2019 INSC 0059
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.8442­8443 Of 2016
M/S. SHANTI CONDUCTORS(P) LTD. & ANR.  ...APPELLANT(S) 
VERSUS
ASSAM STATE ELECTRICITY BOARD & ORS.    ...RESPONDENT(S)
WITH
CIVIL APPEAL NO.8445 Of 2016
 
M/S. TRUSSES AND TOWERS (P)LTD.    ...APPELLANT(S) 
VERSUS
ASSAM STATE ELECTRICITY BOARD & Anr.    ...RESPONDENT(S)
WITH
CIVIL APPEAL NO.8448 Of 2016
ASSAM STATE ELECTRICITY BOARD & Anr.    ...APPELLANT(S) 
VERSUS
M/S. TRUSSES AND TOWERS (P) LTD.      ...RESPONDENT(S)

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WITH
CIVIL APPEAL NO.8450 Of 2016
 
M/S. BRAHMPUTRA CONCRETE PIPE INDUSTRIES ...APPELLANT(S)
VERSUS
ASSAM STATE ELECTRICITY BOARD           ...RESPONDENT(S)
J U D G M E N T
ASHOK BHUSHAN,J.
These   appeals   have   been   filed   questioning   judgment
of   Gauhati   High   Court   by   which   judgment   Regular   First
Appeal   filed   by   the   Assam   State   Electricity   Board   has
been   allowed   setting   aside   the   judgment   and   decree
passed   by   trial   court   in   favour   of   appellants   in
original   suit   proceedings.   It   shall   be   sufficient   to
notice the pleadings in C.A. Nos. 8442­8443 of 2016 for
deciding   the   common   questions   of   law   involved   in   all
these appeals. The facts and pleadings in other appeals
shall also be briefly noticed.

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C.A.Nos.8442­8443 of 2016
(M/s. Shanti Conductors (P) Ltd. & Anr. vs. Assam State
 Electricity Board & Ors.)
2. The   appellant   is   a   Private   Limited   Company   which
has   been   registered   as   a   Small   Scale   Industrial   Unit
for manufacturing electrical conductors and/or wires at
Kokrajhar,   Assam.   On   31.03.1992,   the   respondent­Assam
State   Electricity   Board     placed   an   order   for   supply   of
Aluminium   Electrical   Conductors  from   the   appellants­M/s
Shanti   Conductors   Pvt.   Ltd.   for   a   total   consideration
of   Rs.   1.22   crores.   The   supplies   were   to   be   made
between June and December, 1992. On 13.05.1992, another
order was placed by the Electricity Board to M/s Shanti
Conductors   for   the   supply   of   various   types   of
conductors for a total consideration of Rs. 32.49 lacs.
The   supplies   of   the   aforesaid   goods   were   to   be   made
between   January   and   February,   1993.   On   23.09.1992,   the
President   of   India   promulgated   an   ordinance,   namely,
the   Interest   on   Delayed   Payment   to   Small   Scale
Ancillary   Industrial   Undertakings   Ordinance,   1992.
Subsequently,   on   02.04.1993,   the   Interest   on   Delayed
Payment   to   Small   Scale   and   Ancillary   Industrial

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Undertakings Act, 1993 (in short the “Act”) was enacted
and   it   was   deemed   to   have   come   into   force   with   effect
from   23.09.1992.   Meanwhile,   the   supply   of   equipments
under   the   aforesaid   purchase   orders   was   completed   by
M/s Shanti Conductors on 04.10.1993. On 05.03.1994, the
entire payment of Rs. 2.15 crores against the aforesaid
supply orders was received by M/s Shanti Conductors.
3. On   10.01.1997,   M/s.   Shanti   Conductors   filed   a   suit
for   recovery   of   Rs.53.68   lakhs   claiming   interest   on
delayed   payments.   The   Assam   Electricity   Board
(hereinafter   referred   to   as   the   “Board”)   filed   its
written   statement   raising   the   plea   of   limitation   and
contending   that   the   Act   is   not   applicable   to   the   case
of the appellant as the contract was concluded prior to
enactment   of   Act,   1993.   The   trial   court   decreed   the
suit   on   02.02.2000   for   recovery   of   the   amount   of
Rs.51,60,507.42   with   compound   interest   at   the   rate   of
23.75%   p.a.   The     Board   filed   the   Regular   First   Appeal
No.66   of   2000   before   the   High   Court   of   Gauhati.   The
Division   Bench   of   the   High   court   while   hearing   the   RFA
being   of   the   view   that   certain   important   issues   arise

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for   consideration,   referred   the   matter   to   the   Full
Bench.   The   Full   Bench   framed   following   questions   of
law:
“i)   Whether   the   suit   for   recovery   of   mere
interest   under   the   Interest   on   Delayed
Payments   to   Small   Scale   and   Ancillary
Industrial   Undertakings   Act,   1993   is
maintainable?
ii) Whether in the present case the suit for
recovery   of   Interest   under   the   Delayed
Payments   to   Small   Scale   and   Ancillary
Industrial   Undertakings   Act,   1993   would   not
be   maintainable   as   the   contract   for   supply
of   goods   between   the   parties   was   entered
into   prior   to   enforcement   of   the   Act,   i.e.
on 23.09.1992?
iii)   Whether   the   suit   for   recovery   of
interest  under  the  Delayed  Payments to  Small
Scale   and   Ancillary   Industrial   Undertakings
Act,   1993   would   not   be   maintainable   if   no
reservation   is   made   by   the   supplier
retaining   to   it   the   right   to   recovery
interest   under   the   Act   when   the   payment(s)
of  the  principal  sum  is/are accepted,  though
these   may   be   made   beyond   the   prescribed
period?” 
4. The Full Bench of the High Court vide its judgment
dated   05.03.2002   answered   the   reference   holding   that   a
suit   for   interest   could   be   filed.   It   further   held   that
Act,   1993   is   also   applicable   to   contracts   entered   into

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prior   to   23.09.1992.     It   held   that   interest   under   the
Act   would   be   calculated   from   23.09.1992   till   the
payment   is   made   to   the   supplier.   The   Board   filed   an
appeal   against   the   judgment   of   the   Full   Bench   dated
05.03.2002   in   this   Court   being   C.A.   NO.2351   of   2003
(Assam   State   Electricity   Board   and   others   vs.   Shanti
Conductors   Private   Limited   and   another).   The   appeal
filed   by   the   Board   was   heard   along   with   another
C.A.No.2348   of   2003(   Purbanchal   Cables   and   Conductors
Private   Limited   vs.   Assam   State   Electricity   Board   and
another).   A   two­Judge   Bench   of   this   Court   decided   both
the appeals vide common judgment dated 10.07.2012 which
judgment   is   reported   in   (2012)   7   SCC   462   (Purbanchal
Cables   and   Conductors   Private   Limited   vs.   Assam   State
Electricity   Board   and   another) .   The   two­Judge   Bench
relying   on   earlier   judgments   of   this   Court   held   that
suit for recovery of interest alone under the Act, 1993
is maintainable. It further held that the Act, 1993 has
no   retrospective   application.   It   further   held   that   the
supplier has an accrued right to claim a higher rate of
interest   in   terms   of   the   Act   only   with   regard   to   sale

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agreements   entered   after   the   date   of   the   commencement
of   the   Act   i.e.   23.09.1992.   After   judgment   of   this
Court dated 10.07.2012 RFA No.66 of 2000 was decided by
the   Division   Bench   vide   its   judgment   dated   20.11.2012.
The   Division   Bench   of   the   Gauhati   High   Court   by   the
impugned   judgment   has   allowed   the   appeal   of   the   Board.
The   Division   Bench   following   judgment   of   this   Court   in
Purbanchal   Cables   and   Conductors   Private   Limited   held
that   Act,   1993   would   not   apply   to   a   contract   entered
prior to the enforcement of the Act, 1993. The contract
between   the   parties   being   prior   to   the   enforcement   of
the Act, the appeal filed by the Board was thus allowed
setting   aside   the   judgment   and   decree   of   the   trial
court.   A   subsequent   order   dated   20.12.2012   was   also
passed   by   the   Division   Bench   directing   the   refund   of
amount   of   Rs.38,03,381/­.   Aggrieved   by   both   the
judgments dated 20.11.2012 and 20.12.2012 passed by the
Division   Bench   of   the   Gauhati   High   Court,   Civil   Appeal
Nos.8442­8443   of   2016   have   been   filed   by   the
appellants.

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C.A.No.8445 of 2016 (M/s. Trusses and Towers (P) Ltd. V
Assam State Electricity Board and Anr.)
5. The   Board   placed   two   orders   dated   17.02.1992   and
17.03.1992   with   the   appellant   for   supply   of   pre­
stressed   cement   concrete   poles.   Written   contract   dated
10.06.1992   was   entered   between   the   parties.   Poles   were
supplied   by   the   appellant   to   the   Board   during   the
period   30.03.1992   to   30.09.1992.   Payments   were   also
made   between   23.04.1993   to   08.10.1993.   The   appellant
filed   suit   on   16.05.1994   against   the   Board   seeking
decree   of   Rs.16,55,623/­   with   interest   towards   the
amount   of   delayed   payment   as   per   Act,   1993.   The   trial
court   vide   its   judgment   dated   15.06.1995   decreed   the
suit.   The   Board   filed   Regular   First   Appeal   against   the
judgment   of   the   trial   court.   On   05.04.2001,   the   High
Court   allowed   the   Regular   First   Appeal   filed   by   the
Board. The High Court held that all the bills raised by
the   appellant   were   cleared   by   the   Board   prior   to
commencement   of   Act,   1993.     Further,   the   appellant
having   received   the   principal   amount   could   not   sue   for
interest.   There   was   nothing   on   record   to   indicate   that

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the appellant has received the amount in question under
protest.   The   appellant   filed   SLP(C)No.12217/2001
against   the   judgment   of   the   High   court   dated
05.04.2001. By following order the SLP was permitted to
be withdrawn by this Court:
“Learned   counsel   for   the   petitioner
seeks   leave   to   withdraw   the   special   leave
petition.   He   states   that   he   will   move   the
High   Court   in   review   stating   that   it   has
erred   in   recording   that   "all   the   bills   were
paid  and  cleared  earlier  to the commencement
of   the   Act."   The   special   leave   petition   is
dismissed as withdrawn accordingly.”
6. The   appellant   filed   Review   Application   No.75   of
2001.   The   High   Court   vide   its   order   dated   19.03.2013
partly   allowed   the   review   petition   to   the   extent   that
the   appellant   was   held   to   be   entitled   to   interest   at
the   rate   of   9%   per   annum   for   the   period   of   delayed
payment.
The   appellant   aggrieved   by   the   said   judgment   has
filed C.A.No.8445 of 2016.

