maharashtra State MSEFC Rules, 2006.
Courtroom Practice & Strategic Litigation Guidance:

Always obtain and study the specific State MSEFC Rules (e.g., Delhi, Maharashtra, Haryana, Tamil Nadu MSEFC Rules) applicable to the reference. Check whether the State Rules prescribe a specific format for filing (such as Form 1), conciliation timelines, or mandatory fee deposits, and exploit non-compliance by the opponent.

Section 29 All 32 Sections of MSMED Act Section 31