Page No.# 1/10 GAHC010121262018 2019:GAU-AS:20883 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/3655/2018 CHARU TECHNOLOGY (PVT. ) LTD. A PRIVATE LTD. COMPANY REGISTERED UNDER THE COMPANIES ACT, HAVING ITS REGISTERED OFFICE AT THAKURIA NOVELTY, FOREST GATE, MOTHER TERESA ROAD, NARENGI, GUWAHATI - 781026. VERSUS THE STATE OF ASSAM AND 3 ORS. REP. BY THE SECRETARY TO THE GOVT. OF ASSAM, PUBLIC HEALTH ENGINEERING DEPARTMENT, DISPUR, GUWAHATI -781003. 2:ASSAM STATE HOUSING BOARD REP. BY ITS CHAIRMAN R.G. BARUAH ROAD GUWAHATI- 781005. 3:THE COMMISSIONER ASSAM STATE HOUSING BOARD R.G. BARUAH ROAD GUWAHATI- 781005. 4:THE CHIEF ENGINEER PUBLIC HEALTH ENGINEERING DEPARTMENT GOVT.OF ASSAM HENGRABARI GUWAHATI - 781003 Advocate for the Petitioner : MS M HAZARIKA, MS KEWI Advocate for the Respondent : SC, P H E, SC, A S H B Page No.# 2/10 BEFORE HONOURABLE MR. JUSTICE ANJAN MONI KALITA ORDER Date : 27.04.2026 Heard Ms. M. Hazarika, learned Senior Counsel assisted by Mr. D. Khan, learned counsel for the petitioner. Also heard Mr. I. Bhorthakur, the learned Standing Counsel, PHE Department, appearing for the respondent Nos. 1 and 4 as well as Mr. T. R. Gogoi, the learned Standing Counsel, Assam State Housing Board, appearing for respondent Nos. 2 and 3. 2. The petitioner herein is a private limited company having its industrial unit at Hajobori, Chandrapur, Guwahati, wherein it carries on the business of manufacturing, inter alia, PVC pipes and fittings, Ribbed Screen Strainers, Direct Action Hand Pumps and Casing Pipes, PVC Gutter Pipes, PVC Down Pipes, Rainwater Harvesting Systems, PVC Half-Round Pipes for Water Harvesting and Assemblies for Rainwater Harvesting. The items manufactured by the petitioner, except Rainwater Harvesting Systems, are “scheduled items” under the Assam Preferential Stores Purchase Act. 3. The petitioner’s unit is duly registered under the Micro, Small and Medium Enterprises Development Act, 2006 (hereinafter referred to as the “MSMED Act”) by an Entrepreneurs Memorandum Part II bearing No. 18-24-12-00223 dated 26.03.2010 issued by the concerned authority. 4. The petitioner’s case is that the Commissioner, Assam Housing Board, issued a work order to the petitioner for construction of Rainwater Harvesting Structures, vide letter No. ASHB/TECH/971/2016/20 dated 04.03.2016, at Page No.# 3/10 various locations as mentioned therein, valued at Rs. 3,11,363.82 per unit, which was subsequently enhanced to Rs. 3,28,230.93 per unit. 5. Upon completion of the work, the petitioner intimated the same to the Commissioner, Assam State Housing Board and submitted a bill vide letter No. CT/Mkt&Dev/35/16-187 dated 03.02.2017 for an amount of Rs. 1,37,85,699.00 only. 6. It is contended that, in respect of the aforesaid work completed by the petitioner, a status report regarding completion of the work, i.e., Rainwater Harvesting Systems implemented by the petitioner, was submitted by the Executive Engineer (PHE), Karimganj Division to the Chief Engineer (PHE), Water, Hengrabari vide Memo No. PHEE/KXJ/TB-572/2017-18/2650 dated 24.08.2017, stating that the petitioner had fully completed the work and that the aforesaid systems were found to be functioning satisfactorily. Accordingly, the Commissioner, Assam State Housing Board addressed a letter to the Chief Engineer (PHE) requesting for releasing the bill amounting to Rs. 1,37,85,588.00, vide letter No. ASHB/Const/809/2017/297/374, dated 13.02.2018. 7. In terms of the aforesaid communication, the Commissioner, Assam State Housing Board, vide letter No. ASHB/WA/141/2017/10/560 dated 10.04.2018, informed the petitioner that an amount of Rs. 1,24,07,000.00 had been released and that the same would be disbursed to the petitioner after verification and collection of geo-tagging data and photographs for each and every Rainwater Harvesting System. However, despite several representations submitted by the petitioner seeking release of the said amount, the same was not forthcoming. Consequently, the petitioner has approached this Court by filing the present writ petition. It is further contended that the last representation in this regard was Page No.# 4/10 submitted on 09.05.2018 by the petitioner for release of the due amount. 8. Ms. Hazarika, learned Senior Counsel appearing for the petitioner, submits that during the pendency of the instant writ petition, an amount of Rs. 1,05,62,394.00 has been released to the petitioner. However, the respondent Board, i.e., the Assam State Housing Board, has illegally deducted an amount of approximately Rs. 32,00,000.00 from the petitioner’s bill in the name of statutory deductions. The learned Senior Counsel further submits that, in terms of Sections 15, 16, and 17 of the MSMED Act, the petitioner is entitled to interest on delayed payment by the respondent Board, however, the same has not been taken into account. It is contended that the statutory deduction cannot be to the extent of Rs. 32,00,000.00 and the non-payment of interest by the respondent Board is contrary to the settled position of law. 9. Ms. Hazarika, learned Senior Counsel further submits that, in no case, shall the period agreed upon between the supplier and the buyer in writing exceed 45 days from the date of acceptance or the deemed date of acceptance for such payments. Consequently, any delay beyond 45 days is liable to be compensated by payment of interest for each day of such delay. In this connection, the learned Senior counsel has referred to the Common Judgment and Order dated 13.11.2025 passed in Garg Poly Industries and another vs. State of Assam and others [WP(C)/4631/2023], SRK Metals and Plastics Private Limited vs. State of Assam and others [WP(C)/5273/2023] and Kamakhya Poly Udyog and another vs. State of Assam and others [WP(C)/5966/2023], wherein the Coordinate Bench of this Court, while discussing the Sections 15, 16 and 17 of the MSMED Act, has laid down the procedure to be followed in the event of delay in payment of admitted bill amount. Page No.