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Humanoid Laboratories and Others V/S The State of Assam and Others.

    Review Pet. 171/2016

    Decided On, 13 February 2018

    At, High Court of Gauhati

    By, THE HONORABLE JUSTICE: RUMI KUMARI PHUKAN

    For Petitioner: S.P. Roy, Advocate And For Respondents: R.D. Choudhury, Advocate



Judgment Text


1. This application is filed by the petitioner who was appellant in RFA 27/2004 for review of the Judgment and order dated 04.08.2016 passed in said case.

2. The case of the review applicants is that the applicants received various supply orders on and from 25.02.1991 from the opposite parties No. 3 for supply of medicines and accordingly supplied the medicines and submitted bills for Rs. 9,49,987/-. As the amount was not paid by the opposite parties as such the petitioners filed suit for realization of Rs. 58,88,501.24 inclusive of interest @ 23.5% and future interest @ 23.5% with monthly rest from the month of April, 2000 till the date of actual realization under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993.

3. The suit was dismissed by the court below. In appeal the suit was decreed for principal amount of Rs. 9,49,987/- with an interest 12% PA from the filing of the suit till realization with cost of Rs. One lakh..

4. The limited question raised in this review is that the awarding the interest @ 12% PA from the date of filing of the suit till realization is contrary to the provision of Sec. 3 and 4 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 and the same is liable to be reviewed.

5. Perused the record.

6. Mr. S.P. Roy learned counsel for the applicant contended that in para 13 of the judgment this court has held that the petitioners are small scale industries and should not be deprived of their dues by such irresponsible conduct by the defendants which means that the petitioners are entitled to get the principal amount and the interest as per the provision of the Act, 1993. Again in para 14 observed that the payment higher interest under the Act is mandatory. In para 15 held that the respondents vide Ext. 15 acknowledge about the due towards the appellant and in para 16 held that the appellant side has produced the document Ext. 22 showing prevailing rate of interest circulated by the SBI showing rate of interest @ 20% as on 09.10.1991, 10% as on 02.03.1992, 18% as on 09.10.1992 and 17% as on 01.03.1993. In that view of the matter the findings of the court is contrary to the findings in paras 14, 15 and 16 of the judgment dtd. 04.08.2016 and liable to be reviewed decreeing the suit giving interest @22% and 23.5% with monthly rest as per the provision of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993.

7. Mr. R.K. Dev Choudhuary, learned Govt. Advocate has contended that this court has already assessed the rate of interest having regard to the exhibited documents on record. But, however it has been submitted that the decision referred and relied by this court", The Assam State Electricity Board vs. M/s. Shanti Conductor : 2002 (1) GLT 547 wherein it has been held that "interest on delayed payment under small scale and ancillary undertaking Act, 1993 would be applicable even to the contract entered into prior to the enforcement of the Act", on being challenge before the Hon'ble Supreme Court, the matter now has been referred to a larger bench by the division bench there being divergent view reported in : (2016) 15 SCC 13.

8. Regarding the submission of the learned Government Advocate about reference of the judgment of the Civil Appeal preferred against the Assam State Electricity Board (supra) perhaps cannot be accepted at this stage while State being the respondent has not agitated the said matter at the time of hearing of the appeal by this court and it is worth mentioning that RFA was disposed of by this court only on 04.08.2016 which was decided on contest. The aforesaid order was not pleased by the State and the matter has come up again before this court only by way of review by the appellant to reconsider the rate of interest as mentioned above. The scope of review jurisdiction is limited, the court is not permitted to re open the case on a submission by the other side while, such plea was never raised earlier.

9. Accordingly I decided to dispose of the revision petition as on matters on record.

10. The section 4 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 reads as follows:

"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 such rate which is five percent, above the floor rate for comparable lending.

Explanation-For the purposes of this Section "floor rate comparable lending" means the highest of the minimum lending rates charged by the scheduled banks (not being co-operative banks) on credit limits in accordance with the directions given or issued to banking companies generally by the Reserve Bank of India under the Banking Regulation Act, 1949 (10 of 1949)."

11. So, as per the provision of Section 4 of the Act the buyer is liable to pay interest @5% above to floor rate for comparable lending.

12. In pare 17 while considering the interest, the interest was awarded @12% PA considering the average interest as shown Ext. 24 (rate of interest calculation). Though interest was shown to be calculated as per Ext. 22 i.e. prevailing rate of interest circulated by the SBI showing rate of interest @ 20% as on 09.10.1991, 10% as on 02.03.1992, 18% as on 09.10.1992 and 17% as on 01.03.1993, but due to oversight that was calculated on the basis of the (Ext-24) which was not issued by any Bank authority. On the other hand, Ext. 22 is the certificate issued by the Industrial Co-Operative Bank Ltd. Guwahati in favour of the plaintiff No. 1 showing that interest was realized from the Plaintiff No. 1 in respect of their C/D Account @ 17% from 01.04.1987 to 28.02.1993 and at the rate of 18.5% from 01.03.1993 to 31.03.1993. So, there was error in calculation of the interest and that the point of payment of interest at rate of 5% above as provided by Section 4 of the Act was also not calculated which is error apparent at the face of

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the record. As such the judgment is reviewed and the interest is awarded at the rate of 17 % (which was prevailing at the major period of the time as mentioned above) with added interest at the rate of 5% above and thus the interest comes to 22% PA. 13. On consideration of the above, the review petition is allowed modifying the Judgment passed by this court in RFA 27/2004 and awarded interest @ 22% PA on the principal amount of Rs. 9,49,987/- from the filing of the suit till realization keeping the cost of Rs. One lakh as decided earlier. 14. The review petition is accordingly stands disposed of. 15. Send down the LCR along with a copy of this order to the court below.
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