Retrospective liability for delayed-payment interest does not apply to pre-commencement contracts without clear legislative intent.

A statute creating a new liability for higher interest on delayed payments was treated as non-retrospective in the absence of clear legislative intent, so the controlling date was the supply order or concluded transaction rather than the later payment date. On that reasoning, pre-commencement contracts did not attract interest merely because payment was delayed after the Act came into force. The discussion also notes that dismissal of an earlier appeal did not make the Full Bench view binding on retrospective application, because the appellate decision did not approve that reasoning. The resulting decree was set aside and the interest claim failed on transactions concluded before commencement.

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Issues: (i) Whether the Interest on Delayed Payments to Small Scale and Ancillary Undertakings Act, 1993 applies to contracts concluded before its commencement where payment was made later; (ii) Whether the dismissal of the earlier appeal by the Supreme Court made the Full Bench ruling binding so as to sustain the decree.

Issue (i): Whether the Interest on Delayed Payments to Small Scale and Ancillary Undertakings Act, 1993 applies to contracts concluded before its commencement where payment was made later.

Analysis: The Act creates a new liability of higher interest and, in the absence of express legislative intendment, cannot be given retrospective effect. The controlling date is the date of the supply order or concluded transaction, not the later date on which payment was made. The earlier view that delayed payment after commencement of the Act could attract interest even under a pre-commencement contract was held not to be the correct position.

Conclusion: The Act did not apply to the present transactions, so the suit for interest was not maintainable against the appellant on that basis.

Issue (ii): Whether the dismissal of the earlier appeal by the Supreme Court made the Full Bench ruling binding so as to sustain the decree.

Analysis: The doctrine of merger requires the later appellate decision to be read as a whole. The Supreme Court decision did not approve the Full Bench view on retrospective application of the Act to pre-commencement contracts; rather, it rejected that approach. Mere dismissal of the appeal did not preserve the earlier Full Bench conclusion on the point now in issue.

Conclusion: The Full Bench ruling could not be treated as supporting the decree in the present case.

Final Conclusion: The impugned decree was set aside and the appeal succeeded because the statutory claim for interest could not be sustained on transactions concluded before the Act commenced.

Ratio Decidendi: A statute imposing a new liability for delayed-payment interest is not retrospective unless the legislature clearly says so, and a pre-commencement supply contract does not attract that liability merely because payment was made later.

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