# 5/10 10. Ms. Hazarika, learned Senior Counsel appearing for the petitioner, submits that in terms of the aforesaid Common Judgment and Order dated 13.11.2025, a direction can be issued to the respondent Board to calculate the amount due to the petitioner by taking into account the procedure required to be followed for inclusion of interest that may be payable to the petitioner on account of delay in payment of the amount due for completion of the work under the work orders dated 04.03.2016 and 08.08.2016. 11. Upon hearing the learned counsel for the parties, this Court finds it appropriate to extract hereinbelow the relevant paragraphs of the aforesaid Common Judgment and Order dated 13.11.2025. "79. Having opined so it is also very pertinent to take note of Sections 15 and 16 of the Act of 2006, which are reproduced hereinunder: “15.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: Provided that in no case the period agreed upon between the supplier and the buyer in writing shall exceed forty-five days from the day of acceptance or the day of deemed acceptance. 16. 16. 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 15, 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 compound interest with monthly rests 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 three times of the bank rate notified by the Reserve Bank.” 80. A perusal of the above-quoted Section 15 of the Act of 2006 statutorily imposes an obligation upon the buyer to make payment on or before the date agreed upon between the buyer and the supplier in writing or where Page No.# 6/10 there is no agreement in that behalf before the appointed day. The term „appointed day‟ has been defined in Section 2(b) of the Act of 2006, meaning the day following immediately after the expiry of the period of 15(fifteen) days from the date of acceptance or the day of deemed acceptance of any goods or any services by a buyer from a supplier. Section 2(b) of the Act of 2006 being relevant is reproduced hereinunder: “2(b). “appointed day” means the day following immediately after the expiry of the period of fifteen days from the day of acceptance or the day of deemed acceptance of any goods or any services by a buyer from a supplier”. 81. The proviso to Section 15 further stipulates that under no circumstances, the period agreed upon between the supplier and the buyer in writing shall exceed 45 (forty-five) days from the date of acceptance or the day of deemed acceptance. The proviso is relevant taking into account that irrespective of any agreement/contract between the parties, the statutory injunction holds the field and thereby confines the period not to exceed 45(forty-five) days from the date of acceptance or the day of deemed acceptance. 82. Now let this Court take note of Section 16. There are two aspects of interest in Section 16: first, that it is to be calculated from the appointed day and secondly, the liability to pay compound interest with monthly rests. In this regard, this Court finds it very relevant to take note of a judgment of the learned Calcutta High Court in the case of V.K. Patel and O Vs. Simplex Infrastructure Ltd. reported in 2024 SCC Online Cal.6617, wherein the learned Calcutta High Court explained the very concept as to how the calculation is to be made in terms of Section 16. Paragraph No. 20 to Paragraph No. 31 of the said judgment being relevant are reproduced hereinunder: "20. To ascertain such issue, the very concept of compound interest versus simple interest is to be explored, since compound interest is the chosen mode in Section 16. Importantly, it has also been stipulated in Section 16 of the MSME Act that the compound interest shall be with “monthly rests”. Page No.# 7/10 Thus, the interest is to be compounded at the end of each month after the appointed day. 21. The very concept of compound interest is variable progression, as opposed to simple interest which, by its very definition, always has to be at a fixed rate as on the date of commencement of calculation. In case of simple interest, the interest is calculated at the fixed rate which prevailed at the juncture of commencement of calculations till the date of payment, on the principal. 22. As opposed thereto, the premise of compound interest is staggered progression in the sense that the interest has to be calculated at defined intervals, in the present case, at monthly intervals, which are known as “rests”. Hence, for example, if the principal is Rs. 100/- and the initial rate of interest on the appointed day is 10%, after the end of the first month, the total amount would be Rs. 100 + 10% thereof that is Rs. 10/-, which equals Rs. 110/-. 23. The said sum of Rs. 110/-, which is the initial principal plus interest for the first month, forms the basis of calculation or principal for the second month. Thus, calculated, the principal for the second month would be Rs. 110/-, which would be the base amount on which further interest would be calculated. 24. Hence, although the commencement of calculation is tied to the appointed day, the point of incidence of the bank rates for calculation of interest becomes the end point of each month, which are also known as monthly “rests” as stipulated in Section 16 itself. Hence, by its very nature, compound interest has to be imposed at staggered intervals. 