MIS SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE ELECTRICITY BOARD & ORS.

38. The 1993 Act, thus, will have no application in relation to the transactions entered into between June 1991 and 23- B 9-1992. The trial court as also the High Court, therefore, committed a manifest error in directing payment ofinterest at the rate of23% up to June 1991 and 23.5% thereafter.

39. xxx xxx xxx

40. We, therefore, are of the opinion that in relation to the c transactions made prior to coming into force of the said Act, simple interest at the rate of 9% per annum, which was the bank rate at the relevant time. shall be payable both prior to date of filing of the suit and pendente lite and as future interest in terms of Section 34 of the Code of D Civil Procedure. Interest, however, will be payable in terms of the provisions of the 1993 Act (compound interest at the rate of 23 .5% per annum) in relation to the transactions made after corning into force of the Act, both in respect of interest payable up to the date of institution of the suit and pcndente lite and till realisation. The judgment and decree to that extent requires to be modified. It is directed accordingly." Th is Cou11 has c Iearly laid down that when payments are not made in terms of section 3, section 4 would apply. The Act came into force w.e.f. 23.9.1992 and would not apply to transactions which took place prior to that date and interest at the rate of 23 per cent was disallowed on the transactions 'entered' into between June, 1991 and 23.9.1992.

14. In Shakti Tubes (supra) again, the question whether the Act is prospective or retrospective, came up for consideration before a G Division Bench of this Court. Supply orders were made on 16.7.1992. Decree for payment of interest was passed at the rate of 24 per cent in terms of the Act of 1993. This Court held that the Act is prospective and is not applicable to cases where supply orders were placed before the date of commencement of the Act. Therefore, it was held that the H

408 SUPREME COURT REPORTS [2016] 6 S.C.R.

A provisions of section 34 CPC would be applicable. The Court has consciously held after elaborate consideration of the provisions that the Act is applicable with reference from the date of initiation of the transaction, that is when the supply order was made and not with reference to date of completion of the transaction. This Court has also explained the term 'transaction' used in Assam Small Scale Industries' B case (supra) to mean date of supply order. This Court has also considered retrospective applicability of'welfare legislation'. This Court has followed the decision in Assam Small Scale lndustries's case (supra) and has laid down in Shakti Tubes (supra) thus : "17. In the light of the said facts in Assam Small Scale c Industries case (2005) 13 SCC 19, it was recorded in para 37 of the judgment that while the Act came into effect from 23-9-1992, the supply orders were placed only in respect of SI. Nos. I to 26 immediately and before coming into effect of the Act and rest of the supply orders, namely, supply orders at SI. Nos. 2 7 to 71 were placed between 22- 10-1992 to 19-6-1993 which were subsequent to the date when the Act came into force. In that context, it was clearly recorded in thejudgmentthatthe Act will have no application to the transactions that took place prior to the commencement of the Act. In the next sentence the court made it clear as to what is referred to and understood by the expression "transaction" when it clearly stated that out of7 I transactions, SI. Nos. 1 to26 i.e. supply orders between 5-6-1991 to 28-7-1992 being prior to 23-9-1992 when the Act came into force, higher interest as envisaged under F Sections 4 and 5 of the Act cannot be paid and demanded in respect of the said supply orders/transactions. It was also made clear that the transactions at SI. Nos. 27 to 71 only i.e. supply orders between 22-10-1992 to 19-6-1993. would attract the provisions of the Act. Therefore, those supply orders which were issued by the Corporation between G 22-10-1992 to 19-6-1993 were held to be the transactions which would be entitled to get the benefit of the provisions of the Act.

18. In our considered opinion, the ratio of the aforesaid decision in Assam Small Scale Industries case (supra) is H

MIS SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 409 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

clearly applicable and would squarely govern the facts of the present case as well. The said decision was rendered by this Court after appreciating the entire facts as also all the relevant laws on the issue and therefore, we do not find any reason to take a different view than what was taken by this Court in the aforesaid judgment. Thus, we respectfully agree with the aforesaid decision of this Cowt which is found to be rightly arrived at after appreciating all the facts and circumstances of the case. xxxxx

20. Being faced with the aforesaid situation, the learned c Senior Counsel appearing for the appel !ant-plaintiff sought to submit before us that the decision of this Court in Assam Small Scale fodustries case (supra) refers to the expression "transactions". According to him, the transactions would be complete only when the appellant-plaintiff made the supply and since the supply was made in the instant case after coming into force of the Act, the appellant-plaintiff would be entitled to the benefit of Sections 4 and S of the Act. Refuting the aforesaid submission. the learned Senior Counsel appearing for the respondents submitted that the aforesaid contention is completely misplaced. He pointed out that if such a meaning, as sought to be given by the learned Senior Counsel appearing for the appellant-plainti rt: is accepted that would lead to giving benefit of the provisions of the Act to unscrupulous suppliers who, in order to get the benefit of the Act, would postpone the delivery of the goods on one pretext or the other. F

21. We have considered the aforesaid rival submissions. This Court in Assam Small Scale Industries case (supra) has finally set at rest the issue raised by stating that as to what is to be considered relevant is the date of supply order placed by the respondents and when this Court used the G expression ·•transaction" it only meant a supply order. The Court made it explicitly clear in para 37 of the judgment which we have already extracted above. In our considered opinion there is no ambiguity in the aforesaid judgment passed by this Court. The intent and the purpose of the I-I

410 SUPREME COURT REPORTS [2016] 6 S.C.R.

A Act, as made in para 3 7 of the judgment. are quite clear and apparent. When this Court said "transaction'' it meant initiation of the transaction i.e. placing of the supply orders and not the completion of the transactions which would be completed only when the payment is made. Therefore, the submission made by the learned Senior Counsel appearing 8 for the appellant-plaintiff fails.

22. Consequently, we hold that the supply order having been placed herein prior to the coming into force of the Act, any supply made pursuant to the said supply orders would be governed not by the provisions of the Act but by c the provisions of Section 34 CPC.

23. At one stage, the learned Senior Counsel appearing for the appellant-plaintiff submitted that the Act in question is a beneficial legislation and, therefore, a liberal interpretation and wider meaning is to be given to such a D beneficial and welfare legislation so as to protect the interest of the supplier who is being kept on a higher pedestal by giving a higher benefit in the Act.

