Interest-only recovery is maintainable under delayed-payment law, but the statute applies only prospectively to later contracts.

A suit for recovery of interest alone was held maintainable under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, because the statutory scheme treats principal and interest as part of one remedial framework and permits interest recovery even after the principal is paid. The Act was also held to be prospective only: as a substantive law creating a new liability and vested right to higher interest, it cannot apply to contracts concluded before its commencement absent express or necessary implication. The relevant date is the supply order or transaction initiation, not merely later supply or payment. The appeals were dismissed.

---

---

Issues: (i) Whether a suit for recovery of interest alone is maintainable under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993; (ii) Whether the Act applies to supply contracts concluded before its commencement when the supplies and delayed payments occurred after its commencement.

Issue (i): Whether a suit for recovery of interest alone is maintainable under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993.

Analysis: The statutory scheme treats the supplier's claim for principal and interest as part of a single remedial framework. Section 6 was construed purposively in light of Sections 3, 4 and 5, and the word "together" was understood to mean "along with" or "as well as", not as restricting relief to cases where principal and interest are simultaneously claimed. The Act was held to create a remedy for recovery of delayed-payment interest even where the principal amount had already been received.

Conclusion: A suit for interest alone is maintainable; the conclusion is against the assessee/supplier's opponents and in favour of the supplier on this issue.

Issue (ii): Whether the Act applies to supply contracts concluded before its commencement when the supplies and delayed payments occurred after its commencement.

Analysis: The Act was treated as a substantive law creating a new liability and a corresponding vested right to claim higher interest. Applying the general presumption against retrospectivity, the Court held that in the absence of express or necessary implication, the statute cannot be given retrospective operation to alter pre-existing contractual arrangements. The relevant date was the date of the supply order or initiation of the transaction, not merely the later date of supply or payment.

Conclusion: The Act does not apply to contracts concluded before its commencement; it applies prospectively to transactions entered into after commencement. This issue is decided in favour of the respondent.

Final Conclusion: The appeals were dismissed, with the Court affirming that while interest-only claims are maintainable under the Act, the Act itself cannot be invoked for supply contracts concluded before its commencement.

---