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TMI Blog2009 (2) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate of 24% per annum and at 2% per month compounded with monthly rest from 23.9.1992 till actual date of recovery. According to the respondent- plaintiff it used to supply hydrated lime to the appellant-defendant but the defendant did not pay the bills amounted to Rs. 10,593.75. Consequently, the aforesaid suit was filed claiming the amount of Rs. 10,593.73 along with interest at the rate of 18% per annum till the date of suit and cost of legal notices. However, during the pendency of the suit, the plaint was amended after coming into force of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 (hereinafter referred to as the `Act'). The Act came into force with effect from 23.9.1992 wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riving at the said finding the learned Civil Judge (Senior Division) held that the Scheduled Banks provide loan on interest at the rate of 18% per annum. 6. Being aggrieved by the aforesaid judgment and decree the appellant- defendant preferred a Second Appeal No. 167 of 2001 in the High Court which was admitted on the questions of law framed in the memo of appeal and the High Court also stayed the aforesaid order dated 30.7.1998. The appeal was taken up for final hearing during the course of which reference was made to the provisions, particularly Section 4 and 5, of the Act. 7. The learned Single Jude of the High Court disposed of the said appeal by judgment and order dated 2.5.2007 and held that the aforesaid Act No. 32 of 1993 was pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a member) after referring to the provisions of Section 1, 3, 4, 5 and 10 of the said Act, considered the scope of applicability of the Act. Sections 1, 3, 4, 5, and 10 of the Act are extracted below : 1. Short title, extent and commencement.- (1) This Act may be called the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. (2) It extends to the whole of India except the State of Jammu and Kashmir. (3) It shall be deemed to have come into force on the 23rd day of September, 1992. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. It was held in Assam Small Scale Industries Development Corpn. Ltd. & Ors. (supra) that the provisions of the Act are applicable only with prospective effect. Paragraphs 37 and 38 of the said case which deal with the scope of the applicability of the Act are reproduced hereunder :- 37. We have held hereinbefore that clause 8 of the terms and conditions relates to the payments of balance 10%. It is not in dispute that the plaintiff had demanded both the principal amount as also the interest from the Corporation. Section 3 of the 1993 Act imposes a statutory liability upon the buyer to make payment for the supplies of any goods either on or before the agreed date or where there is no agreement before the appointed day. Only when payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit has to be prior in point of time. 13.In paragraph 11 of the plaint the respondent-plaintiff had itself stated that the cause of action for the suit arose on dates prior to coming into force of the Act. It is obvious from the records that on the date when the Act came into force, the present suit was pending for consideration, and therefore, what would be applicable to the facts of the present case is the provisions of Section 34 of the Code of Civil Procedure, 1908 (for short the `Code') which are reproduced hereinbelow : 34. Interest - (1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 18% per annum but later on when it was found that the Act had come into force with effect from 23.9.1992 an amendment was sought for to the plaint which was allowed by the trial court. The said amendment, in our opinion, should not have been allowed as the said provisions of the Act are not applicable to the facts and circumstances of the present case. 15.The quantum and rate of interest which the appellant in the present case is entitled to would be in accordance with the provisions of Section 34 of the Code and not in accordance with the provisions of the Act. According to the provisions of Section 34 of the Code interest is to be awarded at a reasonable rate and on the principal amount. 16. In Clariant International Ltd. v. Securi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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