M/S. SHANTI CONDUCTORS (P) LTD. & ANR. versus ASSAM STATE ELECTRICITY BOARD & ORS. on 23 January 2019

Conclusion

1. Whether Act, 1993 is not applicable when the contractfor supply was entered between the parties prior to enforcementof the Act i.e. 23.09.1992 ?

The Act, 1993 being beneficial legislation enacted to protectsmall scale industries and statutorily ensure by mandatoryprovision for payment of interest on the outstanding money,accepting the interpretation that the day of agreement has to besubsequent to the enforcement of the Act, the entire beneficialprotection of the Act shall be defeated. The existence of statutoryliability depends on the statutory factors as enumerated in Section3 and Section 4 of the Act, 1993. Factor for liability to makepayment under Section 3 being the supplier supplies any goodsor renders services to the buyer, the liability of buyer cannot bedenied on the ground that agreement entered between the parties A

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Afor supply was prior to Act, 1993. To hold that liability of buyerfor payment shall arise only when agreement for supply wasentered subsequent to enforcement of the Act, it shall be addingwords to Section 3 which is not permissible under principles ofstatutory construction. Even if agreement of sale is entered priorto enforcement of the Act, liability to make payment under SectionB3 and liability to make payment of interest under Section 4 shallarise if supplies are made subsequent to the enforcement of theAct. [Para 52][518-G-H; 519-A-D]

Purbanchal Cables and Conductors Private Limited v.Assam State Electricity Board and another (2012) 7 SCCC462 : [2012] 6 SCR 905 – Not correct law to the extentit held that the Act, 1993 shall be applicable only whensupply order was entered subsequent to enforcementof the Act.

Assam Small Scale Industries Development Corp. Ltd.Dand others v. J.D. Pharmaceuticals and another (2005)13 SCC 19 : [2005] 4 Suppl. SCR 232 – not correctlaw.

2. Whether in the event it is found that Act is applicable also with regard to contract entered prior to Act, 1993 inEpursuance of which contract, supplies were made after theenforcement of Act, 1993, the Act, 1993 can be said to haveretrospective operation ?

Retroactivity in the context of the statute consistsapplication of new rule of law to an Act or transaction which hasFbeen completed before the Rule was promulgated. In the instantcase the liability of buyer to make payment and day from whichpayment and interest become payable under Section 3 and 4 doesnot relate on any event which took place prior to Act, 1993, it isnot even necessary to say that Act, 1993 is retroactive in operation.GThe Act, 1993 is clearly prospective in operation and it is notnecessary to term it as retroactive in operation. [Paras 57,58][521-F-G]

3. Whether money suit by M/s. Shanti Conductors wasbarred by limitation ?

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3.1 Section 10 provided that overriding effect is given tothe provisions of the Act over any inconsistent law for the timebeing in force. It simply meant that if there is anything inconsistentin any other law to the provisions of the Act, the provisions of theAct shall prevail and override any inconsistent law. There is noprovision in 1993 Act pertaining to limitation, the provision ofLimitation Act pertaining to filing suit shall continue to operatethere being nothing contrary or overriding under 1993 Act. Section10 will operate only with regard to expressed provisionscontained in 1993 Act which shall be given overriding effect butreading Section 10 to the effect that it shall override LimitationAct is not correct interpretation of Section 10 and trial court fellin error in relying on Section 10 in holding that Limitation Actwill not apply. Thus, Limitation Act, 1963 is fully applicable withregard to money suit filed by the appellant hence, the question oflimitation has to be answered as per Limitation Act 1963. Thelimitation for suit for recovery of interest under 1993 Act is a suitof nature which shall be covered by Part X Article 113 of theSchedule. [Paras 68-70][526-E-F]

3.2 The period for commencement of limitation for filingsuit under Article 113 begins “when the right to sue accrues”.Section 4 of 1993 Act deals with date from and rate at whichinterest is payable. Section 4 contains expression that where“any buyer fails to make any payment of the amount to the supplieras required under Section 3…. be liable to pay interest to thesupplier on that amount on the appointed day or as the case maybe from the date immediately following the date agreed upon…”.When there is no agreed date of payment between the parties,the payment shall become due from the appointed day. Appointedday has been defined in Section 2(d) to be “the day followingimmediately after the expiry of period of 30 days from the date ofacceptance or the day of deemed acceptance of any goods or anyservice from any buyer or supplier.” In the instant case, lastsupply was received on 04.10.1993, therefore, at least from04.11.1993, if not earlier, the amount of interest under Section 4shall become due. Article 113 provides for “time from whichperiod begins as when the right to sue accrues”. 1993 Act Section4 creates statutory liability to pay interest from the day asmentioned in Section 4 the liability to pay is fastened on buyer.

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AThe amount become due as soon as liability to pay arises. Section6 also uses the word “amount due from buyer”. The amount dueis amount which is liable to be paid by buyer under Section 4.Thus the fact that last payment was made on 05.03.1994 cannotbe treated as period for beginning of the limitation and on thatground it cannot be held that suit was within time. Thus, benefitBof the Section 14 cannot be claimed by the plaintiff in the facts ofthe present case. Thus, suit filed by the plaintiff was barred bytime. [Paras 71, 72, 74, 76][507-F-H, 528-A, C, D-E; 529-A]

4. Whether the suit filed by the appellants for recovery ofonly interest when admittedly entire principal amount was paidCprior to filing of the suit can be said to be maintainable?

Section 6 of the 1993 Act provides that “the amount duefrom the buyer, together with amount of interest calculated inaccordance with provision of Section 4 and 5 shall berecoverable……”. The interpretation that proceeding forDrecovery of interest can be undertaken only when any amount isdue, if accepted then buyer will very easily get away from paymentof interest only after making payment of Principal amount. Thisinterpretation shall defeat very purposes of 1993 Act. It is wellsettled that provisions of Act has to be interpreted in the mannerEso as to advance the object of the Act. [Para 79][529-F-G]

Purbanchal Cables and Conductors Private Limited v.Assam State Electricity Board and another (2012) 7 SCC462 : [2012] 6 SCR 905 – affirmed (View that suit bysupplier for recovery of only interest is maintainableFis fully approved)

5. Whether appeal filed by M/s Trusses and Towers Pvt.Ltd. challenging the review judgment dated 19.03.2003 cannotbe entertained since no liberty was granted by this Court inSLP(C)No.12217 of 2001 when the SLP filed against the mainGjudgment of the High court dated 05.04.2001 was dismissed aswithdrawn ?

The submission of the counsel to the board is that sinceagainst the judgment of High Court dated 15.4.2001, S.L.P. waswithdrawn without obtaining the liberty, appeal is not maintainablechallenging the Review Order and judgment dated 19.3.2003.H

In the Order passed by this Court on 6.8.2001, this Court hadnoticed the submission of the appellant that appellant shall movethe High Court in review stating that it has committed error inrecording that “all the bills were paid earlier to thecommencement of this act”. In the Review Petition, the reviewhas been partly allowed by allowing interest @ 9% against whichthe appeal has been filed. A perusal of the Review judgmentindicates that High Court has not returned any finding that allthe bills were not paid earlier to the commencement of the Act.A perusal of judgment of High Court indicates that High Courtproceed on the presumption that even if 1993 Act is not applicablethe entitlement of the plaintiff could be considered in equity. Whenthe liberty to file review was obtained on the ground as noticedin the Order the review judgment can be questioned on theground on which review was permitted. The Division Benchjudgment does not indicate that it proceeds on the ground ascontended by the appellant and noticed by this Court on06.08.2001. The interest of 9% was allowed on the premise that1993 Act is not applicable and said interest is allowed on equityrelying on an earlier judgment. Thus, instant appeal challengingthe review judgment cannot be entertained. The ground on whichthe appellant can challenge the review judgment can be the groundon which liberty was obtained to file review. Thus appeal is notmaintainable. [Paras 80-82][530-A-F]

6. Whether the High court even after expressing that Act,1993 is not applicable could have allowed 9% interest to theplaintiff?

The High Court allowed interest @ 9% per annum for theperiod of delayed payment. Even if Act 1993 is not applicable,the Court can very well exercise its jurisdiction to award interest.High Court did not commit any error in awarding 9% interest toplaintiff respondent. [Paras 83, 84][531-A, E-F]

Shakti Tubes Ltd. v. State of Bihar and others (2009) 7SCC 673 : [2009] 10 SCR 739; Modern Industries vs.Steel Authority of India Limited (2010) 5 SCC 44 : [2010]4 SCR 560; State Bank’s Staff Union (Madras Circle)v. Union of India and ors. (2005) 7 SCC 584 : [2005] 3Suppl. SCR 200; Jay Mahakali Rolling Mills v. Union AB

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Aof India and others (2007) 12 SCC 198 : [2007] 8SCR 855 – referred to CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 8442-8443 of 2016.

From the Judgment and Order dated 20.11.2012 and 20.12.2012of the Gauhati High Court at Guwahati in RFA No. 66 of 2000 and MC3472 of 2012.

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Civil Appeal Nos. 8445, 8448, 8450 of 2016.E

Ajit Kumar Sinha, Basava Prabhu S. Patil, Navaniti Prasad Singh,Vijay Hansaria, Sr. Advs., Devashish Bharuka, Ravi Bharuka,Ms. Sarvshree Singh, Justine George, Akshay Amritanshu, Vaibhav Niti,Ms. Mohini Priya, Ms. Alankrita Sinha, Ms. Sneha Kalita, A. Pandey,P. I. Jose, Dushyant Parashar, Raghavendra S. Srivatsa, VenkitaFSubramanian T.R., Ajay Singh, R. Bansal, Ms. Abha R. Sharma,D. S. Parmar, Sujeeta Srivastava, Mahendra Singh, R. S. Dvidi, Advs.for the appearing parties.

