M/S. MODERN INDUSTRIES versus M/S. STEEL AUTHORITY OF INDIA LTD. TH. M.D. & ORS.

Citation: [2010] 4 S.C.R. 560 · Decided: 15-04-2010 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2010] 4 S.C.R. 560 
A 
M/S. MODERN INDUSTRIES 
B 
c 
v. 
M/S. STEEL AUTHORITY OF INDIA LTD. TH. M.D. & ORS. 
(Civil Appeal Nos. 3305-3306 of 2010) 
APRIL 15, 2010 
[R.V. RAVEENDRAN AND R.M. LODHA, JJ.] 
Interest on Delayed Payments to Small Scale and 
Ancillary Industrial Undertakings Act, 1993: 
s. 6(1) and (2) - Object and purpose of - Expression 
'amount due from a buyer', followed by expression 'together 
with the amount of interest' u/s 6(1)- Interpretation of- Held: 
Object and the purpose of the Act is to ensure that buyer 
promptly pays the amount due towards the goods supplied 
D or services rendered by the supplier - It also provides for 
payment of interest statutorily on the outstanding money in 
case of default- Said expression must be interpreted keeping 
in mind the purpose and the object of the Act and its 
provisions - Restricted meaning is not justified - s. 6(1) 
E provides that the amount due from buyer together with amount 
of interest calculated as per ss.4 and 5 shall be recoverable 
by supplier from buyer by way of suit or other proceeding 
under any law for the time being in force - Scheme of s. 6 rl 
w ss. 3, 4 and 5 does not envisage multiple proceedings - On 
F facts, order of High Court that expression 'amount due from. 
a buyer' would be amount admitted to be due in its plain and 
natural meaning and when admitted due amount is not paid 
by buyer, ss.3 to 6 along with other provisions of the Act would 
be applicable, cannot be accepted and is set aside - The Act 
G is applicable to the instant case, since parties entered into 
contract in 1983 which got altered from time to time and was 
last altered in 1995, and by that time the Act had come into 
force. 
H 
560 
MODERN INDUSTRIES v. STEEL AUTHORITY OF 
561 
INDIA LTD. TH. M.D. & ORS. 
s. 6(1) and (2) - Action contemplated ins. 6 by way of A 
suit or any other legal proceeding uls. 6(1) or by making 
reference to Industry Facilitation Council u/s. 6(2) -
Maintainability of, only if it is for recovery of principal sum 
along with interest as per ss. 4 and 5 and not for interest alone 
- Held: Uls. 6(2) action by way of reference to IFC could be 
B 
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 -
IFC has competence to determine the amount due for goods 
supplied or services, rendered in cases where the liability is c 
disputed by the buyer- On facts, order of High Court that since 
buyer has alleged breach of contract by supplier, there was 
no amount admitted to be due or settled amount and, thus, 
there wa~ no question of delayed payment and reference of 
.the dispute to IFC uls. 6(2) was without jurisdiction, cannot be 
D 
accepted and is set aside. 
Words and Phrases: 
Word 'together' - Meaning of, ill the context of s. 6(1) 
of the Interest on Delayed Payments to Small Scale and E 
Ancillary Industrial Underlakings Act, 1993 - Held: Word 
'together' ordinarily means conjointly or simultaneously but 
the said meaning may not be apt in the context of s. 6 - Word 
'together' ins. 6(1) would mean 'along with' or 'as well as'. 
Word 'Due' - Meaning of - Held: Has different meanings 
in different context - In narrow sense, word 'due' may imporl 
a fixed and settled obligation or liability - In wider context, 
amount can be said to be 'due', which may be recovered by 
action - Amount that can be claimed as 'due' and recoverable 
F 
by an action may sometimes be also covered by expression G 
'due'. 
The questions which arose for consideration in these 
appeals are as to the meaning of the expression, 'amount 
due from a buyer, together with the amount of interest' 
H 
562 
SUPREME COURT REPORTS 
[2010] 4 S.C.R. 
A under sub-section (1) of s. e of the Interest on Delayed 
Payments to Small Scale and Ancillary Industrial 
Undertakings Act, 1993 and as to whether the Industry 
Facilitation Council cannot go beyond the scope of 
interest on delayed payments upon the matter being 
B referred to it by any party to dispute under sub section 
(2) of s. 6 of the Act. 
Allowing the appeals, the Court 
HELD: 1. The wholesome purpose and object behind 
C the Interest on Delayed Payments to Small Scale and 
Ancillary Industrial Undertakings Act, 1993 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
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