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C.A.No.8448   of   2016(Assam   State   Electricity   Board   and
Anr. vs.Trusses and Towers (P) Ltd.)
7. The   above   appeal   has   been   filed   by   the   Board
against   the   order   in   Review   Petition   No.75   of   2001
filed   by   M/s.   Trusses   &   Towers   (P)   Ltd.   by   which   order
the   High   Court   has   partly   allowed   the   review   petition
to   the   extent   that   the   appellant   was   held   to   be
entitled   to     interest   at   the   rate   of   9%   p.a.   as   noted
above.   The   Board   aggrieved   by   the   grant   of   interest   of
9% p.a. has come up in this appeal.
C.A.No.8450   of   2016(M/s.   Brahmaputra   Concrete   Pipe
Industries vs. Assam State Electricity Board)
8. The Board placed two supply orders dated 17.02.1992
&   17.03.1992   for   pre­stressed   cement   concrete   poles   to
the   appellant.   The   payment   to   the   tune   of
Rs.23,04,585.90   was   withheld   by   the   Board,   principal
amount,   however,   was   started     making   payment   with
effect   from   23.04.1993   and   the   whole   sum   was   paid   upto
18.12.1993.   The   appellant   filed   Money   Suit   No.32/1996
for   recovery   of   sum   of   Rs.10,03,466.23   with   interest.
The   Civil   Judge   has   decreed   the   Suit   No.32/1996   by

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order   dated   30.09.2002   for   an   amount   of   Rs.5,46,233.14
with   interest   and   costs.   Board   filed   RFA   No.78   of   2003
against the judgment of the trial court. The High Court
vide judgment dated 12.02.2005 allowed the appeal filed
by   the   Board   and   dismissed   the   suit   filed   by   the
appellant. The High Court relied on the judgment of the
Purbanchal   Cables   and   Conductors   (P)   Ltd.   held   that
there   is   no   applicability   of   Act,   1993   with   regard   to
transaction   which   took   place   prior   to   23.09.1992.
Against   the   judgment   dated   12.02.1015.   appeal
NO.8448/2016 has been filed.
9. We   have   heard   Shri   Ajit   Kumar   Sinha,   Shri   Basava
Prabhu S. Patil and Shri Navaniti Prasad Singh, learned
senior counsel appearing for the appellants. Shri Vijay
Hansaris, learned senior counsel has appeared for Assam
State Electricity Board.
10. All   these   appeals   were   heard   by   a   two­Judge   Bench
of this Court consisting of Justice V. Gopala Gowda and
Justice   Arun   Mishra.   Both   Hon'ble   Judges   of   the   Bench
delivered   separate   opinion   dated   31.08.2016.   In

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paragraph 28 of the judgment following questions of law
have been noticed:
“i)   Whether   provisions   of   the   Act   are
retroactive in nature? 
ii)   Whether   non   consideration   of   this
aspect   of   the   matter   renders   the   decisions
of   this   Court   in   Modern   Industries   (supra)
and Purbanchal  Cables  & Conductors  Pvt. Ltd.
(supra) as sub silentio?
iii)   Whether   the   judgment   rendered   in
Purbanchal   Cables   &   Conductors   Pvt.   Ltd.
(supra)   operates   as   res   judicata   in   the
instant case?
iv)   Whether   the   suit   filed   by   the
appellants is barred by limitation?
v) Whether the appeal against the review
in   the   connected   matter   in   Civil   Appeal   @
SLP   (C)   No.15274   of   2013   (M/s   Trusses   &
Towers Pvt. Ltd.) is maintainable?
vi) What order?”
11. Dealing with Sections 3, 4, 5 of Act,1993 following
opinion was expressed by Justice Gowda:
  “44.The   Act   was   enacted   in   order   to
provide   a   boost   to   the   small   scale   and
ancillary   industries,   which   were   suffering
as   a   result   of   irregular   and   delayed
payments.   A   perusal   of   the   statement   of
objects and reasons of the Act, the relevant
portion   of   which   has   been   extracted   supra,
makes   it   clear   that   the   small   scale
industries   were   suffering   as   a   result   of

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lack  of working capital,  which  was  affecting
the   economic   health   of   such   industries.
Prompt   payment   on   the   outstanding   money,   it
was   felt,   that   was   the   need   of   the   hour.   In
this   context,   the   provisions   of   Sections   3,
4,   5   of   the   Act,   assume   significance.   More
so   in   light   of   the   fact   that   in   the
definition   clause   of   Section   2   of   the   Act,
the   legislature   has   not   defined   the   words
‘transaction’  or  ‘supply  order’.  It chose  to
only   give   definition   to   the   terms,   inter
alia,   ‘appointed   day’,   ‘buyer’   and
‘supplier’. Since the focus of the Act is on
delayed payment,  which  is  in  consonance with
the   definition   of   the   term   ‘appointed   day’
as   well,   there   is   no   need   to   consider   when
the   ‘transaction’   was   entered   into   or   the
date of the ‘supply order’. Section 3 of the
Act   clearly   provides   that   the   liability   of
the   buyer   to   make   payment   accrues   after   the
supplier   supplies   goods   or   renders   any
services   to   the   buyer.   Thus,   what   was
envisaged   by   the   legislature   as   delayed
payment was payment of  the  outstanding  money
due to the supplier after the goods had been
supplied,   and   after   the   date   agreed   upon   or
the   date   of   deemed   acceptance.   A   bare
reading   of   the   Section   makes   it   clear   that
the   date   of   entering   into   the   agreement   or
the   date   of   supply   order   were   not   in
contemplation   of   the   legislature   at   all.
Thus,   it   is   amply   clear   from   a   bare   reading
of   Section   3   that   for   the   purpose   of   the
Act,   it   does   not   matter   when   the   contract
was   entered   into,   as   long   as   the   supply   of
the   goods   was   after   the   Act   came   into   force
on   23.09.1992.   It   is   in   that   sense   that   the
question   of   retrospective   application   of   the
Act   does   not   arise   at   all.   This   is   further
supported   by   the   use   of   the   non   obstante
clause in Section 4 of the Act. 

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45. At   the   cost   of   repetition,   Section   4   of
the Act is extracted hereunder:
“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   half   time   of   prime
Lending   Rate   charged   by   the   State   Bank
of India.” 
   (emphasis supplied)
  The   use   of   the   non   obstante   clause   before
the   term   “agreement”   also   makes   it   clear
that   once   the   money   becomes   due,   which   is
after   the   supply   of   the   goods   and   rendering
services,   the   buyer   is   liable   to   pay   the
statutory  interest  on  the  delayed  payment  to
the   supplier   no   matter   what   is   contained   in
the   agreement   between   the   buyer   and   the
supplier. 
46.Further,   even   on   the   issue   of
retrospectivity,   what   was   required   to   be
examined   by   this   Court   in   the   aforesaid
cases   was   whether   by   reading   the   relevant
statutory   provisions   Sections   3,   4,   5   and   6
of   the   Act,   a   vested   statutory   right   is
conferred.   As   I   have   already   held   that
aforesaid   provisions   of   the   Act   are
retroactive   in   nature   therefore,   non­
consideration   of   this   aspect   in   Purbanchal
Cables   &   Conductors   Pvt.   Ltd.   (supra)   and
cases   mentioned   therein,   renders   the   said

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judgment   sub   silentio   on   this   question.   The
contention   advanced   by   Mr.   Vijay   Hansaria,
learned   senior   counsel   appearing   on   behalf
of   the   Electricity   Board   in   this   regard
cannot be accepted.”
12. It   was   further   observed   that   this   Court   in
Purbanchal   Cables   and   Conductors   (P)   Ltd.   did   not
consider   the   important   aspect   of   the   matter   as   to
whether   provisions   of   the   Act   are   retroative   or   not.
Issue   No.1   and   2   were   answered   in   favour   of   the
appellant. Other issues were also answered in favour of
the   appellant.   In   paragraphs   56     and   57,   the   appeals
were allowed by Justice Gowda in the following manner:
“56.   For   the   reasons   stated   supra,   I
answer the points framed in these appeals in
favour   of   the   appellants   as   stated   above.
The   appeals   are   accordingly   allowed.   All
pending applications are disposed of. 
57.   In   the   Civil   Appeals   arising   out   of
SLP   (C)   Nos.   9924­9925   of   2013,vide   order
dated   17.02.2015,   the   appellants   M/s   Shanti
Conductors     were   directed   to   pay   an   amount
of   Rs.38,70,000/­   back   to   the   respondents.
The   respondents   shall   refund   the   amount   to
the   appellants   with   9%   interest   per   annum
within six weeks from the date of receipt of
the copy of this Order.”
13. Another   Hon'ble   Judge,   Justice   Arun   Mishra   who

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delivered   separate   opinion   disagreed   with   the   opinion
of Justice Gowda. While disagreeing with the opinion of
Justice   Gowda   following   was   held   in   paragraphs   77,   78,
79 and 80:
“77.   In   view   of   the   aforesaid   catena   of
decisions   of   this   Court,   it   has   to   be   held
that   the   Act   of   1993   cannot   be   said   to   be
retrospective   in   operation   or   having
retroactive   operation.   The   question   stands
answered   affirmatively   beyond   pale   of   doubt
and   the   decisions   are   binding   on   a   Co­
ordinate   Bench.   It   cannot   be   said   that   the
decisions are sub silentio or per incuriam in
any   manner   whatsoever   and,   in   my   opinion,   it
is   not   open   to   the   Co­ordinate   Bench   to   take
a   different   opinion.   There   is   no   confusion
with   respect   to   meaning   of   transaction,
supply   order   and   agreement.   This   Court   while
deciding   aforesaid   cases   was   not   in   oblivion
of   aims   and   objects   of   beneficial
legislation,   considered   same   and   it   has
Page   104   104   affirmatively   pronounced   on   all
the   aspects.   Hence,   I   find   no   scope   to   dwell
further   into   the   same   arena   to   declare   the
various   judgments   to   be   sub   silentio,   per
incuriam   or   not   laying   down   the   law
correctly. 
78.   Even   otherwise,   on   merits,   in   my
opinion,   considering   the   scheme   of   the   Act,
various   provisions   of   the   Act   it   cannot   be
said   to   have   retrospective   operation   or
retroactive   operation   and   where   a   supply
order   has   been   placed   before   the   date   of
commencement   of   the   Act,   that   is   before
23.9.1992,   the   beneficial   provisions   of   the
Act   regarding   higher   interest   would   not   be
applicable.

