Case: M/S SHANTI CONDUCTORS(P) LTD.  Vs. ASSAM STATE ELECTRICITY BOARD &amp; ORS

will very easily get away from payment of interest only after making payment of Principal amount. This interpretation shall defeat very purposes of 1993 Act. It is well settled that provisions of Act has to be interpreted in the manner so as to advance the object of the Act. We thus fully approve the view taken by this Court in Purbanchal Cables (Supra) that suit by supplier for recovery of only interest is maintainable. Issue No.6 80. The submission of the counsel to the board is that since against the judgment of Gauhati High Court dated 15.04.2001, S.L.P. No.12217 of 2001 filed by M/s Trusses & Towers was withdrawn without obtaining the liberty, Civil Appeal No. 8445 of 2016 is not maintainable challenging the Review Order and judgment dated 19.03.2003.In the Order passed by this Court on 06.08.2001, this Court had noticed the submission of the appellant that appellant shall move the High Court in review stating that it has committed error in recording thatall the bills were paid earlier to the commencement of this act. In the Review Petition, the review has been partly allowed by allowing interest @ 9% against which the appeal has been filed. A perusal of the Review judgment indicates that High Court has not returned any finding that all the bills were not paid earlier to the commencement of the Act. 81. A perusal of Division Bench judgment of High Court indicates that High Court proceed on the presumption that even if 1993 Act is not applicable the entitlement of the plaintiff could be considered in equity. When the liberty to file review was obtained on the ground as noticed in the Order the review judgment can be questioned on the ground on which review was permitted. 82. The Division Bench judgment does not indicate that it proceeds on the ground as contended by the appellant and noticed by this Court on 06.08.2001. The interest of 9% was allowed on the premise that 1993 Act is not applicable and said interest is allowed on equity relying on an earlier judgment on this court in Assam Small Scale Industry Development Corporation and others versus G.D. Pharmaceuticals and others, 2005(13) SCC19.We thus are of the view that present appeal challenging the review judgmentcannot be entertained. The ground on which the appellant can challenge the review judgment can be the ground on which liberty was obtained to file review. We thus hold that Civil Appeal No. 8445 of 2016 is not maintainable. Issue No.7 Whether the High court while considering the Review Petition No.75 of 2001 (M/s Trusses & Towers Pvt. Ltd.) even after expressing that Act 1993 is not applicable could have allowed 9% interest to the plaintiff? 83. The High Court in its judgment dated 19.03.2013 allowed interest @ 9% per annum for the period of delayed payment. Even if Act 1993 is not applicable, the Court can very well exercise its jurisdiction to award interest. InAssam Small Scale Industry Development Corporation and others versus G.D. pharmaceuticals and others(Supra),this Court in paragraph 40 while considering the claim of the respondent in a suit filed for recovery of interest under 1993 Act has allowed 9% interest with respect to the transaction made prior to coming into force of the 1993 Act. Paragraph 40 is to the following effect: - 40.We, therefore, are of the opinion that in relation to the transactions made prior to coming into force of the said Act, simple interest at the rate of 9% per annum, which was the bank rate at the relevant time, shall be payable both prior to date of filing of the suit and pendente lite and as future interest in terms of Section 34 of the Code of Civil Procedure. Interest, however, will be payable in terms of the provisions of the 1993 Act(compound interest at the rate of 23.5 % per annum) in relation to the transactions made after coming into force of the Act, both in respect of interest payable up to the date of institution 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% interest to plaintiff respondent. We thus did not find any error in the judgment dated 19.03.2013 allowing partly the review application filed by the plaintiff. Civil Appeal No. 8450 of 2016 85. Now, we come to Civil Appeal No. 8450 of 2016.The appellant has 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 the bills for supply made and amount of security deposited and amount of Rs.10,10,326.74 p. being the amount of delayed interest.The suit was decreed by the learned Civil Judge (Senior Division) vide its judgment and order dated 30.09.2002 for recovery of Rs. 5,46,233.14 p.as on 18.12.93 from the date of enforcement of the Act, 1993 and future interest on the decretal amount @ 6% simple interest per annum with effect from 19.12.1993.Appeal was filed by the respondent in the High Court beingRFA No. 78 of2003, whichhasbeen allowed on 12.02.2015 setting aside the decree for recovery of the amount and interest but maintaining the claim of refund of security deposit to the tune of Rs. 23,738.49 with 9% interest.The High Court following the judgment of this Court inPurbanchal Cables and Conductors Pvt. Ltd. (supra) held that with regard to transaction, which had taken place prior to 23.09.1992, the 1993 Act is not applicable.The appellants have appealed against the judgment of High Court dated 20.02.2015. The pleading on the record does not indicate that any supply was made by the appellant subsequent to enforcement of the 1993 Act. We have already held that the mere fact that supply orders were issued prior to enforcement of the Act does not deny the applicability of the 1993 Act, in event, supply has been made after the enforcement of the Act.