Where to File an MSME Complaint: Which Council Has Jurisdiction?

Which MSME council can hear your complaint?

Yours. The council for the place where you, the supplier, are located. That's the whole rule, and it catches a lot of people off guard, because most assume a case has to go where the buyer is, or wherever the contract says. Section 18(4) of the Micro, Small and Medium Enterprises Development Act, 2006 gives the Micro and Small Enterprises Facilitation Council jurisdiction over a dispute between a supplier inside its area and a buyer located anywhere in India. The section begins "notwithstanding anything contained in any other law". Courts have relied on those words to hold that no contract clause can override it.

So a micro unit in Mayapuri supplying a buyer in Chennai goes to the Delhi council, and the Chennai buyer has to answer in Delhi. A small enterprise in Sector 63, Noida files in Uttar Pradesh. One in IMT Manesar files in Haryana. What suits the buyer is irrelevant.

The hard questions are at the edges. What does "located" mean for a business with more than one address? Within a state, which council covers your district? And what happens if you pick the wrong one? We take those up below. If you've never dealt with a council before, read what the MSME Facilitation Council is and how it works first.

The statute on council jurisdiction

Where is a supplier "located"?

One address, no problem. But take a business with its registered office in Delhi, a plant in Kundli and a godown in Ghaziabad. Now it's not so simple. The present Section 18(4) talks only about where the supplier is "located" and never defines the word. In practice, councils look first at the enterprise's address in its Udyam registration. Then at the place of business on the invoices, and the GST registration of the unit that actually made the supply. If all of those land in one state, nobody bothers to argue.

The fights start when they don't. A buyer will say you're "located" wherever helps its case: at the plant if you filed at the registered office, at the registered office if you filed near the plant. No Supreme Court judgment settles the multi-address situation under the current section. Treat it as open. Build your file so it can answer the point. Udyam lets one registration carry several plant locations, so check that the unit which supplied the goods actually appears on your certificate.

When someone asks Advocate B.K. Singh which council to go to, the first thing he does is hold the Udyam certificate next to the disputed invoices and compare the address and GSTIN. If they match, easy. If they don't, he'd rather spend a week getting the Udyam record corrected, where that can legitimately be done, than six months arguing jurisdiction before the council.

Parliament has stepped in on this. The MSMED (Amendment) Act, 2026 substitutes Section 18(5) so that jurisdiction will turn on the supplier's "official address as per the registration made under section 8". As of late October 2026 that provision hadn't been brought into force. Still, it shows which way the law is heading. And it makes the official address on your Udyam registration the safest anchor right now.

Which MSEFC? Everyday situations

How councils are set up in Delhi, Uttar Pradesh and Haryana

Delhi is simple. There's one council, run under the Department of Industries of the Government of NCT of Delhi, and it covers suppliers anywhere in the National Capital Territory, from Narela and Bawana down to Okhla and Mayapuri. In suitable cases the Delhi council has sent arbitrations to the Delhi International Arbitration Centre at the Delhi High Court. How the two fit together is explained in the commercial court team's guide comparing DIAC arbitration with the MSME council.

Uttar Pradesh is more layered. Besides its state council, it has set up divisional councils at commissionerate level, which started functioning around 2020 and 2021. Ghaziabad, Gautam Buddh Nagar, Hapur and Bulandshahr come under the Meerut division. Which council takes a particular claim, and whether there's a value split between the state and divisional councils, turns on the current state notification. Confirm it with the District Industries Centre, or on the MSME Samadhaan portal, before you file.

Haryana changed its council rules in 2023 to create district councils, chaired by the Additional Deputy Commissioner, next to the state council. The state council takes claims above a principal value threshold, reported as Rs 20 lakh at the time. So a Gurugram or Faridabad supplier with a smaller claim may well be heard at district level. These rules and the threshold have changed more than once. Check them before filing.

Do the buyer's location or the contract's jurisdiction clause count?

Not for choosing the council. Not at all. Big buyers routinely print clauses in their purchase orders sending every dispute to the courts of their head office city, or to an arbitrator they get to appoint. Before 2025 the High Courts couldn't agree on whether such a clause at least fixed the seat of arbitration once the council had taken up the matter. Some said the contractual seat governed. Others said Section 18(4) did.

