STATE OF BIHAR Vs. SHAKTI TUBES LTD

JUDGEMENT

(1.) This appeal is directed against the judgment and decree dated 18-1-2000 passed by Sub-Judge-I, Patna in Money Suit No. 131 of 1997 decreeing the suit on contest with cost.

(2.) Brief facts of the case are that M/s. Shakti Tubes Limited Company, sole respondent, filed Money Suit No. 131 of 1997 in the Court of sub-Judge-I, Patna stating therein that it is a company incorporated under the Companies Act and is Small Scale Industry and has been registered as such by Industries Department, Government of Bihar, and is manufacturing Mild Steel Black Pipes. Minor Irrigation Department. Government of Bihar of which appellants No. 2, 3 and 4 are Secretary, Additional Secretary and Chief Engineer, respectively issued notice inviting tenders for supply of 25 lakh metres of Mild Steel Black Pipes of 4" (100 mm) dia.. nominal bore and of thickness 3.60 mm. In pursuance of notice inviting tender the respondent as well as others submitted tenders in prescribed proforma and tender of respondent was accepted and order was given to it for supply of 1 lac metres of Mild Black Steel Pipes in the manner that 30,000 metres pipes were to be supplied at Bettiah. 20,000 metres at Vaishali and 50,000 metres at Buxar. Appellant No. 4 issued supply order to respondent vide his letter No. 443 dated 17-3-94 (Ext.2) on the terms and conditions noted therein. In pursuance of this order of supply an agreement was duly executed by respondent and appellant No. 4 on 18-3-94 incorporating the terms and conditions of supply (Ext. 3). As per order of supply as well as agreement duly executed between the parties 90 per cent of value of materials supplied was to be paid on receipt of the materials and balance 10 per cent was to be paid after full verification of the same within one month from the date of receipt of the materials. Appellant No. 4 by his letter No. 483 dated 23-3-94 (Ext.2/B) made certain amendments with regar to quantity of materials to be supplied at different places and by this amendment out of one lakh metres pipes, 40,000 metres were to be supplied at Bettiah, 20,000 metres each were to be supplied at Vaishali, Buxar and Bhagalpur. The other terms and conditions remained the same. Respondent as per supply order issued by appellant No. 4 supplied Mild Steel Black Pipes within the stipulated time at the places mentioned in the order. But so far payment is concerned, the respondent received payment for materials supplied to Bhagalpur district in time except the central excise duty paid by respondent over the materials but payments of materials supplied at other districts respondent did not receive payment in time as per the terms and conditions of the agreement and there was delay in making payment. The case of respondent is that after supply of materials to the district of Bettiah, it submitted bills vide Bill No. 326/93-94 dated 31 -3-94 for Rs. 28,14,938.25 and Bill No. 329/93-94 dated 31-3-94 for Rs. 7.02,993.15, the total being Rs. 35,17,931.40 as the cost of materials supplied as per the rate fixed in the order of supply followed by agreement and as per the terms 90 per cent of cost of materials supplied was to be paid on the date of receipt of materials supplied i.e. 31-3-94 when the bills were submitted after supply of materials but the payment of 90 per cent was made to respondent by District Magistrate. Bettiah (Appellant No. 7) on 8-4-95 and balance amount was paid on 19-6-95. For the materials supplied to district of Buxar the respondent submitted bills vide Bill No. 328 dated 31-3-94 for Rs. 19,34,931.66 and Bill No. 330 dated 31-3-94 for Rs. 14,81.661.99, total being Rs. 34,16,593.65 out of which Rs. 30 lacs was paid to respondent on 25-3-95, Rs. 4 lacs was paid on 29-3-95 and rest amount i.e. Rs. 16,593.65 was paid on 19-4-95. For the materials supplied to district of Vaishali the respondent submitted Bill No. 321 dated 31-3-94 for Rs. 15,96,218.62, Bill No. 325 dated 31-3-94 for Rs. 12,69,957.54 and Bill No. 327 dated 31-3-94 for Rs. 6,51,823.84, the total amounting to Rs. 35,18,000/- but the payments were made in the manner that 15 Lakh was paid on 20-4-94, 1 lakh was paid on 30-6-94, 2 lakh was paid on 1 -7-94, 7 lakh was paid on 23-2-95 and Rs. 10,18,000 was paid on 22-3-95. The case of respondent is that none of the amounts of the aforesaid bills was paid in due time as per the order of supply and agreement and there was sufficient delay by appellants in making payments and the respondent therefore being small