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Section 4: Removal of member from Board

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 3 All 32 Sections of MSMED Act Section 5
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Board Sec 2

Legal Commentary & Landmark Judgments: Section 4

Section 4 delineates the comprehensive multi-stakeholder composition of the National Board for Micro, Small and Medium Enterprises, ensuring democratic representation across legislative, ministerial, financial, and industrial sectors.

  • Executive & Ministerial Leadership: Chaired ex officio by the Union Minister in charge of MSME, with the Minister of State or Deputy Minister serving as Vice-Chairperson.
  • Legislative & Institutional Representation: Comprises three Members of Parliament (two elected by Lok Sabha, one by Rajya Sabha), Secretaries to the Government of India handling commerce, finance, corporate affairs, and industry, and representatives from RBI, SIDBI, and NABARD.
  • Sectoral & Grassroots Industry Stakeholders: Mandates inclusion of state government representatives, apex industry chambers, women entrepreneur associations, and representatives of micro and village enterprises to ensure decentralized economic inputs.
Key Landmark Precedents:
  • State of Haryana v. Subash Chander Marwaha (1973) 2 SCC 872: Reaffirmed the constitutional principle that statutory consultative bodies with multi-stakeholder composition cannot have their executive recommendations directly enforced as mandamus unless formally adopted by the executive.
  • Bharat Forge Ltd. v. Union of India (2014 SCC OnLine Del 3121): The High Court observed that the broad representation prescribed under Section 4 reflects the legislative purpose of ensuring that financial and industrial policy is not framed in isolation from small enterprise realities.
Courtroom Practice & Strategic Litigation Guidance:

When challenging executive notifications altering MSME procurement or threshold norms, examine whether statutory consultations with the Board as constituted under Section 4 were undertaken, using administrative records obtained through discovery to test the rationality of policy decisions.

Section 3 All 32 Sections of MSMED Act Section 5