25. Since the point of incidence of the rate of interest is the rate prevailing at the end of each month, which is the monthly rest, the rate prevailing on such date must be the premise of calculation. For instance, if the initial rate of interest prevailing on the appointed day was “x%”, the calculation for the first month would be equal to Principal (P) + “x% of principal”. Again, at the beginning of the second month the rate of interest becomes “y”, the second month's calculation would be equal to (P + x% of P) + y% of (P+ x% of P), which would again form the base amount for calculation of the third month. The only difference between a normal calculation of compound interest and that under Section 16 is that the rate will be three times the bank rate as notified by the RBI in case of the latter. 26. Section 16 mentions the appointed day merely as the starting point of calculation but does not provide that the rate of interest should also be inextricably linked to the said date; rather, the language used is “three times the bank rate notified by the Reserve Bank”. 27. The argument of the petitioner, that if the rates are variable, the appointed day has to be Page No.# 8/10 calculated at the end of each month, is not acceptable, since there is no such possibility if the variable rates are taken into consideration. The appointed day merely provides the starting point of calculation. Thereafter, the calculation will progress at compound rate with monthly rests, meaning thereby that the rate prevailing at each monthly rest should be taken into account for incidence of interest for the said month. In Section 16, the term “rests” has been interchangeably used with “intervals”. 28. The very character of compound interest makes it fluid and variable. If the rate of calculation of interest is fixed at the date of inception of calculation, the same would be a counter-intuitive, artificial and arbitrary superimposition on the normal mode of calculation as given in the statute, since Section 16 provides that the compound interest will be calculated with „monthly rests", at which points the prevailing bank rate of interest is to be taken into account. 29. Just as in the case of the simple interest if suddenly varied rates are imposed it would be arbitrary since the mode of calculation is continuous, similarly, in case of compound interest, which is to be calculated on a staggered basis, fixation of the rate prevailing at the inception would also be arbitrary. 30. The very premise of compound interest with monthly rests is that the calculation of further interest is made at the end of every month at the rates prevailing then. In a Section 16 scenario, the rate at which interest is to be imposed at each monthly rest is three times the bank rate notified by the RBI prevalent at that juncture. 31. Hence, by its very definition, compound interest at monthly rest is variable and cannot be static, frozen at the appointed day.” 83. It is the opinion of this Court that the interpretations so given to Section 16 of the Act of 2006 by the learned Calcutta High Court as quoted hereinabove have lucidly laid down the principles for calculation of the interest and this Court duly agrees to the same. 84. The above analysis shows that the petitioners herein in the batch of three writ petitions would be entitled to the benefits under Sections 15, 16 and 17 of the Act of 2006. Be that as it may, what would be the interest component on the admitted dues has to be worked out as per the Page No.# 9/10 principles laid down as discussed above. The materials before this Court only refers to the work orders and the date on which these work orders were issued. Questions of facts arise pertaining to as to when the supplies were made; when the supplies were accepted; whether it was accepted or it was a deemed acceptance; what is the rate declared by the RBI during the relevant period, more particularly, taking into account that the interest payable is to be compounded with monthly rests; cannot be decided by this Court. It would require exercise to be carried out by the petitioners and looked into by the respondent PHED. 12. In the instant case, it is observed that there is no dispute with regard to the total amount, except for the allegation of the petitioner that a statutory amount has been deducted by the respondent Board without taking into account various relevant factors, including the interest component that may be applicable in the facts of the present case. Accordingly, in the considered opinion of this Court, a direction can be issued to the respondents to consider the case of the petitioner in terms of the aforesaid Common Judgment and Order dated 13.11.2025. 13. Therefore, the petitioner is directed to submit a detailed representation, along with a proper calculation of the amount claimed, taking into account the delayed payment in terms of the aforesaid Common Judgment and Order dated 13.11.2025, before the Commissioner, Assam State Housing Board (respondent No. 3) with a copy to the Chief Engineer, Public Health Engineering Department, Government of Assam (respondent No. 4) along with a copy of this order. 14. Upon receipt of such representation, the respondent No. 3 shall, after affording an opportunity of hearing to the petitioner, dispose of the same within a period of 2 (two) months from the date of receipt thereof. Upon such verification, the due amount, if any, shall be released in favour of the petitioner Page No.# 10/10 in accordance with law. 15. In terms of the aforesaid direction the instant writ petition stands disposed of. JUDGE Comparing Assistant