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]51. The judgment of this Court in Purbanchal Cables and Conductors Pvt. Ltdrelying onAssam Small Scale Industries and Shakti Tubeshad laid down that Act, 1993 cannot be made applicable with regard to sale agreements which were entered into prior to the enforcement of the Act and Act can be invoked only for the sale agreements which were entered after the enforcement of the Act. Although attempt was made in Purbanachal Cables to get judgment in Assam Small Scale Industries and Shakti Tubesreconsidered but co- ordinate Bench inPurbanchal Cableshas refused to permit any such reconsideration. The matter now having been referred to this three-Judge Bench we have to consider and answer as to whether the above interpretation of Act, 1993 as given is in consonance with the statutory scheme52. We have noticed above that theincidence of applicability of 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 to Act, can liability to pay interest on delayed payment be denied on the ground that agreement in pursuance of which supplies were made were entered prior to enforcement of the Act? Entering into an agreement being not expressly or impliedly referred to in the statutory scheme as an incident for fastening of the liability, making the date of agreement as date for imposition of liability does not conform to the statutoryscheme. This can be illustrated by taking an example. There are two small scale industries who received orders for supply of materials. A received such orders prior to the enforcement of the Act and B received the order after the enforcement of the Act. Both supplied the goods subsequent to enforcement of the Act and became entitled to receive payment after the supply, on or before the day agreed upon between the supplier and buyer or before the appointed day. Payments were not made both to A and B as required by Section 3. Can the buyer who has received supplies from supplier A escape from his statutory liability to make payment of interest under Section 3 read with Section 4 ? The answer has to be No. Two suppliers who supply goods after the enforcement of the Act, become entitled to receive payment after the enforcement of the Act one supplier cannot be denied the benefit of the statutory protection on the pretext that 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 be treated as a date for fastening of the liability. The Act, 1993 being beneficial legislation enacted to protect small scale industries and statutorily ensure by mandatory provision for payment of interest on the outstanding money, accepting the interpretation as put by learned counsel for the Board that the day of agreement has to be subsequent to the enforcement of the Act, the entire beneficial protection of the Act shall be defeated. The existence of statutory liability depends on the statutory factors as enumerated in Section 3 and Section4 of the Act, 1993. Factor for liability to make payment under Section 3 being the supplier supplies any goods or renders services to the buyer, the liability of buyer cannot be denied on the ground that agreement entered between the parties for supply was prior to Act, 1993. To hold that liability of buyer for payment shall arise only when agreement for supply was entered subsequent to enforcement of the Act, it shall be adding words to Section 3 which is not permissible under principles of statutory construction. We, thus, are of the view that judgments in Purbanchal Cables and Conductors (supra),Assam Small Scale Industries and Shakti Tubes which held that Act, 1993 shall be applicable only when the agreement to sale/contract was entered prior/subsequent to the enforcement of the Act, does not lay down the correct law. We accept the submission of learned counsel for the appellants that even if agreement of sale is entered prior to enforcement of the Act, liability to make payment under Section 3 and liability to make payment of interest under Section 4 shall arise if supplies are made subsequent to the enforcement of the Act53. In all the judgments of this Court referred above, it has been held that Act, 1993 is not retrospective. It is not even contended before us 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 is not retrospective54. The opinion of Justice Gowda dated 31.08.2016 although holds that Act is not retrospective but he holds the Act retroactive57. Retroactivity in the context of the statute consists application of new rule of law to an Act or transaction which has been completed before the Rule was promulgated58. In the present case the liability of buyer to make payment and day from which payment and interest become payable under Section 3 and 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 in operation. The Act, 1993 is clearly prospective in operation and it is not necessary to term it as retroactive in operation. We, thus, do not subscribe to the opinion dated 31.08.2016 of one of the Honble Judges holding that the Act, 1993 as retroactiveWhether money suit no.21 of 1997 filed by appellant is barred by time is one of the issues which has been raised before us59. From the pleadings on the record it transpires that two supply orders dated 31.03.1992 and 13.05.1992 was issued to the appellant for supply of conductors. In the Plaint, the appellant had given the details of date of supply orders and date when supply was made on different stores. The supplies made by the appellant were both before enforcement of the Act i.e. 23.09.1992 and after the enforcement of the Act60. In view of the discussions as made above only the supplies received after 23.09.1992 are relevant for purposes of 1993 Act. As per pleadings on the record entire supplies by the appellant was completed on 04.10.1993. Details of the payment has also been given in the plaint which