TMI Blog2012 (11) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... supply orders, with M/s Shanti Conductors (P) Limited, for supply of various types of conductors, the two supply orders being, dated 31.03.92 and 13.05.92. Under the supply order, dated 31.03.92, supply was to be completed by January, 1993. The supplies were, however, completed on 23.09.93, because, according to the plaintiffs, the Board delayed in carrying out inspection of the manufactured product and the supplies could not have been affected without requisite inspection having been carried out by the Board. As far as the supply order, dated 13.05.92, aforementioned was concerned, the supply was to be completed by February, 1993, but the supplies were completed, on 05.10.93, for the reasons as indicated hereinbefore. The first supply order was for ₹ 1,22,52,568.79/- and the second supply order was for ₹ 32,49,117.27/-. Thus, the total goods supplied were for ₹ 2,37,71,536.32/-. The last payment was received by the plaintiffs from the Board on 05.03.94. 2. Alleging that the plaintiff had not paid interest on delayed payment of the bills of the plaintiffs, though the plaintiff, M/s Shanti Conductors (P) Limited, was a SSI unit and the Board ought to have paid i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount as prayed for? 6. To what other relief or reliefs the parties are entitled? 5. The learned trial Court answered the Issue No. 2 in the negative by referring to the provisions of Section 10 of the 1993 Act by taking the view that Section 10 of the 1993 Act had an overriding effect and, hence, the suit was not barred by limitation. The other issues were also answered by the learned trial Court in favour of the plaintiffs. As regards applicability of the 1993 Act, the learned trial Court concluded that since payment was made subsequent to the coming into force of the 1993 Act, interest was liable to be paid by the defendants in terms of the provisions of the 1993 Act, though supply orders might have been placed with the plaintiff-Company before the 1993 Act had come into force. The learned trial Court, thus, concluded, while dealing with the issue Nos. 5 and 6, that the plaintiffs were entitled to a decree for realization of the amount, which they had claimed as interest on the delayed payment allegedly made prior to the 1993 Act. 6. The suit of the plaintiffs has accordingly been decreed as indicated above, Aggrieved by the decree, so granted, the defendants have pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conclusions reached and the law laid down, in M/s Trusses Towers (Pvt.) Ltd. (supra), and the matter was accordingly referred to a larger Bench. The Full Bench of this Court delivered its judgment, on 05.03.2002, on the questions referred to it for determination. As observed by the Full Bench, in its judgment and order, dated 05.03.2002, aforementioned, the Full Bench was constituted to decide the following questions: (i) Whether the suit for recovery of mere interest under the Interest only 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 Article, 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 payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 on the delayed payments under the 1993 Act, it would be presumed that the seller or the supplier had waived his right to claim the balance payment, the interest or the interest on the delayed payment under the 1993 Act, as the case may be. 15. Overruling the conclusion, reached in M/s Trusses Towers (Pvt.) Ltd. (supra), that once the principal amount is received by a person without any reservation, he cannot, thereafter, make a claim for a further sum either by way of principal or interest, the Full Beach held that the position of law, as laid down in M/s Trusses Towers (Pvt.) Ltd. (supra), were too widely stated and was not the correct position of law. 16. In short the conclusion of the Full Bench west: (i) a suit, claiming mere interest under the 1993 Act, is maintainable; (ii) a suit for recovery of interest, under the 1993 Act, would be maintainable even in respect of a contract, which had been entered into prior to the coming into force of the of the 1992 Ordinance and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs Private Limited (supra), too, that to a contract, which had stood concluded prior to 23-09-1992, the 1993 Act would not apply. In other words, the Supreme Court, according to Mr. Das, took the view, in Purbanchal Cables and Conductors Private Limited (supra), that the 1993 Act will not apply to transactions, which had taken place prior to 23.09.92, 23.09.92 being the date on which 1993 Ordinance had come into effect and its operation has been carried on by the 1993 Act too. 20. In the light of the decision, in Purbanchal Cables and Conductors Private Limited (supra), it is contended, on behalf of the appellants, that in the case at hand, since the supply orders were placed before the 1993 Act had come into force on 23-09-1992, the decision of the learned trial Court, granting the impugned decree, in the suit, for payment of interest, is wholly against law and is, therefore, not sustainable. 21. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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. Sihna, within time. 25. 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, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Mr. Sinha, that predictability and certainty is an important hallmark of judicial jurisprudence developed in this country. Reliance has also been placed by Mr. Sinha, learned Senior counsel, on the case of U.P. Power Corp. Ltd. v. Rajesh Kumar Others, reported in (2012) 7 SCC 1. 30. Relying on the authorities cited by him, Mr. Sinha, learned Senior counsel, contends that since the Supreme Court, in Purbanchal Cables and Conductors Private Limited (supra), has dismissed the appeal of the appellant Board, the decision of the Full Bench has merged into the said decision of the Supreme Court and (this Bench, being a Divisions Bench, is bound to follow the decision of the Full Bench, which has clearly recorded that the contract, in question, in the present case, was covered by the 1993 Act inasmuch as the supply orders were made prior to the coming into force of the 1993 Act, but the transactions continued even after the 1993 Act had come into force, the last payment having been made by the appellant Board on 05-03-1994 and, hence, in respect of this delayed period of payment, the appellant, ASEB, is liable to pay interest. 31. Further submission of Mr. Sinha is that had the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 and not from the date of payment prescribed under the agreement. 