24. Generally. an Act should always be regarded as prospective in nature unless the legislature has clearly intended the provisions of the said Act to be made applicable with retrospective effect. •· 13. It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation. [The aforesaid) rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the legislature to affect existing rights, it is deemed to be pro~pective only-1111va c1111s1i1111i11 .fz1111ris ji1r111a111 G impo11ere debet 11011 praeteritis-a new law ought to regulate what is to follow, not the past. (See Principles of !itatutory lnterpretati1111 by Justice G.P. Singh, 9th Edn., 2004 at p. 438.) It is not necessary that an express provision be made to make a statute retrospective and the H

M/S SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 411 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

presumption against retrospectivity may be rebutted by A necessary implication especially in a case where the new law is made to cure an acknowledged evil for the benefit of the community as a whole (ibid., p. 440).''*

25. In Zile Singh v. State of Haryana (2004) 8 SCC I at p. 9, this Court observed as follows: (SCC pp. 9-10, paras B 15-16) "15. Though retrospectivity is not to be presumed and ratherthere is presumption against retrospectivity, according to Craies (Statute Lmt', 7th Edn.), it is open for the legislature to enact laws having retrospective operation. This can be c achieved by express enactment or by necessary implication from the language employed. !fit is a necessary implication from the language employed that the legislature intended a particular section to have a retrospective operation. the courts will give it such an operation. In the absence of a retrospective operation having been expressly given, the D cou11s may be called upon to construe the provisions and answer the question whether the legislature had sufficiently expressed that intention giving the statute retrospectivity. Four factors are suggested as relevant: (i) general scope and purview of the statute; (ii) the remedy sought to be E applied; (iii) the former state of the law: and (iv) what it was the legislature contemplated. (p. 388) The rule against retrospectivity does not extend to protect from the effect of a repeal, a privilege which did not amount to accrued right. (p. 392) r

16. Where a statute is passed for the purpose of supplying an obvious omission in a former statute or to 'explain' a former statute, the subsequent statute has relation back to the time when the prior Act was passed. The rule against retrospectivity is inapplicable to such legislations as are explanato1y and declaratory in nature. A classic illustration G is Attorney General v. Pougett ( 1816) 2 Price 381 : 146 ER 130 (Price at p. 392). By a Customs Act of 1873 (53 Geo. 3. c. 33) a duty was imposed upon hides of9s 4d, but the Act omitted to state that it was to be 9s 4d per cwt.. and to remedy this omission another Customs Act (53 Geo. 3, H

412 SUPREME COURT REPORTS [2016] 6 S.C.R.

A c. 105) was passed later in the same year. Between the passing of these two Acts some hides were exported, and it was co.ntended that they were not liable to pay the duty of9s 4d per cwt., but Thomson, C.B., in giving judgment for the Attorney General, said: (ER p. I34) B 'The duty in this instance was, in fact, imposed by the first Act; but the gross mistake of the omission of the weight, for which the sum expressed was to have been payable, occasioned the amendment made by the subsequent Act: but that had reference to the former statute as soon as it passed, and they must be taken together as if they were c one and the same Act;' (Price at p. 392)"

26. There is no dispute with regard to the fact that the Act in question is a welfare legislation which was enacted to protect the interest of the suppliers especially suppliers of the nature of a small-scale industry. But. at the same D time. the intention and the purpose of the Act cannot be lost sight of and the Act in question cannot be given a retrospective effect so long as such an intention is not clearly made out and derived from the Act itself."

15. The case of appellant - Mis. Shanti Conductors Pvt. Ltd. E arose out of same lis which was decided along with Purbu11chal Cables (supra) in which a Division Bench of this Court has similarly answered the questions involved conclusively before remanding the matter to High Court for deciding the appeals. The factual background of Mis. Shanti Co11duc1ors (P) Ltd. case has been duly considered by this Cou11. It is apparent from the judgment that this Court has dealt with appeals filed by both the appellants and with respect to retrospective operation of the Act has laid down thus : "Retrospective operation of the Act

32. The fundamental rule of Jnstruction is the same for all statutes whether fiscal or otherwise. The underlying principle is thatthe meaning and intention ofa statute must be collected from the plain and unambiguous expression used therein rather from any notion. To arrive at the real meaning, it is always necessary to get an exact conception, scope and object of the whole Act. H

MIS SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 413 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

33. In Zile Singh v. State of Haryana (2004) 8 SCC I A this CoUJ1 observed that there were four relevant factors which needed to be considered while considering whether a statute applied prospectively or retrospectively: (SCC p. 9, para 15) "I 5 . ... Four factors are suggested as relevant: (i) general B scope and purview of the statute; (ii) the remedy sought to be applied; (iii) the former state of the law: and (iv) what it was the legislature contemplated."

34. The general scope of the Act has been discussed above. The remedy sought to be applied by the Act is made c clear in the Statement of Objects and Reasons, in which, it is stated that due to the delayed payments by buyers to the small-scale industries, their working capital was being affected, causing great harm to the small-scale industries in general. This Act was passed by Parliament to impose a heavy interest on the buyers who delayed the payments of D the small-scale industries, in order to deter the buyers from delaying the payments after accepting the supplies made by the suppliers.

35. The policy statement of the Ministry of Micro, Small and Medium Enterprises dated 6-8-1991, reads: E ·"3. (3.4) A beginning has been made towards solving the problem of delayed payments to small industries by setting up of 'factoring' services through Small Industries Development Bank of India (SIDBI). Network of such · services would be set up throughout the country and operated through commercial banks. A suitable legislation will be introduced to ensure prompt payment of small industries' bills."

36. Keeping in view the above object. the Act was enacted by Parliament. Before such enactment, it is required to examine rights of the supplier qua the buyer prior to the commencement of the Act. In case of delayed payment, the supplier, prior to the commencement of the Act, was required to file a suit forthe payment of the principal amount, an~ could claim interest along with the principal amount. H

414 SUPREME COURT REPORTS [2016) 6 S.C.R.

A The supplier could avail of the same under Section 34 of the Code of Civil Procedure, 1908 (hereinafter referred to ·as "CPC"). Section 61 of the Sale of Goods Act, 1930 and Section 3 of the Interest Act, 1978.

37Copy pinpoint37. In other words, the supplier whose payment was B delayed by the buyer prior to the commencement of the Act, could file a suit for payment of the principal amount along with the interest. The supplier, thus, had the vested right to claim the principal amount along with interestthereon in case of a delay in payment by the buyer and it was the discretion of the court to award this interest. c

38Copy pinpoint38. The comt has the discretion to award interest along with the principal amount and the same is clear from the use of the word "may" in all the three provisions cited above. Section 34 CPC is the main provision under which interest could be awarded by the court and Section 61 of the Sale D of Goods Act, 1930 is an offshoot of Section 34 CPC. Section 3 of the Interest Act, 1978 also makes the Interest Act subject to the provision of Section 34 CPC. Hence, we can safely deduce that the interest awarded is a discretion exercised by the court, on the principal amount claimed, in case of a suit for recovery of payment by the supplier if such payment is delayed by the buyer.

39Copy pinpoint39. With the commencement of the Act, a new vested right exists with the supplier, that being, if there is delay in payment after the acceptance of the goods by the buyer, the supplier can file a suit for claiming interest at a higher rate, as prescribed by the Act. This position has been approved by this Court in Modern Industries (2010) 5 SCC

44. If a suit for interest simpliciter is maintainable as held by this Court in Modern Industries (supra), then a new liability qua the buyer is created with the commencement (j of the Act giving a vested right to the supplier in case of delayed payment. In other words, if there is a delayed payment by the buyer, then a right to claim a higher rate of interest as prescribed by the Act accrues to the supplier.

