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TMI Blog2006 (2) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactures Mild Steel Black Pipes. The defendant Chief Engineer, Minor Irrigation Department issued, notice inviting tenders for the supply of E.R.W. M.S. Black Pipes 100mm N.B. Light Class. The date of opening of the tenders was 21.3.1992. The plaintiff submitted its tender on 21.3.1992 for Supply of 11 lac metres of M.S. Black Pipes. Many other firms also submitted their tenders. All the tenders were opened and the tender of the plaintiff was accepted and after negotiation, the plaintiff offered to supply the pipes at the rate of ₹ 147.95P. per metre. The offer was accepted by the Chief Engineer vide his memo No. 3956 dated 16.7.1992 and by the same memo he also placed orders for the supply of pipes and directed to execute an agreement with the Executive Engineer, Investigation Division, Patna within 15 days of issue of the order. In the above letter it was clearly mentioned that 90% payment of the total value of the material supplied, would be made on receipt of the materials, and the balance would be paid after full verification of the same within one month of the receipt of the materials. 3. The Steel Authority of India Limited, in the meantime, increase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned authorities as per the terms of the agreement. The balance escalated amount at the rate of ₹ 8.56P per metre not paid so far comes to ₹ 38,13,480/- and compound interest with monthly rests payable thereon as per the above Act amounted to ₹ 27,83,839.00 at the rate of 26.25 % per annum calculated from 1.6.1993 till 15.6.1993 i.e. the date of filing of the money suit No. 97 of 1996. Thus, the total amount payable remained due with the department till 15.6.1996 became ₹ 65,97,319/- which the department refused to pay. 8. The plaintiff, in the meantime, had filed C.W.J.C. No. 274 of 1994 before the High Court. for payment of the sum of ₹ 38,13,480/- along with interest under the Act, but as, regarding the balance of escalated amount, controversy arose, the Court disposed of the matter with the observation that it was a civil dispute and the plaintiff might file a suit. The plaintiff hence, several notice under Section 80 of the Code of Civil Procedure on the defendants, but they failed to pay the dues. The plaintiff then filed the above Money Suit No. 97 of 1996. They claimed ₹ 38,13,480/- as the balance escalated amount at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly 3,07,500 metres by 23.11.1992. The department, hence, cut down the quantity from seven lakh metres to four lakh metres due to slow performance of supply, but yet the plaintiff could not supply the remaining quantity of the materials by -31.12.1992 in clear breach of the contract. The plaintiff supplied the aforesaid materials by 30.4.1993. The defendants, however, on the request of the plaintiff, regularised the supply, in the interest of the work. 13. The further case of the defendants is that the department. of Minor Irrigation after examining the price escalation of the materials decided to fix the escalated rate at the rate of ₹ 190.48 per metre and the same was communicated to the plaintiff vide Chief Engineer's Letter No. 6287 dated 4.11.1992, The same rate was given to the other tenderers also. There was no provision in the agreement for giving inter est. The defendants have also paid the price of materials supplied at the above escalated price. The plaintiff also did not supply the materials on time. Therefore, there was no question of interest on any delayed payment. The escalated rate at ₹ 199.04P as calculated by the plaintiff is wrong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. Learned counsel for the respondent, on the other hand, submitted that, as in both the cases i.e. Money Suit No. 97 of 1996 and C.W.J.C. No. 274 of 1994, the issue was not decided, the suit cannot be said to be barred by res judicata. 21. The judgment of Money Suit No. 97 of 1996 (Ext. 5) shows that though prayer was made therein also for interest on delayed payment, as a writ petition C.W.J.C. No. 274 of 1994 was pending in the High Court, no order was passed on this issue in the suit. Then though, admittedly in the above writ petition No. 274 of 1994, the plaintiff respondents had claimed the balance escalated amount as well as the interest on delayed payment, it is also admitted that the first claim i.e. liability to make payment on escalated rate was rejected with permission to file a suit, and the writ with regard to the interest on delayed payment was admitted. The order of the High Court passed in C.W.J.C. No. 274 of 1994 in this regard, of course has not been filed by any party, but admittedly this order was passed prior to the filing of Money Suit No. 97 of 1996 and the judgment of Money Suit No. 97 of 1996 (Ext.5) shows, that the order was passed on 14.9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 1994 (Ext.4) shows that the Court had directed that in the event of filing of a suit, the period of 10.1.1994 to 20.10.1997 (which is more than than three and a half years) would be excluded if an application under Section 14 of the Limitation Act is filed, The order dated 23.1.1998 passed by the court below also shows that such an application was ' filed, Therefore, I agree with this submission also of the learned counsel for the respondents that the suit was not barred by limitation. 