REGISTERED No. DL-33004/92 The Gazette of India EXTRAORDINARY
PART II—Section I PUBLISHED BY AUTHORITY:
No. 6] NEW DELHI, SATURDAY, JANUARY 2. 1993/PAUSA 12,1914 Separate paging is given to this Part in order that it may be filed.
as a separate compilation MINISTRY OF LAW, JUSTICE AND COMPANY AFFAIRS (Legislative Department) New Delhi, the 2nd January, 1993/Pausa 12, 1914 (Saka) THE INTEREST ON DELAYED PAYMENTS TO SMALL SCALE AND ANCILLARY INDUSTRIAL UNDERTAKINGS ORDINANCE 1993 No. 4 OF 1993 Promulgated by the President in the Forty-third Year of the Republic of India An Ordinance 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 WHEREAS the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Ordinance, 1992 to provide for the aforesaid matters was promulgated by the President on the 23rd day of September, 1992;
AND WHEREAS the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Bill, 1992 was introduced in the House of the People to replace the said Ordinance, but has not been passed;
AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action;
2 THE GAZETTE OF INDIA fcCTRAORDINARY [PART II— Short title, extent and commeeneement Definitions.
Liability of buyer to mat* payment Now THEREFORE, in exercise of ti^ powers conferred by clause # } of article 123 of the Constitution, th4 |?resident is pleased to promulgate the following Ordinance:™
1. (I) This Ordj»8ince may be called the Interest on Detained F o - ments to SmalJ-SfcaSe and Ancillary Industrial Undertakings, Ordinance
1983. *
(2) It extends to the whole of India, except the State of Jammu and Kashmir. -
(3) It shall be deemed to have copme into force on the 23rd day 61 • September, 1992.
2. In this Ordinance, unless the content otherwise requires,—
(a) "ancillary industrial undertaking" has the meaning assigned to it by clause («a) of section 3 of the Industries (Development and Regulation) Act, 1951;
(b) "appointed day" means the day following immediately after ' tiie expiry of the period of thirty days from the day of acceptflWMIsgist the day of deemed acceptance 'of any goods or any services by a buyer from a supplier;
Explanation.—For the purposes of t̂his clause,—
(i) "the day of acceptance*'means,—
(a) the day of the actual delivery of goods or the rendering of services; or . (b) where any objection is, made in , writS(ng by the buyer regarding acceptsfee" of good! ot s&rvides within thirty days from the d% of5^te delivery of goods or th# rendering of aei!fpcie?i 4he, day..O&T which, such objection is removed by the supplier;
(it) "the day of deemed acceptance" means, wbtire ra 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 ot services, the day of the actual delivery of- goods or the rendering of services;
<e) "buyer" means whoever buy* any goods or receives any services from a supplier for consideration; -• ..; :
(d) "goods" meaas every kind o | movable prop>irtyi«ther than actionable claims and inoneyf »; .
(c) "small scale industrial undertaking" has the meaning assigned to it by clause (j) of section 3 of the Industries (Development and "Regulation) Act, 1951; ] ' ^
(f) "supplier" means an ancillary industrial undertaking or a small wale industrial undertakteg holding a permanent registraiioii certifieate issued by the Directorate of Industries «tf a State or union temtory. .
3. Where any supplier supplies any goods- or renders any services' 'to any buyer, the buyer shall make payment tfeerefor on or befota the date agreed upon between him and the supplier in writing or,- where there is no agreement in this behaM, before the appointed day.
W of 1961.
63 of 1»51, SEC. 1J THE GAZETTE OF INDIA EXTRAORDINARY 3 10 of 1949.
43 of 1961.
4. 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 rales 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.
5. Notwithstanding anything contained in any agreement between a supplier and a buyer or in any law for the time being in force, the buyer shaU be liable to pay compound interest (with monthly rests) at the rate mentioned in section 4 on the amount due to the supplier.
6. The amount due from a buyer, together with the amount of interest calculated in accordance with the provisions of section 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. 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 p̂ tr 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. 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 the interest in his annual statement of accounts as remains unpaid to any supplier at he end of each accounting year.
9. 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 Ordinance, shall not, for the purposes of computation of income under that Act, be allowed as deduction.
10. The provisions of this Ordinance shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being m force.
Date from which and rate at which interest is payable.
Liability of buyer to pay compound interest.
Recovery of amount due.
Appeal.
Requirement to specify unpaid amount with interest in the annual statement of accounts.
Interest not to be allowed as deduction from income.
Overriding effect.
V: VHE GAZETTE W IN&IA BSTftAORDINARY [PA«* H-^wTiJ Repeal and tt.(I) The Interest oh D^jgJT^iyments to Smal iSWA^V Ancillary Industrial Un4irtakinfiff3w3ihanc;e, 1992 is liereby^repealed.
(2) NotwittristandH^''such r«pe«il, anything done or any action taken under the Orciiaft^e'-so reported s?»4r be deemed to hhve be^h *wle o* taken ttiidii^JJlie''1'!^^ '- x ' ' Ord, 15 of 1992.
SKASmER DAYAL SHVPMA, K. L. MOHANPU^Ai ; V«If»«D BY TUB MANAGER, GOVBKNWIiNT (W INDIA WtBJS, MWTO ROAD* NEW DBUB AMD PUWilSBEO BT THB CONT*0L£BR OF PUBLICATIONS, DELHI, 1 9 M .