40Copy pinpoint40. The phrase "vested right" has been defined by this H

MIS SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 415 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

Court in Bibi Sayeeda v. State of Bihar ( 1996) 9 SCC 516 A as: (SCC p. 527, para 17) "17. The word 'vested' is defined in Black's Law Dictionary (6th Edn.) at p. 1563 as: ·vested; fixed; accrued; settled: absolute; complete. Having the character or given the rights of absolute B ownership; not contingent; not subject to be defeated by a condition precedent.' Rights are 'vested' when right to enjoyment, present or prospective, has become prope11Y of some particular person or persons as present interest; mere expectancy of future c benefits, or contingent interest in prope11y founded on anticipated continuance of existing laws, does not constitute vested rights .. In Websters Comprehensive Dictionary (International Edn.) at p. 1397 'vested' is defined as: '[L ]aw held by a tenure subject to no contingency; D complete; established by law as a permanent right; vested interests."'

41Copy pinpoint41. A statute creating vested rights is a substantive statute. This Court, in Dhe11ka11al Minor Irrigation Division v. N. C. Budharaj (200 I) 2 SCC 721, opined: (SCC p. 742, E para 23) "23 . ... 'Substantive law', is that part of the law which creates, defines and regulates rights in contrast to what is called adjective or remedial law which provides the method of enforcing rights. Decisions, including the one in Jena F case 13 while adverting to the question of substantive law has chosen to indicate by way of illustration laws such as Sale of Goods Act, 1930 [Section 61(2)], Negotiable Instruments Act, 1881 (Section 80), etc. The provisions of the Interest Act, 1839, which prescribe the general law of G interest and become applicable in the absence of any contractual or other statutory provisions specially dealing with the subject, would also answer the description of substantive law."

42Copy pinpoint42. In Thirwnalai Chemicals Lf(/. v. Union of India (2011) H

416 SUPREME COURT REPORTS [2016] 6 S.C.R.

A 6 SCC 739 this Court comparing substantial law with procedural Jaw, stated: (SCC pp. 748-49, paras 23-24) "23. Substantive law refers to a body of rules that creates, defines and regulates rights and liabilities. Right conferred on a party to prefer an appeal against an order is a B substantive right conferred by a statute which remains unaffected by subsequent changes in law, unless modified expressly or by necessary implication. Procedural law establishes a mechanism for determining those rights and liabilities and a machinery for enforcing them. Right of appeal being a substantive right always acts prospectively. c It is trite law that every statute is prospective unless it is expressly or by necessary implication made to have retrospective operation. 2./. Right of appeal may be a substantive right but the procedure for filing the appeal including the period of limitation cannot be called a substantive right, and an aggrieved person cannot claim any vested right claiming that he should be governed by the old provision pertaining . to period of limitation. Procedural law is retrospective meaning thereby that it will apply even to acts or transactions under the repealed Act."

43Copy pinpoint43. In Shyam Sunder v. Ram Kumar (200 I) 8 SCC 24, a Constitution Bench of this Court discussing the scope and ambit of a declaratory law has observed: (SCC p. 49, para 39) F "39. Lastly, it was contended on behalf of the appellants that the amending Act whereby new Section 15 of the Act has been substituted is declaratory and, therefore, has retroactive operation. Ordinarily when an enactment declares the previous law, it requires to be given retroactive <i effect. The function of a declaratory statute is to supply an omission or to explain a previous statute and when such an Act is passed, it comes into effect when the previous enactment was passed. The legislative power to enact law includes the power to declare what was the previous law and when such a declaratory Act is passed, invariably it H

MIS SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 417 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

has been held to be retrospective. Mere absence of use of the word 'declaration' in an Act explaining what was the law before may not appear to be a declaratory Act but if the court finds an Act as declaratory or explanatory, it has to be construed as retrospective. Conversely where a statute uses the word 'declaratory', the words so used may not be sufficient to hold that the statute is a declaratory Act as words may be used in order to bring into effect new law."

44Copy pinpoint44. In Katikara Chintamani Dora v. Guntreddi Annamanaidu ( 1974) I SCC 567 this Court held: (SCC p. 582, para 50) c "50. It is well settled that ordinarily, when the s1.1bstantive law is altered during the pcndcrn:y of an 11ction, rights of the parties are decided according to law, <IS it existed when the action was begun unless the new st11tute shows a clear intention to vary such rights (Ma.\11•ell 011 l111erpretatio11 <~f Stalutes, 12th Edn. 220). That is to say, 'in the 11bsencc D of anything in the Act, to say that it is to have retrospective operation, it cannot be so c9nstrued as to have the effoct of altering the law applicable to a clahn in litigation 11t the time when the Act is pas~ed' ." 4S, In Gov ind /Jm; y, !TO ( 1976) 1 SCC 906 this Court E speaking through P.N, Bhagwati, J. (as he then was) held: (SCC p, 914, p11rn 11) ''11. Now it is a well-settled rule ofinterpretation hallowed by time 1md s1mctified by judicial decisions that, unless the tenns of 11 statute expres~ly so provide or necessarily require F it. riitrospective operation should not be given to a statute ~o as to take 11w11y or impair Ill! f;lxisting right or create a new obligation or impose a new liability otherwise than as regards matters of procedure. The general rule as stated by Halsbury in VoL 36 of the Lml's ofE11gla1ui (3rd Ecln.) q and reiteratecl in several decisions of this Co1.1rt as well as English courts is that all i;tatutes other thiin those which are merely declaratory or which relate only to matters of procedure or of evidence are prima facie prospective and retrospective operation should not be given to a statute so H

418 SUPREME COURT REPORTS [2016] 6 S.C.R.

A as to affect, alter or destroy an existing right or create a new liability orobligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only." B

46Copy pinpoint46. In Jose Da Costa v. Bascora Sadasiva Sinai Narcornim ( 1976) 2 SCC 917 this Court held: (SCC p. 925, para31) "31. Before asce11aining the effect of the enactments c aforesaid passed by the Central Legislature on pending suits or appeals, it would be appropriate to bear in mind two well- established principles. The first is that' ... while provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them. provisions which touch a right in existence atthe passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment.' (See Delhi Cloth and General Mills Co. Ltd. v. CIT (I 926-27) 54 IA 421, IA p. 425.) E The second is that a right of appeal being a substantive right the institution of a suit carries with it the implication that all successive appeals available under the law then in force would be preserved to the parties to the suit throughout · the rest of the career of the suit. There are two exceptions f to the application of this rule viz. (1) when by competent enactment such right of appeal is taken away expressly or impliedly with retrospective effect and (2) when the court to which appeal lay at the commencement of the suit stands abolished (see Garikapati Veeraya v. N. Subbiah Choudhry AIR 1957 SC 540 and Colonial Sugar Refining G Co. Ltd. v. Irving 1905 AC 369: (I 904-07)All ER Rep Ext 1620 [PC])."

