Research › Search › Judgment

Gauhati High Court · body

2017 DIGILAW 311 (GAU)

HMR Constructions Pvt. Ltd. v. State of Assam

2017-03-14

AJIT SINGH, MANOJIT BHUYAN

body2017
JUDGMENT : Manojit Bhuyan, J. 1. The petitioner’s claim for payment of interest of delayed payments in respect of the security deposit on the basis of “The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993” was negated by the learned Single Judge primarily on the ground that the transaction i.e. placing of the supply order and the agreement entered into by the appellant/the writ petitioner with the Public Works Department occurred prior to coming into force the aforesaid Act of 1993. As such, no claim for interest of delayed payment was admissible in terms of the said Act. Reliance was placed in the case of Assam Small Scale Industries Development Corporation Ltd. v. J.D. Pharmaceuticals, reported in (2005) 13 SCC 19 . 2. As against the Judgment & Order dated 05.06.2013, the appellant now contends that the transaction pertaining to supply of materials had continued beyond the date when the 1993 Act had come into force i.e. 23.09.1992. In this respect the appellant makes reference to the modified Agreement dated 20.10.1993. 3. As the point for determination is limited to the issue as to whether the transactions had taken place beyond 23.09.1992 i.e. the date when the 1993 Act came into force, it would be first be essential to understand the scope of the Act. Paragraphs 37 and 38 of the case in J.D. Pharmaceuticals (supra) is reproduced for the purpose:- “37. We have held hereinbefore that clause 8 of the terms and conditions relates to the payments of balance 10%. It is not in dispute that the plaintiff had demanded both the principal amount as also the interest from the Corporation. Section 3 of the 1993 Act imposes a statutory liability upon the buyer to make payment for the supplies of any goods either on or before the agreed date or where there is no agreement before the appointed day. Only when payments are not made in terms of Section 3, Section 4 would apply. The 1993 Act came into effect from 23-9-1992 and will not apply to transactions which took place prior to that date. We find that out of the 71 suit transactions, Sl. Nos. 1 to 26 (referred to in the penultimate para of the trial court judgment), that is supply orders between 5-6-1991 to 28-7-1992, were prior to the date of the 1993 Act coming into force. We find that out of the 71 suit transactions, Sl. Nos. 1 to 26 (referred to in the penultimate para of the trial court judgment), that is supply orders between 5-6-1991 to 28-7-1992, were prior to the date of the 1993 Act coming into force. Only the transactions at Sl. Nos. 27 to 71 (that is supply orders between 22-10-1992 to 19-6-1993), will attract the provisions of the 1993 Act. 38. The 1993 Act, thus, will have no application in relation to the transactions entered into between June 1991 and 23-9-1992. The trial court as also the High Court, therefore, committed a manifest error in directing payment of interest at the rate of 23% up to June 1991 and 23.5% thereafter.” 4. The case in J.D. Pharmaceuticals (supra) was relied upon in the case of Shakti Tubes Ltd. v. State of Bihar, reported in (2003) 7 SCC 673 and at para 21 and 22 thereof, the Apex Court held as under:- “21. We have considered the aforesaid rival submissions. This Court in Assam Small Scale Industries case has finally set at rest the issue raised by stating that as to what is to be considered relevant is the date of supply order placed by the respondents and when this Court used the expression ‘transaction’ it only meant a supply order. The Court made it explicitly clear in para 37 of the judgment which we have already extracted above. In our considered opinion there is no ambiguity in the aforesaid judgment passed by this Court. The intent and the purpose of the Act, as made in para 37 of the judgment, are quite clear and apparent. When this Court said ‘transaction’ it meant initiation of the transaction i.e. placing of the supply orders and not the completion of the transactions which would be completed only when the payment is made. Therefore, the submission made by the learned Senior Counsel appearing for the appellant-plaintiff fails. 22. Consequently, we hold that the supply order having been placed herein prior to the coming into force of the Act, any supply made pursuant to the said supply orders would be governed not by the provisions of the Act but by the provisions of Section 34 CPC.” 5. From the aforesaid decisions of the Apex Court it is clear that the expression ‘transaction’ means initiation of the transaction i.e. placing of the supply orders. From the aforesaid decisions of the Apex Court it is clear that the expression ‘transaction’ means initiation of the transaction i.e. placing of the supply orders. In the instant case there is no dispute that supply order made in favour of the appellant was on 24.03.1990, that is well before the Act of 1993 was brought in force. On this limited adjudication alone and having regard to the decisions of the Apex Court, as afore-mentioned, we find no ground to disagree with the findings and decision of the learned Single Judge. 6. Mr. G.N. Sahewalla, learned Single Counsel representing the appellant submits that he may be allowed to approach the Industry Facilitation Council, as provided under Section 7A of the Act of 1993 in case there are any transactions with regard to the supply order in question going beyond the cut-off-date i.e. 23.09.1992. We make no comments on it, leaving it open for the appellant to take such steps as available under the law, if so advised. The appeal stands disposed of accordingly.