The court emphasized the statutory liability of the buyer to pay compound interest under the 1993 Act and the limited grounds for setting aside an arbitral award under the 1996 Act.

B.P. Katakey, J.

1. This appeal Under Section 37 of the Arbitration and Conciliation Act, 1996 (in short, 1996 Act) is directed against the judgment dated 17-10-2007 passed by the learned District Judge at Guwahati in Misc. (Arb.) Case No. 6 of 2005 rejecting the application filed Under Section 34 of the 1996 Act praying for setting aside the arbitral award passed by the Industrial Facilitation Council (in short, IFC) acting as an arbitrator in respect of the matter referred to it under Sub-section (1) of Section 6 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial undertakings Act, 1993 (in short, 1993 Act).

2. Pursuant to an order dated 9-3-1998 for supply of 400 Nos. of pilfer-proof steel meter boxes of particular specification, the respondent supplied the materials to the appellant on 14-5-1999, whereafter a bill for Rs. 7 lakh was raised on 2-6-1999. The appellant on 10-1-2000 paid the billed amount to the respondent. The respondent thereafter on 14-1-2000 addressed a communication to the Superintending Engineer of the appellant Board claiming interest on delayed payment under the provisions of 1993 Act, followed by a further communication dated 22-1-2000 in that regard. By another communication dated 18-2-2000, the respondent also informed the Chief Engineer of the appellant Board about the prime lending rate (PLR) of the State Bank of India since 1-3-1999 enclosing therewith the communication issued by the Deputy General Manager of the said bank dated 17-2-2000. Having failed to receive any reply, the respondent again on 3-4-2000 wrote to the Superintending Engineer of the appellant Board claiming interest and requested him to make the payment of the interest under the provisions of the 1993 Act by 10-4-2000 and intimating the said authority that in the event of failure to make such payment, reference to the IFC Under Section 6(2)of the 1993 Act would be made. The matter was thus referred to the IFC in terms of the provisions contained in Sub-section (2) of Section 6 of the 1993 Act on the basis of the application filed by the respondent claiming compound interest with monthly rest at 18% per annum from 13-6-1999 to 10-1-2000 and at the same rate from 10-1-2000 to the date of payment including cost. The IFC which acts as an arbitrator initially in its meeting held on 3-2-2003 dropped the proceeding, which has been challenged by the respondent in WP (C) No. 5980/2003 before this Court. A single bench of this Court vide judgment and order dated 26-3-2004 set aside the said proceeding of the IFC on the ground of violation of the principles of natural justice and directing it to take a fresh decision on the matter within a period of three months from the date of furnishing the certified copy 'of the order. The IFC thereafter held its proceeding on 3-12-2004 and upon hearing the parties passed the award directing payment of Rs. 75,239.02 being the interest payable under the provisions of 1993 Act with effect from 14-6-1999 i.e. the date of expiry of one month from the date of supply of materials till 9-1-2000 i.e. one day prior to making the payment and also to pay pre-award and pendente lite interest. The appellant has challenged the said award by filing an application Under Section 34 of the 1996 Act before the learned District Judge praying for setting aside the same, which having been rejected, the present appeal has been filed.

3. I have heard Mr. B. D. Das, learned Counsel for the appellant as well as Mr. Dutta, respondent in person.

4. Challenging the order passed by the learned District Judge, Mr. Das, learned Counsel for the appellant, has submitted that the respondent having accepted the principal amount under the bill on 10-1-2000 without any reservation, the subsequent claim of the respondent for interest on delayed payment under the provisions of the 1993 Act is not maintainable. Referring to the provisions contained in Sections 3 and 4 of the 1993 Act as well as the definition of "a