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79.   In   the   case   of   appellant   M/s.   Shanti
Conductors (P) Ltd. itself decided along with
Purbanchal   Cables   (supra)   aforesaid   findings
have   been   recorded   by   this   Court   while
remanding   the   case   to   the   High   Court   for
decision   on   merits   as   an   appeal   arising   of
same   lis   was   pending   before   the   High   Court
and   the   High   Court   has   rightly   followed   the
decisions   in   Purbanchal   Cables   &   Conductors
(supra)   decided   along   with   M/s.   Shanti
Conductors   (P)   Ltd.   The   finding   recorded   by
this   Court   in   the   remand   order   is   final   and
binding   on   the   appellant­   M/s.   Shanti
Conductors   (P)   Ltd.   They   cannot   question   the
same   again   in   the   instant   appeals.   Page   105
105
80.   In   view   of   the   aforesaid   discussion,   the
appeals   have   no   merit   and   the   same   deserve
dismissal   and   are   hereby   dismissed.   No
costs.”
14. In   view   of   the   divergent   opinion   expressed   by
learned Judges consisting the Bench the matter has been
placed before this three­Judge Bench.
15. Shri   Ajit   Kumar   Sinha,   leaned   senior   counsel   for
the   appellant   in   his   submission   referred   to   and   relied
on the opinion of Hon'ble Judge allowing the appeal. He
submits   that   the   Act,   1993   was   enacted   as   beneficial
legislation   to   protect   the   small   scale   industries.   The
Act,   1993   focused   on   supplies   and   the   date   of   the

18
agreement   for   supply   has   no   relevance.   The   Act   applies
and   protect   the   suppliers   in   the   event   supplies   have
been   effected   subsequent   to   Act,   1993.   Learned   counsel
submits   that   even   if   the   orders   for   supply   were   issued
prior to 23.09.1992 some of the supplies have been made
after the Act. The provisions of the Act are applicable
and   the   appellant   was   clearly   entitled   for   interest   on
delayed   payment.   He   submits   that   the   contrary   view
expressed   by   this   Court   in   Purbanchal   Cables   and
Conductors   Private   Limited   judgment   does   not   correctly
interpret   the   provisions   of   the   Act,   1993.   He   submits
that   what   is   relevant   is   amount   due   to   the   suppliers
and   in   event   the   amount   due   to   supplier   is   subsequent
to   Act,   1993   the   liability   to   pay   interest   on   delayed
payment accrues and is fastened on the buyer.
16. The   Act   was   brought   by   an   Ordinance.   The   Act
applies on amount due not for any previous period prior
to   Act,   1993   but   subsequent   to   enforcement   of   the   Act,
1993.   The   Act,   1993   has   prospective   application   and   it
is   not   the   case   of   the   appellant   that   Act   has   any
retrospective operation.

19
Shri   Patil   adopting   the   arguments   of   Shri   Sinha,
further   submits   that   withdrawal   of   SLP   (C)No.12217   of
2001   by   the   appellant   shall   not   preclude   the   appellant
from   challenging   the   subsequent   order   dated   19.03.2013
passed   by   the   Gauhati   High   Court   which   has   given   a
fresh cause of action.
17. Shri   Navaniti   Prasad   Singh   submits   that   Act,   1993
was   enacted   for   prompt   payments   of   money   by   buyers   and
to   statutorily   ensure   by   mandatory   provisions   for
payment   of   interest   on   the   outstanding   money,   in   case
of default. He submits that payment of interest even on
commercial transactions was a concept already contained
in   several   statutory   provisions.   By   the     Act,   1993
nothing   new   was   done   except   payment   of   interest   on
delayed   payment   was   ensured   to   deter   the   buyer   from
withholding amount of suppliers.
18. Shri   Vijay   Hansaria,   learned   senior   counsel   for
Board   submits   that   two­Judge   Bench   of   this   Court   in
Purbanchal Cables and Conductors (P) Ltd.   has correctly
interpreted   provisions   of   Act,   1993.   The   Act   has   no

20
application   when   contract   to   supply   was   entered   prior
to   enforcement   of   the   Act,   1993.   He   submits   that   suit
filed   by   Shanti   Conductors   was   barred   by   time.
According   to   the   case   of   the   appellant   the   amount
became   due   on   04.10.1993,   the   limitation   will   start
running   from   04.11.1993   and   suit   having   not   been   filed
within   three   years   suit   was   barred   by   limitation.   He
submits that benefit of the Act, 1993 cannot be allowed
to the appellant. He further submits that the appellant
was   bound   by   the   judgment   of   this   Court   in   Purbanchal
Cables   and   Conductors   (P)   Ltd.   since   by   the   said
judgment dated 10.07.2012 the appeal filed by the Board
in which Shanti Conductors was also respondent has been
decided.     The   appellants   are   bound   by   the   judgment
dated   10.07.2012   and   what   has   been   held   in   the   said
judgment   cannot   be   questioned   by   the   appellant   the
judgment being binding inter­parties.
19. He   further   submits   that   admittedly   the   entire
principal   amount   stood   paid   to   the   appellant   by
04.10.1993   hence   suit   for   only   interest   was   not
maintainable.

21
20. Shri   Hansaria   submits   that   judgments   of   this   Court
in   Assam   Small   Scale   Industries   Development   Corp.   Ltd.
and others vs. J.D. Pharmaceuticals and another, (2005)
13   SCC   19 ,   Shakti   Tubes   Ltd.   vs.   State   of   Bihar   and
others,   (2009)   7   SCC   673 ,   Modern   Industries   vs.   Steel
Authority of India Limited,   ( 2010) 5 SCC 44,   as well as
judgment   of   this   Court   in   Purbanchal   Cables   and
Conductors Private Limited (supra)   having held that Act
has   no   applicability   with   regard   to   contracts   entered
into prior to enforcement of Act, the said law which is
a   settled   law   for   a   quite   long   time   need   not   be
unsettled   by   this   Court.   In   view   of   the   judgment   of
this   Court   in   Purbanchal   Cables ,   the   appeal   of   the
appellant   has   rightly   been   dismissed   by   the   Gauhati
High Court.
21. Replying   the   submission   of   Shri   Patil,   Shri
Hansaria   submits   that   when   the   SLP   by   this   Court   was
dismissed   on   06.08.2001   against   the   judgment   of   the
High   Court   dated   05.04.2001   allowing   the   appeal   of   the
Board, this Court having not granted further liberty it

22
is   not   open   for   the   appellant   to   file   the   appeal
against the impugned judgment deciding review petition.
22. Shri   Hansaria   further   submits   that   the   Board   has
also   filed   appeal   against   the   order   of   the   High   Court
deciding the review petition wherein the High Court has
granted   9%   interest.   Shri   Hansaria   lastly   submitted
that   the   interest   if   any   can   be   claimed   by   the
appellant   only   till   the   date   they   receive   the   final
payment.
23. In   the   rejoinder,   Shri   A.K.   Sinha   has   refuted   the
submissions   of   Shri   Hansaria.   He   submits   that   the
judgment   of   this   Court   in   Purbanchal   Cables   cannot
operate as res judicata, since appeal which was decided
on   10.07.2012   was   only   against   the   reference   of   the
Full   Bench.   The   Full   Bench   having   only   answered   the
legal   questions,   the   appeal   in   the   High   Court   being
still pending and there being no decision in appeal the
principle   of   merger     shall     not   be   attracted.   Shri
Sinha, however, submits that the suit was not barred by
limitation.   The   last     payment   made   to   the   appellant

23
being on 05.03.1994, the suit filed by the appellant on
10.01.1997 was well within limitation.
24. Shri   Patil   in   rejoinder   submits   that   the   order
passed   in   the   review   petition   being   an   order   partly
allowing   the   review   petition   the   appeal   filed   by   the
appellant   is   on   separate   cause   of   action   and   the
earlier   order   passed   by   this   Court   on   06.08.2001   shall
not come in the way of deciding the appeal on merits.
25. Learned   counsel   for   the   parties   have   relied   on
various judgments of this Court which shall be referred
to while considering the submissions of the parties.
26. We   have   considered   the   submissions   of   the   learned
counsel   for   the   parties   and   have   perused   the   divergent
opinion   dated   31.08.2016   given     by   two   Hon'ble   Judges
of this Court in C.A.Nos.8442­8443 of 2016.
27. From the submissions of the learned counsel for the
parties   and   pleadings   on   record   we   need   to   answer   the
following questions in these appeals:
(1) Whether   Act,   1993   is   not   applicable   when   the

24
contract   for   supply   was   entered   between   the
parties   prior   to   enforcement   of   the   Act   i.e.
23.09.1992 ?
(2) Whether   in   the   event   it   is   found   that   Act   is
applicable   also   with   regard   to   contract
entered   prior   to   Act,   1993   in   pursuance   of
which   contract,   supplies   were   made   after   the
enforcement   of   Act,   1993,   the   Act,   1993   can
be said to have retrospective operation ?
(3) Whether   money   suit   by   M/s.   Shanti   Conductors
was barred by limitation ?
(4) Whether   judgment   of   this   Court   in   Purbanchal
Cables   dated   31.08.2016   by   which   appeal   of
M/s.   Shanti   Conductors   was   also   dismissed   is
binding   between   the   parties   i.e.   M/s.   Shanti
Conductors   and   Assam   Electricity   Board   and
the   appellant   cannot   be   allowed   to   question
the said judgment in these appeals ?
(5) Whether   the   suit   filed   by   the   appellants   for
recovery   of   only   interest   when   admittedly
entire   principal   amount   was   paid   prior   to
filing   of   the   suit   can   be   said   to   be
maintainable ?
(6) Whether   appeal   filed   by   M/s   Trusses   and

25
Towers   Pvt.   Ltd.   challenging   the   review
judgment   dated   19.03.2003   cannot   be
entertained   since   no   liberty   was   granted   by
this Court in SLP(C)No.12217 of 2001 when the
SLP   filed   against   the   main   judgment   of   the
High   court   dated   05.04.2001   was   dismissed   as
withdrawn ?
(7) Whether   the   High   court   while   considering   the
Review   petition   no.75   of   2001   M/s   Trusses   &
Towers   Pvt.   Ltd.   even   after   expressing   that
Act,   1993   is   not   applicable   could   have
allowed 9% interest to the plaintiff?
28. Before  we  consider  the   issues  which  have   arisen  in
these   appeals   it   is   necessary   to   notice   the   provisions
of   the   Act,   1993.   In   the   Parliament,   the   Government   of
India   made   a   policy   statement   on   small   scale
industries.   It   was   also   announced   that   suitable
legislation   would   be   brought   to   ensure   prompt   payment
of   money   by   buyers   to   the   small   industrial   units.   An
Ordinance,   namely,   the   Interest   on   Delayed   Payments   to
Small   Scale   and   Ancillary   Industrial   Undertakings
Ordinance,   1992   was   promulgated   by   the   President   on

26
23.09.1993.     To   replace   the   Ordinance,   The   Interest   on
Delayed   Payments   to   Small   Scale   and   Ancillary
Industrial Undertakings Act, 1993 was introduced in the
Parliament. The Statement of Objects and Reasons of the
Act   throws   considerable   light   on   the   prevalent
situation   and   the   remedially   measures   which   was   sought
in     the   legislation.   In   the   Statement   of   Objects   and
reasons following was observed:
“2. Inadequate   working   capital   in   a
small   scale   or   an   ancillary   industrial
undertakings   causes   serious   and   endemic
problems   affecting   the   health   of   such
undertaking.   Industries   in   this   sector   have
also   been   demanding   that   adequate   measures
be   taken   in   this   regard.   The   Small   Scale
Industries   Board,   which   is   an   apex   advisory
body   on   policies   relating   to   small   scale
industrial   units   with   representatives   from
all   the   States,   governmental   bodies   and   the
industrial   sector,   also   expressed   this   view.
It  was, therefore,  felt that  prompt payments
of   money   by   buyers   should   be   statutorily
ensured   and   mandatory   provisions   for
payments   of   interest   on   the   outstanding
money,   in   case   of   default,   should   be   made.
The   buyers,   if   required   under   law   to   pay
interest,   would   refrain   from   withholding
payments   to   small   scale   and   ancillary
industrial undertakings.”
29. Act,   1993   is   a   special   legislation.   Section   2   of
the   Act   provides   definitions,   its   clause   (b)   defined

27
the “appointed day” in the following manner:
"2(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;”
30. Sections 3 to  6 of the Act, 1993 are as follows:
“Section   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   therefor   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   day   of   acceptance
or the day of deemed acceptance.
Section   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   half   time   of   prime
Lending   Rate   charged   by   the   State   Bank   of
India. 

