Summary
Under the 1993 Act, Section 4’s non obstante clause overrides an agreement excluding interest but does not displace an agreed payment date. The later 120-day cap may apply to payments due after its commencement, but applicability and interest calculation here require findings on acceptance dates; the Court did not decide them.
Issues
- Does Section 4 override a contractual term fixing when payment is due, or only a term excluding interest?
- How does the 1998 amendment to Section 3 affect the contractual payment date and interest computation?
- What issues remain for any further interest or restitution proceedings after the arbitral award was set aside?
Provisions considered
- Sections 2(b), 2(c), 2(f), 3, 4 and 5, Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993Section 4 overrides a contractual bar on interest, but not an agreed payment date. After the 1998 proviso to Section 3, the agreed date cannot exceed 120 days from acceptance or deemed acceptance. Applicability and calculation in this matter require determination of those dates; the compound-interest issue under Section 5 remains open. (¶¶ 3, 4, 5, 6, 7, 8, 11, 12, 14, 15)
- Section 43(4), Arbitration and Conciliation Act, 1996Because the arbitral award was set aside, the statutory period between commencement of arbitration and the court’s order is excluded when computing limitation for proceedings concerning the dispute. (¶ 13)
- Section 144, Code of Civil Procedure, 1908After the award was set aside, MSSIDCL could seek restitution or execution as advised; it could also enforce the security if SSPL did not refund the amount. (¶ 16)
Held
- Before the 1998 proviso to Section 3 took effect, the parties could agree on the payment date. Section 4’s non obstante clause overrides a term excluding interest on delayed payment, but does not override the contractual date for payment. (¶ 6)
- From 10 August 1998, the proviso to Section 3 capped the agreed payment period at 120 days from acceptance or deemed acceptance; interest is payable for a period beyond that limit. Whether the proviso applies to this earlier contract and how much interest is due were left for determination after ascertaining the relevant acceptance date. (¶¶ 5, 7, 8, 11, 12, 14)
- The later amendment deeming a State Small Industries Development Corporation a “supplier” for claims against a buyer did not change MSSIDCL’s position as buyer under its supply order with SSPL or alter their inter se contractual rights. MSEB need not be joined in any further proceeding, although facts about acceptance by the consignee may need to be ascertained. (¶ 14)
- The Court did not decide whether compound interest under Section 5 makes the interest component principal. Setting aside the award triggers Section 43(4) of the Arbitration Act; MSSIDCL may seek restitution or execution and may enforce its security if SSPL does not refund the amount. (¶¶ 13, 15, 16)
Result
Appeal dismissed; the setting aside of the arbitral award was affirmed. No order as to costs. MSSIDCL may seek restitution or execution, as advised, and enforce the security if SSPL does not refund the amount.