The Judgment of the Court was delivered by ASHOK BHUSHAN, J. 1. These appeals have been filedGquestioning judgment of Gauhati High Court by which judgment RegularFirst Appeal filed by the Assam State Electricity Board has been allowedsetting aside the judgment and decree passed by trial court in favour ofappellants in original suit proceedings. It shall be sufficient to notice thepleadings in C.A. Nos. 8442-8443 of 2016 for deciding the common H

questions of law involved in all these appeals. The facts and pleadings inother appeals shall also be briefly noticed.

C.A.Nos.8442-8443 of 2016

(M/s. Shanti Conductors (P) Ltd. & Anr. vs. Assam State Electricity Board & Ors.)

2. The appellant is a Private Limited Company which has beenregistered as a Small Scale Industrial Unit for manufacturing electricalconductors and/or wires at Kokrajhar, Assam. On 31.03.1992, therespondent-Assam State Electricity Board placed an order for supplyof Aluminium Electrical Conductors from the appellants-M/s ShantiConductors Pvt. Ltd. for a total consideration of Rs. 1.22 crores. Thesupplies were to be made between June and December, 1992. On13.05.1992, another order was placed by the Electricity Board to M/sShanti Conductors for the supply of various types of conductors for atotal consideration of Rs. 32.49 lacs. The supplies of the aforesaid goodswere to be made between January and February, 1993. On 23.09.1992,the President of India promulgated an ordinance, namely, the Interest onDelayed Payment to Small Scale Ancillary Industrial UndertakingsOrdinance, 1992. Subsequently, on 02.04.1993, the Interest on DelayedPayment to Small Scale and Ancillary Industrial Undertakings Act, 1993(in short the “Act”) was enacted and it was deemed to have come intoforce with effect from 23.09.1992. Meanwhile, the supply of equipmentsunder the aforesaid purchase orders was completed by M/s ShantiConductors on 04.10.1993. On 05.03.1994, the entire payment of Rs.2.15 crores against the aforesaid supply orders was received by M/sShanti Conductors.

3. On 10.01.1997, M/s. Shanti Conductors filed a suit for recoveryof Rs.53.68 lakhs claiming interest on delayed payments. The AssamElectricity Board (hereinafter referred to as the “Board”) filed its writtenstatement raising the plea of limitation and contending that the Act is notapplicable to the case of the appellant as the contract was concludedprior to enactment of Act, 1993. The trial court decreed the suit on02.02.2000 for recovery of the amount of Rs.51,60,507.42 with compoundinterest at the rate of 23.75% p.a. The Board filed the Regular FirstAppeal No.66 of 2000 before the High Court of Gauhati. The DivisionBench of the High court while hearing the RFA being of the view that A

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Acertain important issues arise for consideration, referred the matter tothe Full Bench. The Full Bench framed following questions of law:

“i) Whether the suit for recovery of mere interest under the Intereston Delayed Payments to Small Scale and Ancillary IndustrialUndertakings Act, 1993 is maintainable?

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ii) Whether in the present case the suit for recovery of Interestunder the Delayed Payments to Small Scale and AncillaryIndustrial Undertakings Act, 1993 would not be maintainable asthe contract for supply of goods between the parties was enteredinto prior to enforcement of the Act, i.e. on 23.09.1992?

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iii) Whether the suit for recovery of interest under the DelayedPayments to Small Scale and Ancillary Industrial UndertakingsAct, 1993 would not be maintainable if no reservation is made bythe supplier retaining to it the right to recovery interest under theAct when the payment(s) of the principal sum is/are accepted,Dthough these may be made beyond the prescribed period?”

4. The Full Bench of the High Court vide its judgment dated05.03.2002 answered the reference holding that a suit for interest couldbe filed. It further held that Act, 1993 is also applicable to contractsentered into prior to 23.09.1992. It held that interest under the ActEwould be calculated from 23.09.1992 till the payment is made to thesupplier. The Board filed an appeal against the judgment of the FullBench dated 05.03.2002 in this Court being C.A. NO.2351 of 2003(Assam State Electricity Board and others vs. Shanti Conductors PrivateLimited and another). The appeal filed by the Board was heard alongwith another C.A.No.2348 of 2003( Purbanchal Cables and ConductorsFPrivate Limited vs. Assam State Electricity Board and another). A two-Judge Bench of this Court decided both the appeals vide commonjudgment dated 10.07.2012 which judgment is reported in (2012) 7 SCC462 (Purbanchal Cables and Conductors Private Limited vs.Assam State Electricity Board and another). The two-Judge BenchGrelying on earlier judgments of this Court held that suit for recovery ofinterest alone under the Act, 1993 is maintainable. It further held that theAct, 1993 has no retrospective application. It further held that the supplierhas an accrued right to claim a higher rate of interest in terms of the Actonly with regard to sale agreements entered after the date of thecommencement of the Act i.e. 23.09.1992. After judgment of this CourtHdated 10.07.2012 RFA No.66 of 2000 was decided by the Division Bench vide its judgment dated 20.11.2012. The Division Bench of the GauhatiHigh Court by the impugned judgment has allowed the appeal of theBoard. The Division Bench following judgment of this Court inPurbanchal Cables and Conductors Private Limited held that Act,1993 would not apply to a contract entered prior to the enforcement ofthe Act, 1993. The contract between the parties being prior to theenforcement of the Act, the appeal filed by the Board was thus allowedsetting aside the judgment and decree of the trial court. A subsequentorder dated 20.12.2012 was also passed by the Division Bench directingthe refund of amount of Rs.38,03,381/-. Aggrieved by both the judgmentsdated 20.11.2012 and 20.12.2012 passed by the Division Bench of theGauhati High Court, Civil Appeal Nos.8442-8443 of 2016 have beenfiled by the appellants.

C.A.No.8445 of 2016 (M/s. Trusses and Towers (P) Ltd. VAssam State Electricity Board and Anr.)

5. The Board placed two orders dated 17.02.1992 and 17.03.1992with the appellant for supply of pre-stressed cement concrete poles.Written contract dated 10.06.1992 was entered between the parties.Poles were supplied by the appellant to the Board during the period30.03.1992 to 30.09.1992. Payments were also made between 23.04.1993to 08.10.1993. The appellant filed suit on 16.05.1994 against the Boardseeking decree of Rs.16,55,623/- with interest towards the amount ofdelayed payment as per Act, 1993. The trial court vide its judgmentdated 15.06.1995 decreed the suit. The Board filed Regular First Appealagainst the judgment of the trial court. On 05.04.2001, the High Courtallowed the Regular First Appeal filed by the Board. The High Courtheld that all the bills raised by the appellant were cleared by the Boardprior to commencement of Act, 1993. Further, the appellant havingreceived the principal amount could not sue for interest. There wasnothing on record to indicate that the appellant has received the amountin question under protest. The appellant filed SLP(C)No.12217/2001against the judgment of the High court dated 05.04.2001. By followingorder the SLP was permitted to be withdrawn by this Court:

“Learned counsel for the petitioner seeks leave to withdraw thespecial leave petition. He states that he will move the High Courtin review stating that it has erred in recording that “all the billswere paid and cleared earlier to the commencement of the Act.”The special leave petition is dismissed as withdrawn accordingly.”

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6. The appellant filed Review Application No.75 of 2001. TheHigh Court vide its order dated 19.03.2013 partly allowed the reviewpetition to the extent that the appellant was held to be entitled to interestat the rate of 9% per annum for the period of delayed payment.

The appellant aggrieved by the said judgment has filed C.A.No.8445Bof 2016.

C.A.No.8448 of 2016(Assam State Electricity Board andAnr. vs.Trusses and Towers (P) Ltd.)

7. The above appeal has been filed by the Board against the orderin Review Petition No.75 of 2001 filed by M/s. Trusses & Towers (P)CLtd. by which order the High Court has partly allowed the review petitionto the extent that the appellant was held to be entitled to interest at therate of 9% p.a. as noted above. The Board aggrieved by the grant ofinterest of 9% p.a. has come up in this appeal.

C.A.No.8450 of 2016(M/s. Brahmaputra Concrete PipeDIndustries vs. Assam State Electricity Board)

8. The Board placed two supply orders dated 17.02.1992 &17.03.1992 for pre-stressed cement concrete poles to the appellant. Thepayment to the tune of Rs.23,04,585.90 was withheld by the Board,principal amount, however, was started making payment with effectEfrom 23.04.1993 and the whole sum was paid upto 18.12.1993. Theappellant filed Money Suit No.32/1996 for recovery of sum ofRs.10,03,466.23 with interest. The Civil Judge has decreed the Suit No.32/1996 by order dated 30.09.2002 for an amount of Rs.5,46,233.14 withinterest and costs. Board filed RFA No.78 of 2003 against the judgmentof the trial court. The High Court vide judgment dated 12.02.2005 allowedFthe appeal filed by the Board and dismissed the suit filed by the appellant.The High Court relied on the judgment of the Purbanchal Cables andConductors (P) Ltd. held that there is no applicability of Act, 1993with regard to transaction which took place prior to 23.09.1992. Againstthe judgment dated 12.02.1015. appeal NO.8448/2016 has been filed.

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9. We have heard Shri Ajit Kumar Sinha, Shri Basava Prabhu S.Patil and Shri Navaniti Prasad Singh, learned senior counsel appearingfor the appellants. Shri Vijay Hansaris, learned senior counsel hasappeared for Assam State Electricity Board.

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10. All these appeals were heard by a two-Judge Bench of thisCourt consisting of Justice V. Gopala Gowda and Justice Arun Mishra.Both Hon’ble Judges of the Bench delivered separate opinion dated31.08.2016. In paragraph 28 of the judgment following questions of lawhave been noticed:

“i) Whether provisions of the Act are retroactive in nature?

ii) Whether non consideration of this aspect of the matter rendersthe decisions of this Court in Modern Industries (supra) andPurbanchal Cables & Conductors Pvt. Ltd. (supra) as sub silentio?

iii) Whether the judgment rendered in Purbanchal Cables &Conductors Pvt. Ltd. (supra) operates as res judicata in the instantcase?

iv) Whether the suit filed by the appellants is barred by limitation?

v) Whether the appeal against the review in the connected matterin Civil Appeal @ SLP (C) No.15274 of 2013 (M/s Trusses &Towers Pvt. Ltd.) is maintainable?

vi) What order?”