28
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.
Section   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   interests)   at   the   rate   mentioned   in
section 4 on the amount due to the supplier.
Section 6.  Recovery of amount due. ­
(1)    The   amount   due   from   a   buyer,
together   with   the   amount   of   interest
calculated in accordance with the provisions
of sections 4 and 5, shall be recoverable by
the supplier from the buyer by way of a suit
or   other   proceeding   under   any   law   for   the
time being in force. 
(2)   Notwithstanding   anything   contained
in   sub­  section  (1),   any   party   to   a  dispute
may   make   a   reference   to   the   Industry
Faciliation   Council   for   acting   as   an
arbitrator   or   conciliator   in   respect   of   the
matters referred to in that sub­ section and
the   provisions   of   the   Arbitration   and
Conciliation   Act,   1996   (26   of   1996   )   shall
apply   to   such   dispute   as   if   the   arbitration
or   conciliation   were   pursuant   to   an
arbitration   agreement   referred   to   in   sub­
section (1) of section 7 of that Act.

29
31. Section 3 creates a statutory liability of buyer to
make   payment.   The   statutory   liability   is   to   the   effect
that   where   any   supplier   supplies   any   goods   to   any
buyer,   the   buyer   shall   make   payment,   therefor   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.   The   statutory
liability   has   been   fastened   on   the   buyer   to   make
payment in the following manner:
(i)on or before the date agreed upon between
him and on the supplier in writing, or
(ii)   where   there   is   no   agreement   in   this
behalf before the appointed day. 
32. 'Appointed   day'   as   defined   in   Section   2(b)   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.   Thus,   statutory   liability
to   make   payment   accrues   to   buyer   as   per   Section   3,   it
is   relevant   to   notice   the   event   contemplated   under

30
Section   3   is   ”where   any   supplier   supplies   any   goods   or
renders   any   services   to   any   buyer”.   The   incidence   of
liability   is   supply   of   goods   or   rendering   any   service.
The   Act   is   clearly   prospective   in   nature   and   shall
govern   the   incidence   of   supply   and   rendering   service
which   happens   after   enforcement   of   the   Act   i.e.
23.09.1992.
33. The   second   part   of   Section   3   is   “buyer   shall   make
payment”.   Obviously,   question   of   payment   shall   arise
only   after   supply   of   goods   or   rendering   any   service.
Thus,   by   virtue   of   Section   3,   both   the   incidents   i.e.
supply   or   service   on   the   one   hand   and   payment   on   the
other   has   to   be   after   the   enforcement   of   Act,   1993.
Statutory   provision   of   Section   3   further   creates
statutory   liability   to   make   payment   on   the   agreed   day
in   writing   between   the   buyers   and   the   supplier   and   if
there   is   no   agreement   then   before   appointed   day.     The
fact   that   agreement   in   writing   between   buyer   and
supplier   for   supply   and   payment   is   prior   to   the
enforcement   of   the   Act   is   neither   relevant   nor
material,   what   is   material   is   that   supply   and   services

31
had   to   be   after   the   enforcement   of   the   Act,   only   then
the liability of payment shall accrue.
34. We have already noticed that the purpose and object
of   legislation   was   prompt   payments   of   money   by   buyer
which   has   been   statutorily   ensured   in   Act,   1993   by
containing mandatory provisions of payment of interest.
35. Section 4 which deals with date from which and rate
at   which   interest   is   payable.   The   liability   to   make
payment   of   the   amount   to   the   supplier   only   arises   when
any   buyer   fails   to   make   payment   as   required   under
Section 3.
36. Section   4   further   provides   “notwithstanding
anything   contained   in   any   agreement   between   the   buyer
and   the   supplier   or   any   law   for   the   time   being   in
force”,   thus,   even   if   the   agreement   between   the   buyer
and   the   supplier   contains   clause   that   no   interest   on
late   payment   shall   be   made   the   liability   to   pay
interest   is   fastened   by   virtue   of   Section   4
disregarding   any   contract   to   the   contrary.   Whether   the
contract   between   buyer   and   supplier   is   prior   to

32
enforcement   of   Act,   1993   is   also   neither   relevant   nor
material   and   the   material   is   that   buyer   fails   to   make
payment   to   supplier   as   required   under   Section   3.   The
liability   to   pay   interest   thus   arises   when   the   payment
is not made as per Section 3.
37. The   liability   to   make   payment   under   Section   3   and
the   liability   to   pay   interest   under   Section   4   is   not
dependent   on   date   of   agreement   between   the   parties   to
make   supply.   When   the   question   of   supply   and   payment
are   incidents   contemplated   under   the   Act   which   have   to
take   place   after   the   enforcement   of   the   Act   the   day   of
agreement   between   the   parties   has   no   relevance   in   so
far as statutory liability under the Act is concerned.
38. There   are   several   two­Judge   Benches   judgments   of
this   Court   where   provisions   of   Act,   1993   especially
Sections   3   and   4   have     been   interpreted.   We   now   refer
to   judgments   of   this   Court   which   have   considered   the
above   provisions.   The   first   judgment   which   has   been
noticed   is     Assam   Small   Scale   Industries   Development
Corp.   Ltd.   and   others   vs.   J.D.   Pharmaceuticals   and

33
another,   (2005)   13   SCC   19.   This   Court   in   the   above
judgment   laid   down   that   Act,   1993   will   not   apply   to
transactions   which   took   place   prior   to   enforcement   of
the   Act.   Following   was   laid   down   in   paragraphs   37   and
38:
“37.   We   have   held   hereinbefore   that
Clause   8   of   the   terms   and   conditions   relate
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
with   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   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 1993 Act coming into force. Only the
transactions   at   sl.   no.   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

34
of   23%   upto   June,   1991   and   23.5%
thereafter.” 
39. The   word   'transaction'   used   in   the   above   judgment
has   to   include   the   supply,   in   the   event   word
transaction is understood as supply there cannot be any
quarrel   with   the   proposition   that   Act   will   not   apply
with regard to supply made prior to the Act.
40. The   next   judgment   of   this   Court   is   Shakti   Tubes
Ltd.   vs.   State   of   Bihar   and   others,   (2009)   7   SCC   673 .
In   the   said   case,   Shakti   Tubes   had   filed   a   suit   for
payment   of   interest.   In   the   above   case,   supply   orders
were   placed   by   the   State   of   Bihar   on   16.07.1992,
reliance   on   Act,   1993   was   placed   by   the   appellant.   It
was   also   noticed   in   the   said   case     that   earlier   supply
order   dated   16.07.1992   was   materially   altered   and
substituted   by   a   fresh   supply   order   issued   on
18.03.1993.   Referring   to   the   judgment   of   this   Court   in
Assam Small Scale Industries case,   two­Judge Bench held
that ratio of aforesaid decision is clearly applicable.
In paragraphs 17, 18 and 19 following was laid down:

35
“17.   In   the   light   of   the   said   facts   in
Assam   Small   Scale   Industries   case,   it   was
recorded   in   paragraph   37   of   the   judgment
that   while   the   Act   came   into   effect   from
23rd  September, 1992,  the  supply  orders were
placed   only   in   respect   of   Serial   Nos.   1   to
26  immediately  and  before  coming  into  effect
of   the   Act   and   rest   of   the   supply   orders
namely,   supply   orders   at   Serial   Nos.   27   to
71   were   placed   between   22.10.1992   to
19.06.1993  which  were  subsequent  to the date
when   the   Act   came   into   force.   In   that
context,   it   was   clearly   recorded   in   the
judgment   that   the   Act   will   have   no
application   to   the   transactions   that   took
place   prior   to   the   commencement   of   the   Act.
In the next sentence the Court made it clear
as   to   what   is   referred   to   and   understood   by
the   expression   "transaction"   when   it   clearly
stated   that   out   of   71   transactions,   Serial
Nos.   1   to   26,   i.e.   supply   orders   between
05.06.1991  to  28.07.1992  being  prior  to 23rd
September,   1992   when   the   Act   came   into
force,   higher   interest   as   envisaged   under
Sections   4   and   5   of   the   Act   cannot   be   paid
and   demanded   in   respect   of   the   said   supply
orders/transactions.   It   was   also   made   clear
that   the   transactions   at   Serial   Nos.   27   to
71   only   i.e.   supply   orders   between
22.10.1992   to   19.06.1993,   would   attract   the
provisions   of   the   Act.   therefore,   those
supply   orders   which   were   issued   by   the
Corporation   between   22.10.1992   to   19.06.1993
were held to be the transactions which would
be   entitled   to   get   the   benefit   of   the
provisions of the Act. 
18. In our considered opinion, the ratio
of   the   aforesaid   decision   in   Assam   Small
Scale   Industries   case   is   clearly   applicable
and   would   squarely   govern   the   facts   of   the

36
present   case   as   well.   The   said   decision   was
rendered   by   this   Court   after   appreciating
the   entire   facts   as   also   all   the   relevant
laws   on   the   issue   and,   therefore,   we   do   not
find   any   reason   to   take   a   different   view
than   what   was   taken   by   this   Court   in   the
aforesaid   judgment.   Thus,   we   respectfully
agree   with   the   aforesaid   decision   of   this
Court   which   is   found   to   be   rightly   arrived
at   after   appreciating   all   the   facts   and
circumstances of the case.
19.   Now   coming   to   the   facts   of   the   present
case   we   find   that   there   is   no   dispute   with
regard to the fact that the supply order was
placed   with   the   respondents   on   16.07.1992
for   supply   of   the   pipes   which   date   is
admittedly   prior   to   the   date   on   which   this
Act came into effect. ”
41. The   Bench   further   referring   to   earlier   judgment   of
this   Court   in   Assam   Small   Scale   Industries   observed
that   the   use   of   expression   'transaction'     was   only   for
supply order. In paragraph 21 following was laid down:
“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   paragraph   37   of   the   judgment   which
we   had   already   extracted   above.   In   our

37
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   paragraph   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 .”
42. The   Court   further   held   that   there   was   neither   any
alteration of the contract nor novation of the contract
in paragraph 31 which is to the following effect:
“31.   Even   otherwise,   we   are   of   the
considered   view   that   there   was   neither   any
alteration   of   the   contract   nor   any   novation
of   the   contract   in   the   present   case.   The
correspondence   between   the   parties   clearly
disclosed   that   after   the   respondents   issued
the   supply   order,   the   appellant­plaintiff
did   not   supply   the   pipes   in   terms   of   the
supply   order   and   it   urged   mainly   for   the
increase   in   the   price   of   the   goods.
Subsequently,   they   relied   upon   the   price
escalation   clause   and   asked   for   increase   in
the price of pipes .”
43. Next   judgment   we   notice   is   Modern   Industries   vs.
Steel   Authority   of   India   Limited,   ( 2010)   5   SCC   44.
Noticing   the   purpose   and   object   of   the   Act,   1993

