Upholding the rights of the small-scale industry under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, the Supreme Court has held that such units can demand higher rates of interest from a buyer if there is a delay in making payments for the goods. But the claim cannot be made retrospectively for contracts made prior to the commencement of the Act in September 23, 1993, it clarified, citing two cases: M/s Purbanchal Cables & Conductors Pvt Ltd vs Assam State Electricity Board, and Assam State Electricity Board & Others vs M/s Shanti Conductors Pvt Ltd. The Act aimed at ensuring prompt payment of money by buyers to the small industrial units or an ancillary industrial undertaking who are not paid on time even after supplies are effected and accepted and hence had to suffer severe financial crunch. In one of the cases, Purbanchal received payments from the electricity board only for initial supplies made before December 1992. The manufacturer had filed a recovery suit before a trial court, which granted compound interest at the rate of 18.25% per annum plus interest of 5% above the rate of interest. However, the Gauhati High Court set aside the order. The suppliers submitted that there is extrinsic evidence to show that the Act would apply even to those contracts that were executed prior to September 1992 but where supplies were made after the Act came into force.
Horse racing fee hike upheld
Upholding the Delhi governments power to hike the licence fee for horse racing and arranging betting on races, the Supreme Court has held that such a fee is not a tax but is regulatory in nature. The apex court in the case of Delhi Race Club Ltd vs Union of India said that, The nature of the impost is not merely compulsory exaction of money to augment the revenue of the state but its true object is to regulate, control, manage and encourage the sport of horse racingit is a reasonable increase keeping in view the fact that the expenditure incurred by the government in carrying out the regulatory activities for attaining the object of the Act would have proportionately increased.
After the Commissioner of Excise, Entertainment & Luxury Tax issued a demand letter informing the club that the licence fee deposited by it was short by around R36 lakh for 2001-03, the club challenged the validity of Section 11(2) of the Act that enhanced the licence fee rates. The Delhi High Court dismissed its plea by holding that the licence fee is not a compensatory fee but is in the nature of a regulatory fee and therefore would not require any quid pro quo in the form of any social service.
Higher damages to road mishap claimants
Invoking its inherent powers to grant higher compensation in a motor vehicle accident claim, the Supreme Court took a serious note of sufferings of a family fighting for compensation on the death of its sole bread winner in 1992. It awarded a whopping compensation of R10.63 lakh to the claimants, after dismissing the appeal of New India Assurance Co Ltd, which raised doubts about the validity of the licence of the truck driver who caused the accident, negligence and a host of other technical issues. The apex court directed the insurer to pay the enhanced compensation within six weeks, failing which it asked the Rajasthan High Court to initiate contempt proceedings against the company. It also observed that, This is perhaps the thinking of many thousands of poor litigants, who succeed in the courts below and the high courts but cannot afford the cost and expenses of contesting litigation in the highest court of the country and suffer silently in the name of the almighty God by treating it as their destiny. Earlier, the high court enhanced the amount to R6.45 lakh from R2.55 lakh awarded by the Motor Accidents Claims Tribunal. Even then the claimants could not get that as the company appealed to the Supreme Court, where the case was pending for over five years.