11. Dealing with Sections 3, 4, 5 of Act,1993 following opinionwas expressed by Justice Gowda:

“44.The Act was enacted in order to provide a boost to thesmall scale and ancillary industries, which were suffering as aresult of irregular and delayed payments. A perusal of the statementof objects and reasons of the Act, the relevant portion of whichhas been extracted supra, makes it clear that the small scaleindustries were suffering as a result of lack of working capital,which was affecting the economic health of such industries.Prompt payment on the outstanding money, it was felt, that wasthe need of the hour. In this context, the provisions of Sections 3,4, 5 of the Act, assume significance. More so in light of the factthat in the definition clause of Section 2 of the Act, the legislaturehas not defined the words ‘transaction’ or ‘supply order’. It choseto only give definition to the terms, inter alia, ‘appointed day’,‘buyer’ and ‘supplier’. Since the focus of the Act is on delayedpayment, which is in consonance with the definition of the term‘appointed day’ as well, there is no need to consider when the A

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‘transaction’ was entered into or the date of the ‘supply order’.Section 3 of the Act clearly provides that the liability of the buyerto make payment accrues after the supplier supplies goods orrenders any services to the buyer. Thus, what was envisaged bythe legislature as delayed payment was payment of the outstandingmoney due to the supplier after the goods had been supplied, andafter the date agreed upon or the date of deemed acceptance. Abare reading of the Section makes it clear that the date of enteringinto the agreement or the date of supply order were not incontemplation of the legislature at all. Thus, it is amply clear froma bare reading of Section 3 that for the purpose of the Act, it doesnot matter when the contract was entered into, as long as thesupply of the goods was after the Act came into force on23.09.1992. It is in that sense that the question of retrospectiveapplication of the Act does not arise at all. This is further supportedby the use of the non obstante clause in Section 4 of the Act.

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D45. At the cost of repetition, Section 4 of the Act is extractedhereunder:

“4.Date from which and rate at which interest is payable.-Where any buyer fails to make payment of the amount to thesupplier, as required under section 3, the buyer shall,notwithstanding anything contained in any agreement betweenthe buyer and the supplier or in any law for the time being inforce, be liable to pay interest to the supplier on that amountfrom the appointed day or, as the case may be, from the dateimmediately following the date agreed upon, at one and halftime of prime Lending Rate charged by the State Bank ofIndia.”

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The use of the non obstante clause before the term “agreement”also makes it clear that once the money becomes due, which isafter the supply of the goods and rendering services, the buyer isliable to pay the statutory interest on the delayed payment to thesupplier no matter what is contained in the agreement betweenthe buyer and the supplier.

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46. Further, even on the issue of retrospectivity, what was requiredto be examined by this Court in the aforesaid cases was whether H

by reading the relevant statutory provisions Sections 3, 4, 5 and 6of the Act, a vested statutory right is conferred. As I have alreadyheld that aforesaid provisions of the Act are retroactive in naturetherefore, non-consideration of this aspect in Purbanchal Cables& Conductors Pvt. Ltd. (supra) and cases mentioned therein,renders the said judgment sub silentio on this question. Thecontention advanced by Mr. Vijay Hansaria, learned senior counselappearing on behalf of the Electricity Board in this regard cannotbe accepted.”

12. It was further observed that this Court in Purbanchal Cablesand Conductors (P) Ltd. did not consider the important aspect of thematter as to whether provisions of the Act are retroative or not. IssueNo.1 and 2 were answered in favour of the appellant. Other issueswere also answered in favour of the appellant. In paragraphs 56 and 57,the appeals were allowed by Justice Gowda in the following manner:

“56. For the reasons stated supra, I answer the points framed inthese appeals in favour of the appellants as stated above. Theappeals are accordingly allowed. All pending applications aredisposed of.

57. In the Civil Appeals arising out of SLP (C) Nos. 9924-9925of 2013,vide order dated 17.02.2015, the appellants M/s ShantiConductors were directed to pay an amount of Rs.38,70,000/-back to the respondents. The respondents shall refund the amountto the appellants with 9% interest per annum within six weeksfrom the date of receipt of the copy of this Order.”

13. Another Hon’ble Judge, Justice Arun Mishra who deliveredseparate opinion disagreed with the opinion of Justice Gowda. Whiledisagreeing with the opinion of Justice Gowda following was held inparagraphs 77, 78, 79 and 80:

“77. In view of the aforesaid catena of decisions of this Court, ithas to be held that the Act of 1993 cannot be said to be retrospectivein operation or having retroactive operation. The question standsanswered affirmatively beyond pale of doubt and the decisionsare binding on a Co-ordinate Bench. It cannot be said that thedecisions are sub silentio or per incuriam in any manner whatsoeverand, in my opinion, it is not open to the Co-ordinate Bench to takea different opinion. There is no confusion with respect to meaning AB

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Aof transaction, supply order and agreement. This Court whiledeciding aforesaid cases was not in oblivion of aims and objectsof beneficial legislation, considered same and it has Page 104104 affirmatively pronounced on all the aspects. Hence, I find noscope to dwell further into the same arena to declare the variousjudgments to be sub silentio, per incuriam or not laying down theBlaw correctly.

78. Even otherwise, on merits, in my opinion, considering thescheme of the Act, various provisions of the Act it cannot be saidto have retrospective operation or retroactive operation and wherea supply order has been placed before the date of commencementof the Act, that is before 23.9.1992, the beneficial provisions ofthe Act regarding higher interest would not be applicable.

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79. In the case of appellant M/s. Shanti Conductors (P) Ltd. itselfdecided along with Purbanchal Cables (supra) aforesaid findingshave been recorded by this Court while remanding the case to theDHigh Court for decision on merits as an appeal arising of same liswas pending before the High Court and the High Court has rightlyfollowed the decisions in Purbanchal Cables & Conductors (supra)decided along with M/s. Shanti Conductors (P) Ltd. The findingrecorded by this Court in the remand order is final and binding onEthe appellant- M/s. Shanti Conductors (P) Ltd. They cannotquestion the same again in the instant appeals. Page 105 105

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80. In view of the aforesaid discussion, the appeals have no meritand the same deserve dismissal and are hereby dismissed. Nocosts.”

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14. In view of the divergent opinion expressed by learned Judgesconsisting the Bench the matter has been placed before this three-JudgeBench.

15. Shri Ajit Kumar Sinha, leaned senior counsel for the appellantin his submission referred to and relied on the opinion of Hon’ble JudgeGallowing the appeal. He submits that the Act, 1993 was enacted asbeneficial legislation to protect the small scale industries. The Act, 1993focused on supplies and the date of the agreement for supply has norelevance. The Act applies and protect the suppliers in the event supplieshave been effected subsequent to Act, 1993. Learned counsel submitsthat even if the orders for supply were issued prior to 23.09.1992 someH

of the supplies have been made after the Act. The provisions of the Actare applicable and the appellant was clearly entitled for interest on delayedpayment. He submits that the contrary view expressed by this Court inPurbanchal Cables and Conductors Private Limited judgment doesnot correctly interpret the provisions of the Act, 1993. He submits thatwhat is relevant is amount due to the suppliers and in event the amountdue to supplier is subsequent to Act, 1993 the liability to pay interest ondelayed payment accrues and is fastened on the buyer.

16. The Act was brought by an Ordinance. The Act applies onamount due not for any previous period prior to Act, 1993 but subsequentto enforcement of the Act, 1993. The Act, 1993 has prospectiveapplication and it is not the case of the appellant that Act has anyretrospective operation.

Shri Patil adopting the arguments of Shri Sinha, further submitsthat withdrawal of SLP (C)No.12217 of 2001 by the appellant shall notpreclude the appellant from challenging the subsequent order dated19.03.2013 passed by the Gauhati High Court which has given a freshcause of action.

17. Shri Navaniti Prasad Singh submits that Act, 1993 was enactedfor prompt payments of money by buyers and to statutorily ensure bymandatory provisions for payment of interest on the outstanding money,in case of default. He submits that payment of interest even oncommercial transactions was a concept already contained in severalstatutory provisions. By the Act, 1993 nothing new was done exceptpayment of interest on delayed payment was ensured to deter the buyerfrom withholding amount of suppliers.

18. Shri Vijay Hansaria, learned senior counsel for Board submitsthat two-Judge Bench of this Court in Purbanchal Cables andConductors (P) Ltd. has correctly interpreted provisions of Act, 1993.The Act has no application when contract to supply was entered prior toenforcement of the Act, 1993. He submits that suit filed by ShantiConductors was barred by time. According to the case of the appellantthe amount became due on 04.10.1993, the limitation will start runningfrom 04.11.1993 and suit having not been filed within three years suitwas barred by limitation. He submits that benefit of the Act, 1993 cannotbe allowed to the appellant. He further submits that the appellant wasbound by the judgment of this Court in Purbanchal Cables and A

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AConductors (P) Ltd. since by the said judgment dated 10.07.2012 theappeal filed by the Board in which Shanti Conductors was also respondenthas been decided. The appellants are bound by the judgment dated10.07.2012 and what has been held in the said judgment cannot bequestioned by the appellant the judgment being binding inter-parties.B19. He further submits that admittedly the entire principal amountstood paid to the appellant by 04.10.1993 hence suit for only interestwas not maintainable.

20. Shri Hansaria submits that judgments of this Court in AssamSmall Scale Industries Development Corp. Ltd. and others vs.CJ.D. Pharmaceuticals and another, (2005) 13 SCC 19, Shakti TubesLtd. vs. State of Bihar and others, (2009) 7 SCC 673, ModernIndustries vs. Steel Authority of India Limited, (2010) 5 SCC 44,as well as judgment of this Court in Purbanchal Cables andConductors Private Limited (supra) having held that Act has noapplicability with regard to contracts entered into prior to enforcementDof Act, the said law which is a settled law for a quite long time need notbe unsettled by this Court. In view of the judgment of this Court inPurbanchal Cables, the appeal of the appellant has rightly beendismissed by the Gauhati High Court.