38
following was observed in paragraph 23:
“23.   The   wholesome   purpose   and   object
behind   1993   Act   as   amended   in   1998   is   to
ensure   that   buyer   promptly   pays   the   amount
due   towards   the   goods   supplied   or   the
services   rendered   by   the   supplier.   It   also
provides for payment of interest statutorily
on the outstanding money in case of default.
Section   3,   accordingly,   fastens   liability
upon   the   buyer   to   make   payment   for   goods
supplied   or   services   rendered   to   the   buyer
on or before the date agreed upon in writing
or   before   the   appointed   day   and   when   there
is   no   date   agreed   upon   in   writing,   the
appointed day shall not exceed 120 days from
the day of acceptance. ”
44. The   Court   had   also   considered   one   of   the
submissions that the suit for recovery of mere interest
under Act, 1993 is not maintainable. The Bench answered
the issue by holding that the suit even for interest is
also   maintainable.   Following   was   laid   down   in
paragraphs 45­46:
“45. It   is   true   that   word   'together'
ordinarily   means   conjointly   or
simultaneously   but   this   ordinary   meaning
put   upon   the   said   word   may   not   be   apt   in
the   context   of   Section   6.   Can   it   be   said
that   the   action   contemplated   in   Section   6
by   way   of   suit   or   any   other   legal
proceeding   under   Sub­section   (1)   or   by
making   reference   to   IFC   under   Sub­section
(2)   is   maintainable   only   if   it   is   for

39
recovery   of   principal   sum   along   with
interest   as   per   Sections   4   and   5   and   not
for interest alone? The answer has to be in
negative.
  46.We   approve   the   view   of   Gauhati   High
Court   in   Assam   State   Electricity   Board
(2002)   2   GLR   550   that   word   'together'   in
Section   6(1)   would   mean   'alongwith'   or   'as
well   as'.   Seen   thus,   the   action   under
Section   6(2)   could   be   maintained   for
recovery   of   principal   amount   and   interest
or   only   for   interest   where   liability   is
admitted or has been disputed in respect of
goods supplied or services rendered. In our
opinion,   under   Section   6(2)   action   by   way
of reference to IFC cannot be restricted to
a   claim   for   recovery   of   interest   due   under
Sections   4   and   5   only   in   cases   of   an
existing   determined,   settled   or   admitted
liability.   IFC   has   competence   to   determine
the   amount   due   for   goods   supplied   or
services   rendered   in   cases   where   the
liability   is   disputed   by   the   buyer.
Construction   put   upon   Section   6(2)   by
learned   senior   counsel   for   the   buyer   does
not   deserve   to   be   accepted   as   it   will   not
be in conformity with the intention, object
and   purpose   of   1993   Act.   Preamble   to   1993
Act,   upon   which   strong   reliance   has   been
placed   by   learned   senior   counsel,   does   not
persuade   us   to   hold   otherwise.   It   is   so
because Preamble  may  not  exactly  correspond
with   the   enactment;   the   enactment   may   go
beyond Preamble. 
45. In the above case also the contract was entered on
15.01.1993   but   the   contract   was   subsequently   altered.

40
Last   alteration   being   on   29.04.1995   hence   the   Bench
repelled   the   submission   that   Act,   1993   was   not
applicable.
46. Now   we   come   to   the   judgment   of   this   Court   in
Purbanchal   Cables   and   Conductors   Private   Limited
(supra)   which   is   a   judgment   on   which   reliance   has   been
placed   by   the   High   Court   while   allowing   the   appeal   of
the   Board.   Learned   counsel   for   the   Board   has   also
placed heavy reliance on the said judgment. 
47. In   the   above   case,   Board   placed   order   dated
31.03.1992   for   delivery   of   goods   on   16.09.1992.
Further,   supplies   were   made   between   25.9.1992   and
30.03.1993.   Entire   supply   was   completed   on   12.10.1993
entire   payment   was   received   by   October,   1993.   The
supplier   instituted   money   suit   for   payment   of   interest
on   delayed   payment   under   Act,   1993.   The   issues   to   be
answered   have   been   noted   in   paragraph   10   of   the
judgment which is to the following effect:
"10.The   issues   that   are   required   to   be
answered   by   us   in   these   appeals   are   whether
a   suit   for   interest   along   is   maintainable
under the provisions of the Act, and whether
the   Act   would   be   applicable   to   contracts

41
that   have   been   concluded   prior   to   the
commencement   of   the   Act.   In   other   words,   we
are   required   to   examine   whether   the   Act
would   apply   to   those   contracts   which   were
entered   into   prior   to   the   commencement   of
the Act but supplies were effected after the
Act came into force.”
48. On  the   question  of   maintainability  of  the  suit   for
interest,   the   Bench   held   that   the   supplier   may   file
suit   only   for   a   higher   rate   of   interest   on   delayed
payment   made   by   the   buyer   from   the   commencement   of   the
Act.   The   Bench   held   that   Act,   1993   being   a   substantive
law   it   shall   operate   prospectively.   In   paragraph   51
following has been laid down:
“51.   There   is   no   doubt   about   the   fact
that   the   Act   is   a   substantive   law   as   vested
rights   of   entitlement   to   a   higher   rate   of
interest   in   case   of   delayed   payment   accrues
in   favour   of   the   supplier   and   a
corresponding   liability   is   imposed   on   the
buyer.   This   Court,   time   and   again,   has
observed   that   any   substantive   law   shall
operate   prospectively   unless   retrospective
operation   is   clearly   made   out   in   the
language   of   the   statute.   Only   a   procedural
or   declaratory   law   operates   retrospectively
as there is no vested right in procedure.”
49. The   Court   further   held   that   Act,   1993   shall   be
applicable   only   for   sale   agreements   after   the   date   of

42
the   commencement   of   the   Act   and   not   any   time   prior.
Following was laid down in paragraph 52:
“52.   In   the   absence   of   any   express
legislative   intendment   of   the   retrospective
application of the Act, and by virtue of the
fact that the Act creates a new liability of
a   high   rate   of   interest   against   the   buyer,
the   Act   cannot   be   construed   to   have
retrospective   effect.   Since   the   Act
envisages   that   the   supplier   has   an   accrued
right   to   claim   a   higher  rate   of  interest   in
terms of  the Act, the same can  only be  said
to accrue for sale agreements after the date
of   commencement   of   the   Act   i.e.   23­9­1992
and not any time prior.”
50. The Bench also expressly rejected the submission of
the learned counsel appearing for the supplier that the
earlier   judgments   of   this   Court   in   Assam   Small   Scale
Industries   and   Shakti   Tubes   need   consideration.   On
question of limitation of the suit no final opinion was
expressed. The appeals were ultimately dismissed by the
Bench.
Issue NO.1
51. The judgment of this Court in  Purbanchal Cables and
Conductors   Pvt.   Ltd   relying   on   Assam   Small   Scale
Industries   and   Shakti   Tubes   had   laid   down   that   Act,

43
1993   cannot   be   made   applicable   with   regard   to   sale
agreements   which   were   entered   into   prior   to   the
enforcement   of   the   Act   and   Act   can   be   invoked   only   for
the   sale   agreements   which   were   entered   after   the
enforcement   of   the   Act.   Although   attempt   was   made   in
Purbanachal Cables   to get judgment in   Assam Small Scale
Industries   and   Shakti   Tubes   reconsidered   but   co­
ordinate   Bench   in   Purbanchal   Cables   has   refused   to
permit   any   such   reconsideration.   The   matter   now   having
been   referred   to   this   three­Judge   Bench   we   have   to
consider   and   answer   as   to   whether   the   above
interpretation   of   Act,   1993   as   given   is   in   consonance
with the statutory scheme.
52. We   have   noticed   above   that   the   incidence   of
applicability   of   the   liability   under   the   Act   is   supply
of   goods   or   rendering   of   service .   In   event   the   supply
of   goods   and   rendering   of   services   is   subsequent   to
Act,   can   liability   to   pay   interest   on   delayed   payment
be   denied   on   the   ground   that   agreement   in   pursuance   of
which   supplies   were   made   were   entered   prior   to
enforcement   of   the   Act?   Entering   into   an   agreement

44
being   not   expressly   or   impliedly   referred   to   in   the
statutory   scheme   as   an   incident   for   fastening   of   the
liability,   making   the   date   of   agreement   as   date   for
imposition   of   liability   does   not   conform   to   the
statutory   scheme. This can be illustrated by taking an
example.   There   are   two   small   scale   industries   who
received   orders   for   supply   of   materials.   'A'   received
such orders prior to the enforcement of the Act and 'B'
received   the   order   after   the   enforcement   of   the   Act.
Both   supplied   the   goods   subsequent   to   enforcement   of
the   Act   and   became   entitled   to   receive   payment   after
the   supply,   on   or   before   the   day   agreed   upon   between
the   supplier   and   buyer   or   before   the   appointed   day.
Payments   were   not   made   both   to   A   and   B   as   required   by
Section 3. Can the buyer who has received supplies from
supplier   A   escape   from   his   statutory   liability   to   make
payment of interest under Section 3 read with Section 4
?   The   answer   has   to   be   No.   Two   suppliers   who   supply
goods after the enforcement of the Act, become entitled
to receive payment after the enforcement of the Act one
supplier   cannot   be   denied   the   benefit   of   the   statutory

45
protection   on   the   pretext   that   agreement   in   his   case
was   entered   prior   to   enforcement   of   the   Act.   When   the
date   of   agreement   is   not   referred   as   material   or
incidence   for   fastening   the   liability,   by   no   judicial
interpretation   the   said   date   can   be   treated   as   a   date
for   fastening   of   the   liability.   The   Act,   1993   being
beneficial   legislation   enacted   to   protect   small   scale
industries   and   statutorily   ensure   by     mandatory
provision   for   payment   of   interest   on   the   outstanding
money,   accepting   the   interpretation   as   put   by   learned
counsel   for   the   Board   that   the   day   of   agreement   has   to
be subsequent to the enforcement of the Act, the entire
beneficial protection of the Act shall be defeated. The
existence   of   statutory   liability   depends   on   the
statutory   factors   as   enumerated   in   Section   3   and
Section     4   of   the   Act,   1993.   Factor   for   liability   to
make   payment   under   Section   3   being   the   supplier
supplies   any   goods   or   renders   services   to   the   buyer,
the   liability   of   buyer   cannot   be   denied   on   the   ground
that   agreement   entered   between   the   parties   for   supply
was   prior   to   Act,   1993.     To   hold   that   liability   of

46
buyer   for   payment   shall   arise   only   when   agreement   for
supply   was   entered   subsequent   to   enforcement   of   the
Act, it shall be adding words to Section 3 which is not
permissible  under   principles   of  statutory   construction.
We,   thus,   are   of   the   view   that   judgments   in   Purbanchal
Cables   and   Conductors   (supra) ,   Assam   Small   Scale
Industries   and   Shakti   Tubes   which   held   that   Act,   1993
shall   be   applicable   only   when   the   agreement   to
sale/contract   was   entered   prior/subsequent   to   the
enforcement   of   the   Act,   does   not   lay   down   the   correct
law.   We   accept   the   submission   of   learned   counsel   for
the   appellants   that   even   if   agreement   of   sale   is
entered   prior   to   enforcement   of   the   Act,   liability   to
make   payment   under   Section   3   and   liability   to   make
payment   of   interest   under   Section   4   shall   arise   if
supplies   are   made   subsequent   to   the   enforcement   of   the
Act.
Issue No.2
53. In  all   the  judgments  of  this  Court  referred  above,
it   has   been   held   that   Act,   1993   is   not   retrospective.
It   is   not   even   contended   before   us   by   any   of   the