The Supreme Court settled that in Harcharan Dass Gupta v. Union of India (2025). A Delhi supplier had a construction contract with ISRO that named Bengaluru as the seat. The supplier went to the Delhi council, arbitration went ahead in Delhi, and ISRO got the Karnataka High Court to halt it. The Supreme Court reversed the Karnataka order. It held that the MSMED Act, being a special statute, prevails over private contract terms, and that the council where the supplier is located has jurisdiction. Why the seat matters so much for every later court proceeding is explained in our post on the seat of arbitration.

Where the buyer is matters only for practical things. Where to serve notices. Where its assets are, for enforcement later. Whether its people can attend in person. Many councils now hear matters on video, which leaves the buyer's "inconvenience" argument with very little left in it. For chasing a buyer in another state, see recovering dues from a buyer in another state as an MSME.

Foreign buyers and government buyers

Section 18(4) covers a buyer located anywhere in India. A buyer with no presence here is outside it, and an Indian council has no real way to bind it or enforce against it. Exporters usually fall back on the dispute clause in the export contract, on arbitration abroad, or on a suit in India if the buyer has assets here. Those options are covered in the commercial court team's guide on recovering payment from an overseas buyer. A foreign company that placed the order through an Indian branch, subsidiary or project office may be treated differently. The facts will decide.

Government departments and PSUs are just buyers under the Act. A Faridabad supplier owed money by a central ministry in New Delhi files before its Haryana council. Not in Delhi. Government buyers tend to raise jurisdiction objections out of sheer routine, so make your file watertight from day one. Their usual defences are covered in our post on MSME claims against a government department or PSU.

Can the council hear your kind of dispute at all?

Territory is only half the question. The council also needs the right kind of supplier and the right kind of claim. You have to be a micro or small enterprise. Medium enterprises can't use Section 18. The Supreme Court has said registration should exist before the contract, though a later two-judge bench doubted that, and the issue has gone to a larger bench. And your claim has to be for an amount due under Section 17, meaning the price of goods supplied or services rendered, plus statutory interest on it.

Traders are a headache. Retail and wholesale traders can register on Udyam, but since 2021 that registration has generally been treated as limited to priority sector lending, and councils have turned trader claims away on that basis. See whether a trader can use the MSME Facilitation Council. Service providers are fine. Our post on service provider MSMEs and the council explains how you prove acceptance of services.

Filing before the right council, step by step

1. Start with your Udyam certificate

   Note the official address, the micro or small classification, and the registration date. All three get checked. Make sure the plant or office that made the disputed supply is listed.

2. Hold it against your invoices

   Compare the address and GSTIN on the disputed bills with the Udyam address, line by line, and if they fall in different states, choose your council on purpose and write down exactly why you chose it. Keep that note.

3. Find your district's council

   Delhi has one. In Uttar Pradesh and Haryana, ask the District Industries Centre or check the MSME Samadhaan portal for the council that covers your district and claim size.

4. File the reference

   Most councils take references through the MSME Samadhaan portal. You pick the state, and the application is routed to the council. Some also accept paper filing. Save the acknowledgment and the application number.

5. Spell out the jurisdiction facts

   In the first paragraphs of your claim, say where you're located, give your Udyam number and address, and attach the certificate. Don't make the council dig for it.

6. Watch for the first listing

   Look out for the council's notice to the buyer and the date of the first sitting. If the council says the case is outside its area, get that in writing, so you can refile elsewhere without losing time.

The portal screens are walked through in our guide on filing an MSME Samadhaan complaint online. What the claim itself should say is covered in drafting a reference to the council.

Papers that prove where you're located

• Your Udyam certificate, showing the official address and every plant or unit
• The old EM-II or Udyog Aadhaar Memorandum, if the supplies go back to before Udyam
• The GST registration certificate of the unit that raised the bills
• The disputed invoices and the delivery challans with the dispatch address on them
• The unit's factory licence, pollution consent, or shop and establishment registration
• The lease deed, ownership papers or an electricity bill for the premises
• The certificate of incorporation or the partnership deed, showing the registered office
• A board resolution or authority letter naming whoever will sign the reference

How buyers object to jurisdiction, and when they must

If you're the buyer, put the objection in your first written reply to the council and say it again at the first sitting. The council can't finally decide the point during conciliation. Getting it on record still matters. Once the case moves to arbitration, Section 16 of the Arbitration and Conciliation Act lets the tribunal rule on its own jurisdiction, and the plea has to come no later than the statement of defence. Hold it back until after the award and you'll struggle.