34. The Full Bench has also taken the view that the incidence or the sine qua non for payment of interest, under the 1993 Act, is not the terms of the contract, but the delayed payment. The Full Bench, however, clarified that while making payment of the interest, the interest would have to be calculated, in case of delayed payment, from the date of enforcement of 1993 Act and not from the date of payment prescribed under the agreement. 35. While the decision of the Full Bench that a suit for mere interest is maintainable has, admittedly, been agreed to by the Supreme Court in Purbanchal Cables and Conductors Private Limited (supra), the controversy really remains whether the Apex Court has, in Purbanchal Cables and Conductors Private Limited (supra), approved the decision of the Full Bench that the 1993 Act would be applicable to a contract, which might have been entered into prior to the enforcement of the 1993 Act, but the payment, as envisaged by the contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation. Section 3 of the 1993 Act imposes a statutory liability upon the buyer to make payment for the supplies of any goods either on or before the agreed date or where there is no agreement before the appointed day. Only when payments are not made in terms of Section 3, Section 4 would apply. The 1993 Act came into effect from 23-9-1992 and will not apply to transactions which took place prior to that date. We find that out of the 71 suit transactions, Sl. Nos. 1 to 26 (referred to in the penultimate para of the trial Court judgment), that is supply orders between 5-6-1991 to 28-7-1992, were prior to the date of the 1993 Act coming into force. Only the transactions at Sl. Nos. 27 to 71 (that is supply orders between 22-10-1992 to 19-6-1993), will attract the provisions of the 1993 Act. 38. The 1993 Act, thus, will have no application in relation to the transactions entered into between June 1991 and 23-09-1992. The trial Court as also the High Court, therefore, committed a manifest error in directing payment of interest at the rate of 23% up to June 1991 and 23.5% thereafter. (Emphasis is added) 39. The decision, in Assam Small Scale Industries Development Corpn. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or supply of the pipes which date is admittedly prior to the date on which this Act came into effect. 20. Being faced with the aforesaid situation, the learned Senior Counsel appearing for the appellant-plaintiff sought to submit before us that the decision of this Court in Assam Small Scale Industries case refers to the expression transactions . According to him, the transactions would be complete only when the appellant-plaintiff made the supply and since the supply was made in the instant case after coming into force of the Act, the appellant-plaintiff would be entitled to the benefit of Sections 4 and 5 of the Act. Refuting the aforesaid submission, the learned Senior Counsel appearing for the respondents submitted that the aforesaid contention is completely misplaced. He pointed out that if such a meaning, as sought to be given by the learned Senior Counsel appearing for the appellant-plaintiff, is accepted that would lead to giving benefit of the provisions of the Act to unscrupulous suppliers who, in order to get the benefit of the Act, would postpone the delivery of the goods on one pretext or the other. 21. We have considered the aforesaid rival submissions. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act is no longer res integra. This question is answered by this Court in the case of Assam Small Scale Industries Development Corpn. Ltd. v. J.D. Pharmaceuticals, (2005) 13 SCC 19 as under: 37. We have held hereinbefore that clause 8 of the terms and conditions relates to the payments of balance 10%. It is not in dispute that the plaintiff had demanded both the principal amount as also the interest from the Corporation. Section 3 of the 1993 Act imposes a statutory liability upon the buyer to make payment for the supplies of any goods either on or before the agreed date or where there is no agreement before the appointed day. Only when payments are not made in terms of Section 3, Section 4 would apply. The 1993 Act came into effect from 23-9-1992 and will not apply to transactions which took place prior to that date. We find that out of the 71 suit transactions, Sl. Nos. 1 to 26 (referred to in the penultimate para of the trial Court judgment), that is supply orders between 5-6-1991 to 28-7-1992, were prior to the date of the 1993 Act coming into force. Only the transactions at Sl. Nos. 27 to 71 (that is supply orders between 22-10-1992 to 19-6-1993), will attract the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is not incorrect, a suit for recovery of interest, on delayed payment, would not be maintainable after the 1993 Act had come into force, if the contract for supply had been entered into before coming into force of the 1993 Act and/or supply order was placed before commencement of the 1993 Act. 45. Situated thus, we are, now, required to consider the submission of Mr. A.K. Sinha, learned Senior counsel, that by virtue of the doctrine of merger, the decision of the Full Bench, dated 05.03.2002, has become binding on this Court inasmuch as the present appellants' appeal, which had given rise to the decision, in Purbanchal Cables and Conductors Private Limited (supra), stands, eventually, dismissed by the Supreme Court inasmuch as the Supreme Court, at para 83, in Purbanchal Cables and Conductors Private Limited (supra), concluded thus. The result is, the appeals fail and, accordingly, they are dismissed. No order as to costs. 46. Turning to the question of the doctrine of merger, which Mr. A.K. Sinha, learned Senior counsel, has referred to, there can be no doubt that when an order is passed by an appellate Court agreeing or disagreeing with the order of the trial Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court was not inclined to exercise its discretion so as to allow the appeal being filed. If the order refusing leave to appeal is a speaking order, i.e. when reasons are assigned for refusing the grant of leave, then, the order has two implications. Firstly, the statement of law contained in such an order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law. Whatever is stated in the order are the findings recorded by the Supreme Court, which would bind the parties thereto and also the Court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country; but is does not mean that the order of the Court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting special leave petition or that the order of the supreme Court is the only order binding as res judicata in subsequent proceedings between the parties. Once leave to appeal has been granted and the appellate jurisdiction of supreme Court has been invoked, the order passed in appeal would attract the doctrine of merger. On ..... X X X X Extracts X X X X X X X X Extracts X X X X
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