21. Replying the submission of Shri Patil, Shri Hansaria submitsEthat when the SLP by this Court was dismissed on 06.08.2001 againstthe judgment of the High Court dated 05.04.2001 allowing the appeal ofthe Board, this Court having not granted further liberty it is not open forthe appellant to file the appeal against the impugned judgment decidingreview petition.F22. Shri Hansaria further submits that the Board has also filed

22. Shri Hansaria further submits that the Board has also filedappeal against the order of the High Court deciding the review petitionwherein the High Court has granted 9% interest. Shri Hansaria lastlysubmitted that the interest if any can be claimed by the appellant only tillthe date they receive the final payment.G23. In the rejoinder, Shri A.K. Sinha has refuted the submissions G23. In the rejoinder, Shri A.K. Sinha has refuted the submissionsof Shri Hansaria. He submits that the judgment of this Court inPurbanchal Cables cannot operate as res judicata, since appeal whichwas decided on 10.07.2012 was only against the reference of the FullBench. The Full Bench having only answered the legal questions, theappeal in the High Court being still pending and there being no decisionH

in appeal the principle of merger shall not be attracted. Shri Sinha,however, submits that the suit was not barred by limitation. The lastpayment made to the appellant being on 05.03.1994, the suit filed by theappellant on 10.01.1997 was well within limitation.

24. Shri Patil in rejoinder submits that the order passed in thereview petition being an order partly allowing the review petition theappeal filed by the appellant is on separate cause of action and the earlierorder passed by this Court on 06.08.2001 shall not come in the way ofdeciding the appeal on merits.

25. Learned counsel for the parties have relied on variousjudgments of this Court which shall be referred to while considering thesubmissions of the parties.

26. We have considered the submissions of the learned counselfor the parties and have perused the divergent opinion dated 31.08.2016given by two Hon’ble Judges of this Court in C.A.Nos.8442-8443 of2016.

27. From the submissions of the learned counsel for the partiesand pleadings on record we need to answer the following questions inthese appeals:

(1) Whether Act, 1993 is not applicable when the contract forsupply was entered between the parties prior to enforcementof the Act i.e. 23.09.1992 ?

(2) Whether in the event it is found that Act is applicable also withregard to contract entered prior to Act, 1993 in pursuance ofwhich contract, supplies were made after the enforcement ofAct, 1993, the Act, 1993 can be said to have retrospectiveoperation ?

(3) Whether money suit by M/s. Shanti Conductors was barredby limitation ?

(4) Whether judgment of this Court in Purbanchal Cables dated31.08.2016 by which appeal of M/s. Shanti Conductors wasalso dismissed is binding between the parties i.e. M/s. ShantiConductors and Assam Electricity Board and the appellantcannot be allowed to question the said judgment in theseappeals?

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A(5) Whether the suit filed by the appellants for recovery of onlyinterest when admittedly entire principal amount was paid priorto filing of the suit can be said to be maintainable ?

(6) Whether appeal filed by M/s Trusses and Towers Pvt. Ltd.challenging the review judgment dated 19.03.2003 cannot beBentertained since no liberty was granted by this Court inSLP(C)No.12217 of 2001 when the SLP filed against the mainjudgment of the High court dated 05.04.2001 was dismissedas withdrawn ?

(7) Whether the High court while considering the Review petitionCno.75 of 2001 M/s Trusses & Towers Pvt. Ltd. even afterexpressing that Act, 1993 is not applicable could have allowed 9% interest to the plaintiff?

28. Before we consider the issues which have arisen in theseappeals it is necessary to notice the provisions of the Act, 1993. In theDParliament, the Government of India made a policy statement on smallscale industries. It was also announced that suitable legislation would bebrought to ensure prompt payment of money by buyers to the smallindustrial units. An Ordinance, namely, the Interest on Delayed Paymentsto Small Scale and Ancillary Industrial Undertakings Ordinance, 1992Ewas promulgated by the President on 23.09.1993. To replace theOrdinance, The Interest on Delayed Payments to Small Scale andAncillary Industrial Undertakings Act, 1993 was introduced in theParliament. The Statement of Objects and Reasons of the Act throwsconsiderable light on the prevalent situation and the remedially measureswhich was sought in the legislation. In the Statement of Objects andFreasons following was observed:

“2.Inadequate working capital in a small scale or an ancillaryindustrial undertakings causes serious and endemic problemsaffecting the health of such undertaking. Industries in this sectorhave also been demanding that adequate measures be taken inGthis regard. The Small Scale Industries Board, which is an apexadvisory body on policies relating to small scale industrial unitswith representatives from all the States, governmental bodies andthe industrial sector, also expressed this view. It was, therefore,felt that prompt payments of money by buyers should be statutorilyensured and mandatory provisions for payments of interest on the H

outstanding money, in case of default, should be made. The buyers,if required under law to pay interest, would refrain from withholdingpayments to small scale and ancillary industrial undertakings.”

29. Act, 1993 is a special legislation. Section 2 of the Act providesdefinitions, its clause (b) defined the “appointed day” in the followingmanner:

“2(b)”appointed day” means the day following immediately afterthe expiry of the period of thirty days from the day of acceptanceor the day of deemed acceptance of any goods or any services bya buyer from a supplier;”

30. Sections 3 to 6 of the Act, 1993 are as follows:

“Section 3. Liability of buyer to make payment.- Where anysupplier supplies any goods or renders any services to any buyer,the buyer shall make payment therefor on or before the date agreedupon between him and the supplier in writing or, where there is noagreement in this behalf, before the appointed day:

Provided that in no case the period agreed upon between thesupplier and the buyer in writing shall exceed one hundred andtwenty days from the day of acceptance or the day of deemedacceptance.

Section 4. Date from which and rate at which interest ispayable.- Where any buyer fails to make payment of the amountto the supplier, as required under section 3, the buyer shall,notwithstanding anything contained in any agreement betweenthe buyer and the supplier or in any law for the time being inforce, be liable to pay interest to the supplier on that amount fromthe appointed day or, as the case may be, from the date immediatelyfollowing the date agreed upon, at one and half time of primeLending Rate charged by the State Bank of India.

Explanation.- For the purposes of this section,” Prime LendingRate” means the Prime Lending Rate of the State Bank of Indiawhich is available to the best borrowers of the bank.

Section 5. Liability of buyer to pay compound interest.-Notwithstanding anything contained in any agreement between asupplier and a buyer or in any law for the time being in force, the A

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Abuyer shall be liable to pay compound interest (with monthlyinterests) at the rate mentioned in section 4 on the amount due tothe supplier.

Section 6. Recovery of amount due.-

(1) The amount due from a buyer, together with the amount ofBinterest calculated in accordance with the provisions of sections 4and 5, shall be recoverable by the supplier from the buyer by wayof a suit or other proceeding under any law for the time being inforce.

(2) Notwithstanding anything contained in sub- section (1), anyCparty to a dispute may make a reference to the Industry FaciliationCouncil for acting as an arbitrator or conciliator in respect of thematters referred to in that sub- section and the provisions of theArbitration and Conciliation Act, 1996 (26 of 1996 ) shall apply tosuch dispute as if the arbitration or conciliation were pursuant toDan arbitration agreement referred to in sub- section (1) of section7 of that Act.

31. Section 3 creates a statutory liability of buyer to make payment.The statutory liability is to the effect that where any supplier suppliesany goods to any buyer, the buyer shall make payment, therefor on orEbefore the date agreed upon between him and the supplier in writing or,where there is no agreement in this behalf, before the appointed day.The statutory liability has been fastened on the buyer to make paymentin the following manner:

(i) on or before the date agreed upon between him and on thesupplier in writing, orF(ii) where there is no agreement in this behalf before the appointedday.

32. ‘Appointed day’ as defined in Section 2(b) means the dayfollowing immediately after the expiry of the period of thirty days fromGthe day of acceptance or the day of deemed acceptance of any goods orany services by a buyer from a supplier. Thus, statutory liability to makepayment accrues to buyer as per Section 3, it is relevant to notice theevent contemplated under Section 3 is “where any supplier supplies anygoods or renders any services to any buyer”. The incidence of liabilityis supply of goods or rendering any service. The Act is clearlyH

prospective in nature and shall govern the incidence of supply andrendering service which happens after enforcement of the Act i.e.23.09.1992.

33. The second part of Section 3 is “buyer shall make payment”.Obviously, question of payment shall arise only after supply of goods orrendering any service. Thus, by virtue of Section 3, both the incidentsi.e. supply or service on the one hand and payment on the other has tobe after the enforcement of Act, 1993. Statutory provision of Section 3further creates statutory liability to make payment on the agreed day inwriting between the buyers and the supplier and if there is no agreementthen before appointed day. The fact that agreement in writing betweenbuyer and supplier for supply and payment is prior to the enforcement ofthe Act is neither relevant nor material, what is material is that supplyand services had to be after the enforcement of the Act, only then theliability of payment shall accrue.

34. We have already noticed that the purpose and object oflegislation was prompt payments of money by buyer which has beenstatutorily ensured in Act, 1993 by containing mandatory provisions ofpayment of interest.

35. Section 4 which deals with date from which and rate at whichinterest is payable. The liability to make payment of the amount to thesupplier only arises when any buyer fails to make payment as requiredunder Section 3.

36. Section 4 further provides “notwithstanding anything containedin any agreement between the buyer and the supplier or any law for thetime being in force”, thus, even if the agreement between the buyer andthe supplier contains clause that no interest on late payment shall bemade the liability to pay interest is fastened by virtue of Section 4disregarding any contract to the contrary. Whether the contract betweenbuyer and supplier is prior to enforcement of Act, 1993 is also neitherrelevant nor material and the material is that buyer fails to make paymentto supplier as required under Section 3. The liability to pay interest thusarises when the payment is not made as per Section 3.