indicate that last payment dated 05.03.1994 was received.Paragraph 24 of the plaint gives the details of cause of action for the suit which states that cause of action for the suit arose on 31.03.1992 and thereafter on different date last date being mentioned in paragraph 24 was 05.10.1993 and each date subsequent thereafter.62. The Trial Court held that by virtue of Section 10 of Act, 1993 plea 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 by the defendant had made a reference to the full bench. Full Bench in its order dated 05.03.2002 has not considered or decided the question of limitation63. Against the judgment dated 05.03.2002 of Full Bench of High Court answering the reference, the Assam State Electricity Board had filed appeal in this court being Civil Appeal No. 2351 of 2003. This Court decided Civil Appeal No.2351 of 2003 along with Civil Appeal No. 2348 of 2003 on 10.07.2002 which judgment isPurbanchal Cables and Conductors (P) Ltd. (Supra). This Court in paragraph 31 has noticed the submission of learned Counsel for the State Electricity Board that suits filed by both the suppliers were barred by time but this Court did not express any opinion.64. After the judgment of this Court dated 10.07.2012 when the matters went back to the High Court, Division Bench decided the RFA 66 of 2000 by impugned judgment dated 20.11.2012. The Division Bench in the impugned judgment has noticed the issues in paragraph 5 of the judgment and submissions on the limitations.65. It is thus clear that the Division Bench although noticed the submissions of both the parties on the question as to whether the suit was barred by limitation or not but Division Bench allowed the appeal on the ground that supply orders having been issued prior to enforcement of the Act. Act 1993 is not applicable. The Division Bench did not return any finding as to whether the suit was barred by the limitation or not. The submission that suit has barred by limitation has been pressed before us68. Plaintiff themselves in the plaint as noted above has pleaded that limitation will not apply by virtue of Section 10 which submission was accepted by the Trial Court. The provision of Section 10 of 1993 Act gives overriding effect to the provisions of Act notwithstanding anything inconsistent herewith contained in any other law for the time being in force. The overriding effect was given to the provisions of the Act which were contained in the Act. Section 10 provided that overriding effect is given to the provisions of the Act over any inconsistent law for the time being in force. It simply meant that if there is anything inconsistent in any other law to the provisions of the Act, the provisions of the Act shall prevail and override any inconsistent law. For example, when Section 4 requires payment of interest at particular rate on delayed payment the said rate shall have overriding effect to rate of interest provided in any other law69. Further, as per Section 7 no appeal can be filed against the decree or other order passed regarding recovery of amount due without depositing 75 % of the amount. Thus in a suit if a decree is passed on amount due of interest appeal has to be entertained after depositing 75% or as per any other order passed by the Court. Normal right of appeal shall be overridden by virtue of Section 7 of 1993 Act. The Trial Court fell in error in reading overriding effect given in Section 10 to the Limitation Act also. There is no provision in 1993 Act pertaining to limitation, the provision of Limitation Act pertaining to filing suit shall continue to operate there being nothing contrary or overriding under 1993 Act. Section 10 will operate only with regard to expressed provisions contained in 1993 Act which shall be given overriding effect but reading Section 10 to the effect that it shall override Limitation Act is not correct interpretation of Section 10 and Trial Court fell in errorin relying on Section 10in holding that Limitation Act will not apply70. We thus are of the view that Limitation Act, 1963 is fully applicable with regard to money suit filed by the appellant hence, the question of limitation has to be answered as per Limitation Act 1963.74. Article 113 as noted above provides fortime from which period begins as when the right to sue accrues. 1993 Act Section 4 creates statutory liability to pay interest from the day as mentioned in Section 4 the liability to pay is fastened on buyer. The amount become due as soon as liability to pay arises. Section 6 also uses the wordamount due from buyer. The amount due is amount which is liable to be paid by buyer under Section 4. Thus the fact that last payment was made on 05.03.1994 cannot be treated as period for beginning of the limitation and on that ground it cannot be held that suit was within time75. Shri Sinha had made an alternative submission that plaintiff was entitled for the benefit under section 14 of limitation Act. Since a W.P.No. giving rise to Civil Rule No.1531 of 1993 on behalf of five main members of the Associations i.e. Assam Conductors Manufacture Association was filed in the High Court which on 06.09.1994 directed the petitioner to move to Civil Court for realization of the dues of its member, hence the period during which the writ was pending has to be given benefit. According to pleading in paragraph 24, the Writ Petition was filed by Assam Conductors Manufacture Association. M/s Shanti Conductor(P) Ltd. and another, is a different entity than the Association76. We thus are of the view that benefit of the Section 14 cannot be claimed by the plaintiff in the facts of the present case.We, thus in view of the foregoing discussioncome to the conclusion that suit filed by the plaintiff being Money Suit No. 21 of 1997 was barred