25. Point No. (iii) :- It is an admitted position that the appellants had invited tenders for purchase of M.S. Black Pipes and the respondent had participated in it and the tender of the respondent was accepted and after negotiation between the parties, the respondent offered to supply the pipes at the rate of ₹ 174.95 P per metre and the Chief Engineer accepted the offer. Letter No. 3956 dated 16.7.1992 (Ext. 6) also shows that by that letter the Chief Engineer ordered to supply seven lakh metres of the pipe by 13.12.1992 and there was payment clause in that letter under which 90% of the value of the material was to be paid by the district authorities who were consignees o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the balance amount towards escalation of price of steel, but as the matter with regard to interns under the Act was pending in High Court, the Court held that the same would depend upon the order of the High Court in the writ. It is also admitted that thereafter the respondent withdrew its writ with regard to the interest under the Act from the High Court and filed Money Suit No. 153 of 1997 in the court of the Subordinate Judge 1st, Patna, against the judgment and decree of which, this appeal has been filed. It appears from the judgment that the learned Subordinate Judge by the impugned judgment has allowed the prayer of the respondent with respect to interest at the rate of 24% (19% being interest charged by the Bank of India on Cash Credit Account in the year 1992 plus 5%) compounding at a monthly rests on the decretal amount of ₹ 38,13,400/- with effect from 1.6,1993 till realisation as per the provisions of the Act. 29. The question, hence, that arises for determination is whether the Act is applicable in this case and the learned Subordinate Judge was justified. in awarding interest on the delayed payment under the Act. 30. It is not deni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of a State or Union Territory. Similarly, under section 2(c) of the Act buyer means, whoever buys any goods or receives any services from a supplier for consideration. 34. Thus, it is clear that the respondent is a Small Scale Industrial Unit and covered under the definition of supplier. The judgment of Money Suit No. 97 of 1996 shows that the respondent had supplied to the appellants i.e. the buyer, steel pipes for which a sum of ₹ 38,13,400/- is still due, and admittedly the same has not been paid by the buyer as yet. The agreement between the parties also shows that 90% payment of the value of material had to be made on receipt of the materials and the balance 10% after full verification of the materials within one month of the receipt of the materials. It is also admitted, as already mentioned, that the supply of the materials had been completed on 30.4.1993. Therefore, if the Act is applicable in this case, the respondent is entitled to interest with effect from 1.6.1993 at the rate mentioned in Sections 4 and 5 of the Act. 35. Learned counsel for the appellants, however, submitted that the Act is not applicable in this case and the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement 90% of the value of the medicines was to be released to the respondent on delivery and the balance 10% was to be paid on receipt of full payment from the purchasing department. A suit was filed by the respondent on 7.9.1993 claiming the amount due together with interest in terms of 1993 Act. The trial Judge decreed the suit in favour of the respondent and the appeal preferred against that judgment was dismissed. The Corporation, hence, filed the appeal in the Apex Court. 38. The Apex Court held that 1993 Act came into force with effect from 23.9.1992 and will not apply to transactions which took place prior to that date. We find that out of 71 suit transactions, serial Nos. 1 to 26 (referred to in the pen ultimate para of the trial court judgment) that is Supply Orders between 5.6.1991 and 28.7.1992, were prior to the date of 1993 Act coming into force. Only the transactions at serial Nos. 27 to 71 (i.e. supply orders between 22.10.1992 and 16.6.1993). will attract the provisions of the 1993 Act. 39. Therefore, according to the above decision, it is not the date of agreement or the date on which payment became due, which is material in d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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