47Copy pinpoint47. In K. Kapen Chako v. Provident l11vestme11t Co. (P) Ltd. ( 1977) I SCC 593 this Court discussing the dicta of the English courts on the aspect of retrospectivity H

MIS SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 419 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

observed: (SCC pp. 602-03, paras 37-39) A "37. A statute has to be looked into for the general scope and purview of the statute and at the remedy sought to be applied. In that connection the former state of the law is to be considered and also the legislative changes contemplated by the statute. Words not requiring retrospective operation 8 so as to affect an existing statutory provision prejudicially ought not be so construed. It is a well-recognised rule that statute should be interpreted if possible so as to respect vested rights. ·Where the effect would be to alter a transaction already entered into, where it would be to make that valid which was previously invalid, to make an c instrument which had no effect at all, and from which the party was at liberty to depart as long as he pleased, binding, the prima facie construction of the Act is that it is not to be retrospective. (See Gardner v. Lucas ( 1878) 3 AC 582 (HL). D

38. In Moon v. Durden ( 1848) 2 Ex 22 : 154 ER 389 a question arose as to whether Section 18 of the Gaming Act, 1845 which came into effect in August 1845 was retrospective so as to defeat an action which had been commenced in June 1845. The relevant section provided that no suit shall be brought or maintained for recovering any such sum of money alleged to have been won upon a wager. It was held that it was not retrospective. Parke, 8. said: (ER p. 398) 'It seems a strong thing to hold, that the legislature could have meant that a party, who, under a contract made prior to the Act, had as perfect a title to recover a sum of money, as he had to any of his personal property, should be totally deprived of it without compensation.'

39. Again in S1i1ithies v. National Assn. of Operative G Plasterers (1909) I KB 310, Section 4 of the Trade Disputes Act, 1906 which enacted that an action for tort against a trade union shall not be entertained by any court was held not to prevent the courts from hearing and giving judgment in actions of that kind begun before the passing of the Act. H

420 SUPREME COURT REPORTS (2016] 6 S.C.R.

A It is a general rule that when the legislature alters the rights of parties by taking away or conferring any right of action, its enactments, unless in express terms they apply to pending actions, do not affect them. But there is an exception to this rule. namely, where enactments merely affect procedure and do not extend to rights of action. See Suche (Joseph) B & Co. Lid.. In re ( 1875) I Ch D 48. If the legislature forms !I new procedure alterations in the form of procedure are retrospective unless there is some good reason or other why they should not be. In other words, if a statute deals merely with the procedure in an action, and does not affect c the rights of the pat1ies it will be held to apply prima facie to all actions, pending as well as future."

48Copy pinpoint48. In Dahibe11 v. Vi1sw1ji Keva!bha 1995 Sup·p (2) SCC 295 this Co1111 held: (SCC pp. 299-300, para 12) '' 12. As the amendment in question is not to a procedural D law, it may be stated that the settled principle of inte1•pretation, where substirntive law is amended, is that the same does not opernte retrospectively unless it is either expressly provided or the same follows by necessary Implication. Lest it be thought that a vested right cannot be taken away at all by retrospective legislation, reference may be made to Raftq11!!1111fssa v, Lal Bahadur Chetri AIR 1964 SC 1511 where it was stated that even where vested rights are affected, legislature is competent to take away the same by mc11ns of retrospective legislation: and retrospectivity can \le inferr11d even by necessary F implicafa1n," 49, In life Si11gl1 y. StC/fi: qf Harycma (2004) 8 sec I this C9i1rt 1ix11mined the vnrlous authorities on statutory interpretation and concluded: (SCC pp. 8-9, paras 13-14) ;, ! 3. It is a cardinal principle of construction that every 0 statute is prlnia f!lcie prospective unless it is expressly or by 11ecess111-y irnpllcation made to have a retrospective operation. But the rule in general is applicable where the object of the stat11te Is to affect vested rights or to impose new burd11ns or to impair existing obligations. Unless there H

MIS SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 421 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.)

are words in the statute sufficient to show the intention of A the legislature to affect existing rights, it is deemed to be prospective only-'11ova constitutio futuris formam i111po11ere debet 11011 praeteriti.1"-a new law ought to regulate what is to follow. not the past. (See Principles of Statutory Interpretation by Justice G.P. Singh, 9th Edn., B 2004 at p. 438.) It is not necessary that an express provision be made to make a statute retrospective and the presumption against retrospectivity may be rebutted by necessary implication especially in a case where the new law is made to cure an acknowledged evil for the benefit of the community as a whole (ibid.. p. 440). c

14. The presumption against retrospective operation is not applicable to declaratory statutes .... In determining, therefore, the nature of the Act. regard must be had to the substance rather than to the form. If a new Act is •to explain' an earlier Act. it would be without o~ject unless construed retrospectively. An explanatory Act is gem:rally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that ifa statute is curative or merely declaratory of the previous law retrospective operation is generally intended .... An amending Act may be purely declaratory to clear a meaning ofa provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect (ihid.. pp. 468-69).''

50Copy pinpoint50. In State of' Pu11iah v. Bhqju11 Kaur (2008) 12 SCC 112 this Court held: (SCC p. 116. para 9) F

"9. A statute is presumed to be prospective unless held to be retrospective, either expressly or by necessary implication. A substantive law is presumed to be prospective. It is one of the facets of the rule of law." G

51Copy pinpoint51. There is no doubt about the fact that the Act is a substantive law as vested rights of entitlement to a higher rate of interest in case of delayed payment accrues in favour of the supplier and a corresponding liability is imposed on the buyer. This Court. time and again. has observed that H

422 SUPREME COURT REPORTS [2016] 6 S.C.R.

A any substantive law shall operate prospectively unless retrospective operation is clearly made out in the language of the statute. Only a procedural or declaratory law operates retrospectively as there is no vested right in procedure.

52Copy pinpoint52. In the absence of any express legislative intendment B of the retrospective application of the Act, and by virtue of the factthat the Act creates a new liability of a high rate of interest against the buyer. the Act cannot be construed to have retrospective effect. Since the Act envisages that the supplier has an accrued rightto claim a higher rate of interest in terms of the Act. the same can only be said to accrue for c sale agreements after the date of commence1rn:nt of the Act i.e. 23-9-1992 and not any time prior."

16. This Court in Purbanchal Cables (supra) has also taken note of earlier decisions of Assam Small Scale Industries' case (supra) and Shakti Tubes (supra) and after referring to them has rejected the D submission that the Court in Assam S111all Scale Industries (supra) did not consider and decide the issue whether the Act would apply to those supply orders placed prior to commencement of the Act and the supply being made after commencement of the Act. This Court has held that : "55. Assam Small Scale Industries (2005) 13 SCC 19 E has been followed in Rampur Fertiliser Ltd. (2009) 12 SCC 324 as well as Modern Industries (2010) 5 SCC 44. Therefore, we cannot agree with the submission that th is Court in Assam Small Scale Industries Develop111ent Cmp11. Case (2005) 13 SCC 19 did not specifically consider and decide the issue of whether the Act would apply to such of those contracts executed prior to the commencement of the Act but the supplies being made after the commencement of the Act.''

17. This Court in the case of Purbanc/wl Cahles (supra) has also considered the effect of the binding precedent and sub silelllio ruling since it was urged that Assam Small Scale industries case (supra) and SllLlkti Tubes (supra) did not lay down the law correctly. This Cou11 has rejected the submission thus: "Binding precedent or sub si/eutio ruling H

MIS SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 423 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

56. However. the learned Senior Counsel appearing for A the suppliers, Shri Rakesh Dwivedi and Shri Sunil Gupta would contend that the decision of this Court is not a binding precedent.

