MODERN INDUSTRIES Vs. STEEL AUTHORITY OF INDIA LTD

JUDGEMENT

(1.) Leave granted.

(2.) Two main questions arise for consideration - first, as to the meaning of the expression, 'amount due from a buyer, together with the amount of interest' under Sub-section (1) of Section 6 of the Interest on Delayed Payments to Small SCALE and Ancillary Industrial Undertakings Act, 1993 (for short, '1993 Act') and then, as to whether the Industry Facilitation Council (IFC) cannot go beyond the scope of interest on delayed payments upon the matter being referred to it by any party to dispute under Sub-section (2) of Section 6.

(3.) M/s. Modern Industries, Rourkela (for short, 'supplier') got an order from the Steel Authority of India Limited - Rourkela Steel Plant (for short, 'buyer') on January 15, 1983 for manufacture of Right Manipulator Side Guard. The order value was Rs. 8.19 lakhs. Inter alia, the terms and conditions of the order were : (i) the job should be done exactly as specified in the drawings; (2) the alignment of bearing housings be made by the supplier and for this purpose, a spare shaft assembly would be issued against indemnity bond for checking the perfect alignment and free rotation of the shaft ; (3) the essentiality certificate would be issued by the buyer; (4) O.S.T./ T.O.T. 5% to be paid extra and (5) 90 per cent payment to be made against the proof of dispatch (R/R) and inspection certificate, balance 10 per cent payment would be made within thirty days after receipt of materials at site in good condition. It appears that initially buyer did not issue raw-materials but later on the buyer on May 28, 1985 agreed to supply the materials free of cost. The supplier also informed the buyer that the drawings were defective. According to the supplier, there was delay in supply of materials and removal of defects from drawings. The buyer ultimately extended the period of supplies till June 4, 1997. It is admitted case of the parties that supplies were made within extended period. The buyer ordered for release of Rs. 6,07, 493/- as an interim payment but deducted the balance payment of Rs. 2,11,506/- out of Rs. 8.19 lakhs of the original order as the cost of the supply of materials. The supplier, accordingly, raised a dispute in respect of balance payment together with interest on delayed payment before IFC under Section 6(2) of 1993 Act.