IMPORTANT POINT
The main legal point established in the judgment is that the Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertakings Act, 1993 does not apply to transactions prior to its enforcement, and interest at the rate of 18% per annum was justified based on the bills.

JUDGMENT :

1. The present appeal under Section 100 of the Code of Civil Procedure, 1908 (for short ‘C.P.C.’) was filed by State of Gujarat through Home Department with Gujarat Small Industries Corporation Ltd. as appellant No.2, challenging the judgment and decree dated 13.12.2005, passed by the Presiding Officer, Fast Track Court, Rajkot in Regular Civil Appeal No.43 of 2005. By the impugned judgment, the learned Judge, dismissed the appeal and confirmed the order dated 05.09.2000 passed by learned 5th Joint Civil Judge (S.D.), Rajkot in Civil Suit No.217 of 1988, and allowed the Cross Objections filed by the respondent, M/s.Regal Scale Industries – original plaintiff. The plaintiff's decretal amount for Rs.1,89,317.51/- was ordered to be recovered from the present appellants – original defendants with 22.25% compound interest with monthly interest (after 30 days expiry period from date of delivery i.e., 11.11.1983 and 05.02.1984). The rest of the judgment and decree was confirmed.

1.1 The ground inter alia raised are that the appellate Court had no jurisdiction to entertain the suit, and further ground was raised that the Interest On Delayed Payments to Small Scale And Ancillary Industrial Undertakings Act, 1993 would not be applicable to the facts of the case, as it has come in force on 23.09.1992 and would have no retrospective effect. It is also inter alia contended that the respondent firm has tried to derive a double benefit out of the observations of the trial Court, and that in addition to the interest at the rate of 22.25% included in the decree passed by the trial Court, the appellate Court again awarded interest at the rate of 22.25% under 1993 Act on the entire decretal amount, which is erroneous.

2. The facts of the case in nutshell are as under:

2.1 The present respondent – original plaintiff is a partnership firm registered as small scale industries by the State and Central Governments, manufactures ‘Lion Brand Weigh Bridge and Scale’. The appellant no.2 - Gujarat Small Industries Corporation, under Government of Gujarat, provides marketing and other support to small scale industries in the government and other organization as per inquiry.

2.2 It was the case before the trial Court that respondent was asked to provide complete technical details and specifications etc., and on 31.05.1982, two Weigh Bridge of capacity of 60 M.T. were supplied to ARTO at Bhilad and the cost of the same was fixed at Rs.3,77,500/-. All documents for 90% payment regarding supply of weigh bridges were sent through bank, but due to lapse of time, the bank had charged Rs.6,054/-, which was deducted from the account of respondent.

2.3 After repeated reminder, the appellant had paid 3% amount of Rs.22,650/- on 26.08.1985. The respondent had sent a notice to the appellant under section 80C of C.P.C. claiming that 18% interest per annum will be payable as per the bill condition on delayed payment. Thereafter, the respondent had filed Special Civil Suit No.217 of 1988 against the appellant, as on filing of the suit dated 03.10.1988, as stated, the amount of Rs.1,15,000/- was outstanding.

2.4 It is stated that on enactment of the new Act being Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertaking Act, 1993, the trial Court had permitted the respondent to amend the original suit, where as per new Act, the rate of interest was 17.25% + 5% = 22.25%, and the amount was calculated as Rs.1,89,317.51/-.

2.5 The suit of the respondent – plaintiff came to be decreed with costs and the appellants were directed to make the payment of decretal amount of Rs.1,89,317.51 with 12% interest per annum from the date of filing of the suit till realization of the decretal amount. However, the same was not complied with and therefore the respondent had filed Special Execution Petition No.301/2000 before the Civil Court, Rajkot on 16.11.2000.

2.6 Being aggrieved by the same, the appellants filed First Appeal No.3144 of 2000 along with stay applicat