The usual objections run like this. The supplier isn't located in the council's area. Or it wasn't micro or small when the contract was signed. Or it's a trader. Or the claim isn't for an amount due under Section 17. If the tribunal rejects the objection, the buyer can't rush to court straight away. Section 16(6) says that challenge is made together with the challenge to the award under Section 34. And after India Glycols v. MSEFC (2023), writ petitions for this purpose are generally not entertained. How these challenges play out once there's an award is covered in whether a buyer can challenge an MSME council award.

What if you file before the wrong council?

If the council spots it early, it'll usually return or close the reference and tell you to go to the correct one. The MSMED Act doesn't clearly give one state's council power to transfer a reference to another's. So in practice you refile. What you lose is time, weeks or months of it. With older invoices, you may also be walking into a limitation problem. You can try arguing that time spent in good faith before the wrong forum should be excluded. Don't build your plan around that argument.

Worse is when nobody notices, or the council brushes aside a valid objection and passes an award anyway. That award can be set aside for lack of jurisdiction under Section 34. For a supplier, it's the worst result possible: a year or two gone, perhaps a released deposit that now has to be paid back, and a fresh start. Spending a day checking addresses at the beginning is cheap insurance.

Moving premises raises a related problem. If your unit has moved to another state since the supplies, councils generally look at where you are when the reference is filed. A buyer may argue it's your location at the time of the contract that counts. Update your Udyam registration promptly after any move, keep both the old and new records, and explain the move in your claim. For a big claim after a recent move, take advice on the council before filing. The answer can depend on details like where the books are kept and which unit raised the invoices.

If the council sends the case to an arbitration centre, does jurisdiction move with it?

Under Section 18(3), the council can either arbitrate itself or send the dispute to an institution or centre that offers alternative dispute resolution. Section 18(4) gives that centre the same jurisdiction. So when the Delhi council refers a case to the Delhi International Arbitration Centre, the centre's jurisdiction flows from the council's. The arbitration stays tied to where the supplier is.

In practical terms, the centre's own rules then decide procedure and fees, and those can be quite different from the council's. Ask early. When the referral happens, find out what the centre will charge and who pays first, before anyone sends you an invoice. We've had suppliers come to us startled by an institutional fee demand after a council reference that cost almost nothing to file.

Which court supervises the case once the council has it?

The courts covering the council's seat. After Harcharan Dass Gupta (2025), a buyer's Section 34 challenge to a council award belongs in the court for the area where the council sits, which is where the supplier is located. Any court named in the contract is beside the point. The Delhi High Court has applied this to dismiss a petition filed in Delhi about proceedings before a Haryana council. Within that area, the Commercial Courts Act, 2015 decides on value whether it goes to the district Commercial Court or to the High Court's Commercial Division.

Enforcement works differently. The supplier executes the award wherever the buyer's assets are, even in another state, without transferring the award first. Think of it this way. The supplier's council decides where the dispute is heard. The buyer's assets decide where the money is collected.

Jurisdiction mistakes we keep seeing

• Filing in the buyer's state. Its council can't hear your claim. Go where you're located.
• Letting the purchase order decide. A jurisdiction or arbitration clause in the PO doesn't displace Section 18(4), however firmly it's worded.
• Records that don't line up. Udyam address in one state, invoices from a second, claim filed in a third. You've just handed the buyer its objection.
• Assuming it's the state council in UP or Haryana. There are divisional and district councils too. Check which one takes your district and your claim size.
• Ignoring the council when it hesitates. If the council doubts its jurisdiction, answer in writing straight away instead of hoping the doubt fades.
• Forgetting that foreign buyers are outside it. A buyer with no presence in India is beyond Section 18(4).

What to do this week

Get out your Udyam certificate and the disputed invoices, lay them side by side on the table, and check the address, the listed units, the GSTIN and the registration date. Find out from the District Industries Centre or the Samadhaan portal which council covers your district and claim size. If your addresses don't match up, pick your council and note down why before you file.

If you're a buyer served with a reference from a faraway council, check the supplier's Udyam record and invoices yourself, and put any jurisdiction objection in your very first reply. In the files that come to Advocate B.K. Singh, an objection raised on day one gets taken seriously. The same objection raised after the award usually looks like an afterthought.

If you'd like your Udyam record, invoices and the buyer's details checked so you're sure of the right council before filing, or want to hear when the 2026 amendment's jurisdiction rule comes into force, reach Advocate B.K. Singh's team through the contact page.