2013 (3) TMI 518 - SC - Indian Laws

Interest on delayed payments to small scale and ancillary industrial undertakings - The supplier/appellant has raised the demand for interest on delayed payment made by the respondent/Board related to the supplies of goods namely Aluminium Conductors Steel Reinforced (for short ACSR ), however, the same was not acceded. These supplies were made after the expiry of the time stipulated in the agreement/supply order, but after obtaining specific extension of time by the respondent/Board. - held that - what is to be considered relevant is the date of supply order placed by the respondents and when this Court used the expression transaction it only meant a supply order. When this Court said transaction it meant initiation of the transaction i.e. placing of the supply orders and not the completion of the transactions which would be completed only when the payment is made. Therefore, the submission made by the learned Senior Counsel appearing for the appellant-plaintiff fails. Binding value of a precedent - We are in full agreement with the view expressed in Keshav Mills Co. Ltd. s case (supra). The learned Senior Counsel Shri Rakesh Dwivedi has not been able to make out a case for reconsideration of the decision of this Court in Assam Small Scale Industries Development Corpn. Ltd (supra). In fact, a plea for reconsideration of the same was rejected by a Division Bench of this Court in Shakti Tubes Ltd. (supra). We are unable to agree with the argument of Shri Dwivedi and Shri Gupta that the provisions of the Act were not considered in its entirety. In fact, the entire scheme of the Act has been considered in the case of Rampur Fertilizers Ltd. (supra) and specific answer to the issue under consideration was answered. When there are four decisions of this Court with regard to the applicability of the Act for contracts entered into prior to the commencement of the Act, and when the plea for reconsideration has been expressly rejected in the past, we are of the view, it would be against the spirit of the doctrine of stare decisis for us to take any view in divergence with same. - The result is appeals fail and accordingly, they are dismissed. No order as to costs.

Summary

Issues Involved:
1. Maintainability of a suit for interest alone under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993.
2. Applicability of the Act to contracts concluded prior to its commencement.
3. Retrospective operation of the Act.
4. Limitation period for filing suits under the Act.

Detailed Analysis:

1. Maintainability of a Suit for Interest Alone:
The Supreme Court affirmed that a suit for interest alone is maintainable under the Act. The Court referred to its previous decision in Modern Industries v. Steel Authority of India Ltd., which held that the Act allows for the recovery of interest on delayed payments even if the principal amount has already been paid. The Court emphasized that the Act's purpose is to ensure prompt payments to small scale industries and that the supplier can file a suit solely for the recovery of interest due to delayed payments.

2. Applicability of the Act to Contracts Concluded Prior to its Commencement:
The Court examined whether the Act applies to contracts that were concluded before the Act came into force but where supplies were made after its commencement. The Court reaffirmed its earlier decisions in Assam Small Scale Industries Development Corpn. Ltd. and Shakti Tubes Ltd., holding that the Act does not apply to contracts concluded prior to its commencement. The Court noted that the Act creates new liabilities and rights, which cannot be applied retrospectively unless explicitly stated by the legislature.

3. Retrospective Operation of the Act:
The Court discussed the principles of statutory interpretation, emphasizing that substantive laws are presumed to operate prospectively unless a clear legislative intent for retrospective application is evident. The Court found no such intent in the Act and concluded that it does not have retrospective effect. The Act's provisions apply only to contracts and transactions that occurred after its commencement date of 23rd September 1992.

4. Limitation Period for Filing Suits:
The Court did not express a definitive view on whether the suits filed by the suppliers were barred by limitation, as some appeals were still pending before the High Court. However, the Court indicated that the Limitation Act, 1963, applies to suits filed under the Act unless explicitly excluded by the special law. The Court referenced its decision in Mukri Gopalan v. Cheppilat Puthanpurayil Aboobacker, which held that the Limitation Act applies unless a specific time schedule is provided under the special law.

Conclusion:
The appeals were dismissed, upholding the decisions of the lower courts. The Supreme Court confirmed that a suit for interest alone is maintainable under the Act, but the Act does not apply retrospectively to contracts concluded before its commencement. The Court emphasized the importance of legislative intent and statutory interpretation in determining the applicability and operation of the Act.