37. The liability to make payment under Section 3 and the liabilityto pay interest under Section 4 is not dependent on date of agreementbetween the parties to make supply. When the question of supply andpayment are incidents contemplated under the Act which have to take A

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Aplace after the enforcement of the Act the day of agreement betweenthe parties has no relevance in so far as statutory liability under the Actis concerned.

38. There are several two-Judge Benches judgments of this Courtwhere provisions of Act, 1993 especially Sections 3 and 4 have beenBinterpreted. We now refer to judgments of this Court which haveconsidered the above provisions. The first judgment which has beennoticed is Assam Small Scale Industries Development Corp. Ltd.and others vs. J.D. Pharmaceuticals and another, (2005) 13 SCC19. This Court in the above judgment laid down that Act, 1993 will notapply to transactions which took place prior to enforcement of the Act.CFollowing was laid down in paragraphs 37 and 38:

“37. We have held hereinbefore that Clause 8 of the terms andconditions relate to the payments of balance 10%. It is not indispute that the plaintiff had demanded both the principal amountas also the interest from the Corporation. Section 3 of the 1993DAct imposes a statutory liability upon the buyer to make paymentfor the supplies of any goods either on or before the agreed dateor where there is no agreement before the appointed day. Onlywhen payments are not made in terms of Section 3, Section 4would apply. The 1993 Act came into effect with effect fromE23.9.1992 and will not apply to transactions which took place priorto that date. We find that out of the 71 suit transactions, sl. Nos.1to 26 (referred to in penultimate para of the Trial Court Judgment),that is supply orders between 5.6.1991 to 28.7.1992, were prior tothe date of 1993 Act coming into force. Only the transactions atsl. no. 27 to 71 (that is supply orders between 22.10.1992 toF19.6.1993). will attract the provisions of the 1993 Act.

38. The 1993 Act, thus, will have no application in relation to thetransactions entered into between June, 1991 and 23.9.1992. TheTrial Court as also the High Court, therefore, committed a manifesterror in directing payment of interest at the rate of 23% uptoJune, 1991 and 23.5% thereafter.”

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39. The word ‘transaction’ used in the above judgment has toinclude the supply, in the event word transaction is understood as supplythere cannot be any quarrel with the proposition that Act will not applywith regard to supply made prior to the Act.

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40. The next judgment of this Court is Shakti Tubes Ltd. vs.State of Bihar and others, (2009) 7 SCC 673. In the said case, ShaktiTubes had filed a suit for payment of interest. In the above case, supplyorders were placed by the State of Bihar on 16.07.1992, reliance on Act,1993 was placed by the appellant. It was also noticed in the said casethat earlier supply order dated 16.07.1992 was materially altered andsubstituted by a fresh supply order issued on 18.03.1993. Referring tothe judgment of this Court in Assam Small Scale Industries case,two-Judge Bench held that ratio of aforesaid decision is clearly applicable.In paragraphs 17, 18 and 19 following was laid down:

“17. In the light of the said facts in Assam Small Scale Industriescase, it was recorded in paragraph 37 of the judgment that whilethe Act came into effect from 23rd September, 1992, the supplyorders were placed only in respect of Serial Nos. 1 to 26immediately and before coming into effect of the Act and rest ofthe supply orders namely, supply orders at Serial Nos. 27 to 71were placed between 22.10.1992 to 19.06.1993 which weresubsequent to the date when the Act came into force. In thatcontext, it was clearly recorded in the judgment that the Act willhave no application to the transactions that took place prior to thecommencement of the Act. In the next sentence the Court madeit clear as to what is referred to and understood by the expression“transaction” when it clearly stated that out of 71 transactions,Serial Nos. 1 to 26, i.e. supply orders between 05.06.1991 to28.07.1992 being prior to 23rd September, 1992 when the Actcame into force, higher interest as envisaged under Sections 4and 5 of the Act cannot be paid and demanded in respect of thesaid supply orders/transactions. It was also made clear that thetransactions at Serial Nos. 27 to 71 only i.e. supply orders between22.10.1992 to 19.06.1993, would attract the provisions of the Act.therefore, those supply orders which were issued by theCorporation between 22.10.1992 to 19.06.1993 were held to bethe transactions which would be entitled to get the benefit of theprovisions of the Act.

18. In our considered opinion, the ratio of the aforesaid decisionin Assam Small Scale Industries case is clearly applicable andwould squarely govern the facts of the present case as well. Thesaid decision was rendered by this Court after appreciating the A

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entire facts as also all the relevant laws on the issue and, therefore,we do not find any reason to take a different view than what wastaken by this Court in the aforesaid judgment. Thus, we respectfullyagree with the aforesaid decision of this Court which is found tobe rightly arrived at after appreciating all the facts andcircumstances of the case.

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19. Now coming to the facts of the present case we find thatthere is no dispute with regard to the fact that the supply orderwas placed with the respondents on 16.07.1992 for supply of thepipes which date is admittedly prior to the date on which this Actcame into effect. “

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41. The Bench further referring to earlier judgment of this Courtin Assam Small Scale Industries observed that the use of expression‘transaction’ was only for supply order. In paragraph 21 following waslaid down:

“21. We have considered the aforesaid rival submissions. ThisDCourt in Assam Small Scale Industries case has finally set at restthe issue raised by stating that as to what is to be consideredrelevant is the date of supply order placed by the respondents andwhen this Court used the expression “transaction” it only meant asupply order. The Court made it explicitly clear in paragraph 37 ofEthe judgment which we had already extracted above. In ourconsidered opinion there is no ambiguity in the aforesaid judgmentpassed by this Court. The intent and the purpose of the Act, asmade in paragraph 37 of the judgment, are quite clear andapparent. When this Court said “transaction” it meant initiation ofFthe transaction i.e. placing of the supply orders and not thecompletion of the transactions which would be completed onlywhen the payment is made. therefore, the submission made bythe learned senior counsel appearing for the appellant-plaintifffails .”

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42. The Court further held that there was neither any alteration ofthe contract nor novation of the contract in paragraph 31 which is to thefollowing effect:

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“31. Even otherwise, we are of the considered view that therewas neither any alteration of the contract nor any novation of thecontract in the present case. The correspondence between the H

parties clearly disclosed that after the respondents issued the supplyorder, the appellant-plaintiff did not supply the pipes in terms ofthe supply order and it urged mainly for the increase in the priceof the goods. Subsequently, they relied upon the price escalationclause and asked for increase in the price of pipes .”

43. Next judgment we notice is Modern Industries vs. SteelAuthority of India Limited, (2010) 5 SCC 44. Noticing the purposeand object of the Act, 1993 following was observed in paragraph 23:

“23. The wholesome purpose and object behind 1993 Act asamended in 1998 is to ensure that buyer promptly pays the amountdue towards the goods supplied or the services rendered by thesupplier. It also provides for payment of interest statutorily on theoutstanding money in case of default. Section 3, accordingly,fastens liability upon the buyer to make payment for goods suppliedor services rendered to the buyer on or before the date agreedupon in writing or before the appointed day and when there is nodate agreed upon in writing, the appointed day shall not exceed120 days from the day of acceptance. “

44. The Court had also considered one of the submissions that thesuit for recovery of mere interest under Act, 1993 is not maintainable.The Bench answered the issue by holding that the suit even for interestis also maintainable. Following was laid down in paragraphs 45-46:

“45. It is true that word ‘together’ ordinarily means conjointly orsimultaneously but this ordinary meaning put upon the said wordmay not be apt in the context of Section 6. Can it be said that theaction contemplated in Section 6 by way of suit or any other legalproceeding under Sub-section (1) or by making reference to IFCunder Sub-section (2) is maintainable only if it is for recovery ofprincipal sum along with interest as per Sections 4 and 5 and notfor interest alone? The answer has to be in negative.

46. We approve the view of Gauhati High Court in Assam StateElectricity Board (2002) 2 GLR 550 that word ‘together’ in Section6(1) would mean ‘alongwith’ or ‘as well as’. Seen thus, the actionunder Section 6(2) could be maintained for recovery of principalamount and interest or only for interest where liability is admittedor has been disputed in respect of goods supplied or servicesrendered. In our opinion, under Section 6(2) action by way of A

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Areference to IFC cannot be restricted to a claim for recovery ofinterest due under Sections 4 and 5 only in cases of an existingdetermined, settled or admitted liability. IFC has competence todetermine the amount due for goods supplied or services renderedin cases where the liability is disputed by the buyer. Constructionput upon Section 6(2) by learned senior counsel for the buyerBdoes not deserve to be accepted as it will not be in conformitywith the intention, object and purpose of 1993 Act. Preamble to1993 Act, upon which strong reliance has been placed by learnedsenior counsel, does not persuade us to hold otherwise. It is sobecause Preamble may not exactly correspond with the enactment;Cthe enactment may go beyond Preamble.

45. In the above case also the contract was entered on 15.01.1993but the contract was subsequently altered. Last alteration being on29.04.1995 hence the Bench repelled the submission that Act, 1993 wasnot applicable.

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46. Now we come to the judgment of this Court in PurbanchalCables and Conductors Private Limited (supra) which is a judgmenton which reliance has been placed by the High Court while allowing theappeal of the Board. Learned counsel for the Board has also placedheavy reliance on the said judgment.

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47. In the above case, Board placed order dated 31.03.1992 fordelivery of goods on 16.09.1992. Further, supplies were made between25.9.1992 and 30.03.1993. Entire supply was completed on 12.10.1993entire payment was received by October, 1993. The supplier institutedmoney suit for payment of interest on delayed payment under Act, 1993.FThe issues to be answered have been noted in paragraph 10 of thejudgment which is to the following effect:

“10.The issues that are required to be answered by us in theseappeals are whether a suit for interest along is maintainable underthe provisions of the Act, and whether the Act would be applicableto contracts that have been concluded prior to the commencementof the Act. In other words, we are required to examine whetherthe Act would apply to those contracts which were entered intoprior to the commencement of the Act but supplies were effectedafter the Act came into force.”

