M/S. SHAKTI TUBES LTD. versus STATE OF BIHAR & ORS.

Citation: [2009] 10 S.C.R. 739 · Decided: 07-07-2009 · Supreme Court of India · Bench: MUKUNDAKAM SHARMA · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2009] 10 S.C.R. 739 
., 
MIS. SHAKTI TUBES LTD. 
A 
·-
v. 
STATE OF BIHAR & ORS. 
(Civil Appeal No. 172 of 2007) 
JULY 7, 2009 
B 
~ 
[DR. MUKUNDAKAM SHARMA AND DR. 8.S. 
CHAUHAN, JJ.] 
Interest on Delayed Payment to Small Scale Industries 
Act, 1993 - ss.4 and 5 - Contract for supply of pipes - Pipes c 
supplied - But certain amount remained payable to appellant-
supplier- Money suit filed by appellant decreed by Trial Court 
with interest compounding at monthly rest@ 24% p.a. - High 
Court reduced the rate to simple interest @ 9% p.a. -
Challenge to - Appellant sought payment of interest at higher D 
rate and compoundable interest in terms of ss.4 and 5 of the 
1993 Act- Held: Since the supply order was placed prior to 
coming into force of the Act, appellant not entitled to benefit 
under ss.4 & 5 of the 1993 Act - Though the 1993 Act is a 
welfare legislation enacted to protect the interest of suppliers, 
E 
especially suppliers of the nature of a small scale industry, 
.. 
but the Act cannot be given retrospective effect when such 
:>( 
intention was not clearly made out and derived from the Act 
itself - Contention raised by appellant regarding alteration & 
"! 
novation of contract giving rise to a new contract after coming 
into force of the 1993 Act, had no legal and factual basis -
F 
Code of Civil Procedure, 1908 - s.34 - Contract Act, 1872 -
s.62. 
Interpretation of Statutes -
Presumption against 
...,. 
~ 
retrospectivity- Held: Every statute is prima facie prospective 
G 
unless it is expressly or by necessary implication made to 
have a retrospective operation - However it is not necessary 
that an express provision be made to make a statute 
739 
H 
740 
SUPREME COURT REPORTS 
[2009] 10 S.C.R. 
A retrospective - Presumption against retrospectivity may be 
)t 
rebutted by necessary implication especially in a case where 
-
the new law is made to cure an acknowledged evil for benefit 
of the community as a whole - Maxims - Maxim "nova 
constitutio futuris formam imponere debet non praeteritis''. 
B 
Constitution of India, 1950 -Art. 136 - Pleadings - New 
plea - Mixed question of law and facts, not urged before the 
courts below or even in memomndum of appeal filed in 
) 
Supreme Court - Held : Cannot be raised for the first time at 
the time of final hearing of appeal before Supreme Court. 
c 
Appellant is a company incorporated under the 
Indian Companies Act and registered as a Small Scale 
Industry in the Industries Department, Government of 
Bihar. It entered into an agreement with the State of Bihar 
D for supply of pipes. Appellant supplied pipes as per the 
agreement, but a sum of Rs. 38,13,4801- remained payable 
which was allegedly withheld by the respondents. 
Appellant filed suit seeking decree for payment of the 
aforesaid amount of Rs. 38, 13,480/- with interest 
E compounding at monthly rest at the rate of 24% per 
annum on the aforesaid decreetal amount. The trial court 
passed decree for payment of Rs.38, 13,480/- alongwith 
.. 
interest compounding at monthly rest at the rate of 24% 
)<' 
per annum on the aforesaid amount. The respondents 
F filed appeal challenging the payment of interest on the 
ground that it was higher than what the appellant was 
actually entitled to. The High Court directed that the 
appellant would be entitled to simple interest at the rate 
of 9% per annum. 
G 
In appeal to this Court, the appellant contended that 
it was entitled to claim interest in terms of the provisions 
• .... 
of the Interest on Delayed Payment to Small Scale 
Industries Act, 1993 since transaction in the instant case 
came to an end after coming into force of the Act. It 
H contended that the earlier supply order which was issued 
SHAKTI TUBES LTD. v. STATE OF BIHAR & ORS. 
741 
,. 
on 16.07 .1992 came to be materially altered and 
A 
substituted by a fresh supply order issued on 18.03.1993 
by which date the aforesaid Act had already been 
enforced and, therefore, the appellant was entitled to 
claim interest at a higher rate as envisaged in Section 4 
of the Act payable with compound interest as provided . B 
for under Section 5 of the Act. 
The only issue that thus arose for consideration in 
the present appeal was as to whether the appellant was 
entitled to a direction for payment of interest C 
compounding at monthly rest at the rate of 24% per 
annum. 
Dismissing the appeal, the Court 
HELD :1.1. In facts of the present case, there is no o 
dispute with regard to the fact that t

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