Purbanchal Part 1

8/3/2019 Purbanchal Part 1

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S Y N O P S I S

The Peti t ioner as been non-suited n an erroneousinterpretation f section6 of the Interest on delayedpayments o small scalesand Ancl l l lary ct Industr ialundertakings ct 1993 hereinaftereferredo as the Act)whichappl ieso smallscale ndustr ial ndertaking i th lnthe meaning f section (i) of the Industr ial evelopmentRegulat ionct.TheHighcourt has aken he viewon thebasisof the Divtsior i enchJudgment f the saidCourt(RE: Assamstate ElectricityBoardand AnotherVersusTrusses ndTowers Pvt)Ltd' reportedn 2001 (2) G'L'T'121) that since he principal mounteyen thoughpaidbeyond he appointed ay, hr:suit or accruednterest ordelayed payment stands defeated and therefore theinterest n delayed ayment ecomesrrecoverablendersections and 5 0f the Act,AnotherDivision ench f theHighcourt in the caseof (Assam tate Electriclty oard&others,VersusM/s.ShaniiconductorsPvt)Ltd & Anotherhas akena contrary iewandhasaccordinglyeferredhematter o a FullBench n the ol lowing uestions:

( a ) . t h a t a s u i t f o r r e c o v e r y o f m e r e i n t e r e s t u n d e r t h eAct s maintainabler not?


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(b). whether ontractsnterednto prior o 23.09'1992willbegovernedY heAct?

(c). whether he suit for recovery f interest nder heAct s maintalnablef no reseruations madeby thesupplier,he right o recovernterest?

TheFullBench nsweredhereferencesunder:-

A sult or recoveryf mere nterestfordelaYedaYmentnderheActis maintainablend the caseofM/s.TrussesndTowers asewasoverruledn hisPoint.

o n Q u e s t i o n N o , ( b ) , T h e c o n t r a c t s p r i o r t o e n f o r c e m e n to f the Act on 23.09.1992 l l l a lsobe subjectmatter of the Act butinterest n delayedPaymentwouldonlY be from 23.09.1992i l l thedateof Payment.

OnQuestion o, c ) ' Theobseruationn the case f M/s'Trussesand Towers (ParagraPh-23) "once he PrinciPaimount s


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received Ya Person lthout nYreservation,hereafter e cannotmake a clalm for turthersumeitherbYwaYof the PrinciPalrlnterest" re oowldelY tated ndthereforeonothave heaPProvalofFullBench nd s husoverruled'

The mPugnedudgment hichwasfounded on the basls of M/s'Trusses ndTowerss therefore olongera goodLaw n view of theJudgment enderedbY the FullBench, and the imPugnedjudgment s therefore equired obe set aside. It may be statedhereln that the Hlgh Courtcompletely verlookedhe findingof theTrialCourt hat he principaldnroUntwas Paidmuch after theenforcement f the Act' But theDivision Bench assumed andpresumed that the PrinciPalamountwas received rior o theenforcementof the Act therebY


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ignorlng he sald f indingand therespondents erein also did notrefute hat findingof fact record ytheTrialCourt.

Point herefore equires o be considered y this Hon'bleCourt or a correct nterpretationf section of the Act.

In the ,rstancease, he princlpalumwaspald ongafteri!the appointedldatesec*ion (i) of theAct)and hat too byan nterim rder f the HighCourt n a writ peti t ioni ledbyM/s.AssamConductors anufacturer'sssociation hereinfor recovery f all otheramountdue on delayed aymentthe HighCourtdirectedhe same o be recoveredhroughthe process f ClvilCourt.Pursuanthereto he petitionerfrleda suit or recovery f the statutorynterest ndelayedpayment.HighCourtheld hat since he principal mountis not dueon the dateof the nsti tut ion f suit , nterest ndelayed aymentwas rrecoverable.y this interpretationsection of the Act hasbeen endered ugatory, ince hebuyer analways void he l iabi l l ty f the rnandate f theAct to pay statutory nterest and thereby escape herecoverability f the interest on delayed payment asenjoined ndersections and 5 of the Act. The objectofthe Act s to provideo SmallScalendustrlalUndertakings


