Telangana High Court
Transmission Corporation Of Andhra ... vs M/S. Sri Paravathi Parameshwar Cables ... on 21 May, 2025
Author: P.Sam Koshy
Bench: P.Sam Koshy, N.Tukaramji
IN THE HIGH COURT FOR THE STATE OF TELANGANA:
HYDERABAD
***
CIVIL MISCELLANEOUS APPEAL Nos.940, 941, 943, 944, 946, 952, 953
& 954 of 2015
Between:
Transmission Corporation of Andhra Pradesh Limited,
(APTRANSCO) Rep. by its Chairman and Managing Director,
Vidyuth Soudha, Somajiguda,
Hyderabad - 500 082 and Others.
Appellants
VERSUS
M/s. Sri Gowri Shankar Cable Industries,
K.M. Valasa - 532 440, Regidiamadalavalasa,
Mandal, Srikakulam District,
Rep. by its Managing Partner and Others.
Respondents
COMMON JUDGMENT PRONOUNCED ON: 21.05.2025
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE N.TUKARAMJI
1. Whether Reporters of Local newspapers
may be allowed to see the Judgments? : Yes
2. Whether the copies of judgment may be
marked to Law Reporters/Journals? : Yes
3. Whether His Lordship wishes to
see the fair copy of the Judgment? : Yes
_________________
P.SAM KOSHY, J
Page 2 of 15
* THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE N.TUKARAMJI
+ CIVIL MISCELLANEOUS APPEAL Nos.940, 941, 943, 944, 946, 952,
953 & 954 of 2015
% 21.05.2025
# Between:
Transmission Corporation of Andhra Pradesh Limited,
(APTRANSCO) Rep. by its Chairman and Managing Director,
Vidyuth Soudha, Somajiguda,
Hyderabad - 500 082 and Others.
Appellants
VERSUS
M/s. Sri Gowri Shankar Cable Industries,
K.M. Valasa - 532 440, Regidiamadalavalasa,
Mandal, Srikakulam District,
Rep. by its Managing Partner and Others.
Respondents
! Counsel for the Appellant(s) : Vikram Pooserla, learned Senior
Counsel representing Mr. Anup
Koushik.
^Counsel for the Respondent(s) : Mr. P. Sri Raghu Ram, learned
Senior Counsel representing
Mr. K. Raghu Babu, learned counsel
for respondent No.1.
<GIST:
> HEAD NOTE:
? Cases referred
1. (2015) 3 Supreme Court Cases 49
2. (2019) 15 Supreme Court Cases 131
3. (2021) 9 Supreme Court Cases 1
4. (2019) 19 Supreme Court Cases 529
5. 2023 SCC OnLine SC Bom 2397
6. (2021) 18 Supreme Court Cases 790
7. (2008) 7 Supreme Court Cases 169
Page 3 of 15
THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE N.TUKARAMJI
CIVIL MISCELLANEOUS APPEAL Nos.940, 941, 943, 944, 946, 952, 953
& 954 of 2015
COMMON JUDGMENT:
(per the Hon'ble Sri Justice P.Sam Koshy)
Since the issue raised in the instant appeals is one and the same, they are
taken up for analogous hearing and are decided by way of this common
judgment.
2. Heard Mr. Vikram Pooserla, learned Senior Counsel representing Mr.
Anup Koushik, learned counsel for the appellants and Mr. P. Sri Raghu Ram,
learned Senior Counsel representing Mr.K. Raghu Babu, learned counsel for
respondent No.1.
3. For convenience, the facts in Civil Miscellaneous Appeal No.940 of 2015
are discussed hereunder.
4. The instant is an appeal under Section 37 of the Arbitration and
Conciliation Act, 1996 (briefly, the 'A&C Act' hereinafter). The challenge is to
the order dated 20.07.2015, in Arb.OP.No.1641 of 2003, passed by the learned
XIV Addl. Chief Judge, (Fast Track Court), City Civil Court, Hyderabad.
5. Vide the impugned order; the learned XIV Addl. Chief Judge had
dismissed the petition filed under Section 34 of the A&C Act by the appellant
herein affirming the award dated 16.11.2002, in Case No. 29/3/1/608, passed by
respondent No.2 / The A.P. Industry Facilitation Council (for short, the
'Facilitation Council').