57. Shri Rakesh Dwivedi, learned Senior Counsel would submit that the decisions of this Court in Assam Small Scale B Industries (2005) 13 SCC 19 and Shakti Tubes (2009) 7 SCC 673 regarding the prospective operation of the Act were not law declared under Article 141, as the points under consideration in those cases were different from the issues raised in these appeals. He would further submit that the question about operation of the Act for contracts concluded c prior to 23-9-1992 was not even a question, which came up for consideration before the Court and was not even argued by the learned counsel appearing in that matter. and hence would not form a part of the ratio of the decision. He would further submit that the question was answered without adequately considering the provisions of the beneficial legislation and therefore, it cannot be treated as a binding precedent.

58. Shri Sunil Gupta, learned Senior Counsel while adopting the argument advanced by Shri Dwivedi on this issue, would submit that there are two exceptions to the doctrine of precedent, namely. per incuriam and sub silentio. It was on the strength of the latter that Shri Gupta would submit that the decisions of this Court in As ..11111 Small Scale lndus1rie.1· (2005) 13 sec 19 and Shakti Tubes (2009) 7 sec 673 cannot be considered as precedents. The learned Senior F Counsel would state that a decision would not apply as a precedent when the court has failed to consider the objects and purpose of the Act in question and also ce11ain previous judgments of this Court. He would further contend that the aforesaid judgments suffer from the sub silentio principle G being rendered without full and adequate arguments on the issue. The learned Senior Counsel would als_o state that the Court did not look at the issue from the viewpoint canvassed presently.

59. The learned Senior Counsel would rely on the decision H

424 SUPREME COURT REPORTS [2016] 6 S.C.R.

A of this Court in MCD v. Gurnam Kaur ( 1989) I SCC 101. This Court has held: (SCC pp. 110-11, paras 11-12) "11. Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the learned Judge who B passed the order in Jamna Das case [WPs Nos. 981-82 of 1984 decided on 29.3.1985 (SC)] and to the learned Judge who agreed with him, we cannot concede that this Cou11 is bound to follow it. It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to c direct removal of encroachments from any public place like pavements or public streets. and without any citation of authority. Accordingly. we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of D the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms ofa statute or of a rule having thi:: force of a statute. So far as the order shows. no argument was addressed to the cou11 on the question whether or not any direction could properly be made compelling the Municipal Corporation to construct E a stal I at the µitching site of a pavement squatter. Professor P.J. Fitzgerald. editor or Salmond on Juri.lprudence. 12th fain. explains the concept ofs11b silentio at p. 153 in these words: A decision passes sub silcntio. in the technical sense that F has come to be attached to that phrase. when tht: particular point of law involved in the decision is not perceived by the 1:011rt or present to its mind. The court may consciously decide in fov11ur ofo111:: party be..:aus.: of Point A. which it considers and µronoum:i.:s upon. lt may be shown. however. Ci that logically the court should not have decided in favour of the µarticular party unkss it also decided Point 13 in his favour: but Point 13 was not argued or considered by the . cow1. In such circumstances. although Point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on Point 13. Point H

MIS SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 425 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

B is said to pass sub silentio. A

12. In Gerard v. Worth of Paris Ltd. ( 1936) 2 All ER 905 (CA), the only point argued was on the question of priority of the claimant's debt, and, on this argument being heard, the cou1t granted the order. No consideration was given to the question whether a garnishee order could B properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith Ltd. ( 1941) I KB 675 : (1941) 2 All ER 11 (CA), the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., c said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier court before it could make the order which it did; neve1theless, D since it was decided 'without argument, without reference to the crucial words of the rule, and without any citation of authority', it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed. One of the chief reasons for the doctrine of precedent is that a E matter that has once been fully argued and decided should not be allowed to be reopened. The weight accorded to dicta varies with the type of dictum. Mere casual expressions carry no weight at all. Not every passing expression ofa Judge, however eminent. can be treated as F an ex cathedra statement, having the weight of authority."

60. In State of U.P. v. Synthetics and Chemicals Ltd. (1991) 4 SCC 139, His Lordship R.M. Sahai, J., in his concurringjudgment set out the principles of per incuriam and sub silcntio and has held thus: (SCC pp. 162-63, paras G 40-41) "./O. ·Jncuria' literally means 'carelessness·. In practice per incurimn appears to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The 'quotable in law' is avoided and ignored H

426 SUPREME COURT REPORTS [2016] 6 S.C.R.

A if it is rendered. •in ignoratium of a statute or other binding authority'. (Young v. Bristol Aeroplane Co. Ltd. 1944 KB 718: ( 1944) 2 All ER 293 (CA) Same has been accepted, approved and adopted by this Court while interpretingA1ticle 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sahu v. Rajdewan B Dubey AIR 1962 SC 83 this Court while pointing out the procedure to be followed when conflicting decisions are placed before a Bench, extracted a passage from Hals bury '.5 Laws of England incorporating one of the exceptions when the decision of an appellate court is not c binding. ./J. Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law? Here again the English D courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub silentio. •A decision passes sub silentio. in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the cou1t or present to its mind.' (Salmond on Jurisprudence, E 12th Edn., p. 153). In Lancaster Motor Co. (London) Ltd. v. Bremith Ltd. (1941) I KB 675: (1941) 2 All ER 11 (CA) the Cou1t did not feel bound by earlier decision as it was rendered •without any argument. without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this Court in MCD v. Gumam Kaur ( 1989) I SCC I0 I. The Bench held that. ·precedents sub si lentio and without argument are of no moment'. The courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio dccidendi. In B. Shama H

M/S SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 427 ELECTRICITY BOARD & ORS. [ARUN MISHRA. J.]

Rao v. UT of Pondicherry AIR 1967 SC 1480 it was observed, 'it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restrnint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law."

61. In Amit Das (1) v. State of Bihar (2000) 5 SCC 488 this Cou11 held: (SCC p. 498, para 20) c "20. A decision not expressed, not accompanied by reasons and not proceeding on a conscious consideration of an issue cannot be deemed to be a law declared to have a binding effect as is contemplated by A11icle 141. That which has escaped in the judgment is not the ratio decidendi. D This is the rule of sub silentio. in the technical sense when a particular point of law was not consciously determined. (See State of U.P. v. Sy111hetics & Chemicals Ltd. ( 1991) 4 sec 139, sec para 41.)"

62. In Tika Ram v. Slate of U.P. (2009) 10 SCC 689 it was held: (SCC pp. 740-41, para 104) "104. We do not think that the law laid down in these cases would apply to the present situation. In all these cases, it has been basically held that a Supreme Court decision does not become a precedent unless a question is directly raised and considered therein. so also it does not become a law declared unless the question is actually decided upon. We need not take stock of all these cases and we indeed have no quarrel with the propositions settled therein."