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tu n d e r S e c t i o n s 4 a n d 5 o f t h e A c t c e r t a i n b e n e f i t s b y w a yo f i n t e r e s t i f t h e p u r c h a s e p r i c e i s n o t p a i d o n a c c e p t a n c eof goodsundersection (i ) of the Act within30 daysofa ; c e p t a n c e w h i c h i s t h e a p p o i n t e d d a y w i t h i n t h e m e a n i n gof section2(b) of the Act ' This ls a beneficial ieceoflegislat iono, he small scale Industr ialUndertakingow a r d o f f a n d / o r r o c o m p e n s a t e t h e a m o u n t o f I n t e r e s t , t h eS m a | | S c a l e l n d u s t r i a l U n d e r t a k i n g i s r e q u i i e d t o p a y t othe Ba k and Financia Inst i tut lon for delayedreimbursementf loan.Suit vlasdecreed ut HighCourts e t a s i d e t h e J u d g m e n t i n A p p e a I s i n c e t h e s u i t w a s o n l yfor recovey of Interest n delayed ayment nd furtherdirected he refundof depositmadeby the Respondentsf o r o b t a i n i n g s t a y a s p e r s e c t i o n T o f t h e A c t f o r p r e f e r r i n gan Appeal gainst he Judgment f the LowerCourt 'TheH i g h C o u r t h a s f a i l e d t o m a k e t h e d i s t i n c t i o n b e t w e e n t h eordinary Interest and statutory interest for delayedpayment. here s no discretion onferred n the Courtsofar as t l te paynlentof statutory nterest s concerned'w he reas fo rpaym en to fo rd i na ry i n te res td i sc re t i onves t sin theCourt '

The atterDivision ench as akenheview hatsectiono f t h e A c t d o e s n o t b a r a s u i t f o r | n t e r e s t o n d e | a y e dpaymentotwithstandinghe act hatnoprincipalmountls &le on the date of tl p tnstttutton of ttre sult fo rrecoveq/ of anount by wa y cf lntsrgt on detEyed payrlents'


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27 -Q | -2OOj t

The Peti t ionernsti tuted MoneySuit No'109of 1996seeking ecovery f Rs ' 24,57,927'28paise by way of Interest on the delayedpaymentof the principal amount by theRespondents.he aforesaidMoneySuit wasinstltuted under "the Interest on delayedpayments to Small Scale and AncilliaryIndustr lal ' UndertakingsAct 1993"' TheaforesaidMoney Suit I ' lo'109of 1996 wasinstitutedn the Courtof the Assistant istrictJudge o.1KamruP t Guwahat i '

TheLearned ivi l udge SeniorDivision) o'1KamrupGuwahatldecreed he sult Institutedby the petitionerwlth 18'25 /o ?rannumplus5olonterest bove he said ateof interestwith

monthlYest i l l real isat lon'

Beingaggrievedjudgment andrenderedbY the

by and dissatisfied ith theDecree dated 27'0L'2000Learned lvi l Judge Senior


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18-08-2001

Division) N0.1, the Respondents ereinpreferredan Appealunder Order 41 Rule 1C.P.C. 1908,and the samewas registered sRegular lrstAppeal 0.80 f 2000'

A DivlslonBenchof the HighCourtof Gauhatihadbeenpleasedo allow he Appeal referred

by the Respondentsnd dlsmissedhe suitof

the petlt loner. t the time of admission f theAppeal, he'Respondents as directed o payto the petltloner sumof Rs'10 acs,whlch hepetltlonerwas directed o refund to theRespondents ithln a perlodof two months'

fai l ing which it was directedhat the said

amount would carry interest of LZo/operannum,This s the impugnedudgment ndorder which s sought o be assai ledn theinstant peclal eave etl t ion'

In passinghe impugnedudgment ndorder'the Division ench f the HighCourt eferredto a DivisionBench udgment f the GauhatiHighCourt Assam tateElectr ic i ty oard ndOthersVersus .rs' ShantiConductors rivate'Limited and Another. Subsequently he

4' aI


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05-03-2002:

correctnessf the aforesaid ecisionwasdoubtedyanother ivisionench f hesameHlghCourtand the matterwas accordlnglyreferredo the FullBench f threeHon'bleJ u d g e s .