47
parties   that   the   Act,   1993   is   retrospective   in
operation.   Judgments   of   this   Court   as   noticed   above
rightly hold that Act, 1993 is not retrospective. 
54. The   opinion   of   Justice   Gowda   dated   31.08.2016
although   holds   that   Act   is   not   retrospective   but   he
holds   the   Act   retroactive.     The   word   retroactive   has
been   defined   in     Black's   Law   Dictionary   in   the
following words:
" Retroactive.adj.(17C)   (Of   a   statute,
ruling,   etc.)   extending   in   scope   or   effect
to   matters   that   have   occurred   in   the   past.
­Also   termed   retrospective.   Cf.   Prospective
(1).­retroact,vb.”
55. Two­Judge Bench of this Court in  State Bank's Staff
Union   (Madras   Circle)   vs.   Union   of   India   and   ors.,
(2005)   7   SCC   584,   had   occasion   to   examine   the   concept
of   retroactive   and   retrospective.   In   paragraphs   20   and
21 of the judgment following has been laid down:
“20.   Judicial   Dictionary   (13th   Edn.)
K.J.  Aiyar, Butterworth,  p. 857,  states that
the   word   "retrospective"   when   used,   with
reference   to   an   enactment   may   mean   (i)
affecting   an   existing   contract;   or   (ii)
reopening   up   of   past,   closed   and   completed
transaction;   or   (iii)   affecting   accrued
rights   and   remedies;   or   (iv)   affecting

48
procedure.   Words   and   Phrases,   Permanent
Edn.,   Vol.   37­A,   pp.   224­25,   defines   a
"retrospective   or   retroactive   law"   as   one
which   takes   away   or   impairs   vested   or
accrued   rights   acquired   under   existing   laws.
A   retroactive   law   takes   away   or   impairs
vested   rights   acquired   under   existing   laws,
or   creates   a   new   obligation,   imposes   a   new
duty,   or   attaches   a   new   disability,   in
respect   to   transaction   or   considerations
already past. 
21.   In   Advanced   Law   Lexicon   by   P.
Ramanath   Aiyar   (3rd   Edition,   2005)   the
expressions   "retroactive"   and
"retrospective"   have   been   defined   as   follows
at page 4124 Vol.4)
"Retroactive­   Acting   backward;   affecting
what   is   past.   (Of   a   statute,   ruling,   etc.)
extending in scope or effect to matters that
have   occurred   in   the   past.   ­   Also   termed
retrospective. (Black, 7th Edn. 1999)
'Retroactivity'   is   a   term   often   used   by
lawyers   but   rarely   defined.   On   analysis   it
soon   becomes   apparent,   moreover,   that   it   is
used   to   cover   at   least   two   distinct
concepts.   The   first,   which   may   be   called
'true   retroactivity',   consists   in   the
application   of   a   new   rule   of   law   to   an   act
or   transaction   which   was   completed   before
the   rule   was   promulgated.   The   second
concept,   which   will   be   referred   to   as
'quasi­retroactivity',   occurs   when   a   new
rule   of   law   is   applied   to   an   act   or
transaction   in   the   process   of   completion....
The   foundation   of   these   concepts   is   the
distinction   between   completed   and   pending
transactions...."
(T.C.   Hartley,   The   Foundations   of   European

49
Community Law 129 (1981).
* * *
Retrospective­   Looking   back;   contemplating
what is past.
Having operation from a past time.
'Retrospective'   is   somewhat   ambiguous   and
that   good   deal   of   confusion   has   been   caused
by   the   fact   that   it   is   used   in   more   senses
than   one.   In   general   however   the   Courts
regards   as   retrospective   any   statute   which
operates   on   cases   or   facts   coming   into
existence   before   its   commencement   in   the
sense that it affects even if for the future
only   the   character   or   consequences   of
transactions   previously   entered   into   or   of
other   past   conduct.   Thus,   a   statute   is   not
retrospective   merely   because   it   affects
existing   rights;   nor   is   it   retrospective
merely   because   a   part   of   the   requisite   for
its   action   is   drawn   from   a   time   and
antecedents   to   its   passing.   (Vol.44
Halsbury's   Laws   of   England,   Fourth   Edition,
page 570 para 921) ”
56. Further in   Jay Mahakali Rolling Mills vs. Union of
India   and   others,   2007   (12)   SCC   198,   explaining   the
retroactive   and   retrospective   following   has   been   laid
down:
“8.   “Retrospective”   means   looking
backward,   contemplating   what   is   past,   having
reference   to   a   statute   or   things   existing
before   the   statute   in   question.
Retrospective   law   means   a   law   which   looks
backward   or   contemplates   the   past;   one,
which   is   made   to   affect   acts   or   facts

50
occurring,   or   rights   occurring,   before   it
comes   into   force.   Retroactive   statute   means
a statute, which creates a new obligation on
transactions   or   considerations   or   destroys
or impairs vested rights.”
57. Retroactivity   in   the   context   of   the   statute
consists   application   of   new   rule   of   law   to   an   Act   or
transaction   which   has   been   completed   before   the   Rule
was promulgated.
58. In the present case the liability of buyer to make
payment   and   day   from   which   payment   and   interest   become
payable   under   Section   3   and   4   does   not   relate   on   any
event   which   took   place   prior   to   Act,   1993,   it   is   not
even   necessary   for   us   to   say   that   Act,   1993   is
retroactive   in   operation.   The   Act,   1993   is   clearly
prospective   in   operation   and   it   is   not   necessary   to
term   it   as   retroactive   in   operation.   We,   thus,   do   not
subscribe to the opinion dated 31.08.2016 of one of the
Hon'ble   Judges   holding   that   the   Act,   1993   as
retroactive.
Issue No.3
Whether   money   suit   no.21   of   1997   filed   by   appellant   is

51
barred   by   time   is   one   of   the   issues   which   has   been
raised before us.
59. From the pleadings on the record it transpires that
two   supply   orders   dated   31.03.1992   and   13.05.1992   was
issued   to   the   appellant   for   supply   of   conductors.   In
the Plaint, the appellant had given the details of date
of   supply   orders   and   date   when   supply   was   made   on
different   stores.   The   supplies   made   by   the   appellant
were both before enforcement of the Act i.e. 23.09.1992
and after the enforcement of the Act.
60. In   view   of   the   discussions   as   made   above   only   the
supplies   received   after   23.09.1992   are   relevant   for
purposes   of   1993   Act.   As   per   pleadings   on   the   record
entire   supplies   by   the   appellant   was   completed   on
04.10.1993.   Details   of   the   payment   has   also   been   given
in   the   plaint   which   indicate   that   last   payment   dated
05.03.1994   was   received.     Paragraph   24   of   the   plaint
gives the details of cause of action for the suit which
states   that   cause   of   action   for   the   suit   arose   on
31.03.1992   and   thereafter   on   different   date   last   date
being mentioned in paragraph 24 was 05.10.1993 and each

52
date   subsequent   thereafter.   With   regard   to   limitation
there   is   specific   pleading   in   paragraph   21   of   the
plaint which is to the following effect: ­ 
“21.   That   the   transaction   between
the   plaintiffs   and   the   defendants
are   duly   maintained   by   the
plaintiffs   in   the   Books   of   Accounts
like   ledger,   Sale   Register   etc.
which   are   kept   in   the   usual   course
of   the   business   of   the   plaintiffs
and   those   accounts   between   the
plaintiffs and the defendants are in
continuity   and   the   interest   payable
by   the   defendants   to   the   plaintiffs
are   carried   over   till   date.   As   such
the   suit   of   the   plaintiff’s   is   in
within   time.   Apart   from   that   the
provisions   of   the   Limitation   Act
does   not   apply   in   view   of   the
provisions   contained   in   the   Act,
1993   as   because   the   Act   of   1993   is
having   overriding   effect   over   the
Limitation Act and all other Acts.“  
61. Written   statement   was   filed   by   the   defendants   in
which written statement in paragraph 4 of the statement
plea was taken that suit is barred by limitation. Trial
Court   in   its   judgment   dated   02.02.2000   has   noticed   the
issues which were framed, one of the issues i.e.   Issue
no.2   was   “whether   the   issue   was   barred   by   the

53
limitation.” The entire discussion of issue no.2 by the
Trial Court is to the following effect: ­
“ Issue No.2: ­
The   supply   order   placed   by   the
defendant   no.2   was   exhibited   as
Exts­6   and   7   by   the   plaintiff.   The
goods   were   supplied   vide   challans
which were exhibited as Exts­8 to 37
and   69   to   71   and   73.   The   delivery
commenced   on   21.06.92   and   ended   on
23.03.93. The bills were raised vide
Exts­38 to  55  and  Ext­60  to 68. The
plaintiff   had   not   denied   about   the
receipt of the bill amount. The bill
Exxt­55   was   raised   on   02.01.93   and
the   bill   Ex­68   was   raised   on
18.12.93.   This   is   a   case   under   the
provision of the interest on Delayed
Payments   to   Small   Scale   and
Ancillary   Industrial   Undertakings
Act and Section 10 of the said gives
over­riding effect as follows:­
“10.   Over­riding   effect:­   The
provisions   of   this   Act   shall   have  
effect   notwithstanding   anything
inconsistent therewith  contained
in  any  other  law  for  the  time  being
in force.”
So,   Section   10   has   taken   away   the
plea   of   limitation   in   such   type   of
cases. So issue no.2 is also decided
in favour of the plaintiff.”
62. The   Trial   Court   held   that   by   virtue   of   Section   10

54
of   Act,   1993   plea   of   limitation   is   taken   away   and   the
suit   is   not   barred   by   the   limitation.     The   Division
Bench  of  the  High  Court in  RFA  No.  66  of  2000  filed by
the   defendant   had   made   a   reference   to   the   full   bench.
Full   Bench   in   its   order   dated   05.03.2002   has   not
considered or decided the question of limitation. 
63. Against the judgment dated 05.03.2002 of Full Bench
of   High   Court   answering   the   reference,   the   Assam   State
Electricity   Board   had   filed   appeal   in   this   court   being
Civil Appeal No. 2351 of 2003. This Court decided Civil
Appeal No.2351 of 2003 along with Civil Appeal No. 2348
of   2003   on   10.07.2002   which   judgment   is   Purbanchal
Cables   and   Conductors   (P)   Ltd.   (Supra) .   This   Court   in
paragraph   31   has   noticed   the   submission   of   learned
Counsel   for   the   State   Electricity   Board   that   suits
filed   by   both   the   suppliers   were   barred   by   time   but
this Court did not express any opinion. Paragraph 31 of
the judgment is to the following effect: ­
“31.   Though   the   learned   Senior
Counsel   would   state   that   the   suits
filed   by   both   the   suppliers   in   the
present batch of appeals were barred
by   limitation.   We   do   not   intend   to