scale industry became entitled for payment of interest on delayed payment according to the provisions of Section 4 of The Interest On Delayed Payments of Small Scale and Ancillary Industrial Undertakings Act, 1993 (hereinafter to be referred to as 'the Act') at the rate as provided in Section 5 of the Act. The case of the respondent was that because payment was not made within the time, therefore, appellants were liable to pay the interest on delayed payment, the total amounting to Rs. 39,21,729.00 as per detailed chart given in Schedule-I of the plaint and because in spite of repeated requests by respondent for payment of interest the appellants did not take any step the respondent filed CWJC No. 3757 of 1995 before this Court. It also served notice dated 18-6-97 to appellant under Section 80 of the Code of Civil Procedure (in short CPC) through its lawyer but in spite of it appellants failed to make payment of interest over delayed payments. This Court by its order dated 20-10-97 permitted the respondent to withdraw the writ application with direction to file suit before the competent civil Court and also passed order to exclude the period spent before this Court from 26-5-95 to 20-10-97 for computing the period of limitation if application under Section 14 of the Limitation Act is filed. The case of respondent was that although there was no limitation in filing the suit but it filed petition under Section 14 of the Limitation Act. The further case of respondent was that in Column 9 offender it had been clearly noted that at the time of submitting tender there was no excise duty on 100 mm mild steel black pipes but in case it is levied in future by Government at the time of delivery it will be charged extra and during supply of pipes by respondent to appellants the Central Excise Department, Government of India imposed Excise Duty on M.S. Black Pipes and after supply in part made by the respondent the exit of pipes from the manufacturing place of respondent was allowed on payment of central excise duty and. therefore, respondent supplied the balance pipes to appellant after making payment of central excise duty amounting to Rs. 15,76,131.68. The respondent after making supply of materials demanded the amount of central excise duty which was paid by it from appellant No. 4 who agreed and accepted to make payment of the amount of excise duty to respondent and by his letter No. 930 dated 2-8-94 (Ext.2/D), demanded the excise gate pass to verify the payment of actual amount of excise duty paid by respondent in respect of materials supplied and respondent accordingly submitted copies of duty paid including gate passes which were 68 in numbers showing payment of Rs. 15,76,131.68 as excise duty and since thereafter respondent was insisting orally and by writing letters for payment of amount of excise duty and since the assurances were always given to respondent for payment of excise duty, therefore, while filing CWJC No. 3757/1995 respondent did not include the amount of excise duty in his claim or in the plaint of the suit but because appellants refused to pay the amount of excise duty, therefore, respondent by amendment got the amount of excise duty included in the suit after serving notice under Section 80 CPC for claiming excise duty. On all these grounds respondent claimed decree for Rs. 39,21,729.00 as delayed payment interest, decree for Rs. 15,76,131.68 being excise duty paid by it, decree for interest from 1-11-97 and pendente lite and future interest till its realisation at the rate of 24 per cent compound interest with monthly rests.

(3.) Appellants appeared and contested the suit by filing written statement stating therein that suit as framed was not maintainable. The suit was barred for non joinder of necessary parties, suit was barred by Special Relief Act and also barred by waiver, acquiescence and estoppel. The appellants in their written statement admitted that Minor Irrigation Department, Government of Bihar, had invited tenders for supply of 25 lakh metres of 4" dia. Mild Steel Black Pipes and respondent submitted tender which was accepted and respondent was given supply order for supply of 1 lac metres of 4" M S B Pipes to three districts namely, Bettiah, Vaishali and Buxar. They further accepted that as per the terms and conditions 90 per cent of payment of the value of materials was to be paid on receipt of the materials and balance 10 per cent was to be paid after full verification of the same within one month after receipt of the materials.