6. The facts relevant for adjudication of the instant appeal are that the
appellant had made certain purchases of AAA and ACSR Conductors from
respondent No.1 somewhere in the year 1996. The entire demand as raised by
the appellant was duly supplied by respondent No.1. However, after the supply
was made, the appellant failed in honoring the payment schedule and there was
a considerable delay in making the payments and, in addition, there were some
bills also which were outstanding. The respondent No.1, thereafter, filed a claim
petition before the Facilitation Council for an amount of Rs.32,63,673/- along
with interest and also directed the appellant to pay the balance of outstanding
amount. The Facilitation Council after hearing both the parties, vide its award
dated 16.11.2002, allowed the claim petition to the extent of directing the
appellant to pay an amount of Rs.24,14,382/- and also awarded 10% simple
interest post award on the said amount.
7. This award of the Facilitation Council was subjected to challenge by the
appellant under Section 34 of the A&C Act before the learned XIV Addl. Chief
Judge. The learned XIV Addl. Chief Judge dismissed the said petition, leading
to filing of the instant appeal under Section 37 of the A&C Act.
8. The claim petition in the instant case was filed by respondent No.1 before
the Facilitation Council on 10.05.2001.
9. The primary challenge by the appellant before the Facilitation Council as
also before the learned XIV Addl. Chief Judge was that the claim petition was
barred by limitation. The Facilitation Council had not accepted the said
objection primarily on the ground that neither the Interest on Delayed Payments
To Small Scale and Ancillary Industrial Undertakings Act, 1993 (for short, the
'Act of 1993'), nor does the Micro, Small and Medium Enterprises
Development Act, 2006 (for short, the 'Act of 2006') prescribe any period of
limitation for any of the parties to approach Facilitation Council in respect of
their claim. The same view was also accepted by the learned XIV Addl. Chief
Judge while dismissing the Section 34 petition.
10. In the instant appeal, under Section 37 of the A&C Act also, the
contention of the learned Senior Counsel for the appellant is that the aspect of
limitation has not been satisfactorily considered by the learned XIV Addl. Chief
Judge.
11. Learned Senior Counsel for the appellant in support of his contentions
relied upon the following decisions:
a) Associate Developers vs. Delhi Development Authority 1
b) SSangyong Engineering and Construction Company Limited vs.
National Highways Authority of India (NHAI) 2
c) Project Director, National Highways NO. 45 E and 220 National
Highways Authority of India vs. M. Hakeem and Another3
d) Shanti Conductors Private Limited and Another vs. Assam State
Electricity Board and Another4
e) Sonali Power Equipment, Through its Managing Director Shri Vijay
Krushnarao Sontakey vs. Chairman, Maharashtra State Electricity
Board and Others 5
12. Per contra, the learned Senior Counsel for respondent No.1, referring to
Section 10 of the Act of 1993 contended that the provisions under the said Act
have an overriding effect and, therefore, since the Act of 1993 in itself does not
prescribe any period of limitation for approaching the Facilitation Council for
redressal of grievances, it would amount to there being no specified period of
limitation available for a person aggrieved for approaching the Facilitation
(2015) 3 Supreme Court Cases 49
(2019) 15 Supreme Court Cases 131
(2021) 9 Supreme Court Cases 1
(2019) 19 Supreme Court Cases 529
2023 SCC OnLine SC Bom 2397
Council. According to the learned Senior Counsel for respondent No.1, the Act
of 1993 being a special Act, which otherwise does not prescribe any limitation,
therefore, the provisions of Section 43 of the Arbitration and Conciliation Act
or for that matter the provisions of the Limitation Act would not be applicable
to the instant case. In view of the same, learned Senior Counsel for respondent
No.1 contended that the view taken by the Facilitation Council while passing
the award as also the stand taken by the learned XIV Addl. Chief Judge while
rejecting the contention of limitation raised by the appellant was justified.
13. According to the learned Senior Counsel for respondent No.1 the Act of
1993, so also the Act of 2006, does not prescribe any time limit and, therefore,
there cannot be an objection of the claim being barred by limitation. It was also
the contention that the liability that of the appellant is a continuous liability and
therefore is a continuous cause of action as per Section 8 of the Act of 1993 and
Section 22 of the Act of 2006 and, in view of the same, the appellant who is
statutorily bound to acknowledge the liability on day-to-day basis in their pubic
accounts, the question of limitation arising out of such transactions would not
arise at all.
