[32 of 1993, dated 2nd. April, 1993]
An Act to provide for and regulate
the payment of interest on delayed Payments to small scale and
ancillary industrial undertakings and for matters connected
therewith or incidental thereto.
Comment: This Act has been
enacted inter-alia to
provide for and regulate the payment of interest on delayed Payments
to small scale and ancillary industrial undertaking.
Be it enacted by Parliament in the
Forty-fourth year of the Republic of India as follows: -
1. Short title, extent and
commencement
(1) This Act may be called the Interest
on Delayed Payments to Small Scale and Ancillary Industrial
Undertakings Act, 1993.
(2) It extends to the whole of India
except the State of Jammu and Kashmir.
(3) It shall be deemed to have come into
force at once on 23rd day of September, 1992.
2. Definitions
In this Act, unless the context otherwise
requires,
(a) "ancillary industrial undertaking"
has the meaning assigned to it by clause (aa) of section 3 of the
Industries (Development and Regulation) Act, 1951 (65 of 1951);
(b) "appointed day" means the day
following immediately after the expiry of the period of thirty days
from the day of acceptance or the day of deemed acceptance of any
goods or any services by a buyer from a supplier.
Explanation: For the purposes of
this clause,-
(i) "the day of acceptance" means,
(a) the day of actual delivery of goods
or the rendering of services; or
(b) where any objection is made in
writing by the buyer regarding acceptance of goods or services
within thirty days from the day of the delivery of goods or the
rendering of services, the day on which such objection is removed by
the supplier;
(ii) "the day of deemed acceptance"
means, where no objection is made in writing by the buyer regarding
acceptance of goods or services within thirty days from the day of
the delivery of goods or the rendering of services, the day of the
actual delivery of goods or the rendering of services;
(c) "buyer" means whoever buys any goods
or receives any services from a supplier for consideration;
(d) "goods" means every kind of movable
property other than actionable claims and money;
(e) "small scale industrial undertaking"
has the meaning assigned to it by clause (j) of section 3 of the
Industries (Development and Regulation) Act, 1951 (65 of 1951);
(f) "supplier" means an ancillary
industrial undertaking or a small scale industrial undertaking
holding a permanent registration certificate issued by the
Directorate of Industries of a State or Union Territory.
3. Liability of buyer to make
payment
Where any supplier supplies any goods or
renders any services to any buyer, the buyer shall make payment
therefor on or before the date agreed upon between him and the
supplier in writing or, where there is no agreement in this behalf,
before the appointed day.
4. Date from which and rate at
which interest is payable
Where any buyer fails to make payment of
the amount to the supplier, as required under section 3, the buyer
shall, notwithstanding anything contained in any agreement between
the buyer and the supplier or in any law for the time being in
force, be liable to pay interest to the supplier on that amount from
the appointed day or, as the case may be, from the date immediately
following the date agreed upon, at such rate, which is five per cent
points above the floor rate for comparable lending.
Explanation: For the purposes of
this section, "floor rate for comparable lending" means the highest
of the minimum lending rates charged by scheduled banks (not being
co-operative banks) on credit limits in accordance with the
directions given or issued to banking companies generally by the
Reserve Bank of India under the Banking Regulation Act, 1949 (10 of
1949).
5. Liability of buyer to pay
compound interest
Notwithstanding anything contained in any
agreement between a supplier and a buyer or in any law for the time
being in force, the buyer shall be liable to pay compound interest
(with monthly interest) at the rate mentioned in section 4 on the
amount due to the supplier.
6. Recovery of amount
due
The amount due from a buyer, together
with the amount of interest calculated in accordance with the
provisions of sections 4 and 5 shall be recoverable by the supplier
from the buyer by way of a suit or other proceeding under any law
for the time being in force.
7. Appeal
No appeal against any decree, award or
other order shall be entertained by any Court or other Authority
unless the appellant (not being a supplier) has deposited with it
seventy-five per cent of the amount in terms of the decree, award
or, as the case may be, other order in the manner directed by such
Court, or, as the case may be, such authority.
8. Requirement to specify unpaid
amount with interest in the annual statement of accounts
Where any buyer is required to get his
annual accounts audited under any law for the time being in force,
such buyer shall specify the amount together with interest in his
annual statement of accounts as remains unpaid to any supplier at
the end of each accounting year.
9. Interest not to be allowed as
deduction from income
Notwithstanding anything contained in the
Income Tax Act, 1961, the amount of interest payable or paid by any
buyer, under or in accordance with the provisions of this Act, shall
not, for the purposes of computation of income under the Income Tax
Act, be allowed as deduction.
10. Overriding effect
The provisions of this Act shall have
effect notwithstanding anything inconsistent therewith contained in
any other law for the time being in force.
11. Repeal and saving
The Interest on Delayed Payments to Small
Scale and Ancillary Industrial Undertakings Ordinance, 1993
(Ordinance 4 of 1993) is hereby repealed. Notwithstanding such
repeal, anything done or any action taken under the Ordinance so
repealed shall be deemed to have been done or taken under the
corresponding provisions of this Act.