55
express our view on the issue, since
some   of   the   appeals   filed   by   the
suppliers   are   still   pending   before
the High Court. Any observation that
we   may   make   would   certainly   affect
the   interest   of   both   the   parties
since   that   issue   is   yet   to   be
decided by the High Court.” 
64. After   the   judgment   of   this   Court   dated   10.07.2012
when   the   matters   went   back   to   the   High   Court,   Division
Bench   decided   the   RFA   66   of   2000   by   impugned   judgment
dated   20.11.2012.   The   Division   Bench   in   the   impugned
judgment   has   noticed   the   issues   in   paragraph   5   of   the
judgment   and   submissions   on   the   limitations.   In
paragraph   22,   the   submissions   on   behalf   of   the   Assam
State   Electricity   Board   have   been   noticed   whereas     the
reply   given   by   the   learned   counsel   for   the   appellant
has   been   noticed   in   paragraph   22,   24,   25   &   26   of   the
judgment which are as follows: ­
“22.   Yet   another   ground   of
challenge,   advanced   at   the   time   of
hearing   of   this   appeal,   by   Mr.   Das,
learned   Senior   counsel,   is   that   the
learned trial Court has wrongly held
that   the   suit   was   not   barred   by
limitation   and,   in   this   regard,
reference   made   by   the   learned   trial
Court   to   Section   10   of   1993   Act   is

56
wholly   erroneous   in   as   much   as
Section   10   merely   lays   down   that
provisions   of   1993   Act   shall   have
effect   notwithstanding   anything
inconsistent   therewith   contained   in
any other  law  for  the  time  being  in
force. 
24.   As   regards   the   question   as   to
whether   1993   Act   would   apply   to   the
contract   at   hand   and   whether   the
suit   was   barred   by   limitation.   Mr.
AK   Sinha,   learned   Senior   counsel,
has   pointed   out   that   it   is   not   in
dispute that the payment of the dues
of   the   plaintiffs­respondents   was
made   by   ASEB   as   late   as   05.03.1994
and,   in   such   circumstances,   the
period of limitation started, in the
present   case,   with   effect   from
05.03.1994 and the suit, having been
instituted   on   10.01.1997,   it   is
clear,   submits   Mr.   A.K.   Sinha,   that
the suit deserved to be treated as a
suit instituted within the period of
limitation.   This   apart,   it   is   the
submission   of   Mr.   Sinha,   learned
Senior Counsel, that on 06.09.1994 ,
Assam   Conductors   Manufacturers
Association   had   filed   a   writ
petition,   which   gave   rise   to   Civil
Rule   No.   1531   of   1993   on   behalf   of
its   five   named   members   of   the
Association,   which   included   M/s
Shanti   Conductors,(i.e.   the
plaintiff   in   the   present   suit),   and
the   High   Court,   vide   its   order,
dated   06.09.1994,   directed   the   writ
petitioner   to   move   the   Civil   Court
for   realization   of   the   dues   of   its
members,   whereupon   the   Association,

57
immediately,   filed   Writ   Appeal
No.474   of   1994,   which   was   finally
dismissed on 28.08.1997.
25.   In   such   a   situation,   as
indicated   above,   section   14(2)   of
the   Limitation   Act,   1963,   is,
according   to   Mr.   Sinha,   of   great
relevance   in   as   much   as   Section
14(2)   of   the   Limitation   Act,   1963,
provides   that   in   computing   the
period   of   limitation   for   any   suit,
the   time   during   which   the   applicant
had   been   prosecuting   with   due
diligence   another   civil   proceeding,
the   said   period   has   to   be   excluded.
Under Section 2(a) of the Limitation
Act,   1963,   points   out   Mr.   Sinha,   an
applicant   includes:(I)   petitioner;
and   (II)   a   person   from   or   through
whom   an   applicant   derives   his   right
to   apply.   Thus,   even   assuming   that
the   Limitation   Act,   1963,   applies,
then   also,   the   period   during   which
the   writ   petition   and   the   writ
appeal   of   the   said   Association   was
pending   on   behalf   of,   amongst
others,   M/s   Shanti   Conductors,   the
said   period,   contends   Mr.   Sinha,
deserves   to   be   excluded   under   the
provisions   of   Section   14(2)   of   the
Limitation   Act   and,   thus,   the   suit
was,   reiterates   Mr.   Sinha,   within
time.
26. Above all, points out Mr. Sinha,
learned   Senior   counsel,   that   the
appellants,   in   the   present   appeal,
have   not   challenged   the   learned
trial   Court's   decision   on   the   issue
of   limitation.   In   this   regard,

58
taking   the   Court   through   the
memorandum   of   appeal,   which   the
appellants have preferred,Mr. Sinha,
Learned   Senior   counsel,   has   pointed
out that the memorandum of appeal is
wholly   silent   and   does   not   raise   or
challenge   the   learned   trial   Court's
decision on the issue of limitation.
Furthermore,   points   out   Mr.   Sinha,
the   Full   Bench,   while   deciding   the
reference,   has   clearly   observed,   in
its   decision   that   the   suit   was,
admittedly,   within   three   years   of
the   last   payment   made   by   the
appellant Board. The observations of
the Full Bench read as follows: ­
"The   suit   was   admittedly   within   3
years   of   the   last   payment   made   by
the appellant Board.””
65. It   is   thus   clear   that   the   Division   Bench   although
noticed   the   submissions   of   both   the   parties   on   the
question   as   to   whether   the   suit   was   barred   by
limitation or not but Division Bench allowed the appeal
on   the   ground   that   supply   orders   having   been   issued
prior   to   enforcement   of   the   Act.     Act   1993   is   not
applicable.   The   Division   Bench   did   not   return   any
finding   as   to   whether   the   suit   was   barred   by   the
limitation   or   not.   The   submission   that   suit   has   barred
by limitation has been pressed before us.

59
66. Shri   Hansaria   submits   that   according   to   the   own
case   of   the   appellant   supplies   was   completed   on
04.10.1993,   hence,   as   per   Section   4   of   the   1993   Act
amount   and   interest   shall   become   due   after   one   month
i.e.   w.e.f.   04.11.1993.   Suit   having   not   been   filed
within   3   years   from   04.11.1993   was   clearly   barred   by
time. 
67. The Trial court has held that suit is not barred by
time   relying   on   Section   10   of   1993   Act.   Section   10   of
the 1993 Act is as follows: ­
“10.   Overriding   effect:   ­   The
provisions   of   this   Act   shall   have
effect   notwithstanding   anything
inconsistent   therewith   contained   in
any other  law  for  the  time  being  in
force.”
68. Plaintiff   themselves   in   the   plaint   as   noted   above
has pleaded that limitation will not apply by virtue of
Section   10   which   submission   was   accepted   by   the   Trial
Court.   The   provision   of   Section   10   of   1993   Act   gives
overriding   effect   to   “the   provisions   of   Act

60
notwithstanding   anything   inconsistent   herewith
contained   in   any   other   law   for   the   time   being   in
force”.   The   overriding   effect   was   given   to   the
provisions   of   the   Act   which   were   contained   in   the   Act.
Section   10   provided   that   overriding   effect   is   given   to
the provisions of the Act over any inconsistent law for
the   time   being   in   force.   It   simply   meant   that   if   there
is   anything   inconsistent   in   any   other   law   to   the
provisions   of   the   Act,   the   provisions   of   the   Act   shall
prevail and override any inconsistent law. For example,
when   Section   4   requires   payment   of   interest   at
particular   rate   on   delayed   payment   the   said   rate   shall
have   overriding   effect   to   rate   of   interest   provided   in
any other law. 
69. Further,   as   per   Section   7   no   appeal   can   be   filed
against   the   decree   or   other   order   passed   regarding
recovery   of   amount   due   without   depositing   75   %   of   the
amount.  Thus   in  a   suit   if   a  decree   is   passed   on  amount
due   of   interest   appeal   has   to   be   entertained   after
depositing   75%   or   as   per   any   other   order   passed   by   the
Court.   Normal   right   of   appeal   shall   be   overridden   by

61
virtue   of   Section   7   of   1993   Act.   The   Trial   Court   fell
in   error   in   reading   overriding   effect   given   in   Section
10 to the Limitation Act also. There is no provision in
1993   Act   pertaining   to   limitation,   the   provision   of
Limitation Act pertaining to filing suit shall continue
to   operate   there   being   nothing   contrary   or   overriding
under   1993   Act.   Section   10   will   operate   only   with
regard   to   expressed   provisions   contained   in   1993   Act
which   shall   be   given   overriding   effect   but   reading
Section   10   to   the   effect   that   it   shall   override
Limitation Act is not correct interpretation of Section
10 and Trial Court fell in error  in relying on Section
10  in holding that Limitation Act will not apply. 
70. We   thus   are   of   the   view   that   Limitation   Act,   1963
is   fully   applicable   with   regard   to   money   suit   filed   by
the   appellant   hence,   the   question   of   limitation   has   to
be   answered   as   per   Limitation   Act   1963.   The   limitation
for   suit   for   recovery   of   interest   under   1993   Act   is   a
suit of nature which shall be covered by Part X Article
113 of the Schedule which is to the following effect: ­

62
" PART X­SUITS FOR WHICH THERE IS NO
PRECRIBED PERIOD
113. Any suit for
which no period 
of limitation is 
provided 
elsewhere in this
Schedule” Three 
years When the 
right to 
sue 
accrues
71. The   period   for   commencement   of   limitation   for
filing suit under Article 113 begins “when the right to
sue   accrues”.   We   have   now   to   find   out   as   to   when   the
right   to   sue   accrues   to   the   plaintiff   as   per   1993   Act.
Section  4   of   1993   Act   deals  with   date   from   and   rate  at
which   interest   is   payable.   Section   4   contains
expression   that   where   “any   buyer   fails   to   make   any
payment of the amount to the supplier as required under
Section   3……..be   liable   to   pay   interest   to   the   supplier
on   that  amount   on   the   appointed  day  or   as   the   case   may
be   from   the   date   immediately   following   the   date   agreed
upon…….”.   There   is   no   agreed   date   of   payment   between
the   parties   as   is   clear   from   both   the     supplies   orders
which are on the record. Thus, the payment shall become
due   from   the   appointed   day.   Appointed   day   has   been

63
defined   in   Section   2(d)   to   be   “the   day   following
immediately   after   the   expiry   of   period   of   30   days   from
the   date   of   acceptance   or   the   day   of   deemed   acceptance
of   any   goods   or   any   service   from   any   buyer   or
supplier.”     It   is   pleaded   by   the   appellant   that   last
supply was completed on 04.10.1993. Thus, appointed day
will   be   04.11.1993.   Thus   when   the   payment   was   not   made
on   04.11.1993   with   regard   to   amount   due,   the   interest
as   per   Section   4,   the   limitation   for   filing   the   suit
will start running. 
72. We   have   already   held   that   Act   shall   apply   with
regard   to   supplies   made   after   the   date   of   enforcement
of   Act   i.e.   23.03.1992.   Last   supply   being   received   on
04.10.1993   at   least   from   04.11.1993,   if   not   earlier,
the   amount   of   interest   under   Section   4   shall   become
due.
 
