Kanara Chamber of Commerce and Industry (KCCI), Mangaluru has urged the Union government to amend the Insolvency and Bankruptcy Code, 2016 and include Micro, Small and Medium Enterprises (MSMEs) under Clause (b) of sub-section 1 of Section 53 on par with the workmen’s dues. It is in the interest of survival of MSMEs, the chamber said.
In a letter dated September to Union Minister for Finance and Corporate Affairs Nirmala Sitaraman, the president of KCCI M. Ganesh Kamath said the MSMEs are the backbone of the Indian economy, and the special schemes initiated by the government have been much appreciated as they have provided timely finance and assistance to MSMEs.
“When MSMEs do business with some Limited Liability Companies that are later referred to the National Company Law Tribunal (NCLT), they stand no chance of recovering their dues. This is because MSMEs do not have the resources or the expertise to analyse their customers’ creditworthiness. As a result, MSMEs believe such entities would honour their commitment and have the capability of meeting their financial obligations. In such a situation, MSMEs have little bargaining power in dealing with corporate customers,” he said.