14. Learned Senior Counsel for respondent No.1 in support of his contentions
relied upon the following decisions:
a) Shilpi Industries and Others vs. Kerala State Road Transport
Corporation and Another6
b) Consolidated Engineering Enterprises vs. Principal Secretary,
Irrigation Department and Others 7
15. From plain reading of the order passed by the Facilitation Council what
would be revealed is the fact that so far as the relationship between the appellant
and respondent No.1 being that of purchaser and supplier respectively is not in
dispute. The appellant placed orders with respondent No.1, and the respondent
No.1, in turn had supplied the entire conductors / cables / wires as demanded by
the appellant and the entire supply was duly received by the appellant. The
appellant was, thereafter, for the supply made required to make payment within
30 days from the date of receipt of goods. It is here that the appellant had
defaulted or failed in making the payments. Though, subsequently some
payments were made, since there was a substantial delay in making payments, a
claim petition was filed by respondent No.1 before the Facilitation Council
claiming interest for delayed payments so made and also a claim was raised for
certain outstanding payments to be made.
16. What is also relevant at this juncture is the fact that the Facilitation
Council in the course of adjudicating the matter, framed three issues based on
the pleadings that had come before it, which are as follows:
(2021) 18 Supreme Court Cases 790
(2008) 7 Supreme Court Cases 169
1. Whether the claimant proved beyond doubt that the supplier under
the contract fall within the expression "Small Scale and Ancillary
Industrial Undertakings act"?
2. Whether the claimant established the claim of payment of interest
in accordance with the provisions of the Act?
3. Whether the claimant is entitled to future interest on the
amounts found due as per provisions of the Act?
17. Another aspect which needs appreciation at this juncture is the fact that
respondent No.1 relied upon all the documents and correspondences made
between the parties in respect of purchases and supply made and in respect of
the payments those which were being sought for by respondent No.1. However,
as regards the appellant, except for his statement of defence, there was no
document or evidence which the appellant could lead before the Facilitation
Council in support of his defence or to falsify and get the claim rejected put
forth by respondent No.1. Based upon the documentary evidence available on
record, the Facilitation Council found that there was no dispute so far as the
respondent No.1 having supplied the conductors / cables / wires to the appellant.
There was also no dispute so far as the appellant having not made the payments
within the time prescribed and there was a delay on the part of the appellant in
clearing the dues. There was also no dispute so far as the entitlement of
respondent No.1 under the provisions of the Act of 2003, so also the entitlement
under the Act of 2006 is concerned. There is also no dispute so far as
respondent No.1 falling within the purview of small scale industrial undertaking
in terms of The Industries (Development and Regulations) Act, 1951.
18. It is also necessary at this juncture to take note of the fact that the Act of
2003 and the Act of 2006 were primarily enacted in order to permit and develop
small scale sectors in India. These Acts were enacted to provide and facilitate in
enhancing the competitiveness. These Acts were framed taking into
consideration the inadequate working capital in small scale or ancillary
industrial undertaking and which proved to be an endemic term. Hence, to boost
up their financial condition and with a view to encourage prompt payment of
money by buyers, these statutes were framed providing mandatory payments of
interest of outstanding money in the case of default.
19. When we keep in mind the object and reasons for enactment of the Act of
1993 and the Act of 2006, and also the purpose and intention of having the
Facilitation Councils, we may feel that the finding arrived at by the Facilitation
Council cannot be found fault with. Nonetheless, when we look at the order
passed by the Facilitation Council from the legal point of view, particularly
when hearing an appeal under Section 34 or for that matter under Section 37 of
the A&C Act, what we need to understand is, or what we need to consider is,
'whether the finding of the Facilitation Council as also the Court which has
decided the Section 34 petition so far as holding that the provisions of the
Limitation Act does not apply in proceedings initiated under the Act of 1993 is
valid or not?'
20. We are of the considered opinion that the said matter is no longer res
integra as the Hon'ble Supreme Court has laid to rest the said issue in its
judgment in the case of Shanti Conductors Private Limited and Another
(supra). The Hon'ble Supreme Court in paragraph Nos.79, 80 and 81 has
specifically dealt with the issue, which for ready reference is reproduced
hereunder:
"79. ............The overriding effect was given to the provisions of
the Act which were contained in the Act. Section 10 provided that
overriding effect is given to the provisions of the Act over any inconsistent
law for the time being in force. It simply meant that if there is anything
inconsistent in any other law to the provisions of the Act, the provisions of
the Act shall prevail and override any inconsistent law. For example, when
Section 4 requires payment of interest at particular rate on delayed
payment the said rate shall have overriding effect to rate of interest
provided in any other law."