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48. On the question of maintainability of the suit for interest, theBench held that the supplier may file suit only for a higher rate of intereston delayed payment made by the buyer from the commencement of theAct. The Bench held that Act, 1993 being a substantive law it shalloperate prospectively. In paragraph 51 following has been laid down:

“51. There is no doubt about the fact that the Act is a substantivelaw as vested rights of entitlement to a higher rate of interest incase of delayed payment accrues in favour of the supplier and acorresponding liability is imposed on the buyer. This Court, timeand again, has observed that any substantive law shall operateprospectively unless retrospective operation is clearly made outin the language of the statute. Only a procedural or declaratorylaw operates retrospectively as there is no vested right inprocedure.”

49. The Court further held that Act, 1993 shall be applicable onlyfor sale agreements after the date of the commencement of the Act andnot any time prior. Following was laid down in paragraph 52:

“52. In the absence of any express legislative intendment of theretrospective application of the Act, and by virtue of the fact thatthe Act creates a new liability of a high rate of interest against thebuyer, the Act cannot be construed to have retrospective effect.Since the Act envisages that the supplier has an accrued right toclaim a higher rate of interest in terms of the Act, the same canonly be said to accrue for sale agreements after the date ofcommencement of the Act i.e. 23-9-1992 and not any time prior.”

50. The Bench also expressly rejected the submission of the learnedcounsel appearing for the supplier that the earlier judgments of this Courtin Assam Small Scale Industries and Shakti Tubes needconsideration. On question of limitation of the suit no final opinion wasexpressed. The appeals were ultimately dismissed by the Bench.

Issue NO.1

51. The judgment of this Court in Purbanchal Cables andConductors Pvt. Ltd relying on Assam Small Scale Industries andShakti Tubes had laid down that Act, 1993 cannot be made applicablewith regard to sale agreements which were entered into prior to theenforcement of the Act and Act can be invoked only for the sale A

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Aagreements which were entered after the enforcement of the Act.Although attempt was made in Purbanachal Cables to get judgment inAssam Small Scale Industries and Shakti Tubes reconsidered butco-ordinate Bench in Purbanchal Cables has refused to permit anysuch reconsideration. The matter now having been referred to this three-Judge Bench we have to consider and answer as to whether the aboveBinterpretation of Act, 1993 as given is in consonance with the statutoryscheme.

52. We have noticed above that the incidence of applicabilityof the liability under the Act is supply of goods or rendering of service.In event the supply of goods and rendering of services is subsequent toCAct, can liability to pay interest on delayed payment be denied on theground that agreement in pursuance of which supplies were made wereentered prior to enforcement of the Act? Entering into an agreementbeing not expressly or impliedly referred to in the statutory scheme asan incident for fastening of the liability, making the date of agreement asDdate for imposition of liability does not conform to the statutory scheme.This can be illustrated by taking an example. There are two small scaleindustries who received orders for supply of materials. ‘A’ received suchorders prior to the enforcement of the Act and ‘B’ received the orderafter the enforcement of the Act. Both supplied the goods subsequent toenforcement of the Act and became entitled to receive payment afterEthe supply, on or before the day agreed upon between the supplier andbuyer or before the appointed day. Payments were not made both to Aand B as required by Section 3. Can the buyer who has received suppliesfrom supplier A escape from his statutory liability to make payment ofinterest under Section 3 read with Section 4 ? The answer has to be No.FTwo suppliers who supply goods after the enforcement of the Act, becomeentitled to receive payment after the enforcement of the Act one suppliercannot be denied the benefit of the statutory protection on the pretextthat agreement in his case was entered prior to enforcement of the Act.When the date of agreement is not referred as material or incidence for fastening the liability, by no judicial interpretation the said date can beGtreated as a date for fastening of the liability. The Act, 1993 beingbeneficial legislation enacted to protect small scale industries andstatutorily ensure by mandatory provision for payment of interest on theoutstanding money, accepting the interpretation as put by learned counselfor the Board that the day of agreement has to be subsequent to the H

enforcement of the Act, the entire beneficial protection of the Act shallbe defeated. The existence of statutory liability depends on the statutoryfactors as enumerated in Section 3 and Section 4 of the Act, 1993.Factor for liability to make payment under Section 3 being the suppliersupplies any goods or renders services to the buyer, the liability of buyercannot be denied on the ground that agreement entered between theparties for supply was prior to Act, 1993. To hold that liability of buyerfor payment shall arise only when agreement for supply was enteredsubsequent to enforcement of the Act, it shall be adding words to Section3 which is not permissible under principles of statutory construction.We, thus, are of the view that judgments in Purbanchal Cables andConductors (supra), Assam Small Scale Industries and ShaktiTubes which held that Act, 1993 shall be applicable only when theagreement to sale/contract was entered prior/subsequent to theenforcement of the Act, does not lay down the correct law. We acceptthe submission of learned counsel for the appellants that even ifagreement of sale is entered prior to enforcement of the Act, liability tomake payment under Section 3 and liability to make payment of interestunder Section 4 shall arise if supplies are made subsequent to theenforcement of the Act.

Issue No.2

Issue No.2

53. In all the judgments of this Court referred above, it has beenheld that Act, 1993 is not retrospective. It is not even contended beforeus by any of the parties that the Act, 1993 is retrospective in operation.Judgments of this Court as noticed above rightly hold that Act, 1993 isnot retrospective.

54. The opinion of Justice Gowda dated 31.08.2016 although holdsthat Act is not retrospective but he holds the Act retroactive. The wordretroactive has been defined in Black’s Law Dictionary in the followingwords:

“Retroactive.adj.(17C) (Of a statute, ruling, etc.) extending inscope or effect to matters that have occurred in the past. -Alsotermed retrospective. Cf. Prospective (1).-retroact,vb.”

55. Two-Judge Bench of this Court in State Bank’s Staff Union(Madras Circle) vs. Union of India and ors., (2005) 7 SCC 584,had occasion to examine the concept of retroactive and retrospective.In paragraphs 20 and 21 of the judgment following has been laid down:

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“20. Judicial Dictionary (13th Edn.) K.J. Aiyar, Butterworth, p.857, states that the word “retrospective” when used, withreference to an enactment may mean (i) affecting an existingcontract; or (ii) reopening up of past, closed and completedtransaction; or (iii) affecting accrued rights and remedies; or (iv)affecting procedure. Words and Phrases, Permanent Edn., Vol.37-A, pp. 224-25, defines a “retrospective or retroactive law” asone which takes away or impairs vested or accrued rights acquiredunder existing laws. A retroactive law takes away or impairs vestedrights acquired under existing laws, or creates a new obligation,imposes a new duty, or attaches a new disability, in respect totransaction or considerations already past.

21. In Advanced Law Lexicon by P. Ramanath Aiyar (3rd Edition,2005) the expressions “retroactive” and “retrospective” have beendefined as follows at page 4124 Vol.4)

“Retroactive- Acting backward; affecting what is past. (Of astatute, ruling, etc.) extending in scope or effect to matters thathave occurred in the past. - Also termed retrospective. (Black,7th Edn. 1999)

‘Retroactivity’ is a term often used by lawyers but rarely defined.On analysis it soon becomes apparent, moreover, that it is used tocover at least two distinct concepts. The first, which may be called‘true retroactivity’, consists in the application of a new rule of lawto an act or transaction which was completed before the rule waspromulgated. The second concept, which will be referred to as‘quasi-retroactivity’, occurs when a new rule of law is applied toan act or transaction in the process of completion.... The foundationof these concepts is the distinction between completed and pendingtransactions....”

(T.C. Hartley, The Foundations of European Community Law 129(1981).

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Retrospective- Looking back; contemplating what is past.

Having operation from a past time.

‘Retrospective’ is somewhat ambiguous and that good deal ofconfusion has been caused by the fact that it is used in moresenses than one. In general however the Courts regards asretrospective any statute which operates on cases or facts cominginto existence before its commencement in the sense that it affectseven if for the future only the character or consequences oftransactions previously entered into or of other past conduct. Thus,a statute is not retrospective merely because it affects existingrights; nor is it retrospective merely because a part of the requisitefor its action is drawn from a time and antecedents to its passing.(Vol.44 Halsbury’s Laws of England, Fourth Edition, page 570para 921) “

56. Further in Jay Mahakali Rolling Mills vs. Union of Indiaand others, 2007 (12) SCC 198, explaining the retroactive andretrospective following has been laid down:

“8. “Retrospective” means looking backward, contemplatingwhat is past, having reference to a statute or things existing beforethe statute in question. Retrospective law means a law whichlooks backward or contemplates the past; one, which is made toaffect acts or facts occurring, or rights occurring, before it comesinto force. Retroactive statute means a statute, which creates anew obligation on transactions or considerations or destroys orimpairs vested rights.”

57. Retroactivity in the context of the statute consists applicationof new rule of law to an Act or transaction which has been completedbefore the Rule was promulgated.

58. In the present case the liability of buyer to make payment andday from which payment and interest become payable under Section 3and 4 does not relate on any event which took place prior to Act, 1993,it is not even necessary for us to say that Act, 1993 is retroactive inoperation. The Act, 1993 is clearly prospective in operation and it is notnecessary to term it as retroactive in operation. We, thus, do not subscribeto the opinion dated 31.08.2016 of one of the Hon’ble Judges holdingthat the Act, 1993 as retroactive.

Issue No.3

Whether money suit no.21 of 1997 filed by appellant is barred bytime is one of the issues which has been raised before us.

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59. From the pleadings on the record it transpires that two supplyorders dated 31.03.1992 and 13.05.1992 was issued to the appellant forsupply of conductors. In the Plaint, the appellant had given the details ofdate of supply orders and date when supply was made on different stores.The supplies made by the appellant were both before enforcement ofthe Act i.e. 23.09.1992 and after the enforcement of the Act.