63. Though the submissions made by Shri Rakesh Dwivedi G and Shri Sunil Gupta, learned Senior Counsel seem attractive at the first blush, we are of the view, they lack merit. In Assam Small Scale !nduslries (2005) 13 SCC 19, the question of retrospective operation of the Act or whether past contracts were governed by the Act, was argued by H

428 SUPREME COURT REPORTS [2016] 6 S.C.R.

A the learned Senior Counsel appearing for the respondent. In the said judgment this Court has observed: (SCC p. 30, para 19) "19 . ... The 1993 Act, it was submitted, being also a beneficent statute, the same should be construed liberally. B The Act, Mr Chow.dhury would argue, will thus, have a retrospective effect."

64. Further, in Shakti Tubes Ltd. (2009) 7 SCC 673, this issue was canvassed by the learned counsel, due to which, this Cout1 referred to the precedent in Assam Small Scale c !11dustries (2005) 13 SCC 19. The argument on this point has been noted thus: (Shakti Tubes Ltd. case (2009) 7 sec 673, sec pp. 676-77, paras 9-1 I) "9. According to the appellant-plaintiff, the said interest has been claimed by the appel !ant-plaintiffsince it is entitled D to so claim in terms of the provisions of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 (hereinafter referred to as 'the Act'). Mr G.C. Bharuka, learned Senior Counsel appearing for the appellant-plaintiff drew our attention to the provisions of the Act and to the decision of this Cout1 in Assam Small E Scale Industries Development Corpn. Ltd. v. J.D. Pharmaceuticals (2005) 13 SCC 19. In support of his contention that the transaction in the instant case came to an end with the appellant-plaintiff supplying the goods after coming into force of the Act he has taken us through the relevant sections of the Act as also the Statements of Objects and Reasons of the Act. According to him. the appellant-plaintiff is entitled to be paid in h.:rms of the provisions of the Act. JO. Mr Bharuka contended that the earlier supply order which was issued on 16-7-1992 came to be materially altered and substituted by a fresh supply order issued on 18-3-1993 by which date the aforesaid Act had already been enforced and therefore, the appellant-plaintiff was entitled to claim interest at a higher rate as envisaged in Sections 4 and 5 of the said Act. H

M/S SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 429 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

11. Mr Dinesh Dwivedi, learned Senior Counsel appearing A for the respondents strongly refuted the aforesaid submissions made by the learned Senior Counsel appearing for the appellant-plaintiff on the ground that the supply order was issued in the instant case on 16-7-1992 and therefore, in terms of and in line with the decision of this Cou11 in B Assam Small Scale Industries case (supra) the appellant- plaintiff was entitled to be paid interest only at the rate of 9% per annum and not at a higher rate as contended by the appel )ant-plaintiff."

65. This Court in Shakti Tubes Ltd. (2009) 7 SCC 673 expressly rejected the argument of the learned Senior c Counsel appearing for the appellant in that case, that the Act should be given retrospective effect because it was a beneficial legislation, in paras 24 to 26, which have been set out below: (SCC pp. 681-83) "24. Generally, an Act should always be regarded as prospective in nature unless the legislature has clearly intended the provisions of the said Act to be made applicable with retrospective effect. '13. It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation. [The aforesaid] rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the legislature to affect existing rights, it is deemed to be prospective only-nova constilulio futuris formam imponere debet non praeteritis-a new law ought to regulate what is to follow, not the past. (See Principles of Statutory Interpretation by Justice G.P. Singh, 9th Edn., 2004 at p. 438.) It is not necessary that an express provision be made to make a statute retrospective and the presumption against retrospectivity may be rebutted by necessary implication especially in a case where the new law is made to cure an acknowledged evil for the benefit of the community as a whole (ibid., p. 440).' (Zile Singh case H

430 SUPREME COURT REPORTS [2016) 6 S.C.R.

A (2004) 8 sec 1, sec pp. 8-9, para 13)

25. xxxxx

26. xx xx x"

66. In Rampur Feriiliser Lid. (2009) 12 SCC 324 this B Court again examined the entire scheme of the Act before Jollowing the dicta of this Court in Assam Small Scale Induslries (2005) 13 SCC 19. Even in Modem lnduslries (20 I0) 5 SCC 44 this Court did not differ from the dicta of this Court in Assam Small Scale Industries (supra) and Shakti Tubes (2009) 7 SCC 673." c It has been held in Shakli Tubes (supra) that in Ra111pur Fertiliser Lid. v. Vigyan Che111icals Industries (2009) 12 SCC 324, this Cou11 has examined the entire scheme of the Act and has followed the decision in Assa111 Small Scale industries' case (supra). In Modem Induslries V. Steel Authorily of India Lid. (20 I0) 5 sec 44, this Court has also

D not differed from the same. This Cou11 has also considered the binding value of the precedent on Co-ordinate Bench and made elaborate discussion. Plea for reconsideration of decision in Assam Small Scale Industries Dere/op111e111 Corporation Lid. (supra) was also rejected by a Division Bench of this Court in Shakli Tubes (supra).

E 18. The Court in Purbanchal Cables (supra) has referred to large number of decisions and made the following discussion with respect to binding value of the precedent: "Binding value of a precedent

67. In T¥i11nm1 Rao v. Union of India ( 1981) 2 SCC 362, F His Lordship Y.V. Chandrachud, C.J ., speaking for the Constitution Bench, held: (SCC p. 393, para40) "40. It is also true to say that for the application of the rule of stare decisis, it is not necessary that the earlier decision or decisions oflong standing should have considered G and either accepted or rejected the pai1icular argument which is advanced in the case on hand. Were it so, the previous decisions could more easily be treated as binding by applying the law of precedent and it will be unnecessary to take resort to the principle of stare decisis. It is, therefore, H

MIS SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 431 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

sufficient for invoking the rule of stare decisis that a certain decision was arrived at on a question which arose or was argued, no matter on what reason the decision rests or what is the basis of the decision. In other words, for the purpose of applying the rule of stare decisis, it is unnecessary to enquire or determine as to what was the rationale of the earlier decision which is said to operate as stare decisis."

68. In Union of India v. Raghubir Si11gh (1989) 2 SCC 754, this Court held: (SCC p. 766, paras 8-9) "'S. Taking note of the hierarchical character of the judicial system in India, it is of paramount importance that the law c declared by this Court should be certain, clear and consistent. It is commonly known that most decisions of the courts are of significance not merely because they constitute an adjudication on the rights of the parties and resolve the dispute between them, but also because in doing so they embody a declaration of law operating as a binding principle in future cases. In this latter aspect lies their particular value in developing the jurisprudence of the law.

9. The doctrine of binding precedent has the merit of promoting a certainty and consistency in judicial decisions, and enables an organic development of the law, besides providing assurance to the individual as to the consequence of transactions forming part of his daily affairs. And, therefore, the need for a clear and consistent enunciation of legal principle in the decisions of a cou11."

