JUDGMENT :

1. Leave granted.

2. We have heard learned Senior Advocate appearing for the appellant-Snehadeep Structures Private Limited¹ [For short “SSPL”] and the Respondent- Maharashtra Small Scale Industries Development Corporation Ltd.² [For short “MSSIDCL”]

3. During the course of the hearing, our attention was drawn to Sections 3, 4 and 5 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993.³ [For short “1993 Act”] For the sake of convenience, the said Sections are reproduced below:

“3. Liability of buyer to make payment - Where any supplier supplies any goods or renders any services to any buyer, the buyer shall make payment therefor on or before the date agreed upon between him and the supplier in writing or, where there is no agreement in this behalf, before the appointed day:

Provided that in no case the period agreed upon between the supplier and the buyer in writing shall exceed one hundred and twenty days from the day of acceptance or the day of deemed acceptance.

4. Date from which and rate at which interest is payable - Where any buyer fails to make payment of the amount to the supplier, as required under section 3, the buyer shall, notwithstanding anything contained in any agreement between the buyer and the supplier or in any law for the time being in force, be liable to pay interest to the supplier on that amount from the appointed day or, as the case may be, from the date immediately following the date agreed upon, at one-and-half time of Prime Lending Rate charged by the State Bank of India.

Explanation - For the purposes of this section “Prime Lending Rate” means the Prime Lending Rate of the State Bank of India which is available to the best borrowers of the bank.

5. Liability of buyer to pay compound interest - Notwithstanding anything contained in any agreement between a supplier and a buyer or in any law for the time being in force, the buyer shall be liable to pay compound interest (with monthly interest) at the rate mentioned in section 4 on the amount due to the supplier.”

4. We would also reproduce the definition clauses (b), (c) and (f) to Section 2, which are applicable, unless the context otherwise requires. The same read thus:

(b) “appointed day” means the day following immediately after the expiry of the period of thirty days from the day of acceptance or the day of deemed acceptance of any goods or any services by a buyer from a supplier.

Explanation - For the purposes of this clause:

(i) “the day of acceptance” means:

(a) the day of the actual delivery of goods or the rendering of services.

(b) where any objection is made in writing by the buyer regarding, acceptance of goods or services within thirty days from the day of the delivery, of goods or the rendering of services, the day on which such objection is removed by the supplier.

(ii) “the day of deemed acceptance” means, where no objection is made in writing by the buyer regarding acceptance of goods or services within thirty days from the day of the delivery of goods or the rendering of services, the day of the actual delivery of goods or the rendering of services.

(c) “buyer” means whoever buys any goods or receives any services from a supplier for consideration.

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(f) “supplier” means an ancillary industrial undertaking or a small scale industrial undertaking holding a permanent registration certificate issued by the Directorate of Industries of a State or Union territory and includes:

(i) the National Small Industries Corporation, being a company, registered under the Companies Act, 1956 (1 of 1956).

(ii) the Small Industries Development Corporation of a State or a Union territory, by whatever name called, being a company registered under the Companies Act, 1956 (1 of 1956).”

5. The proviso to Section 3 and the amendment to Section 2(f) to include the addition of National Small Industries Corporation and the Small Industries Development Corporation of a State or a Union Territory to the definition of