In Brief
The State of Arunachal Pradesh appealed against a High Court order granting interest under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 on contracts executed before the Act came into force (23 September 1992). The Supreme Court held that the Act has no retrospective application to pre-commencement contracts and supplies. The Court set aside the High Court's award of statutory interest but upheld the obligation to pay the principal amount plus contractual interest, requiring payment within three months.
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