Facts
The petitioner operated a beverage-manufacturing unit, including packaged drinking water, in Manvi.
Source reference: no citationIt had obtained municipal trade licences for 2023–24 and 2024–25 and held an Udyam registration certificate as a micro, small and medium enterprise (MSME) under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act).
Source reference: p.5On 7 September 2026, the Municipality directed GESCOM to disconnect the unit’s electricity supply, and GESCOM’s notice of 9 September 2026 gave the petitioner seven days to obtain a trade licence, failing which the supply would be disconnected.
Source reference: p.2–4The petitioner challenged both communications under Articles 226 and 227 of the Constitution.
Source reference: p.2Issues
1. Whether the petitioner, as an MSME registered under the MSMED Act, was exempt from obtaining a municipal trade licence under the amended Karnataka Municipalities Act, 1964.
Source reference: p.5–72. Whether the Municipality’s direction and GESCOM’s notice threatening disconnection of electricity for failure to obtain a trade licence could stand in light of that exemption.
Source reference: p.6–7Law Applied
Section 256(1) of the Karnataka Municipalities Act, 1964, as amended, exempts Micro, Small and Medium Enterprises registered under the MSMED Act, 2006, in the concerned District Industries Centre from obtaining a trade licence; the amendment also exempts specified large industries that have filed an Industrial Entrepreneurs Memorandum or Industrial Licence with the relevant Government of India authority.
Source reference: p.6The Court relied on this statutory exemption and identified no judicial precedents as a basis for its decision.
Source reference: p.6–7Reasoning
The Court found that the petitioner held an Udyam registration certificate under the MSMED Act.
Source reference: p.5It concluded that the petitioner was covered by the statutory exemption and that the Municipality had issued its direction without taking that exemption into account.
Source reference: p.6–7Because GESCOM’s notice followed the Municipality’s direction and likewise proceeded on the basis that a trade licence was required, both communications were contrary to the amended Act.
Source reference: p.7Holding
The Court held that the petitioner was exempt from obtaining a trade licence and allowed the writ petition.
It set aside the Municipality’s communication dated 7 September 2026 and GESCOM’s notice dated 9 September 2026; no order was made as to costs.
Source reference: p.7Acts & Sections Cited
1 provisions across 1 statute referred to in this judgment. Each provision opens on LawLens.
KARNATAKA MUNICIPALITIES ACT, 19641
Original Court PDF
M/S SAI ENTERPRISESvsTHE MANAGING DIRECTOR
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