The court emphasized that the interpretation of a statute should subserves the objective of the enactment and lead to the advancement of the object and purpose of the legislation.

VIPIN SANGHI, J.

( 1 ) THE present Execution Petition arisen from an Arbitration Award dated 06. 07. 2001 passed by the Sole Arbitrator Shri A. K. Duggal in Arbitration between M/s Kanhai Engineering (Towers) Pvt. Ltd. " (hereinafter referred to as the Decree Holder) and M/s. Telecommunication Consultants India Pvt. Ltd. (hereinafter referred to as the Judgment Debtor ). The learned arbitrator, inter alia, awarded the Decree Holder interest as per Clause 5. 1. 1. of the Agreement between the parties. The objections filed under Section 34 of the Arbitration and Conciliation Act, 1996 in O. M. P. No. 302/2001 came to be dismissed and the award was upheld vide order dated 09. 03. 2006 by this Court. The Award was modified to the extent that interest was granted under the provisions of "the interest on Delayed Payments to Small Scale Industrial and Ancillary undertakings Act, 1993" (hereinafter referred to as the Act ).

( 2 ) THE Decree Holder while computing the amount due, calculated the same by adding compound interest with monthly rest at a fixed rate of 23% and arrived at a sum of Rs. 45,67,163. 00 (Forty five lakhs sixty seven thousands one hundred sixty three only ). After deducting the amount tendered by the Judgment Debtor, the claim of the Decree Holder is Rs. 30,90,571. 00 (Thirty lakhs ninety thousands five hundred seventy one only) calculated as mentioned herein above.

( 3 ) ON the other hand, the Judgment Debtor calculated its liability under the decree by assuming the same principal liability, the same time frame for the computation of interest, and computed its liability with compound interest compounded monthly, but the rate of interest has been arrived on the basis of the floating rate of interest based on the lending rates of the banks from time to time. The Judgment Debtor has also added 5 per cent points to the floor rate of interest under Section 4 of the Act.

( 4 ) THE only question that arises for determination is with regard to the correct manner of arriving at the rate at which interest is to be applied in computing the overdue interest. The Decree Holder claims that interest is to be paid at a fixed compounded rate, with monthly rests, while the Judgment Debtor seeks to pay interest at a floating rate, with monthly rests.

( 5 ) HAVING heard arguments of the both the counsels for the parties, I am of the view that the rate of interest adopted by the Judgment Debtor is correct, for the reasons to follow.

( 6 ) THE Act is a legislation intended for the benefit of Small Scale industries and Ancillary Undertakings. It seeks to prevent delay in flow of institutional credit due to such Small Scale Industries and Ancillary undertakings. The main purpose of the Act as stated in the Objects and Reasons is to provide for and regulate the payment of interest on delayed payments to small Scale Industries and Ancillary Undertakings. Sections 4 and 5 of the Act being relevant are reproduced herein below:

"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 such rate which is five per cent points above the floor rate for comparable lending. Explanation. " For the purposes of this section, "floor rate for comparable lending" means the highest of the minimum lending rates charged by scheduled banks (not being co-operative banks) on credit limits in accordance with the directions given or issued to banking companies generally by the Reserve Bank of india under the Banking Regulation Act, 1949. "

"5. Liability of buyer to pay compound interest. " Notwithstanding anything contained in any agreement between a s