THE HON’BLE SRI JUSTICE G. KRISHNA MOHAN REDDY C.M.A No: 613 of 2008 11th March, 2011 Between: M/s. Sesha Sai Industries … Appellant And A.P. Industrial Components Ltd., and another … Respondents THE HON’BLE SRI JUSTICE G. KRISHNA MOHAN REDDY C.M.A No: 613 of 2008 JUDGMENT: This appeal is directed against judgment dated 05.02.2008 in A.S.No.2 of 2006 on the file of the Principal District Judge, Medak at Sangareddy filed aggrieved by the judgment and decree dated 14.11.2003 in O.S.No.11 of 1997, filed under Section 6 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 (for short, ‘the Act’), on the file of Senior Civil Judge, Sanga Reddy, Medak District. 2. The appellant herein is the respondent in the appeal and plaintiff in the O.S, and the respondents herein are the appellants in the appeal and defendants in the O.S. For the sake of convenience, the parties will be referred to as they are arrayed in the O.S. here afterwards. 3. The defendants filed their written statement but subsequently failed to pursue the matter and hence, basing upon the material on record and evidence recorded, the lower Court without there being any cross- examination of witnesses examined, decreed the suit in favour of the plaintiff. 4. Later, the defendants preferred appeal on the file of II-Addl. District and Sessions Judge (FTC) at Sanga Reddy, Medak District-the first appellate Court, along with I.A.No.1619 of 2005 under Section 5 of the Limitation act, seeking condonation of delay of 565 days in preferring the appeal. The application was allowed and then the appeal was numbered (as A.S.No.2 of 2006). It was contended by the plaintiff that, prima facie, without the defendants complying with the mandatory provision of Section 7 of the Act which provides for depositing of 75% of the decretal amount, to number the appeal the same should not have been entertained. 5. During the pendency of the appeal, the plaintiff filed Civil Revision Petition No.428 of 2006 before this Court against the order passed in I.A. No.1619 of 2005 in which it was contended by the learned counsel for the plaintiff that if the interest was worked out as per the Act, the District Judge got no jurisdiction to entertain the appeal, and the appeal was to be filed before the High Court. This Court disposed of the Civil Revision Petition directing the lower Court to hear the appeal on the aspect of maintainability in view of Section 7 of the Act. This Court, however, had not disturbed the order of condonation of the delay granted by the lower appellate Court. 6. Thereafter, the appellate Court disposed of the appeal by Judgment dated 05.02.2008, in which it is observed that Section 7 of the Act got two hidden clauses, one provides that the defendants have to deposit 75% of the decretal amount while filing the appeal, and the other provides exemption of it while accepting the later view. Section 7 of the Act reads: “Appeal: No appeal against any decree, award or other order shall be entertained by any court or other authority unless the appellant (not being a supplier) has deposited with it seventy-five per cent of the amount in terms of the decree, award or, as the case may be, other order in the manner directed by such court or, as the case may be, such authority.” Further, the appellate Court set aside the lower Court judgment and remanded the matter to the lower court for disposal for reasons recorded. 7. The learned counsel for the plaintiff argues that the Appellate Court failed to consider the direction of this Court in the Civil Revision Petition and that it misinterpreted the provisions of Section 7 of the Act to the effect that the question of deposit of decretal amount need not be insisted with a request to set aside the remand made by the Appellate Court. 8. On the other hand, the learned counsel for the defendants argues that by virtue of Section 32 of Micro, Small and Medium Enterprises Development Act, 2006 (for short, MSME Act), the earlier Act was repealed and hence the question of considering the case in the light of the provisions of Section 7 of the earlier Act would not arise at all. It is further contended by him that the matter is to be dealt with in accordance with Sections 16 to 19 of the MSME Act, whereas Section 18 provides for referring the matter for settlement under Arbitration and Conciliation Act, without filing a suit. It is also contended by him that Section 6 of the earlier Act was amended which has the similar effect of referring the matter to Arbitration and Conciliation. 9. Then learned counsel for the plaintiff has replied that by the date MSME Act came into force, his client had already obtained the decree in the suit and hence, the application of MSME Act against the Judgment passed in the suit does not arise at all, unless there is a specific provision to apply the provisions with retrospective effect which is not the case here and the appellate Court has to dispose of the matter basing upon the provisions of the earlier Act only. 10. Therefore, it is to be determined whether the appellate Court properly examined the scope of Section 7 of the earlier Act and whether in view of the later Act the suit or the appeal is not tenable. 11. By virtue of Section 7 of the Act, unless the defendants deposited 75% of the decretal amount, the appellate Court should not have numbered the appeal. It does not give any discretion to the appellate Court to avoid deposit of 75% of the decretal amount and hence the appellate Court misinterpreted it. Further, when this Court by order dated 03.04.2006 in the Civil Revision Petition No.428 of 2006, categorically directed the II-Addl District Court, Sangareddy to decide the question of maintainability of the appeal before that Court in view of Section 7 of the Act, it should have been done. 12. In the result, the appeal is allowed and the judgment passed by the first appellate Court in A.S.No.2 of 2006 is set aside. The first appellate Court is directed to decide the question of maintainability of the appeal in view of Section 7 of the earlier Act and also in view of the relevant provisions of the later Act, independently, subject to which the question of deposit of 75% of the decretal amount would arise. Further, the first appellate Court is directed to dispose of the matter afresh in view of the aspects raised and without being influenced by any of the observations made above, and subject to the arguments of both the parties and with reference to the provisions contained in both the Acts. There shall be no order as to costs. _______________________________________ JUSTICE G.KRISHNA MOHAN REDDY 11th March, 2011 KSM