TMI Blog2002 (3) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... upplier prior to coming into force of the Act and payments were made thereafter. According to the plaintiff the payments and not been made within the stipulated period. 2. Against the judgment and decree of the trial court the Board filed the present appeal (RFA No.66/2000). When the matter had come up for hearing before a Division Bench (Myself and A.H. Saikia, J) it was argued on behalf of the appellant that in fact the suit for mere recovery of interest under the Act was not maintainable in view of the provisions of Section 6 of the Act. According to the learned counsel for the appellant, on the date of filing of the suit no principal amount was due from the Board to the plaintiff and consequently the suit for recovery or for realisation of mere interest only under the Act of 1993 was not maintainable. Reliance was placed, on the observations in para 15 the judgment of Division Bench of this Court in Assam State Electricity Board v. Trusees Towers (P.) Ltd., reported in 2001(2) GLT 121, which are to the following effect - "15. A bare reading of the section itself will show that there must be some amount due from a buyer and along with that amount a claim for interest may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Full Bench, we had asked the counsel for the parties to address us on an ancillary question, i.e., whether the supplier can at all waive of in writing or otherwise his right to recover the interest under the Act in view of the provisions of Sections 4 and 5 of the Act ? 6. Before we proceed further, certain provisions of the Act may be noticed. Section 2(b) of the Act defines the 'appointed day'; Section 3 provides for the liability of the buyer to make payment, whereas Section 4 provides for the date from which and rate at which interest is payable. Section 5 provides for as to how interest is calculated. It provides that compound interest is payable on the delayed payment by the buyer to the seller. Section 6 provides for the recovery of the amount due together with interest. Section 10 states that the Act would have overriding affect. Sections 2(b), 3 to 6 and 10 of the Act may be.reproduced : "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to ensure prompt payment of money by buyers to the small industrial units. 2. Inadequate working capital in a small scale or an ancillary industrial undertaking causes serious and endemic problems alluding the health of such undertaking. Industries in the 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 representative 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 payment 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." 8. As a matter of fact it may be noticed that in the present case some payments towards the supply had been made by Board to the plaintiff supplier prior to coming into force of the Act (i.e., 22.09.1992) and some payments had been made thereafter. Whereas in the case of Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest will be claimed, to the date of institution of the proceedings : Provided that where the amount of the debt or damages has been repaid before the institution of the proceedings interest shall not be allowed under this section for the period after such repayment. (2) Where, in any such proceedings as are mentioned in Sub-section (1)- (a) judgment, older or award is given for a sum which, apart from interest on damages, exceeds four thousand rupees. And (b) the sum represents or includes damages in respect of personal injuries to the plaitiff or any other person, or in respect of a person's death, then, the power conferred by that sub-section shall be exercised so as to include in that sum interest on those damages or on such part of them as the court considers appropriate for the whole or part of the period from the date mentioned in the notice to the date of institution of the proceedings, unless the court is satisfied that there are special reasons why no interest should be given in respect of those damages. (3) Nothing in this section, - (a) shall apply in relation to - , (i) any debt or damages upon which interest is payable as or right, by virtue of any ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings. The suit is filed under the provisions of the Code of Civil Procedure to realize the recoverable amount as envisaged under Section 6 of the Act The opening words of Section 6(1) "the amount due from the buyer, together with the amount of interest....." can only mean that the principal sum due from the buyer as well as or along with the amount of interest calculated under the provisions of the Act, are recoverable. The word 'together' here would mean 'as well as' or 'alongwith'. This cannot mean that the principal sum must be due on the date of the filing of the suits. The suits are maintainable for recovery of the outstanding, principal amount, if any, along with the amount of interest on the delayed payments as calculated under Sections 4 and 5 of the Act. We are unable to agree with that if the principal sum is not due, no suit would lie for the recovery of the interest on the delayed payments, which might have already accrued. If such an interpretation is given the very object of enacting the Act would be frustrated. The Act had been enforced to see that small scale industries get the payment regarding supply made by them within the prescribed period and in case of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for debt, damages or claim of interest in respect of any debt or damages already paid. The provisions of Section 1 of the Interest Act of 1839 also do not create any right of filing a suit. Even if it is taken that this Act does not provide for awarding any interest by the Court on the suit for recovery of mere interest, it cannot be said that suit for mere recovery of interest would not lie. In normal suits for the recovery of any sum or interest only which may have accrued further can be awarded by the Court under the Interest Act of 1978. However, in view of the overriding affect of the 1993 Act in any suit for the recovery of the amount mentioned in Section 6 of the Act would be payable under the Act of 1993. 