Arbitration and Conciliation Act, 1996, Section 34, 37 and 43(4) -Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, clauses (b), (c) and(f) to Section 2, Sections 3,4 and 5 – Arbitration – Interest – Supply/purchase order dated 30.03.1995 issued by MSSIDCL to SSPL – The contract had, therefore, postulated and the parties had agreed that MSSIDCL would be liable to pay SSPL only after the goods are delivered and accepted by the consignee, namely, Maharashtra State Electricity Board (MSEB) and on the payment being received by MSSIDCL from the MSEB – Amended proviso to Section 3 would be applicable in respect of supplies or payments due or payable after 10.08.1998 whereas agreement was entered into between the parties on 30.03.1995 – Even if, for the sake of argument, it is to be accepted that the proviso to Section 3 would be applicable in respect of supplies or payments due or payable after 10.08.1998, the issue with regard to calculation and computation of interest requires examination and determination of the day of acceptance or the day of deemed acceptance, as interest would be payable only after a period of 120days from such date – Held that do not find any good ground and reason to interfere with the conclusion in the impugned judgment passed by the Division Bench of the High Court, setting aside the arbitral award dated 30.06.2003 – Award having been set aside, the provisions of Section 43(4) of the Act, 1996 would come into operation and would accordingly apply – On the question of liability under Section 5 as well, there is a dispute – Principal amount has been paid -Whether under Section 5, interest as compounded is to be treated as a principal amount – This aspect has not been considered in the award passed by the sole arbitrator, which has awarded compound interest on the interest element with monthly rest at 1.5 times the Prime Lending Rate charged by the State Bank of India – Certain payments were made by MSSIDC Land a substantial amount of over Rs.1.30 crores has been paid to/withdrawn by SSPL – It will be open to MSSIDCL to move an application under Section 144 of the Code of Civil Procedure, 1908for restitution or execution, as it may be advised – MSSIDCL would be entitled to enforce the security in case SSPL does not pay or refund the said amount – Appeal liable to be dismissed. (Para 8 to 16)
SUPREME COURT OF INDIA
2024 STPL(Web) 209 SC
[2024 INSC 201]
Snehadeep Structures Pvt. Limited Vs. Maharashtra Small Scale Industries Development Corporation Ltd.
Civil Appeal No. 3856 of 2024(arising out of SLP(C) No. 12063 OF 2018)-Decided on 05-03-2024
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