By udgment ated 5'03-2002he lrrludge Bench f the GauhatlHlghCourt nR.F.A.No. 65 of 2O0O n Assam StateElectricltyqard ndOthers ersus /s'ShantiConductorsrivate imited ndAnother avestated sunder:

"The enunciation f Law by the DivisionBench n Paragraph3 of M/s' Trussesand Towers,where he observationsreto the effect that "once the principalamount s recelved y a personwlthoutany reseruation, hereafter he cannotmakea claim or a further umeitherbyway of principalor interest" are toowidely stated and do not have ourapprovaland herebyoverruled' Truecopy of the said judgment dated 5thMarch, 2OOZn AssamState Electricity


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Board and Oth:rs VersusConductors rivateLlmitedis annexed hereto and

M/s. ShantiandAnothermarked as

2Oth arch, 002: Special eave eti t ioni led n hisHon'bleCou t'


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IN THEGAUHATI IGHCOURT(THE HIGH COURTOF ASSAM: NAGAI,AND:MEGHAI-AYA:MANIURRIPURA: IZOMMANDARUNACHALRADESH)

R,F,A. NO.80 0F 2000 '

1. Assam tateElectr ic i tYoard'Bi jul iBhawan, altanbazar'uwahati 'dulY epresentedY tsChairman'

2. TheChiefEngineerMaterials)AssamStateElectricitYoard'Bi jul iBhawan, altanbazar'hY-1'(PreviouslyesignatedsController r Stores)'

. . . . . . . . .ppellants/Defendants'

Versus

M /s .Pu rbancha |C ab |es&C onduc to r s (P )L im i t ed ,Nirmal Nagar Apartment' (6tn Floor) Rehabari 'Guwahat l -8 '

ResPodent/Pl intiff


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P R E S E N T

THEHON,BLE R. USTICE. N.SHARMA'THEHON'BLE R. USTICE .G.AGARWAI'A'

Appearanceor heAppellants" ' r 'B' D' Das'Advocate'

Appearanceor he Respondent" 'Shrl' K' Goswaml'ShrlB' M' !]arma'ShrlS' Sen'

. ShrlM' Baruah' dvocates

Dateof hearing. 18/08/2001.

Dateof JudgmentOral) ' t8/08/200t '

J U D G M E N T O R A L )

BYHON'BLER. USTICE !' SARMA'

1. This appealhas been fi led by tfre AssamStateElectr ic i ty oardagainst he ludgment nd decree ated27.Ot 000 passedby the LearnedCivi l Judge SeniorDiv is ion) 0 .1 ,Guwahat in Money u i tNo ' 09 11996 'Bythe impugnedudgment he Learned udgedecreed namountof Rupees wenty ourLakhsFiftyseven housandninehundredwentysevenand wentyeightpaiseRs'24'


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57,g27.28Paiseo the plaintiff owardsnterest nder he

provision f the Interest of Delayedpayments o Small

Industr iar Undertakings and Anci l lary Act ' 1993(hereinafter atted he Act)' The llabll lWof buyer o pay

interestby way of compensatlons provlded ndersectlon

5 of the Act, ' e' quotedbelow:

*5. Liabil i tyof buyer o pay compoundnterest' 'Notwithstandlng nythlng contalned n any

agreement etween supplier anda buyeror

in any law for the time being in force' the

buyershailbe [able to paycompoundnterest(with monthlybasis)at the rate mentionedn

Section on the amountdue o the supplier"'

Z, The recovery f amountdue provided s Section6

and hat s quoted e low:-

*6. Recovery f amountdue' - The amountduefrom a buyer' togetherwith the amount ofinterest caiculated n accordancewith theprovisions f Sections4 and 5' shal l be

recoverabley the suppllerrom the buyerbyway of a suit or otherproceedingnderanylaw or the time being n force"'


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3. A comb'inedeadlngof Sections and 6 of the Act

wil lshow hatsomeamountmustbedueand nteresthal l

be PaYablehereon nlY'

