STATE OF GUJARAT Vs. REGAL SCALE INDUSTRIES

JUDGEMENT

(1.) The present appeal under Sec. 100 of the Code of Civil Procedure, 1908 (for short 'C.P.C.') was filed by State of Gujarat through Home Department with Gujarat Small Industries Corporation Ltd. as appellant No.2, challenging the judgment and decree dtd. 13/12/2005, passed by the Presiding Officer, Fast Track Court, Rajkot in Regular Civil Appeal No.43 of 2005. By the impugned judgment, the learned Judge, dismissed the appeal and confirmed the order dtd. 5/9/2000 passed by learned 5th Joint Civil Judge (S.D.), Rajkot in Civil Suit No.217 of 1988, and allowed the Cross Objections filed by the respondent, M/s.Regal Scale Industries - original plaintiff. The plaintiff's decretal amount for Rs.1,89,317.51 was ordered to be recovered from the present appellants - original defendants with 22.25% compound interest with monthly interest (after 30 days expiry period from date of delivery i.e., 11/11/1983 and 5/2/1984). The rest of the judgment and decree was confirmed.

(2.) The facts of the case in nutshell are as under:

(3.) Mr. Aakash Gupta, learned AGP for the appellants relying on the judgments of Rampur Fertiliser Ltd. Vs. Vigyan Chemicals Industries, decided on 18/2/2009 by the Hon'ble Supreme Court in Civil Appeal No.1101 of 2009 (Arising out of SLP (C) No.17893 of 2007), submitted that the judgment of Assam Small Scale Ind. Dev. Corp. Ltd. and Ors. Vs. J.D. Pharmaceuticals and Ors. decided on 7/10/2005 by the Hon'ble Supreme Court in Civil Appeal No.6324 of 2005 (Arising out of S.L.P. (C) No.3950 of 2005), were considered by the Apex Court, and the Act, called as Interest on delayed payment to Small Scale and Ancillary Industrial undertaking Act, 1993, was examined along with Sec. 34 of the Code of Civil Procedure, 1908, where in the case the appellant had claimed interest at the rate of 18% per annum, and when subsequent to the Act w.e.f. 23/9/1992, an amendment was sought in the plaint, which was allowed by the trial Court. 3.1 Learned AGP submitted that the Apex Court in the judgment had very categorically observed that such amendment ought not to have been allowed, as the said provision of Act was not applicable to the facts and circumstances of the case. Mr. Gupta, learned AGP, thus stated that the rate of interest which the appellant was considered to be entitled was in accordance to the provision of Sec. 34 of C.P.C., and, thus stated that in relation to the transaction made prior to coming into force the Delayed Payment Act, simple interest at the rate of 9% per annum was granted, taking the same to be the Bank rate at the relevant time, therefore, in view of the legal proposition, it was held therein that the High Court was not justified in granting interest at the rate of 18% per annum with monthly rest. Mr. Gupta, learned AGP, stated that considering the facts and circumstances, the Apex Court had, thus, directed that pendente lite and future interest at the rate of 9% shall be paid.