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60. In view of the discussions as made above only the suppliesreceived after 23.09.1992 are relevant for purposes of 1993 Act. As perpleadings on the record entire supplies by the appellant was completedon 04.10.1993. Details of the payment has also been given in the plaintwhich indicate that last payment dated 05.03.1994 was received.CParagraph 24 of the plaint gives the details of cause of action for the suitwhich states that cause of action for the suit arose on 31.03.1992 andthereafter on different date last date being mentioned in paragraph 24was 05.10.1993 and each date subsequent thereafter. With regard tolimitation there is specific pleading in paragraph 21 of the plaint which isDto the following effect: - “21. That the transaction between the plaintiffs and thedefendants are duly maintained by the plaintiffs in the Booksof Accounts like ledger, Sale Register etc. which are kept inthe usual course of the business of the plaintiffs and thoseEaccounts between the plaintiffs and the defendants are incontinuity and the interest payable by the defendants to theplaintiffs are carried over till date. As such the suit of theplaintiff’s is in within time. Apart from that the provisions ofthe Limitation Act does not apply in view of the provisionscontained in the Act, 1993 as because the Act of 1993 is havingFoverriding effect over the Limitation Act and all other Acts.”

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61. Written statement was filed by the defendants in which writtenstatement in paragraph 4 of the statement plea was taken that suit isbarred by limitation. Trial Court in its judgment dated 02.02.2000 hasnoticed the issues which were framed, one of the issues i.e. Issue no.2Gwas “whether the issue was barred by the limitation.” The entirediscussion of issue no.2 by the Trial Court is to the following effect: - “Issue No.2: - The supply order placed by the defendant no.2 was exhibitedas Exts-6 and 7 by the plaintiff. The goods were supplied H

vide challans which were exhibited as Exts-8 to 37 and 69 to71 and 73. The delivery commenced on 21.06.92 and endedon 23.03.93. The bills were raised vide Exts-38 to 55 andExt-60 to 68. The plaintiff had not denied about the receiptof the bill amount. The bill Exxt-55 was raised on 02.01.93and the bill Ex-68 was raised on 18.12.93. This is a caseunder the provision of the interest on Delayed Payments toSmall Scale and Ancillary Industrial Undertakings Act andSection 10 of the said gives over-riding effect as follows:- “10. Over-riding effect:- The provisions of this Act shallhave effect notwithstanding anything inconsistent therewithcontained in any other law for the time being in force.”So, Section 10 has taken away the plea of limitation in suchtype of cases. So issue no.2 is also decided in favour of theplaintiff.”

62. The Trial Court held that by virtue of Section 10 of Act, 1993plea of limitation is taken away and the suit is not barred by the limitation.The Division Bench of the High Court in RFA No. 66 of 2000 filed bythe defendant had made a reference to the full bench. Full Bench in itsorder dated 05.03.2002 has not considered or decided the question oflimitation.

63. Against the judgment dated 05.03.2002 of Full Bench of HighCourt answering the reference, the Assam State Electricity Board hadfiled appeal in this court being Civil Appeal No. 2351 of 2003. This Courtdecided Civil Appeal No.2351 of 2003 along with Civil Appeal No. 2348of 2003 on 10.07.2002 which judgment is Purbanchal Cables andConductors (P) Ltd. (Supra). This Court in paragraph 31 has noticedthe submission of learned Counsel for the State Electricity Board thatsuits filed by both the suppliers were barred by time but this Court didnot express any opinion. Paragraph 31 of the judgment is to the followingeffect: - “31. Though the learned Senior Counsel would state that thesuits filed by both the suppliers in the present batch of appealswere barred by limitation. We do not intend to express ourview on the issue, since some of the appeals filed by thesuppliers are still pending before the High Court. Any A

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Aobservation that we may make would certainly affect theinterest of both the parties since that issue is yet to be decidedby the High Court.”

64. After the judgment of this Court dated 10.07.2012 when thematters went back to the High Court, Division Bench decided the RFAB66 of 2000 by impugned judgment dated 20.11.2012. The Division Benchin the impugned judgment has noticed the issues in paragraph 5 of thejudgment and submissions on the limitations. In paragraph 22, thesubmissions on behalf of the Assam State Electricity Board have beennoticed whereas the reply given by the learned counsel for the appellanthas been noticed in paragraph 22, 24, 25 & 26 of the judgment which areCas follows: - “22. Yet another ground of challenge, advanced at the timeof hearing of this appeal, by Mr. Das, learned Senior counsel,is that the learned trial Court has wrongly held that the suitwas not barred by limitation and, in this regard, referencemade by the learned trial Court to Section 10 of 1993 Act iswholly erroneous in as much as Section 10 merely lays downthat provisions of 1993 Act shall have effect notwithstandinganything inconsistent therewith contained in any other lawfor the time being in force.

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24. As regards the question as to whether 1993 Act wouldapply to the contract at hand and whether the suit was barredby limitation. Mr. AK Sinha, learned Senior counsel, haspointed out that it is not in dispute that the payment of thedues of the plaintiffs-respondents was made by ASEB as lateas 05.03.1994 and, in such circumstances, the period oflimitation started, in the present case, with effect from05.03.1994 and the suit, having been instituted on10.01.1997, it is clear, submits Mr. A.K. Sinha, that the suitdeserved to be treated as a suit instituted within the period oflimitation. This apart, it is the submission of Mr. Sinha, learnedSenior Counsel, that on 06.09.1994 , Assam ConductorsManufacturers Association had filed a writ petition, whichgave rise to Civil Rule No. 1531 of 1993 on behalf of its fivenamed members of the Association, which included M/s ShantiConductors,(i.e. the plaintiff in the present suit), and the High F

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Court, vide its order, dated 06.09.1994, directed the writpetitioner to move the Civil Court for realization of the duesof its members, whereupon the Association, immediately, filedWrit Appeal No.474 of 1994, which was finally dismissed on28.08.1997.

25. In such a situation, as indicated above, section 14(2) ofthe Limitation Act, 1963, is, according to Mr. Sinha, of greatrelevance in as much as Section 14(2) of the Limitation Act,1963, provides that in computing the period of limitation forany suit, the time during which the applicant had beenprosecuting with due diligence another civil proceeding, thesaid period has to be excluded. Under Section 2(a) of theLimitation Act, 1963, points out Mr. Sinha, an applicantincludes:(I) petitioner; and (II) a person from or through whoman applicant derives his right to apply. Thus, even assumingthat the Limitation Act, 1963, applies, then also, the periodduring which the writ petition and the writ appeal of the saidAssociation was pending on behalf of, amongst others, M/sShanti Conductors, the said period, contends Mr. Sinha,deserves to be excluded under the provisions of Section 14(2)of the Limitation Act and, thus, the suit was, reiterates Mr.Sinha, within time.

26. Above all, points out Mr. Sinha, learned Senior counsel,that the appellants, in the present appeal, have not challengedthe learned trial Court’s decision on the issue of limitation. Inthis regard, taking the Court through the memorandum ofappeal, which the appellants have preferred,Mr. Sinha,Learned Senior counsel, has pointed out that the memorandumof appeal is wholly silent and does not raise or challenge thelearned trial Court’s decision on the issue of limitation.Furthermore, points out Mr. Sinha, the Full Bench, whiledeciding the reference, has clearly observed, in its decisionthat the suit was, admittedly, within three years of the lastpayment made by the appellant Board. The observations ofthe Full Bench read as follows: - “The suit was admittedly within 3 years of the last paymentmade by the appellant Board.””

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A65. It is thus clear that the Division Bench although noticed thesubmissions of both the parties on the question as to whether the suitwas barred by limitation or not but Division Bench allowed the appeal onthe ground that supply orders having been issued prior to enforcementof the Act. Act 1993 is not applicable. The Division Bench did notreturn any finding as to whether the suit was barred by the limitation orBnot. The submission that suit has barred by limitation has been pressedbefore us.

66. Shri Hansaria submits that according to the own case of theappellant supplies was completed on 04.10.1993, hence, as per Section4 of the 1993 Act amount and interest shall become due after one monthCi.e. w.e.f. 04.11.1993. Suit having not been filed within 3 years from04.11.1993 was clearly barred by time.

67. The Trial court has held that suit is not barred by time relyingon Section 10 of 1993 Act. Section 10 of the 1993 Act is as follows: -

D“10. Overriding effect: - The provisions of this Act shall haveeffect notwithstanding anything inconsistent therewithcontained in any other law for the time being in force.”

68. Plaintiff themselves in the plaint as noted above has pleadedthat limitation will not apply by virtue of Section 10 which submissionEwas accepted by the Trial Court. The provision of Section 10 of 1993Act gives overriding effect to “the provisions of Act notwithstandinganything inconsistent herewith contained in any other law for the timebeing in force”. The overriding effect was given to the provisions of theAct which were contained in the Act. Section 10 provided that overridingeffect is given to the provisions of the Act over any inconsistent law forFthe time being in force. It simply meant that if there is anything inconsistentin any other law to the provisions of the Act, the provisions of the Actshall prevail and override any inconsistent law. For example, when Section4 requires payment of interest at particular rate on delayed payment thesaid rate shall have overriding effect to rate of interest provided in anyother law.G

69. Further, as per Section 7 no appeal can be filed against thedecree or other order passed regarding recovery of amount due withoutdepositing 75 % of the amount. Thus in a suit if a decree is passed onamount due of interest appeal has to be entertained after depositing75% or as per any other order passed by the Court. Normal right ofH

appeal shall be overridden by virtue of Section 7 of 1993 Act. The TrialCourt fell in error in reading overriding effect given in Section 10 to theLimitation Act also. There is no provision in 1993 Act pertaining tolimitation, the provision of Limitation Act pertaining to filing suit shallcontinue to operate there being nothing contrary or overriding under1993 Act. Section 10 will operate only with regard to expressed provisionscontained in 1993 Act which shall be given overriding effect but readingSection 10 to the effect that it shall override Limitation Act is not correctinterpretation of Section 10 and Trial Court fell in error in relying onSection 10 in holding that Limitation Act will not apply.