4. Thisaspect f the mattercameup for considerat ionbeforehisCourt n F' A' No' 109/95 eportedn 2001 2)GLT tzt (Assam State ElectricityBoard & Another'

Appe l lan tsVersus-M/s 'Trusses & TowersP) Ltd '

Respondent) hereina DivisionBenchof this Court nparagraph-15as a iddown he awus el le s :

*15. A bare eading f the Sectiontselfwi l l showthat theremust be someamountdue roma buyer

andalongwith hat amount claim or nterestmay

b e m a d e . N o a m o u n t b e l n g d u e f r o m t h e b u y e r ,meresuitonly or Interests notmaintainablen viewof Section (1) of the Actquoted bove"'

This court also n the penultimate art of the Judgment

pointed ut as ol lows:-

'22, Even n caseswhere he buyer s liable o pay' interestby virtue of this Act it is the duty of

the Court to find out the amount of losss u f f e r e d b y t h e d e | a y e d p a y m e n t a n d o n l y


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Sectionsbe l iab le' l i a b l e ' i s

c)

thereafter nterestcan be paid.This Act cannot be used as an open dagger to stabsomebodyas and when there is delayedpayment, f that nterpretatlons given hlsActinsteadof beinga tool of justice,shall be aweaponof .oppresslon. l l these hings werenot aken nto considerationy the trialCourt"'

II(quoted bove)wil l show hat the buyers shal l ' ito pay".The Dict ionarymeaningof the word

as o l lows: -

"L iab le . Bound or obliged n law or' squity,responslble,chargeable,answerable,compellable to tuL.'4 satisfaction,compensationr restitution

"'So when the word used s liable o pay, the court mustexerclse iscret lono flnd out what ls the loss hat thesuppliers ave suffered, traightway the Courtcan notpassa decreeon the wholeamountof the bi | | , houghsome amount has alreadybeen recelved.No lnterest spayable n the amountalreadypald, hat is, what has


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5. Thebrief actsareas ol lows:-

Therewasan order or supplyof somematerials yAssamStateElectricity oard Rluminum onductors).he/ - : . r \ . . ; \ r i ;_supplyorder was on \1/1/921 The suppl iercould notl,supply he items ixed n the orderwithin imeof contract,extension as granted rom t ime to t ime and ult imatelysupplywas completed n LZlt0/93and he paymentwasa lsomade n october , 3 for the ent i re mount f b i l l s .IssueNo,9 in thesu i t 5as o l lows:

"IssueNo,9:- Whetherhe del ivery eriod f supplywasextended Pto30/tt /93 ?"

The indings n IssueNo,9 of the Trialcourt s that thisextensionwas given at the prayerof the plaint i f fandextensionwas granted o November, 3. Supplywascompletedn octoner, 3 andas ndicatedbove aymentswere alsomade,Thereafterhis suit was iled n the year1996 3 /8/96) only or interest laiminghe rightunderthe Act of 1993as mentioned bove. t hasbeenalreadydecided y thiscourt hat the baresuit or nterests notmain ta inab le ,s on the dateof the su i t no amountwasdue o the plaint i f f .


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6 . I n A i R 1 9 7 9 S c p a g e 1 0 2 9 ( S u p e r i n t e n d e n t a n dRemembrancerf Legal ffalrso Govt'of WestBengal'A p p e l l a n t V s A b a n l M a i t y , R e s p o n d e n t ) t h e w o r d ' l l a b l e 'cameup for conslderatlonnd n paras16 and 17 of theJudgmenthe SupremeCourtpointed ut as ollows:

I t is true thai c,rdinari lyhe word "l lable"denotes i) Legallysubjector amenable o'"(2) Exposed r subject o or likely to sufferfrom(somethlng re'Judlclal) ,"(3) Subjectothe possibi l iW'Coingr undergoingomethingundesirable),(SeeshorterOxfordDictionary)'Accordingo Webster'sNewWorldDictionaryalso, the word "l iable" denotes'somethingexternal hichmaYbefal l s '

t7, Accordingly,he word "l lable" occurr ing nmanystatutes ''asbeenheldas not conveyingthe senseof an absolute bligation r penaltybut merely mporting possibll i ty f attractlngsuch obligation, r penalty'Vrlwhere thisword s usedalongwith the words shallbe"'Thus where an AmericanRevenueStatutedeclaredhat for the Commission f a certainAct, a vessel shall be llable o forfelture"' t


