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2012 Supreme(Gau) 1265
IN THE HIGH COURT OF GAUHATI
I.A. Ansari and P.K. Musahary, JJ.
A.S.E.B. and Ors. – Appellants
Vs.
M/s. Shanti Conductors (P) Ltd. – Respondent
R.F.A. No. 66 of 2000
Decided On: 20.11.2012
For Appellant/Petitioner/Plaintiff: Mr. B.D. Das and Mr. H.K. Sharma
For Respondents/Defendant: Mr. A.K. Sinha
Headnote:
Constitution of India, 1950 - Articles 136 and 141 - Interest on Delayed Payments to Small Scale and Ancillary Undertakings Act, 1993 - Sections 10, 3, 6, 4 and 5 - Limitation Act, 1963 - Sections 14 and 2 – Delayed Payment – Electricity Supply – Pay Interest - This is an appeal against judgment and decree passed in Money Suit by learned Civil Judge No - 2 whereby plaintiffs-respondents suit was decreed on contest against defendants-appellants - Case of respondent Conductors Limited was in brief thus - Respondent Conductors Limited is a private limited company incorporated under provisions of Companies Act and stands registered as a Small Scale Industrial Unit with Directorate of Industries Assam - Company aforementioned also stands registered under provisions of Assam Preferential Stores of Purchase Act and Rules framed there under - Appellants Assam State Electricity Board placed two supply orders with Conductors Limited for supply of various types of conductors two supply orders - Under supply order supply was to be completed by January - Supplies were however completed because according to plaintiffs Board delayed in carrying out inspection of manufactured product and supplies could not have been affected without requisite inspection having been carried out by Board – Held, When read and read carefully it becomes crystal clear that according to decision of Supreme Court in Cables and Conductors Private Limited conclusion of Full Bench that would apply even to a contract which might have been entered into prior to enforcement where payments as envisaged by contract were delayed and made after enforcement on such delayed payment buyer would be liable to pay interest had not been agreed to in Assam Small Scale Industries Development Corpn Ltd and decision in Assam Small Scale Industries Development Corpn Ltd which was followed in Tubes Ltd has observed in Cables and Conductors Private Limited have remained no longer res integra and that would not apply to a contract which had been entered had come into force but supplies were made or payments were made after had come into force - Realistically and legally speaking with help of doctrine of merger decision of Supreme Court in Cables and Conductors Private Limited has to be read as a whole and we hold and we must hold that to transactions at hand does not apply and suit in present case was not maintainable - Consequently impugned decree cannot be sustained - Appeal allowed.
I.A. Ansari, J.
1. This is an appeal against the judgment and decree, dated 02-02-2007, passed, in Money Suit No. 21 of 1997, by the learned Civil Judge (Sr. Division), No. 2, Guwahati, whereby the plaintiffs-respondents' suit was decreed, on contest, against the defendants-appellants. The case of the respondent, M/s Shanti Conductors (P) Limited, was, in brief, thus:
The respondent, M/s Shanti Conductors (P) Limited, is a private limited company, incorporated under the provisions of the Companies Act and stands registered as a Small Scale Industrial Unit (SSI Unit) with the Directorate of Industries, Assam. The company aforementioned also stands registered under the provisions of the Assam Preferential Stores of Purchase Act and the Rules framed thereunder. The appellants, Assam State Electricity Board (hereinafter referred to as 'the Board'), placed two supply orders, with M/s Shanti Conductors (P) Limited, for supply of various types of conductors, the two supply orders being, dated 31.03.92 and 13.05.92. Under the supply order, dated 31.03.92, supply was to be completed by January, 1993. The supplies were, however, completed on 23.09.93, because, according to the plaintiffs, the Board delayed in carrying out inspection of the manufactured product and the supplies could not have been affected without requisite inspection having been carried out by the Board. As far as the supply order, dated 13.05.92, aforementioned was concerned, the supply was to be completed by February, 1993, but the supplies were completed, on 05.10.93, for the reasons as indicated hereinbefore. The first supply order was for Rs.1,22,52,568.79/- and the second supply order was for Rs.32,49,117.27/-. Thus, the total goods supplied were for Rs.2,37,71,536.32/-. The last payment was received by the plaintiffs from the Board on 05.03.94.
2. Alleging that the plaintiff had not paid interest on delayed payment of the bills of the plaintiffs, though the plaintiff, M/s Shanti Conductors (P) Limited, was a SSI unit and the Board ought to have paid interest in terms of the provisions of the Interest on Delayed Payments to Small Scale and Ancillary Undertakings Act, 1993 (hereinafter referred to as 'the 1993 Act'), the plaintiffs instituted the suit, in question, seeking realization of a sum of Rs.53,68,492.56/- along with future interest @ 27% per annum.
3. The defendants, headed by the Board, contested the suit by contending, inter alia, that there was no cause of action for the suit, the suit was barred by limitation and the suit was not maintainable in its present form, the further case of the defendants being that the plaintiffs could not deliver the goods within the delivery schedule and payment for entire supply of materials could not be made in time. Moreover, the supply orders, according to the defendants, were given prior to the promulgation of the Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertaking Ordinance, 1992 (hereinafter referred to as 'the 1992 Ordinance'), which came into force on 23.09.92. Thereafter, the Ordinance was enacted into a legislation, namely, Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertakings Act, 1993 (in short, 'the 1993 Act'). Though the 1993 Act was enacted on 02.04.93, the 1993 Act, by a legal fiction, is deemed to have come into effect from the date of promulgation of the 1992 Ordinance on 23.09.92. In other words, the defendants' case was that since the supply orders were placed with the plaintiff-Company, M/s. Shanti Conductors (P) Ltd., prior to the coming into force of the 1993 Act on 23.09.92, the 1993 Act was not applicable to the contract in issue and the suit, instituted by the plaintiffs, were, therefore, not sustainable in law. This apart, the defendants denied that the plaintiff company was entitled to claim interest inasmuch as the goods were, according to the defendants, not supplied within the delivery schedule, for, the delivery schedule, if maintain
