Retrospective registration as an MSME does not allow a supplier to invoke remedies under the MSMED Act for contracts made before the registration. The benefits of MSME registration are not applicable retrospectively, as clarified by various legal interpretations and court rulings.

Key Points on Retrospective Registration and MSMED Act Remedies
Legal Provisions:

The MSMED Act, 2006, stipulates that benefits associated with MSME registration cannot be claimed retrospectively. This means that if a supplier was not registered as an MSME at the time of entering into a contract, they cannot later claim benefits under the Act for that contract.
Judicial Interpretations:

The Supreme Court has ruled that if a micro, small, or medium enterprise registers after a contract has been executed, the registration will only have a prospective effect. This was highlighted in the case of Gujarat State Civil Supplies Corpn. Ltd. v. Mahakali Foods (P) Ltd., where it was established that remedies under the MSMED Act apply only to transactions occurring after registration.
Dispute Resolution Mechanism:

The MSMED Act provides a framework for dispute resolution through Facilitation Councils. However, this mechanism is only accessible to registered MSMEs, reinforcing the need for prior registration to invoke such remedies.
Case Examples:

In a notable case, a supplier who registered as an MSME after entering into a contract was denied the ability to invoke the MSMED Act for disputes arising from that contract. The court emphasized that the registration must precede the contract for the benefits to apply.
Implications for Suppliers:

Suppliers should ensure they are registered as MSMEs before entering into contracts if they wish to avail themselves of the protections and remedies provided under the MSMED Act. This proactive approach is essential for safeguarding their rights and interests.
Conclusion
In summary, retrospective registration as an MSME does not grant suppliers the right to invoke remedies under the MSMED Act for contracts entered into prior to their registration. The legal framework and judicial interpretations clearly establish that benefits are only applicable prospectively, emphasizing the importance of timely registration for MSMEs

No, retrospective registration as an MSME generally does not entitle a supplier to invoke remedies under the MSMED Act for contracts entered into before the registration date. The Supreme Court of India has consistently held that benefits under the MSMED Act are not available retrospectively.
Mandatory Registration:
The MSMED Act requires registration as an MSME before claiming benefits like dispute resolution through Facilitation Councils, as stated in Supreme Court's case on Silpi Industries.
Prospective Effect:
Registration is generally considered prospective, meaning it applies to transactions and agreements entered into after the registration date.
Avoiding Abuses:
The Ministry of Micro, Small & Medium Enterprises has a rationale for preventing the possibility of opportunistic invocation of the Act's protections after a dispute arises, which could happen if retrospective benefits were granted.