69. In Krishena Kumar v. Union of J11dia ( 1990) 4 SCC F 207, this Court observed: (SCC p. 233, para 33) "33. Stare decisis et non quieta movere. To adhere to precedent and not to unsettle things which are settled. But it applies to litigated facts and necessarily decided questions. Apart from Article 141 of the Constitution oflndia, the policy G of courts is to stand by precedent and not to disturb settled point. When court has once laid down a principle oflaw as applicable to certain state of facts, it will adhere to that principle, and apply it to all future cases where facts are substantially the same. A deliberate and solemn decision of H

432 SUPREME COURT REPORTS [20 I 6] 6 S.C.R.

A com1 made after argument on question of law fairly arising in the case, and necessary to its determination, is an authority, or binding precedent in the same court, or in other com1s of equal or lower rank in subsequent cases where the veiy point is again in controversy unless there are occasions when departure is rendered necessary to vindicate plain, obvious B principles of law and remedy continued injustice. It should be invariably applied and should not ordinarily be depa11ed from where decision is of long standing and rights have been acquired under it, unless considerations of public policy demand it." c 70. In Mishri Lal v. Dhirendra Nath (I 999) 4 SCC I I this Cou11 held: (SCC p. I 8, para I 3) "13. .. . It is further to be noted that Meharban Singh case (I 969) 3 SCC 542 came to be decided as early as I 970 and has bee1J followed for the last three decades in the State of Madhya Pradesh and innumerable number of matters have been dealt with on the basis thereof and in the event, a different view is expressed today, so far as this specific legislation is concerned, it would unsettle the situation in the State of Madhya Pradesh and it is on this score also that reliance on the doctrine of 'stare decisis' may be apposite. While it is true that the doctrine has no statutory sanction and the same is based on a rule of convenience and expediency and as also on 'public policy' but in our view, the doctrine should and ought always to be strictly adhered to by the cou11s of Jaw to subserve the ends of justice."

71. In Central Board of Dawoodi Bohra Communizy v. State ofMaharashtra (2005) 2 SCC 673, a Constitution Bench of this Court held: (SCC p. 680, para 8) G "8. In Raghubir Singh case (I 989) 2 SCC 754 Pathak, C .J. pointed out that in order to promote consistency and certainty in the law laid down by the superior court the ideal condition would be that the entire court should sit in all cases to decide questions oflaw, as is done by the Supreme Com1 of the United States. Yet, His Lordship noticed, that H

M/S SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 433 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

having regard to the volume of work demanding the attention of the Supreme Court oflndia, it has been found necessary as a general rule of practice and convenience that the court should sit in divisions consisting of Judges whose number may be determined by the exigencies of judicial need, by the nature of the case including any statutory mandate relating thereto and by such other considerations which the Chief Justice, in whom such authority devolves by convention, may find most appropriate. The Constitution Bench reaffirmed the doctrine of binding precedents as it has the merit of promoting certainty and consistency in judicial decisions, and enables an organic development of c the law, besides providing assurance to the individual as to the consequence of transactions forming part of his daily affairs."

72. In Shanker Raju v. U11io11 of India (2011) 2 SCC 132 this Court observed: (SCC p. 139, para I 0) D "JO. It is a settled principle of law that a judgment, which has held the field for a long time, should not be unsettled. The doctrine of stare decisis is expressed in the maxim stare decisis et 11011 quieta movere, which means 'to stand by decisions and not to disturb what is settled'. Lord Coke E aptly described this in his classic English version as' those things which have been so often adjudged ought to rest in peace'. The underlying logic of this doctrine is to maintain consistency and avoid uncertainty. The guiding philosophy is that a view which has held the field for a long time should not be disturbed only because another view is possible." F (emphasis in original)

73. In Fida Hussain v. Moradabad Development Authority (2011) 12 SCC 615 this Cou11 held: (SCC p. 622, para 15) G "15. Having carefully considered the submissions of the learned Senior Counsel Shri Varma, we are of the view that the judgment in Gafar case (2007) 7 SCC 614 does not require reconsideration by this Court. In Gafar case (supra) this Court had meticulously examined all the legal H

434 SUPREME COURT REPORTS [2016] 6 S.C.R.

A contentions canvassed by the parties to the !is and had come to the conclusion that the High Cou11 has not committed any error which warrants interference. In the present appeals. the challenge is for the compensation assessed for the lands notified and acquired under the same notification pe11aining to the same villages. Therefore. it would not be 8 proper for us to take a different view, on the ground that what was considered by this Court was on a different fact situation. This view ofours is fortified by the judgment of this Court in Ballahhadas Marhurdas Lakhani v. kfunicipal Commiflee, Malkapur ( 1970) 2 SCC 267. c wherein it was held that a decision of this Court is binding when the same question is raised again before this Cou11, and reconsideration cannot be pleaded on the ground that relevant provisions. etc. were not considered by the Cou11 in the former case."

D 74. Judicial discipline demands that a decision of a Division Bench of two Judges should be followed by another Division Bench of two Judges and this has been stated time and again by this Court. In Raghubir Singh ( 1989) 2 SCC 754, a Constitution Bench of this Cou11 speaking through R.S. Pathak. C.J. held: (SCC p. 778, para 28) E "28, We are of the opinion that a pronouncement of law by a Division Bench of this Court is binding on a Division Bench of the ~!lme or a smaller number of Judges, and in order that such decision be binding, it is not necessary that it should be a decision rendered by the Full Court or a F Constitution Bench of the Court."

75. In Union ofIndia v. Parcis Laminates (f) Ltd. ( 1990) 4 SCC 453 this Court has observed: (SCC pp. 457·58, para 9)

q "9. It is true that 11 Bench of two members must not lightly disregard the deci~ion of another Bench of the same Tribunal on an identic11I question. This is particularly true when the earlier decision is rendered by a larger Bench. The rationale of this rule ls the need for continuity, certainty and predictability in the administration of justice. Persons H

MIS SHANTI CONDUCTORS {P) LTD. ANR. v. ASSAM STATE 435 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

affected by decisions of Tribunals or courts have a right to expect that those exercising judicial functions will follow the reason or ground of the judicial decision in the earlier cases on identical matters. Classification of particular goods adopted in earlier decisions must not be lightly disregarded in subsequent decisions, lest such judicial inconsistency should shake public confidence in the administration of justice." 76, Shri Vijay Hansaria, learned Senior Counsel contends that a case for referring the matter to a larger Bench though is pleaded by the learned Senior Counsel. Shri Rakesh Dwivedi, this Court ought to test the same by the parameters c laid down by this Court in CIT v. Saheli Leasing and Industries Ltd. (20 I 0) 6 SCC 384 to find out whether the matter deserves to be referred to a larger Bench,

77. Jn Sahr.di leasing (supra), this Court held: (SCC p. 393, para 29) D

"29. (x) In order to enable the court to refer 11ny case to a larger Bench for reconsideration, it is necessary to point out that particular provision of law hoving a bearing over the issue involved was not token not!l of or there is an error apparent on its face or that a partilrnlar earlillr decision was not noticlld, which has a diregt bearing or has t11ken a contrary view."