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l

!

was held that these words do not effect apresentabsolute orfeiturebut only gives aright to have he vessel orfeittedunderdueprocess f law (seeKateheron, 4 Fedcas 39,141-6 Sawy 106) quoted in words andphrases.Volume 25 page 109 permanentEdlt lon,WestPubl ishlngompany)imilar ly,thasbeenheld hat n section 02, ndianPanelCode, he phrase shallalsobe llable o flne"doesnot conveya mandate ut leave t to thediscretion f the Court onvlcting n accused fthe offences f murder, o imposeor not t0imposefine In addltlon o the sentenceofdeath r imPrisonmentor i fe."

7. In view of that mater, the trial Court was notjustif ied to hold that there was a mandate rom theLegislatureo grant compoundnterestwithoutapplyingthe direct ion. urtherno mountbeing ueon the dateofthe suit , he suit s l iable o be dismissedn that grounda lone .

8. , In thatviewof the malter hisappeals a| lcwed. hesuit of the plaintiff shall stand disnrissedwith costsalthough ut. At the t ime oi admission f th is appealhe

7


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1AssamStateElectricity oardwasdirectedo paya sumofRupees en Lakhs Rs. 10,00,000/-) nd the samewaswithdrawn gainsthe BankGuarantee.hatamount hal lbe refunded o the defendantwithln a perlod of twomonths,al l ingwhich heamount hal l arry nterest t therateof Rs.12% perannum.Even he BankGuarantee aybe enforced y AssamStateElectrlcity oard.

9. We haveheardShri B. D. Das,Learned dvocateorthe Appellant nd Shrl B. K Goswaml, earnedSenlorAdvocateor the Respondent.

Sd/-J, N.Sarma, udge.Sd/-P,G,Agarwal,udge.

Gauhatl lghCourt.

// TRUE COPY/


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l oF O R M . 2 8

IN THESUPREMEOURT F NDIAORDERVIRULE (1) (a)

(CIVI APPELI-ATEURISDICTION

/ (wrn pnRveRoR rureRtN euler)

BETWEEN

1

M/s.PurbanchalablesConductors rivate imited'ThroughtsChairman,RamGoPal garwal,NirmalNagar Partment,(6thFloor), ehabari 'Guwahat i -780008 '

A N D

AssamStateElectricityBoard,RepresentedY ts Chairman,B i ju l iBhawan,Paltar ibazar,Guwahati-780001.

POSITION FPARTIES.In the Court/ In thisCourt'Tribunal romwhoseOrder he Peti t ionarises.

Respcrndent. Petitloner.

Contesting/RespondentN 0 , 1 .Appel lan tN o , 1 .


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2 .

nAppellant Contesting/N0.2. ResPondentNo.2 '

TheChiefEngineer(Materlals).AssamStateElectrlcitYoard,B i ju l iBhawan,Paltanbazar,Guwahat i -1 .(PrevlouslyeslgnatedsControl lerr Stores)

To,TheHon 'b leheChie fus t ice f nd iaandHisCompanionustices f theSupreme ourto f Ind ia .

Thehumble eti t ion f the peti t ionerabove-named,

1. That this Petition or SpecialLeave o Appeal sdirected galnst he lmpugnedlnalJudgment nd orderdated18.8.2001 endered y the DivlsionBenchof theGauhat i ighCour t TheHighCour t f Assam: aga land:Meghalaya: an ipur :Tr ipura :Mizoram nd Arunacha lPradeshn R ' F. A. No'80of 2000'By the saidJudgmentandorder he Dlvision ench f the Highcourt hadbeenpleasedo al low he Appeal f the Respondentserein nddirected he dlsmissal f the suit of the petitioner iledseeking ecoveryof the amount by way of interestondelayed ayment f the Principal mount'The impugned

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Purbanchal Part 1