High Court
Case Details
RFA 72/2003 BEFORE THE HON’BLE MR. JUSTICE B.P. KATAKEY JUDGMENT & ORDER (ORAL)
Legal Reasoning
This appeal by the plaintiffs is directed against the judgment and decree dated 17.12.2002 passed by the learned Civil Judge (Senior Division) No. 3, Kamrup at Guwahati in MS No. 23/2000, for not awarding interest under the provision of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakin gs Act, 1993 (in short the 1993 Act). 2. The appellant, as plaintiffs, instituted the said suit praying f or a decree for realization of Rs. 6,02,774/-, being the principal amount, and i nterest of Rs. 2,82,768/-, calculated up to the month of December, 1999 ,based on 5% points above the floor rate for comparable lending and also claimed future interest at the rate of 20.04% per annum with monthly rest as per the provision of the 1993 Act for supply of hume pipes to the defendants, contending that tho ugh pursuant to the various orders issued such goods were supplied and bills wer e raised the entire amount due have not been paid, though certain part payments were made, leaving a balance of Rs. 6,02,774 to be paid towards the principal am ount. 3. The suit of the plaintiffs was contested by the respondents/defe ndants by filing the written statement contending inter alia that the suit is ba rred by time and that the court has no territorial jurisdiction and that the bil ls submitted by the plaintiffs includes the AGST and the Central Excise duty. Th e defendants, however, have admitted issuance of orders for supply of hume pipes and also the supply of the articles ordered for. 4. wing issues for determination: The trial court, on the basis of the pleadings, framed the follo (cid:28)1. Whether this court has territorial jurisdiction to try this suit? 2. Whether the suit is barred by limitation? 3. Whether the plaintiffs is stopped from claiming interest as the same is not c ontained in the tender agreement? 4. Whether the plaintiffs is entitled to get a decree as prayed for? 5. What other relief/relieves the parties are entitled to? (cid:29) 5. The plaintiffs in order to prove their case has examined one wit ness and exhibited a number of documents, which includes the permanent registrat ion certificate issued by the Directorate of Industries, Govt. of Assam certifyi ng the plaintiffs as small scale industrial unit in respect of manufacture of RC C hume pipes. 6. The defendants in support of their pleadings did not adduce any evidence. The plaintiffs’ witness, however, was cross examined by the defendants . 7. The trial court upon appreciation of the evidence on record deci ded all the issues in favour of the plaintiffs. The trial court accordingly pass ed a decree for realisation of Rs. 4,13,822.62, which was found to be due and pa yable to the plaintiffs for the supply of goods pursuant to the supply orders. T he trial court has also passed the decree for payment of interest at the rate of 12.75 % per annum from one month after the supply till the institution of the s uit and further interest at the same rate from the date of institution of the su it till the date of payment. 8. nt of interest under the provision of the 1993 Act. The plaintiffs have, therefore, filed the present appeal for gra 9.
