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2006 DIGILAW 282 (GAU)

Prag Electrical Pvt. Ltd. v. State of Assam

2006-03-23

AFTAB H.SAIKIA

body2006
JUDGMENT A.H. Saikia, J. 1. Heard Mr. U. Bhuyan, learned Counsel for the petitioner and Mr. K.C. Mahanta, learned State Counsel appearing for the official respondents. 2. All these three writ petitions i.e. W.P. (C) No. 4892/05, WP (C) No. 4893/05 and WP (C) No. 4894/05 have been taken up for analogous hearing as they carry common question of law as well as facts and, accordingly, they are being disposed of by this common judgment. 3. In WP (C) No. 4892/05, the petitioner, by satisfying the work order dated 5.6.2000, submitted two bills being No. 20/2000-2001 dated 18.10.2000 for Rs. 52,155.00 and bill No. 19/2000-2001 dated 18.10.2000 for Rs. 1,16,416 i.e., in total Rs. 1,68,571/-. Out of this amount, Rs. 50,000/- has remained unpaid till date. That being the position, the petitioner has sought for a direction from this Court to the respondents/authorities to make the payment of the balance amount as indicated above with interest as admissible under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 (for short 'the Act'). 4. In WP (C) No. 4893/05, though the final bill of Rs. 81,500/- was submitted after the completion of the work order so allotted to the petitioner, till date no payment has been made and accordingly payment of outstanding amount above mentioned along with the interest in terms of the Act has been sought. 5. Similarly, in WP (C) No. 4894/05, out of total balance amount for the completion of the contract work, the petitioner has not been paid an amount of Rs. 2,01,936.59 and accordingly a direction has been sought in this writ petition for payment of the above amount with interest. 6. The moot question that has been raised in this batch of writ petitions is whether the petitioner, being a small scale industry, is entitled to get the interest on the delayed payment of the bill amount in terms of the Act. 7. Mr. Bhuyan, learned Counsel for the petitioner has submitted that in terms of provisions of Sections 3 and 4 of the Act, the petitioner is entitled to get the interest as the said outstanding amount has not been paid after the appointed day as defined under Section 2(b) of the Act. 8. No counter has been filed on behalf of the State respondents. 8. No counter has been filed on behalf of the State respondents. Even no record has been placed before this Court when the matter is taken up for hearing. 9. Mr. Mahanta, learned State Counsel, on the other hand, contended that since the contract work was for the period of 2000, the petitioner cannot claim any interest in terms of the Act though he has admitted that the outstanding bill amount to which the petitioner has been claiming, has not been cleared till date. 10. For proper resolution of the issue raised herein, it would be relevant and necessary to read the relevant provisions of the Act. 11. The 'appointed day' has been defined under Section 2(b) of the Act as under: (b) 'Appointed day' means the day following immediately after the expiry of the period of thirty days from the day of acceptance or the day of deemed acceptance of any goods or any services by a buyer from a supplier. Explanation-For the purposes of this clause- (i) 'The day of acceptance' means- (a) The day of the actual delivery of goods or the rendering of services; or (b) Where any objection is made in writing by the buyer regarding acceptance of goods or services within thirty days from the day of the delivery of goods or the rendering of services, the day on which such objection is removed by the supplier. 12. Sections 3, 4 and 5 of the Act run as follows: 3. Liability of buyer to make payment-Where any supplier supplies any goods or renders any services to any buyer, the buyer shall make payment therefore on or before the date agreed upon between him and the supplier in writing or, where there is no agreement in this behalf before the appointed day: [Provided that in no case the period agreed upon between the supplier and the buyer in writing shall exceed one hundred and twenty days from the days from the day of acceptance or the day of deemed acceptance.] [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 one-and-a-half time of Prime Lending Rate charged by the State Bank of India. Explanation-For the purposes of this section, "Prime Lending Rate" means the Prime Lending Rate of the State Bank of India which is available to the best borrowers of the Bank.] 5. Liability of buyer to pay compound interest-Notwithstanding anything contained in any agreement between a supplier and a buyer or in any law for the time being in force, the buyer shall be liable to pay compound interest (with monthly rests) at the rate mentioned in Section 4 on the amount due to the supplier. 13. A conjoint reading of the above provisions of law would go to show that if a buyer, after getting due delivery of the goods in terms of the contract between the buyer and supplier, fails to make payment on the appointed date i.e., the following day immediately after expiry of period of 30 days from the date of acceptance, of the goods, he shall be liable to pay interest to the supplier on that outstanding amount which has not been cleared in terms of the liability of the buyer. 14. The Full Bench of this Court in a case of Assam, State Electricity Board and Ors. v. Shanti Conductors Pvt. Ltd. and Anr. (2002) 2 GLR 550, paragraphs 12 and 13 held as under: 12.... The Act had been enforced to see that small scale industries get the payment regarding supply made by them within the prescribed period and in case of delay in payments the interest would be at a much higher rate (1 1/2 times of lending rate, charged by the State Bank of India). The obligation of payment of higher interest under the Act is mandatory. The obligation of payment of higher interest under the Act is mandatory. Sections 4 and 5 of the Act of 1993 contain a non obstante clause i.e. 'Notwithstanding anything contained in any agreement between the buyer and the supplier.' In other words, the parties to the contract cannot even contract out of the provisions of the 1993 Act. Even if such provision that interest under the Act on delay meant would not be chargeable is incorporated in the contract. Sections 4and 5 of the Act of 1993 would still prevail as the very wording of these sections indicate.... 13... The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 is a special provision for the benefit of the small scale and ancillary industrial undertakings, and in a suit for recovery of interest under the Act of 1978, the provisions of the Interest Act would not apply, but the provisions of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 would apply.... 15. Relying on this decision of the Full Bench, the Division Bench of this Court in Chief Secretary to the Govt. of Assam and Ors. v. Brahmaputra Udyog Private Limited and Anr. Writ Appeal No. 280/02, disposed of on 25.6.2002, held that the Govt. is liable to pay the interest over the unpaid amount from the date of Act came into force i.e. 23.9.1992 although the supply order was issued prior to the Act came into force. 16. In another case, this Court in Universal Pipes Pvt. Ltd. v. State of Assam and Ors. WP(c) No. 1194/03, disposed of on 6.8.2003 while dealing exactly with a case of similar nature, held that though the petitioner has got the balance amount but since the same was not paid after 23.9.1992 i.e., the day when the Act came into force till 3.1.2000, the petitioner was entitled to get the interest for the period and the till the realization of the balance amount as per provisions of Sections 4 and 5 of the Act. 17. In the case at hand, it is seen that though no affidavit-in-opposition has been filed, it is admitted that the petitioner has submitted his outstanding bill and the total bill amount has not been paid till date. 17. In the case at hand, it is seen that though no affidavit-in-opposition has been filed, it is admitted that the petitioner has submitted his outstanding bill and the total bill amount has not been paid till date. That being so, in view of the provision of Sections 3, 4, and 5 of the Act and also having regard to the above cited cases, this Court is of the view that the petitioner is entitled to get interest in terms of the Act. The respondents, therefore, are directed to take necessary steps for payment of the interest along with the outstanding bill amount calculated in terms of the provisions of the Act to the petitioner as expeditiously as possible. 18. Be it made clear that the interest shall be accrued not only on the outstanding amount but also on the amount which has been paid after the appointed day. 19. In the result, this batch of writ petition succeeds and stands allowed. However, there will be no order as to costs. Petition allowed.