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Section 5: Functions of 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 4 All 32 Sections of MSMED Act Section 6
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Board Sec 2 Enterprise Sec 2

Legal Commentary & Landmark Judgments: Section 5

Section 5 regulates the tenure, resignation, casual vacancies, disqualifications, and allowances of nominated members of the National Board for Micro, Small and Medium Enterprises.

  • Fixed Statutory Tenure: Nominated non-official members hold office for a statutory term of two years from the date of official notification, subject to eligible reappointment.
  • Voluntary Resignation and Vacancy Succession: Members may resign by written notice to the Central Government; vacancies arising from death, resignation, or disqualification are filled for the unexpired residual term.
  • Remuneration & Procedural Propriety: Central Government retains rule-making authority under Section 29(2)(a) to prescribe sitting fees, traveling allowances, and administrative rules governing meeting procedures.
Key Landmark Precedents:
  • B.P. Singhal v. Union of India (2010) 6 SCC 331: The Supreme Court held that the doctrine of pleasure is subject to constitutional fundamentals of non-arbitrariness and natural justice where statutory tenures are delineated by legislation.
  • Shanker Raju v. Union of India (2011) 2 SCC 132: Established that statutory conditions of tenure and procedural mechanisms for filling vacancies must strictly adhere to the legislative mandate prescribed in the parent statute.
Courtroom Practice & Strategic Litigation Guidance:

Ensure that when questioning the validity of Board resolutions or consultative reports in administrative law proceedings, the quorum and member tenures at the material time complied strictly with Section 5 and notifications issued thereunder.

Section 4 All 32 Sections of MSMED Act Section 6