Broad construction of delayed-payment recovery law allows disputed principal claims and interest to be by the Council.

Under Section 6 of the 1993 Act, the phrase "amount due from a buyer" was construed broadly to include disputed claims for principal as well as statutory interest, so a prior admitted or settled liability was not required before reference. The Industry Facilitation Council, acting as arbitrator or conciliator under Section 6(2) read with the Arbitration and Conciliation Act, 1996, could determine both the principal amount and interest in the same proceeding. The Act was held applicable where the contractual arrangement had been altered after its commencement, and the earlier supply-order dates did not exclude its operation. The comprehensive recovery mechanism for delayed payments was therefore affirmed.

---

---

Issues: (i) Whether the expression "amount due from a buyer, together with the amount of interest" in Section 6 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 confines the remedy to an admitted or settled liability, or also covers disputed claims for the principal amount and interest. (ii) Whether the Industry Facilitation Council had jurisdiction under Section 6(2) to decide the buyer's liability on the principal amount as well as interest, and whether the 1993 Act applied to the transaction in question.

Issue (i): Whether the expression "amount due from a buyer, together with the amount of interest" in Section 6 of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 confines the remedy to an admitted or settled liability, or also covers disputed claims for the principal amount and interest.

Analysis: The expression "amount due" was construed in the setting of Sections 3, 4, 5 and 6 of the 1993 Act, whose object is to secure prompt payment to small scale suppliers and to impose statutory interest for delay. Section 6(1) provides recovery of the amount due together with statutory interest, and Section 6(2) enables reference of disputes to the Industry Facilitation Council as arbitrator or conciliator. The Court held that the statutory scheme contemplates a single remedy for recovery of both principal and interest and does not require a prior adjudication of an admitted, settled or undisputed debt before the reference can be entertained.

Conclusion: The phrase "amount due from a buyer" is not confined to an admitted or settled sum, and the supplier may invoke Section 6(2) even where liability to pay the principal amount is disputed.

Issue (ii): Whether the Industry Facilitation Council had jurisdiction under Section 6(2) to decide the buyer's liability on the principal amount as well as interest, and whether the 1993 Act applied to the transaction in question.

Analysis: Section 6(2) incorporates the Arbitration and Conciliation Act, 1996 and authorises the Council to act as arbitrator or conciliator in respect of the matters referred to in Section 6(1). The Court held that this jurisdiction extends to determination of the principal amount due and the statutory interest. On applicability, the Court found that the contractual arrangement had been altered after the 1993 Act came into force, and therefore the Act applied. The earlier supply-order dates did not displace the later operative contractual position. The High Court's view that the Council lacked jurisdiction because there was no admitted amount due was rejected.

Conclusion: The Industry Facilitation Council had jurisdiction to determine the disputed principal liability and interest, and the 1993 Act applied to the transaction.

Final Conclusion: The statutory scheme was held to provide a comprehensive and self-contained mechanism for recovery of delayed payments and interest, and the High Court's contrary view was set aside.

Ratio Decidendi: Under Section 6 of the 1993 Act, the phrase "amount due from a buyer" includes disputed principal claims arising from goods supplied or services rendered, and the Industry Facilitation Council may determine both principal and statutory interest within the same reference.

---