14. For the foregoing reasons, our answer to the first question is that a suit for recovery of mere interest only on delayed payments under the Act of 1993 is maintainable. As observed above, in Trusses Towers case (supra) since on the date of the enforcement of the Act of 1993, i.e., 23.09.1992 no principal sum was due and all payments had been received by the supplier prior to that date, the question of enforcement of any right under the Act on any alleged delayed pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sections 4 and 5 of the Act which clearly provide 'Notwithstanding anything in the agreement'. However, in such a case interest on the delayed payment which is made after the coming into force of the Act of 1993 would be calculated under the Act from the date of the enforcement of the Act and not from the date of payment prescribed under the agreement. To illustrate, supposing the payment under the contract was to be made by 1st of January, 1992, however, the payment is made on 1st of January, 1994. The interest under the Act of 1993 on the delayed payment will be calculated in accordance with the provisions of Section 5 of the Act from 23.09.1992 to 1st January, 1994 and not from 01.01.1992. In support of what we have observed above, some case law may be cited. In Queen v. Inhabitants of St. Mary Whitechapel, reported in (1848) 12 OB 120, the question related to the construction of Section 2 of the Poor Removal Act, 1846, which provided that 'no woman residing in any perish with her husband at the time of his death shall be removed from such perish, for 12 calendar months next after his death, if she so long continues a widow'. In this case a widow was sought to be removed wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to engage himself in the commission of an offence similar to that for which he was convicted, may direct such person to remove himself, outside the area within the local limits of his jurisdiction, by such route and within such time as the said officer may prescribe and not to enter or return to the area from which he was directed to remove himself." 18. It was argued that the said section would only be applicable if the convictions are after, the coming into the force of Section 57 of the Bombay Police Act, 1951. No person could be removed under. Section 57 if the convictions were prior to the coming into force of Section 57 of the Bombay Police Act. The argument was that if action is taken on the basis of the past convictions then the Act would be deemed to have been applied retrospectively. Nagetiving this argument the Apex Court observed as under - "12. Now, Section 57 of the Bombay Police Act, 1951, does not create a new offence nor makes punishable that which was not an offence. It is designed to protect the public from activities of undesirable persons to have been convicted of offences of a particular kind. The section only enables authorities to take note of their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , even where an accused person has been convicted prior to the coming into the force of the new Code but his sentence is still running, it would not be inappropriate to say that the "accused person has, on conviction, been sentenced to imprisonment for a term", and he would be entitled to claim under Section 428 that the period of detention undergone by him during the investigation, inquiry or trial of the case should be set off against the term of imprisonment imposed on him and he should be required to undergo only the remainder of the term." 20. Apart from the above, we are of the view that the Act of 1993 is a beneficial legislation for the small scale and ancillary industrial undertakings. They must get full benefit of the Act from the date of its enforcement. 21. In view of the above observations, our answer to this question is that the Act of 1993 would be applicable even to the contracts entered into prior to the enforcement of the Act, i.e., 23.09.1992. However, the interest on the delayed payment would be calculated under the Act from 23.09.1992 till date of payment. ANCILLARY QUESTION : Before answering to Question No. 3, we deem it proper to answer the ancillary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a seller can waive of his right of recovery of the interest on the delayed payments under the Act of 1993. QUESTION NO. 3: 23. We had heard learned counsel for the parties on this point. We are of the view that the waiver is always a question of fact and in each case the waiver has to be proved as a fact on the basis of evidence (oral, documentary or circumstantial) as to whether the supplier has waived of his right to recover the interest on the alleged delayed payments under the Act. Waiver is a question of fact which has to be pleaded and proved and there is no presumption under the law that if the payment is received without any reservation to claim the balance payment or the interest or the interest on the delayed payments under the Act of 1993, it would be presumed that the seller or the supplier had waived of his right to claim the balance payment, the interest or the interest on the delayed payment under the Act, as the case may be. In Lalakauprchand Godha and Ors v. Mir Nawab Himayatalikhan Azamjah, repoted in AIR 1963 SC 250, it was observed as under : "(a) When a statute clearly cover a case, it is hardly necessary to refer to decisions. In deference, however, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case is that the appellants must have known that they could receive the second instalment and retain the first instalment by accepting the condition on which the sum of Ra. 20 lacs was offered to them namely, that they must record a full satisfaction of their claim." 24. In our view the enunciation of law by the Division Bench in paragraph 23 of Trusses Towers (supra), where the observations are to the effect that "Once the principal amount is received by a person without any reservation, thereafter he cannot make a claim for a further sum either by way of principal or interest" are too widely stated and do not have our approval and hereby overruled. In D C Builders Ltd. v. Kees, reported in 1965 (3) All England Report 837, the contractor had even given a receipt after receiving less payment than due that he had received the same in full and final settlement. Yet, it was held that he could prove that such a writing was given by the supplier under some compulsion and coercion or on the threat of receiving no amount at all. In other words, the waiver or satisfaction of the bill was allowed to be disproved by the supplier. 25. In view of the above discussions, ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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