Legal Reasoning
I have heard Mr. SP Roy, learned counsel for the appellant. None appears for the respondents. 10. Referring to Ext. 3, permanent registration certificate, and al so the evidence adduced it is submitted by Mr. Roy, learned counsel for the appe llant that since the orders were issued and accordingly goods were supplied afte r the permanent registration certificate was issued for manufacturing RCC hume p ipes, the plaintiffs are entitled to interest as provided under Section 4 of the 1993 Act, with effect from the appointed date i.e. the actual date of supply of goods till the date of realization there being no agreed date for payment. The learned counsel submits that despite the aforesaid provision and the evidence le d, the trial court did not pass the decree for interest under the provision of S ection 4 of the said Act. 11. I have considered the submission advanced by the learned counsel for the appellant and also perused the records including the judgment and decre e passed, apart from the evidence adduced, both oral and documentary. No cross o bjection has been filed by the defendants. None has appeared even to argue that the finding recorded by the trial court is illegal. 12. In the plaint the plaintiffs have claimed interest under the pro vision of the 1993 Act contending inter alia that they are entitled to the inter est as provided under Section 4 of the said Act, it being a registered SSI unit and as the defendants have failed to make payment within one month from the date it supplied the goods i.e. hume pipes, for which registration was granted by th e Director of Industries. The plaintiffs in order to prove that it is a register ed SSI unit has also proved the permanent registration certificate issued by the Director of Industries on 19.7.1993, which has been marked as Ext. 3. The plain tiffs have also proved the supply orders which are marked as exhibits so also th e supply of goods i.e. hume pipes. The plaintiffs have also proved the bills, wh ich are marked as exhibits. 13. As noticed above, the defendants in fact in their written statem ent filed have admitted the issuance of supply orders, supply of goods as well a s the submission of bills. Hence there is in fact no dispute relating to the sup ply orders as well as the supply of goods. 14. The trial court has found that out of the billed amount an amoun t of Rs. 4,13,822.02 remained unpaid, for which the decree has been passed. The finding in that regard has not been challenged by the parties to the suit. 15. The only question which requires determination in this appeal is whether the plaintiffs are entitled to interest under the provision of the 1993 Act. 16. As noticed above, in order to substantiate the plea that the pla intiffs are entitled to interest, they have proved Ext. 3, the permanent registr ation certificate, apart from the supply orders and supply of goods and the bill s. It appears from the supply orders that there is no agreed date for making pay ment. The 1993 Act has been promulgated to provide for and regulate th 17. e payment of interest on delayed payments to small scale and ancillary industria l undertakings and for matters connected therewith or incidental thereto. Sectio n 10 of the said Act provides that the provision of this Act shall have effect n otwithstanding anything inconsistent therewith contained in any other law for th e time being in force. 18. Section 4, prior to amendment by Act of 23 of 1998, which came i nto effect from 10.8.1998, provides that where any buyer fails to make payment o f the amount to the supplier as required under section 3, the buyer shall, notwi thstanding anything contained in any agreement between the buyer and the supplie r or in any law for the time being in force, be liable to pay interest to the su pplier on that amount from the appointed day or, as the case may be, from the da te immediately following the date agreed upon, at such rate which is five per ce nt points above the floor rate for comparable lending. Explanation to Section 4 defines ’floor rate for comparable lending’ which means the highest of the minimum lending rates charged by scheduled banks (not being cooperative banks) on credit limits in accordance with the directions given or i ssued to banking companies generally by the Reserve Bank of India under the Bank ing Regulation Act, 1949. 19. Section 3 of the said Act stipulates that where any supplier sup plies any goods or renders any services to any buyer, the buyer shall make payme nt therefor on or before the date agreed upon between him and the supplier in wr iting or, where there is no agreement in this behalf, before the appointed day. The appointed day is defined in Section 2 (b) as the day following immediately a fter expiry of the period of thirty days from the day of acceptance or the day o f deemed acceptance of any goods or any service by a buyer from a supplier. 20. In the instant case, the plaintiffs could prove that it is a reg istered SSI unit for manufacturing of hume pipes, which has supplied goods to th e defendants and hence it is entitled to interest under the provision of the 199 3 Act, from the appointed day, there being no agreed date for payment. The plain tiffs have also proved that based on floor rate for comparable lending for diffe rent periods they are entitled to Rs. 2,82,374.00 towards interest under the pro vision of the 1993 Act till the date of filing the suit. 21. In view of the above the plaintiffs are entitled to interest of Rs. 2,82,768.00 till the date of filing of the suit. The plaintiffs are also ent itled to compound interest from the date of filing of the suit till the payment on the principal amount of Rs. 6,02,774.00 at the rate of 5% point above the flo or rate for comparable lending under Section 4 and 5 of the 1993 Act. 22. owed to the extent indicated above. No cost. The appeal filed by the appellants/plaintiffs is accordingly all 23. The Registry is directed to send down the records forthwith.