As per case facts, the Appellant, Assam Small Industries Development Corporation, acting as an agent, facilitated the supply of medicines from the Respondent, a small-scale industry, to various government departments ... under a State Act promoting such industries. The Corporation failed to make full payments to the Respondent, citing non-receipt of funds from the government departments and arguing that the State was a necessary party. The Respondent sued for outstanding payments and interest, securing favorable judgments from the Trial Court and High Court, which awarded compound interest. The Corporation then appealed to the Supreme Court.The question arose regarding the true nature of the relationship between the Corporation and the Respondent (principal-agent vs. buyer-seller), the Corporation's statutory liability to pay, the necessity of making the State a party to the suit, and crucially, the applicability of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, to transactions that occurred before and after its enactment, and the appropriate rate and type of interest (simple vs. compound).Finally, the Supreme Court held that the Corporation was not merely an agent but had a statutory obligation to ensure payment to the small-scale industry, given its pervasive control and the beneficial nature of the State Act; thus, the State was not a necessary party. The Court clarified that the terms of the agreement could not override the statutory scheme. It ruled that the 1993 Act would apply only to transactions that took place after its enforcement, meaning compound interest at an enhanced rate was applicable only for post-enactment transactions. For pre-enactment transactions, simple interest at the bank rate was to be awarded, both prior to filing the suit and pendente lite. The appeal was allowed in part concerning the interest calculation.