About MSME Facilitation Council (MSEFC)

The MSME Facilitation Council (MSEFC) is established under Section 20 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. It provides a mechanism for resolving disputes related to delayed payments to MSME suppliers by buyers.

Who Can File?

Any MSME supplier registered under the MSMED Act can file a reference to the MSEFC if a buyer fails to pay within 45 days (or the agreed period, not exceeding 45 days) of delivery of goods/services.

Process Before MSEFC

• Step 1 — Reference: Supplier files reference with MSEFC stating amount due
• Step 2 — Conciliation: MSEFC attempts conciliation within 75 days
• Step 3 — Arbitration: If conciliation fails, MSEFC acts as arbitrator or refers to institution
• Step 4 — Award: Arbitral award including compound interest at 3× bank rate

Key Protections Under MSMED Act

• Buyer must pay within 45 days or face compounded interest at 3× RBI bank rate
• Buyer cannot dispute MSEFC jurisdiction — jurisdiction is mandatory
• Section 19: Buyer must deposit 75% of award amount to challenge it
• Government departments cannot delay MSME payments

How Advocate Prakhar Gupta Can Help

• Registering your MSME for Udyam certificate (prerequisite)
• Filing reference before MSEFC Kota
• Representing in conciliation proceedings
• Appearing in MSEFC arbitration
• Challenging awards or enforcing awards in District Court
• Section 19 pre-deposit applications