by time77. While deciding Issue No.3 we having held that Money Suit filed by the appellant was barred by time, it is not necessary to express any opinion on the above issue78. The question as to whether suit filed only for interest is maintainable has been considered in detail by this Court.79. Section 6 of the 1993 Act provides thatthe amount due from the buyer, together with amount of interest calculated in accordance with provision of Section 4 and 5 shall be recoverable ……. Section 6 uses the expressiontogether with the amount of interest with the amount due from the buyer. The interpretation put by learned counsel for the Board is that proceeding for recovery of interest can be undertaken only when any amount is due. He submits that amount due used in Section 6 is Principal amount. In event we accept the interpretation put by counsel for the Board, then buyer will very easily get away from payment of interest only after making payment of Principal amount. This interpretation shall defeat very purposes of 1993 Act. It is well settled that provisions of Act has to be interpreted in the manner so as to advance the object of the Act. We thus fully approve the view taken by this Court in Purbanchal Cables (Supra) that suit by supplier for recovery of only interest is maintainable80. The submission of the counsel to the board is that since against the judgment of Gauhati High Court dated 15.04.2001, S.L.P. No.12217 of 2001 filed by M/s Trusses & Towers was withdrawn without obtaining the liberty, Civil Appeal No. 8445 of 2016 is not maintainable challenging the Review Order and judgment dated 19.03.2003.In the Order passed by this Court on 06.08.2001, this Court had noticed the submission of the appellant that appellant shall move the High Court in review stating that it has committed error in recording thatall the bills were paid earlier to the commencement of this act. In the Review Petition, the review has been partly allowed by allowing interest @ 9% against which the appeal has been filed. A perusal of the Review judgment indicates that High Court has not returned any finding that all the bills were not paid earlier to the commencement of the Act81. A perusal of Division Bench judgment of High Court indicates that High Court proceed on the presumption that even if 1993 Act is not applicable the entitlement of the plaintiff could be considered in equity. When the liberty to file review was obtained on the ground as noticed in the Order the review judgment can be questioned on the ground on which review was permitted82. The Division Bench judgment does not indicate that it proceeds on the ground as contended by the appellant and noticed by this Court on 06.08.2001. The interest of 9% was allowed on the premise that 1993 Act is not applicable and said interest is allowed on equity relying on an earlier judgment on this court in Assam Small Scale Industry Development Corporation and others versus G.D. Pharmaceuticals and others, 2005(13) SCC19.We thus are of the view that present appeal challenging the review judgmentcannot be entertained. The ground on which the appellant can challenge the review judgment can be the ground on which liberty was obtained to file review. We thus hold that Civil Appeal No. 8445 of 2016 is not maintainableWhether the High court while considering the Review Petition No.75 of 2001 (M/s Trusses & Towers Pvt. Ltd.) even after expressing that Act 1993 is not applicable could have allowed 9% interest to the plaintiff?83. The High Court in its judgment dated 19.03.2013 allowed interest @ 9% per annum for the period of delayed payment. Even if Act 1993 is not applicable, the Court can very well exercise its jurisdiction to award interest. InAssam Small Scale Industry Development Corporation and others versus G.D. pharmaceuticals and others(Supra),this Court in paragraph 40 while considering the claim of the respondent in a suit filed for recovery of interest under 1993 Act has allowed 9% interest with respect to the transaction made prior to coming into force of the 1993 Act.84. High Court did not commit any error in awarding 9% interest to plaintiff respondent. We thus did not find any error in the judgment dated 19.03.2013 allowing partly the review application filed by the plaintiffCivil Appeal No. 8450 of 201685. Now, we come toCivil Appeal No. 8450 ofe appellant has 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 the bills for supply made and amount of security deposited and amount of Rs.10,10,326.74 p. being the amount of delayed interest.The suit was decreed by the learned Civil Judge (Senior Division) vide its judgment and order dated 30.09.2002 for recovery of Rs. 5,46,233.14 p.as on 18.12.93 from the date of enforcement of the Act, 1993 and future interest on the decretal amount @ 6% simple interest per annum with effect from 19.12.1993.Appeal was filed by the respondent in the High Court beingRFA No. 78 of2003, whichhasbeen allowed on 12.02.2015 setting aside the decree for recovery of the amount and interest but maintaining the claim of refund of security deposit to the tune of Rs. 23,738.49 with 9% interest.The High Court following the judgment of this Court inPurbanchal Cables and Conductors Pvt. Ltd. (supra) held that with regard to transaction, which had taken place prior to 23.09.1992, the 1993 Act is not applicable.The appellants have appealed against the judgment of High Court dated 20.02.2015. The pleading on the record does not indicate that any supply was made by the appellant subsequent to enforcement of the 1993 Act. We have already held that the mere fact that supply orders were issued prior to enforcement of the Act does not deny the applicability of the 1993 Act, in event, supply has been made after the enforcement of the Act.