PANAJI
Goa Dairy’s financial troubles have not spared it from a Rs 4.31-crore liability, with the Goa Micro and Small Enterprises Facilitation Council ordering payment to G K Plastics for unpaid dues and statutory interest.
The Council, comprising Chairman Advocate Galileo Teles and Members Priyanka Pikale and J B Pinto, held that financial difficulties cannot dilute obligations under the MSMED Act while directing the Goa State Co-Operative Milk Producers Union Limited to pay Rs 2,25,51,192 towards the unpaid principal amount and Rs 2,05,85,223 as interest calculated up to June 30, 2026. The amount is to be paid within 30 days of the award.
“The pleas relating to financial hardship, administrative constraints, reserve funds, absence of mala fides, or instalment payments do not constitute valid legal defences to defeat or dilute the statutory consequences contemplated under the MSMED Act, 2006,” it said.
The Union is further warned that failure to make payment within the stipulated period will incur interest at three times the Bank Rate notified by the Reserve Bank of India, compounded monthly, from the end of the 30 days until final payment.
The dispute arose from supplies of cattle feed raw materials made by G K Plastics to the Union between October 2021 and July 2023 under various purchase orders. The claimant had initially sought recovery of Rs 2.35 crore in principal along with statutory compound interest.
The Council noted that the Union had itself acknowledged substantial outstanding dues. In August 2024, its Committee of Administrators acknowledged liability of Rs 2,41,20,188.03, while citing financial constraints and other liabilities as reasons for its inability to clear the amount in one lump sum.
It also found that subsequent payments made by the Union during the proceedings had to be adjusted while determining the final principal liability. It calculated the balance due as Rs 2,25,51,192 as on March 10, 2026, after accounting for payments made during the arbitration.
“The pleas relating to financial hardship, administrative constraints, reserve funds, absence of mala fides, or instalment payments do not constitute valid legal defences to defeat or dilute the statutory consequences contemplated under the MSMED Act, 2006,” the award mentioned further.
Importantly, the Council rejected the Union’s plea that the claimant was merely a trader and therefore could not invoke the delayed-payment provisions of the MSMED Act. It held that G K Plastics was a registered supplier and had established substantial processing and value addition at its Bethora, Ponda unit.
The Union, as per the order, never denied receiving the goods or the existence of outstanding dues. “The Respondent has repeatedly admitted its liability to pay the outstanding principal amount,” it said.