70. We thus are of the view that Limitation Act, 1963 is fullyapplicable with regard to money suit filed by the appellant hence, thequestion of limitation has to be answered as per Limitation Act 1963.The limitation for suit for recovery of interest under 1993 Act is a suit ofnature which shall be covered by Part X Article 113 of the Schedulewhich is to the following effect: - “ PART X-SUITS FOR WHICH THERE IS NO PRECRIBEDPERIOD

113. Any suit for which no period of limitation is provided elsewhere in this S chedule”

Three When the years right to sue accrues

71. The period for commencement of limitation for filing suit underArticle 113 begins “when the right to sue accrues”. We have now to findout as to when the right to sue accrues to the plaintiff as per 1993 Act.Section 4 of 1993 Act deals with date from and rate at which interest ispayable. Section 4 contains expression that where “any buyer fails tomake any payment of the amount to the supplier as required under Section3……..be liable to pay interest to the supplier on that amount on theappointed day or as the case may be from the date immediately followingthe date agreed upon…….”. There is no agreed date of payment betweenthe parties as is clear from both the supplies orders which are on therecord. Thus, the payment shall become due from the appointed day.Appointed day has been defined in Section 2(d) to be “the day following A

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Aimmediately after the expiry of period of 30 days from the date ofacceptance or the day of deemed acceptance of any goods or any servicefrom any buyer or supplier.” It is pleaded by the appellant that lastsupply was completed on 04.10.1993. Thus, appointed day will be04.11.1993. Thus when the payment was not made on 04.11.1993 withregard to amount due, the interest as per Section 4, the limitation forBfiling the suit will start running.

72. We have already held that Act shall apply with regard to suppliesmade after the date of enforcement of Act i.e. 23.03.1992. Last supplybeing received on 04.10.1993 at least from 04.11.1993, if not earlier, theamount of interest under Section 4 shall become due.C

73. Shri Sinha has submitted that last payment having been madeon 05.03.1994 suit filed within 3 years and suit being filed on 10.01.1997was within 3 years from 05.03.1994 and hence was well within time. Hesubmits that last payment being on 05.03.1994 the refusal to pay has tobe treated from that day only and thereafter suit could be filed withinDthree years.

74. Article 113 as noted above provides for “time from whichperiod begins as when the right to sue accrues”. 1993 Act Section 4creates statutory liability to pay interest from the day as mentioned inSection 4 the liability to pay is fastened on buyer. The amount becomeEdue as soon as liability to pay arises. Section 6 also uses the word “amountdue from buyer”. The amount due is amount which is liable to be paid bybuyer under Section 4. Thus the fact that last payment was made on05.03.1994 cannot be treated as period for beginning of the limitationand on that ground it cannot be held that suit was within time.

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75. Shri Sinha had made an alternative submission that plaintiffwas entitled for the benefit under section 14 of limitation Act. Since aW.P.No. giving rise to Civil Rule No.1531 of 1993 on behalf of five mainmembers of the Associations i.e. Assam Conductors ManufactureAssociation was filed in the High Court which on 06.09.1994 directedGthe petitioner to move to Civil Court for realization of the dues of itsmember, hence the period during which the writ was pending has to begiven benefit. According to pleading in paragraph 24, the Writ Petitionwas filed by Assam Conductors Manufacture Association. M/s ShantiConductor(P) Ltd. and another, is a different entity than the Association.

76. We thus are of the view that benefit of the Section 14 cannotbe claimed by the plaintiff in the facts of the present case. We, thus inview of the foregoing discussion come to the conclusion that suit filedby the plaintiff being Money Suit No. 21 of 1997 was barred by time.

Issue No.4

77. While deciding Issue No.3 we having held that Money Suitfiled by the appellant was barred by time, it is not necessary to expressany opinion on the above issue.

Issue No. 5

78. The question as to whether suit filed only for interest ismaintainable has been considered in detail by this Court. In paragraph17, following has been laid down in Purbanchal Cables (Supra) :- “17. The decision of the Full Bench of the Gauhati High Courtwhich has been approved by this Court in Modern Industriesis impugned before us in one of the appeals. Since a DivisionBench of this Court has already approved the dictum of theFull Bench of the High Court with regard to the maintainabilityof a suit only for interest that question is no longer res integra.Therefore, the suppliers may file a suit only for a higher rateof interest on delayed payments made by the buyer from thecommencement of the Act.”

79. Section 6 of the 1993 Act provides that “the amount due fromthe buyer, together with amount of interest calculated in accordancewith provision of Section 4 and 5 shall be recoverable ……”. Section 6uses the expression “together with the amount of interest with the amountdue from the buyer.” The interpretation put by learned counsel for theBoard is that proceeding for recovery of interest can be undertaken onlywhen any amount is due. He submits that amount due used in Section 6is Principal amount. In event we accept the interpretation put by counselfor the Board, then buyer will very easily get away from payment ofinterest only after making payment of Principal amount. This interpretationshall defeat very purposes of 1993 Act. It is well settled that provisionsof Act has to be interpreted in the manner so as to advance the object ofthe Act. We thus fully approve the view taken by this Court in PurbanchalCables (Supra) that suit by supplier for recovery of only interest ismaintainable.

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530SUPREME COURT REPORTS

AIssue No.6

80. The submission of the counsel to the board is that since againstthe judgment of Gauhati High Court dated 15.04.2001, S.L.P. No.12217of 2001 filed by M/s Trusses & Towers was withdrawn without obtainingthe liberty, Civil Appeal No. 8445 of 2016 is not maintainable challengingBthe Review Order and judgment dated 19.03.2003. In the Order passedby this Court on 06.08.2001, this Court had noticed the submission of theappellant that appellant shall move the High Court in review stating thatit has committed error in recording that “all the bills were paid earlier tothe commencement of this act”. In the Review Petition, the review hasbeen partly allowed by allowing interest @ 9% against which the appealChas been filed. A perusal of the Review judgment indicates that HighCourt has not returned any finding that all the bills were not paid earlierto the commencement of the Act.

81. A perusal of Division Bench judgment of High Court indicatesthat High Court proceed on the presumption that even if 1993 Act is notDapplicable the entitlement of the plaintiff could be considered in equity.When the liberty to file review was obtained on the ground as noticed inthe Order the review judgment can be questioned on the ground onwhich review was permitted.

82. The Division Bench judgment does not indicate that it proceedsEon the ground as contended by the appellant and noticed by this Court on06.08.2001. The interest of 9% was allowed on the premise that 1993Act is not applicable and said interest is allowed on equity relying on anearlier judgment on this court in Assam Small Scale IndustryDevelopment Corporation and others versus G.D. PharmaceuticalsFand others, 2005(13) SCC 19. We thus are of the view that presentappeal challenging the review judgment cannot be entertained. Theground on which the appellant can challenge the review judgment canbe the ground on which liberty was obtained to file review. We thus holdthat Civil Appeal No. 8445 of 2016 is not maintainable.

Issue No.7G

Whether the High court while considering the Review PetitionNo.75 of 2001 (M/s Trusses & Towers Pvt. Ltd.) even after expressingthat Act 1993 is not applicable could have allowed 9% interest to theplaintiff?

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83. The High Court in its judgment dated 19.03.2013 allowedinterest @ 9% per annum for the period of delayed payment. Even ifAct 1993 is not applicable, the Court can very well exercise its jurisdictionto award interest. In Assam Small Scale Industry DevelopmentCorporation and others versus G.D. pharmaceuticals and others(Supra), this Court in paragraph 40 while considering the claim of therespondent in a suit filed for recovery of interest under 1993 Act hasallowed 9% interest with respect to the transaction made prior to cominginto force of the 1993 Act. Paragraph 40 is to the following effect: -

“40.We, therefore, are of the opinion that in relation to thetransactions made prior to coming into force of the said Act,simple interest at the rate of 9% per annum, which was thebank rate at the relevant time, shall be payable both prior todate of filing of the suit and pendente lite and as future interestin terms of Section 34 of the Code of Civil Procedure. Interest,however, will be payable in terms of the provisions of the1993 Act(compound interest at the rate of 23.5 % per annum)

in relation to the transactions made after coming into forceof the Act, both in respect of interest payable up to the date ofinstitution of the suit and pendente lite and till realization.The judgment and decree to that extent requires to be modified.It is directed accordingly.”

84. High Court did not commit any error in awarding 9% interestto plaintiff respondent. We thus did not find any error in the judgmentdated 19.03.2013 allowing partly the review application filed by theplaintiff.

Civil Appeal No. 8450 of 2016

85. Now, we come to Civil Appeal No. 8450 of 2016. The appellanthas filed Money Suit No. 32 of 1996 for recovery of a sum of Rs.10,34,065.23 p. and Rs. 23,738.49 p. being the outstanding against thebills for supply made and amount of security deposited and amount ofRs.10,10,326.74 p. being the amount of delayed interest. The suit wasdecreed by the learned Civil Judge (Senior Division) vide its judgmentand order dated 30.09.2002 for recovery of Rs. 5,46,233.14 p. as on18.12.93 from the date of enforcement of the Act, 1993 and future intereston the decretal amount @ 6% simple interest per annum with effectfrom 19.12.1993. Appeal was filed by the respondent in the High Court A

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Abeing RFA No. 78 of 2003, which has been allowed on 12.02.2015setting aside the decree for recovery of the amount and interest butmaintaining the claim of refund of security deposit to the tune of Rs.23,738.49 with 9% interest. The High Court following the judgment ofthis Court in Purbanchal Cables and Conductors Pvt. Ltd. (supra)held that with regard to transaction, which had taken place prior toB23.09.1992, the 1993 Act is not applicable. The appellants have appealedagainst the judgment of High Court dated 20.02.2015. The pleading onthe record does not indicate that any supply was made by the appellantsubsequent to enforcement of the 1993 Act. We have already held thatthe mere fact that supply orders were issued prior to enforcement of theCAct does not deny the applicability of the 1993 Act, in event, supply hasbeen made after the enforcement of the Act. There being nothing onrecord to come to the conclusion that any supply was made after theenforcement of the Act so as to enable the appellant to claim interestunder Section 3 read with Section 4 of the 1993 Act, we are of the view that judgment of the High Court does not need any interference in thisDappeal.

86. Intervention applications are not entertained.

87. In result, all the appeals are dismissed.

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Devika Gujral

Appeals dismissed.

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