M/S Maa Durga Trading Company Through Its Proprietor Shri Rajendra Singhal vs. The State Of Madhya Pradesh
Held
The Court held that the factum of delayed payment by respondent No. 2/Council is admitted and undisputed. The payment became due after 90 days from 23.02.2020 and was fully paid only by 20.03.2025. Therefore, the petitioner is entitled to claim interest on the delayed payment. Invoking Section 3 of the Interest Act, 1978, the Court directed respondent No. 2/Council to pay interest at the rate of 6% per annum on the delayed payments from the date the principal amount became due until the date of its actual payment. This payment was to be made within eight weeks. The Court found no merit in the respondent's contention that the petition was infructuous or that the Council was not liable for interest due to State Government's delay.
Facts
The petitioner, M/s Maa Durga Trading Company, supplied fire rescue vehicles to respondent No. 2, the Municipal Council, Sheopur, for Rs. 42,00,000/-. The payment was due 90 days after 23.02.2020. The petitioner filed a writ petition as the amount remained unpaid. During the proceedings, the principal amount was paid in installments: Rs. 10,00,000/- on 10.06.2022, Rs. 20,00,000/- on 05.03.2025, and Rs. 10,93,221/- on 20.03.2025, after deducting GST. The petitioner's grievance regarding interest on the delayed payment, which became due in 2020 and was fully paid by 2025, persisted.
Key Issues
1. Whether the petitioner is entitled to claim interest on the delayed payment of the principal amount, in light of Section 3 of the Interest Act, 1978, and Section 2(b) thereof? The petitioner argued that the amount became due in 2020 and was paid in 2025, entitling them to interest from the due date until actual payment, as the factual position of delayed payment is undisputed. The respondent No. 2/Council argued that the petition should be dismissed as infructuous since the principal amount has been paid. They contended that the delay was due to delayed fund release by the State Government and thus the Council should not be liable for interest.
Sections Cited
Section 3, Section 2(b)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER The instant petition under Article 226 of the Constitution of India is preferred seeking following reliefs:- i. Issue of writ of mandamus directing the respondent to make the payment of fire truck which has been supplied by petitioner along with 12% interest. ii. An appropriate writ, order or may kindly be issued to directing the respondents to take action on the representation Annexure P-15 submitted by the petitioner in accordance with law. Any other relief which this Hon'ble High Court deems fit in the facts and circumstances of the case may also kindly be granted.
Admittedly, the present petitioner had supplied fire rescue vehicles to resp
The judgment continues below.
Read the full judgment
A free account opens 10 full GST judgments a month (one account works on both bharattax.net and this site). Re-reading one you have already opened does not count again.
The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.
Reproduced from the public record of the Madhya Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.