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2010 Supreme(UK) 5
2010 (1) UAD 620
SUPREME COURT OF INDIA
Hon’ble Mr. Justice Tarun Chatterjee and Hon’ble Mr. Justice V.S. Sirpurkar
Civil Appeal No. 10 of 2010
SNEHADEEP STRUCTURES PRIVATE LIMITED – Appellant
Versus
MAHARASHTRA SMALL SCALE INDUS. DEV. COR. – Respondent
Decided on : 05.01.2010
For the Respondent:Mr. S. Dholakia, Sr. Adv., Mr. M.P. Rao, Mr. A.K. Mishra, Mr. Abhay Chandrakant Mahimkar, Advocates
Headnote:(A) Interest on Delayed Payments to Small Scale and Ancillary Undertakings Act, 1993, Sec. 7 and Arbitration and Conciliation Act, 1996, Sec. 34 — Interpretation and Scope of Expression "Appeal" U/S 7 of 1993 Act — 'Appeal' herein includes an application to set aside an arbitral award filed u/s 34 of the 1996 Act — Therefore, deposit of 75% of the amount awarded is a pre requisite for entertaining the application filed. (Paras 3, 14, 32, 33, 58)
(B) Limitation Act, 1963, Sec. 5 — An order dismissing an application as barred by limitation — After rejecting an application u/s 5 of the Limitation Act to excuse the delay in presentation was held to be one 'passed on appeal' within the meaning of Section 109 of the Code. (Para 27)
(C) Civil Procedure Code, 1908, Sec. 115 — Appellate jurisdiction — Exercise of — Nature of order passed under — Held that even an order passed by virtue of limited power of revision u/s 115 of the Code is treated as an exercise of appellate jurisdiction — Though under that provision, the Court cannot go into the questions of facts. (Para 32)
¼v½ y?kq m|ksx vkSj lgk;d vaMjVsfdax ,DV] 1993] /kkjk 7 ds vUrxZr foyafcr Hkqxrku ij C;kt dh x.kuk] vkSj vkfcZVsª'ku vkSj duflfy;s'ku ,DV 1996] /kkjk 34 & /kkjk 7 vf/kfu;e 1993 ds vUrxZr ^vihy* dk rkRi;Z vkSj foLrkj bl ds vUrxZr vihy ls rkRi;Z /kkjk 34 vf/kfu;e 1996 ds vUrxZr iapkV fu.kZ; dks jn~n djus dh izkFkZuk dks Hkh lfEefyr djuk gS & blfy, nk;j izkFkZuk i= ij fopkj djus gsrq iap fu.kZ; dh /kujkf'k dk 75 izfr'kr /ku tek fd;k tkuk iwoZ 'krZ ds :i esa visf{kr gSA ¼izLrj 3] 14] 32] 33] 58½
¼c½ fyfeVs'ku ,DV] 1963] /kkjk 5 & fyfeVs'ku ls ckf/kr izkFkZuk i= dks jn~n fd;s tkus dk vkns'k & /kkjk 5 fyfeVs'ku ,DV ds vUrxZr nk;js esa foyEc dks {kek djus gsrq izkFkZuk i= vLohdkj djus ds ckn ;g fu.kZ; fn;k x;k fd nhokuh lafgrk dh /kkjk 109 ds vfHkizk; ds fy, ^vihy ds okLrs Lohdr* gksuk gSA ¼izLrj 27½
¼l½ nhokuh izfd;k lafgrk] 1908] /kkjk 115 & vihyh; {ks=kf/kdkj dk iz;ksx blds vUrxZr ikfjr vkns'k dh izdfr & fu.kZ; esa dgk x;k fd lafgrk dh /kkjk 115 ds vUrxZr iqujh{k.k dh lhfer 'kfDr gksrs gq, dksbZ vkns'k ikfjr gks tk, rks mls vihyh; dk;Z{ks= dk iz;ksx ekuk tk,xk & ;|fi ml izkfo/kku ds rgr U;k;ky; rF; ds iz'uksa esa ugha tk ldrhA ¼izLrj 32½
Tarun Chatterjee, J. — Leave granted.
2. This appeal by Special Leave arises from a judgment and order dated 5th of February, 2008 of the High Court of Bombay in Appeal No. 485 of 2006 whereby the Division Bench of the High Court had set aside the order dated 25th of January, 2006 of the learned Single Judge of the same High Court dismissing an Arbitration Petition being Arbitration Petition No. 499/2003 filed by the respondents.
3. The crucial question that arises for our consideration is with respect to the interpretation of the term ‘appeal’ appearing in Section 7 of the Interest on Delayed Payments to Small Scale and Ancillary Undertakings Act, 1993 (hereinafter referred to as ‘the Interest Act’).
4. The facts of the case can be summarised as follows :
The appellant company is a Small Scale Industrial Undertaking for the purposes of the Interest Act. The Maharashtra State Electricity Board (in short ‘MSEB’) issued a Work Order dated 27th of March, 1995 in favour of Maharashtra Small Scale Industries Development Corporation (hereinafter referred to as ‘the Corporation’). The order was for supply of pipeline, bends and fixtures to be used for laying a slurry pipeline at the Chandarpur Thermal Power Station. The Corporation, in their turn, issued a Supply Order dated 30th of March, 1995 in favour of the appellant-company. The work was completed and the bills were duly submitted by the appellant-company. However, there was a huge delay on the part of the Corporation in paying the said bills to the appellant company and no reasonable cause was shown. Resultantly, the appellant company demanded interest on delayed payment under the Interest Act by a letter dated 7th of December, 1999. The claim was allegedly denied by the Corporation by a letter dated 24th of April, 2000. On 21st of December, 2001, the appellant-company served a notice on the Corporation pointing out that the refusal of the Corporation to pay interest as demanded by the appellant company has given rise to a dispute which shall be referred to the Chairman of the Corporation/his nominee in accordance with clause 27 of the Supply Order, within 15 days from the date of service of notice. Though the Corporation acknowledge the delay and claim for interest vide a letter dated 05th of February, 2002, it held the view that the liability to pay the interest lay on MSEB, which was the buyer, and not on the Corporation. Therefore, the letter stated that reference to arbitration at that stage was not warranted. Aggrieved by the refusal of the respondent to refer the matter to arbitration, the appellant-company preferred an Arbitration Application under Section 1 of the Arbitration and Conciliation Act, 1996 (for short the ‘Arbitration Act’) before the High Court of Bombay. The High Court appointed a former Judge of the High Court Mr. Justice S.W. Puranik as the Sole Arbitrator. The Arbitrator by his Award dated 30th of June, 2003 directed the Corporation to pay a sum of Rs. 78,19,540.73 to the Appellant company.
5. Aggrieved, the Corporation filed an application under section 34 of the Arbitration Act before the High Court of Bombay for setting aside the award which came to be numbered as Arbitration Petition No. 499 of 2003. During the pendency of these proceedings the Appellant company pointed out that under section 7 of the Interest Act the Corporation has to deposit 75% of the amount awarded by Arbitrator under the Award.
6. The Learned Single Judge of the High Court, vide his order dated 23rd of August, 2005 dismissed the application filed under Section 34 of the Arbitration Act for setting aside the award of the Arbitrator. It was found that despite the statement made on behalf of the Corporation that a Bank Guarantee would be furnished to comply with Section 7 of the Interest Act recorded on 9th of August, 2005, they had not done so; nor have they asked for any extension of time. Hence, it was held that the petition under Section 34 of the Arbitration Act wa