73. Shri   Sinha   has   submitted   that   last   payment   having
been   made   on   05.03.1994   suit   filed   within   3   years   and
suit   being   filed   on   10.01.1997   was   within   3   years   from
05.03.1994   and   hence   was   well   within   time.   He   submits

64
that   last   payment   being   on   05.03.1994   the   refusal   to
pay has to be treated from that day only and thereafter
suit could be filed within three years. 
74. Article  113  as  noted  above  provides  for  “time  from
which   period   begins   as   when   the   right   to   sue   accrues”.
1993   Act   Section   4   creates   statutory   liability   to   pay
interest   from   the   day   as   mentioned   in   Section   4   the
liability   to   pay   is   fastened   on   buyer.   The   amount
become   due   as   soon   as   liability   to   pay   arises.   Section
6   also   uses   the   word   “amount   due   from   buyer”.   The
amount   due   is   amount   which   is   liable   to   be   paid   by
buyer   under   Section   4.   Thus   the   fact   that   last   payment
was   made   on   05.03.1994   cannot   be   treated   as   period   for
beginning   of   the   limitation   and   on   that   ground   it
cannot be held that suit was within time. 
75. Shri   Sinha   had   made   an   alternative   submission   that
plaintiff was entitled for the benefit under section 14
of limitation Act. Since a W.P.No. giving rise to Civil
Rule   No.1531   of   1993   on   behalf   of   five   main   members   of
the   Associations   i.e.   Assam   Conductors   Manufacture

65
Association   was   filed   in   the   High   Court   which   on
06.09.1994   directed   the   petitioner   to   move   to   Civil
Court   for   realization   of   the   dues   of   its   member,   hence
the   period   during   which   the   writ   was   pending   has   to   be
given   benefit.   According   to   pleading   in   paragraph   24,
the   Writ   Petition   was   filed   by   Assam   Conductors
Manufacture   Association.   M/s   Shanti   Conductor(P)   Ltd.
and   another,   is   a   different   entity   than   the
Association.
76. We thus are of the view that benefit of the Section
14   cannot   be   claimed   by   the   plaintiff   in   the   facts   of
the   present   case.     We,   thus   in   view   of   the   foregoing
discussion     come   to   the   conclusion   that   suit   filed   by
the   plaintiff   being   Money   Suit   No.   21   of   1997   was
barred by time. 
Issue No.4
77. While   deciding     Issue   No.3   we   having   held   that
Money   Suit   filed   by   the   appellant   was   barred   by   time,
it is not necessary to express any opinion on the above
issue. 

66
Issue No. 5  
78. The   question   as   to   whether   suit   filed   only   for
interest   is   maintainable   has   been   considered   in   detail
by this Court. In paragraph 17, following has been laid
down in  Purbanchal Cables (Supra)  :­
"17.   The   decision   of   the   Full   Bench
of   the   Gauhati   High   Court   which   has
been   approved   by   this   Court   in
Modern   Industries   is   impugned   before
us   in   one   of   the   appeals.   Since   a
Division   Bench   of   this   Court   has
already   approved   the   dictum   of   the
Full   Bench   of   the   High   Court   with
regard   to   the   maintainability   of   a
suit only for interest that question
is no longer res integra. Therefore,
the   suppliers   may   file   a   suit   only
for   a   higher   rate   of   interest   on
delayed   payments   made   by   the   buyer
from the commencement of the Act.”
79. Section 6 of the 1993 Act provides that “the amount
due   from   the   buyer,   together   with   amount   of   interest
calculated   in   accordance   with   provision   of   Section   4
and   5   shall   be   recoverable   ……”.   Section   6   uses   the
expression   “together   with   the   amount   of   interest   with
the   amount   due   from   the   buyer.”   The   interpretation   put
by learned counsel for the Board is that proceeding for

67
recovery   of   interest   can   be   undertaken   only   when   any
amount   is   due.   He   submits   that   amount   due   used   in
Section   6   is   Principal   amount.   In   event   we   accept   the
interpretation put by counsel for the Board, then buyer
will very easily get away from payment of interest only
after   making   payment   of   Principal   amount.   This
interpretation   shall   defeat   very   purposes   of   1993   Act.
It   is   well   settled   that   provisions   of   Act   has   to   be
interpreted   in   the   manner   so   as   to   advance   the   object
of   the   Act.   We   thus   fully   approve   the   view   taken   by
this   Court   in   Purbanchal   Cables   (Supra)   that   suit   by
supplier for recovery of only interest is maintainable.
Issue No.6
80.   The   submission   of   the   counsel   to   the   board   is   that
since   against   the   judgment   of   Gauhati   High   Court   dated
15.04.2001,   S.L.P.   No.12217   of   2001   filed   by   M/s
Trusses   &   Towers   was   withdrawn   without   obtaining   the
liberty,   Civil   Appeal   No.   8445   of   2016   is   not
maintainable   challenging   the   Review   Order   and   judgment
dated 19.03.2003.   In the Order passed by this Court on
06.08.2001,   this   Court   had   noticed   the   submission   of

68
the   appellant   that   appellant   shall   move   the   High   Court
in   review   stating   that   it   has   committed   error   in
recording   that   “all   the   bills   were   paid   earlier   to   the
commencement   of   this   act”.   In   the   Review   Petition,   the
review   has   been   partly   allowed   by   allowing   interest   @
9%   against   which   the   appeal   has   been   filed.   A   perusal
of   the   Review   judgment   indicates   that   High   Court   has
not   returned   any   finding   that   all   the   bills   were   not
paid earlier to the commencement of the Act. 
81. A  perusal  of   Division  Bench  judgment  of  High  Court
indicates   that   High   Court   proceed   on   the   presumption
that even if 1993 Act is not applicable the entitlement
of   the   plaintiff   could   be   considered   in   equity.   When
the   liberty   to   file   review   was   obtained   on   the   ground
as   noticed   in   the   Order   the   review   judgment   can   be
questioned   on   the   ground     on   which   review   was
permitted.
82. The   Division   Bench   judgment   does   not   indicate   that
it proceeds on the ground as contended by the appellant
and   noticed   by   this   Court   on   06.08.2001.   The   interest

69
of   9%   was   allowed   on   the   premise   that   1993   Act   is   not
applicable   and   said   interest   is   allowed   on   equity
relying   on   an   earlier   judgment   on   this   court   in   Assam
Small Scale Industry Development Corporation and others
versus   G.D.   Pharmaceuticals   and   others,   2005(13)   SCC
19.   We   thus   are   of   the   view   that   present   appeal
challenging the review judgment   cannot be entertained.
The   ground   on   which   the   appellant   can   challenge   the
review   judgment   can   be   the   ground   on   which   liberty   was
obtained to file review. We thus hold that Civil Appeal
No. 8445 of 2016 is not maintainable. 
Issue No.7
Whether   the   High   court   while   considering   the   Review
Petition No.75 of 2001 (M/s Trusses & Towers Pvt. Ltd.)
even   after   expressing   that   Act   1993   is   not   applicable
could have allowed 9% interest to the plaintiff? 
83. The   High   Court   in   its   judgment   dated   19.03.2013
allowed   interest   @   9%   per   annum   for   the   period   of
delayed   payment.   Even   if   Act   1993   is   not   applicable,
the   Court   can   very   well   exercise   its   jurisdiction   to
award   interest.     In   Assam   Small   Scale   Industry

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Development   Corporation   and   others   versus   G.D.
pharmaceuticals   and   others   (Supra),   this   Court   in
paragraph   40   while   considering   the   claim   of   the
respondent   in   a   suit   filed   for   recovery   of   interest
under   1993   Act   has   allowed   9%   interest   with   respect   to
the   transaction   made   prior   to   coming   into   force   of   the
1993 Act. Paragraph 40 is to the following effect: ­
“40.We,   therefore,   are   of   the
opinion   that   in   relation   to   the
transactions   made   prior   to   coming
into   force   of   the   said   Act,   simple
interest   at   the   rate   of   9%   per
annum,   which   was   the   bank   rate   at
the   relevant   time,   shall   be   payable
both  prior  to  date  of  filing  of the
suit and pendente lite and as future
interest   in   terms   of   Section   34   of
the   Code   of   Civil   Procedure.
Interest,   however,   will   be   payable
in   terms   of   the   provisions   of   the
1993   Act(compound   interest   at   the
rate   of   23.5   %   per   annum)   in
relation   to   the   transactions   made
after   coming   into   force   of   the   Act,
both   in   respect   of   interest   payable
up to the date of institution of the
suit   and   pendente   lite   and   till
realization. The judgment and decree
to   that   extent   requires   to   be
modified.   It   is   directed
accordingly.”  

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84. High Court did not commit any error in awarding 9%
interest   to   plaintiff   respondent.   We   thus   did   not   find
any   error   in   the   judgment   dated   19.03.2013   allowing
partly the review application filed by the plaintiff.
Civil Appeal No. 8450 of 2016
85. Now, we come to Civil Appeal No. 8450 of 2016.  The
appellant   has   filed   Money   Suit   No.   32   of   1996   for
recovery   of   a   sum   of   Rs.   10,34,065.23   p.   and   Rs.
23,738.49   p.   being   the   outstanding   against   the   bills
for   supply   made   and   amount   of   security   deposited   and
amount   of   Rs.10,10,326.74   p.   being   the   amount   of
delayed   interest.     The   suit   was   decreed   by   the   learned
Civil   Judge   (Senior   Division)   vide   its   judgment   and
order   dated   30.09.2002   for   recovery   of   Rs.   5,46,233.14
p.    as   on   18.12.93   from  the  date   of  enforcement  of   the
Act,   1993   and   future   interest   on   the   decretal   amount   @
6%   simple   interest   per   annum   with   effect   from
19.12.1993.     Appeal   was   filed   by   the   respondent   in   the
High Court being  RFA No. 78 of  2003, which  has  been

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allowed   on   12.02.2015   setting   aside   the   decree   for
recovery of the amount and interest but maintaining the
claim   of   refund   of   security   deposit   to   the   tune   of   Rs.
23,738.49   with   9%   interest.     The   High   Court   following
the   judgment   of   this   Court   in   Purbanchal   Cables   and
Conductors   Pvt.   Ltd.   (supra)   held   that   with   regard   to
transaction, which had taken place prior to 23.09.1992,
the   1993   Act   is   not   applicable.     The   appellants   have
appealed   against   the   judgment   of   High   Court   dated
20.02.2015.     The   pleading   on   the   record   does   not
indicate   that   any   supply   was   made   by   the   appellant
subsequent   to   enforcement   of   the   1993   Act.     We   have
already held that the mere fact that supply orders were
issued   prior   to   enforcement   of   the   Act   does   not   deny
the applicability of the 1993 Act, in event, supply has
been   made   after   the   enforcement   of   the   Act.     There
being   nothing   on   record   to   come   to   the   conclusion   that
any supply was made after the enforcement of the Act so
as   to   enable   the   appellant   to   claim   interest   under
Section   3   read   with   Section   4   of   the   1993   Act,   we   are
of   the   view   that   judgment   of   the   High   Court   does   not

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need any interference in this appeal.
86. Intervention applications are not entertained.
87. In result, all the appeals are dismissed.
  ......................J.
        (A. K. SIKRI)
......................J.
        (ASHOK BHUSHAN)
......................J.
        (S.ABDUL NAZEER)
NEW DELHI,
JANUARY 23, 2019