78. The Constitution Bench of this Court in Kf;!shc11• Mills Co. Ltd. v. CIT. AIR\ 965 SC 1636 crystallised the position with regard to what the Col!rt should <lo when a plea for consideration of an earlier j11dgment is made. It was held: (AIR p. 1644, para 23) "2J . ... When it is 11rged thilt thll view already taken by this Court sho11ld be reviewed and revised it m<!y not necessarily be an adequate reason for such review and revision to hold that though the e11rlier vil'lw is a re11sonably possible view, the alternative view which is prl'lssed on th~ subsequent occasion i~ more reasom1bhi. In reviewinl!i 11mf revising its earlier decision, thi~ Co11rt sho11h:I 11sk itself whether in the interest~ of the public ~wod or for any other H

436 SUPREME COURT REPORTS [2016] 6 S.C.R.

A val id and compulsive reasons, it is necessary that the earlier decision should be revised. When this Court decides questions of law, its decisions are, under Article 141, binding on all courts within the territory of India, and so, it must be the constant endeavour and concern of this Court to introduce and maintain an element of ce1tainty and continuity B in the interpretation of law in the country. Frequent exercise by th is Cou1t of its power to review its earlier dee isions on the ground that the view pressed before it later appears to the court to be more reasonable, may incidentally tend to make law uncertain and introduce confusion which must c be consistently avoided. That is not to say that if on a subsequent occasion, the cou1t is satisfied that its earlier decision was clearly erroneous, it should hesitate to correct the error; but before a previous decision is pronounced to be plainly erroneous, the court must be satisfied with a fair amount of unanimity amongst its members that a revision ofthe said view is fully justified. It is not possible or desirable, and in any case it would be inexpedient to lay down any principles which should govern the approach of the court in dealing with the question of reviewing and revising its earlier decisions. It would always depend on several relevant considerations:-What is the nature of the infirmity or error on which a plea for a review and revision of the earlier view is based? On the earlier occasion, did some patent aspects of the question remain unnoticed, or was the attention of the court not drawn to any relevant and material statutory provision, or was any previous decision of this F Comt bearing on the point not noticed? Is the couit hearing such plea fairly unanimous that there is such an error in the earlier view? What would be the impact of the error on the general administration of law or on public good? Has the earlier decision been followed on subsequent occasions G either by this Court or by the High Cou1ts? And, would the reversal of the earlier decision lead to public inconvenience, hardship or mischief? These and other relevant considerations must be carefully borne in mind whenever this Court is called upon to exercise its jurisdiction to review and revise its earlier decisions." H

M/S SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 437 ELECTRICITY BOARD & ORS. [ARUN MISHRA. J.]

79. We are in full agreement with the view expressed in A Keshav Mills case ( 1965) 2 SCR 908. The learned Senior Counsel Shri Rakesh Dwivedi has not been able to make out a case for reconsideration of the decision of this Court in Assam Small Scale industries (2005) 13 SCC 19. In fact, a plea for reconsideration of the same was rejected B by a Division Bench of this Court in Shakti Tubes (2009) 7 SCC 673. We are unable to agree with the argument of Shri Dwivedi and Shri Gupta that the provisions of the Act were not considered in its entirety. In fact, the entire scheme of the Act has been considered in Rampur Fertiliser (2009) 12 sec 324 and specific answer to the issue under c consideration was answered." It is apparent from aforesaid discussion that the decision of a Co- ordinate Bench is binding and there has to be consistency and settled principle should not be unsettled as laid down in Raghubir Singh (supra) and other decisions referred to above. Judicial discipline demands that a D decision of the Division Bench of this Court should be followed by another Bench of two Judges.

19. Jn Modem Industries (supra), a Division Bench of this Com1 has also held that the Act of 1993 is prospective in operation is settled by two decisions of this Court in Assam Small Scale industries' case (supra) E and Shakti Tubes (supra). This Cou11 has observed that since the earlier contract got altered from time to time, it was last altered on 29.4.1995. By that time Act of 1993 had already come into force. Hence the date of alteration in the agreement was held to be material for the applicabi Iity of the provisions of the Act. In Rampur Fertiliser Ltd. (supra), a Division Bench of this Cou11 has held that the provisions of the Act of 1993 are prospective. The Court considered various provisions contained in sections 1, 3, 4, 5 and I 0 of the Act. This COL1rt followed the decision in Assam Small Scale Industries' case and has laid down thus : "14. It was held in Assam Smafl Scale Industries Development Corpn. Ltd. ( 1987) 3 SCC 80 that the provisions of the Act are applicable only with prospective effect. Paras 37 and 38 of the said case which deal with the scope of the applicability of the Act are reproduced hereunder : (SCC p. 36) H

438 SUPREME COURT REPORTS [2016] 6 S.C.R.

A "37. xx xx x

38. xx xx x .. In view of the ratio of the aforesaid decision the scope of the present appeal is very limited for it is already laid down by this Court that the Act, namely, the Interest on Delayed B Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 came into effect from 23-9-1992. Therefore, the said Act would have no application and would not apply to transactions which took place prior to the aforesaid date. In the case in hand the transaction which c was the subject-matter of the suit took place prior to 23-9-

1992. This position is clear for the suit itself was filed on 3 1-10-1991 and therefore cause of action for fi Iing the suit has Lo be prior in point of time."

20. In view of the aforesaid catena of decisions of this Court, it has to be held that the Act of 1993 cannot be said to be retrospective in operation or having retroactive operation. The question stands answered affirmatively beyond pale of doubt and the decisions are binding on a Co-ordinate Bench. It cannot be said that the decisions are sub sile11tio or per i11curia111 in any manner whatsoever and. in my opinion. it is not open to the Co-ordinate Bench to take a different opinion. There is no confusion with respect to meaning of transaction, supply order and agreement. This Cou11 while deciding aforesaid cases was not in oblivion of aims and objects of beneficial legislation. considered same and it has affirmatively pronounced 011 all the aspects. Hence, I find no scope to dwell further into the same arena to declare the various judgments to be sub silentio, per i11c11ria111 or not laying down the law correctly.

21. Even otherwise, on merits. in my opinion, considering the scheme of the Act, various provisions of the Act it cannot be said to have retrospective operation or retroactive operation and where a supply order has been placed before the date of commencement of the Act, G that is before 23 .9.1992, the beneficial provisions of the Act regarding higher interest would not be applicable.

22. In the case ofappellant Mis. Shanti Conductors (P) Ltd. itself decided along with PurbG11chal Cah/es (rnpraJ aforesaid findings have been recorded by this Court while remanding the case to the High Court for decision on merits as an appeal arising of same lis was pending H

MIS SHANTI CONDUCTORS (P) LTD. ANR. v. ASSAM STATE 439 ELECTRICITY BOARD & ORS. [ARUN MISHRA, J.]

before the High Court and the High Court has rightly followed the A decisions in Purba11chal Cables & Conductors (supra) decided along with Mis. Shanti Conductors fP) Ltd. The finding recorded by this Court in the remand order is final and binding on the appellant- Mis. Shanti Conductors (P) Ltd. They cannot question the same again in the instll;n.t appeals. B

23. In view of the aforesaid discussion, the appeals have no merit and the same deserve dismissal and are hereby dismissed. No costs.

Nidhi Jain *Matter referred to larger Bench. c

*In vie" of separate diwrgcntjudgmcnts of the tlro Judge Bench.