80..........The trial court fell in error in reading overriding effect given in
Section 10 of the Limitation Act also. There is no provision in the 1993 Act
pertaining to limitation, the provisions of the Limitation Act pertaining to
filing suit shall continue to operate there being nothing contrary or
overriding under the 1993 Act. Section 10 will operate only with regard to
expressed provisions contained in the 1993 Act which shall be given
overriding effect but reading Section 10 to the effect that it shall override
the Limitation Act is not correct interpretation of Section 10 and the trial
court fell in error in relying on Section 10 in holding that the Limitation
Act will not apply.
81. We thus are of the view that the Limitation Act, 1963 is fully applicable
with regard to money suit filed by the appellant hence, the question of
limitation has to be answered as per the Limitation Act, 1963. The
limitation for suit for recovery of interest under the 1993 Act is a suit of
nature which shall be covered by Part X Article 113 of the Schedule which
is to the following effect:
"Part X-Suits for which there is no prescribed period
113. Any suit for which no period of Three years When the right to sue
limitation is provided elsewhere in this accrues"
schedule
21. Recently, the three Judge Bench of the Bombay High Court also had an
occasion of dealing with the said issue in the case of Sonali Power Equipment
(supra), wherein the three Judge Bench while answering a reference made to it,
in paragraph No.72 has held as under:
"72. It was also held that the right to sue accrued not on the date of the
agreement but on the day of supply, considering which it was held that the
claim was barred by time. It is necessary to note that Section 10 of
the Interest on Delayed Payment to the Small Scale and Ancillary
Industrial Undertakings Act, 1993 gave the provisions thereof an
overriding effect. No doubt true that the claims under the Interest on
Delayed Payment to the Small Scale and Ancillary Industrial
Undertakings Act, 1993, mandated the recovery to be made by way of a
suit or other proceeding under any law for the time being in force, by
virtue of Section 6(1) therein, that however does not in any way deter from
the fact that even for claims under the Interest on Delayed Payment to the
Small Scale and Ancillary Industrial Undertakings Act, 1993, the law of
limitation was held to be applicable, in spite of there being nothing in the
said Act of 1993 to indicate its applicability and the overriding effect of
Section 10 thereof was held to mean not to override the Limitation
Act.............................."
The aforesaid view of the Bombay High Court was following the
judgment of the Hon'ble Supreme Court in the case of Shanti Conductors
Private Limited and Another (supra).
22. In the light of the aforesaid authoritative decision by the Hon'ble
Supreme Court and also by the three Judge Bench of the Bombay High Court,
we are of the considered opinion that the finding arrived at by the Facilitation
Council on the aspect of limitation is not proper, legal and valid. Neither is the
decision of the learned XIV Addl. Chief Judge which decided the Section 34
petition legally sustainable. In view of the same, the findings of the Facilitation
Council as also the learned XIV Addl. Chief Judge deserves to be and are
accordingly set aside so far as its finding on the aspect of limitation is
concerned.
23. The next question to be decided is, the consequence of such a finding.
Once when this Bench holds that the finding of the Facilitation Council as also
the learned XIV Addl. Chief Judge to be bad in law on the aspect of limitation,
what needs to be considered is:
1) Whether in fact there was any delay caused on the part of respondent
No.1 in raising the claim before the Facilitation Council?
2) What are the relevant dates which have been brought before the
Facilitation Council as also before the learned XIV Addl. Chief Judge?
3) Some of the relevant dates which would be necessary to decide the period
of limitation are:
a) The dates on which the payments fell due to respondent No.1.
b) The different dates on which the payments were made to
respondent No.1 against each of the purchase order.
c) When was the date on which the appellant had refused to honor the
claim of respondent No.1 so far as the claim for interest on delayed
payment.
4) Keeping in view the aforesaid dates, whether the claim petition filed by
respondent No.1 on 10.05.2001 was barred by limitation under the
Limitation Act?
24. Hence, we are of the considered opinion that for deciding the issue of
limitation, the matter needs to be remanded back wherein the appellant would
show before the Facilitation Council the relevant dates from which the period of
limitation would start and whether the claim was in fact barred by limitation or
not.
25. The instant appeal therefore stands partly allowed. Consequently, the
batch of Civil Miscellaneous Appeals also stand partly allowed.
26. As a sequel, miscellaneous applications pending if any, shall stand
closed. However, there shall be no order as to costs.
_________________
P.SAM KOSHY, J
_________________
N.TUKARAMJI, J
Date: 21.05.2025
Note: L.R. Copy to be marked.
(B/o)GSD
