Delhi High Court - Orders
National Agro Seed Corporation India vs Ms National Seeds Corporation Limited on 5 August, 2024
Author: Jasmeet Singh
Bench: Jasmeet Singh
$~80
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ OMP (ENF.) (COMM.) 26/2022
NATIONAL AGRO SEED CORPORATION INDIA
.....Decree Holder
Through: Mr. Shekhar G. Devasa, Mr.
Thashmitha Muthanna, Mr. Manish
Tiwari, Advs.
versus
MS NATIONAL SEEDS CORPORATION LIMITED
.....Judgement Debtor
Through: Mr. Yashvardhan, Ms. Kritika
Nagpal, Mr. Gyanendra Shukla, Mr.
Pranav Das, Advs.
CORAM:
HON'BLE MR. JUSTICE JASMEET SINGH
ORDER
% 05.08.2024
1. This is a petition seeking enforcement of the Arbitral Award dated 13.06.2019.
2. Admittedly, substantial payments have been received by the decree- holder in terms of the Arbitral Award dated 13.06.2019 and the dispute at this stage only remains pertaining to the interest component on the amounts deposited from 13.06.2019 to 08.09.2022.
3. The judgment debtor had challenged the Arbitral Award dated 13.06.2019 by filing a petition under section 34 of the Arbitration and Conciliation Act, 1996, being OMP (COMM.) 432/2019.
4. My attention has been drawn to order dated 16.10.2019 passed in This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/08/2024 at 22:04:49 O.M.P (COMM.) 432/2019 when this court directed the judgement debtor to deposit 50 % of the Awarded Amount. The operative portion of order dated 16.10.2019 reads as under:
"On the petitioner depositing 50% of the Awarded amount i.e. Rs. 1,46,40,005.2/-, within a period of six weeks from today, enforcement of the impugned Award dated 13th June, 2019 shall remain stayed".
5. The petition filed by the judgement debtor under section 34 of the Arbitration and Conciliation Act, 1996 was dismissed vide order dated 05.01.2022. The decree holder has filed the present execution petition on 24.01.2022.
6. My attention has also been drawn to order dated 17.02.2022 passed in I.A. No. 2677/2022 filed in O.M.P. (COMM.) 432/2019 whereby this Court regarding the substantial payments received by the decree holder in terms of the Arbitral Award directed as under:-
"3. In view of the above, this Court directs that the amount deposited by the petitioner with the Registry of this Court pursuant to the order dated 16.10.2019 be considered as the amount deposited by the petitioner in OMP(ENF.) (COMM).26/2022."
7. Meanwhile, an application was filed by the Decree - holder in the present petition, under Order XXI seeking release of the amount deposited along with accrued interest followed by a reply being filed by the Judgement debtor disputing the claims of the decree-holder on various grounds and praying that the application seeking release of the amount be dismissed.
8. Vide order dated 23.03.2022 passed in the present petition, the judgment-debtor requested that the 50 % amount deposited with this court in terms of the order dated 16.10.2019 passed in O.M.P. (COMM.) 432/2019 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/08/2024 at 22:04:49 be not released to the decree-holder as the judgment-debtor is in the process of filing an appeal. The order dated 23.03.2022 reads as under:-
"1. The learned counsel appearing for the Judgment Debtor states that it has already deposited 50% of the awarded amount. He requests that the said amount should not be released to the Decree Holder for a few weeks as the appeal preferred by the Judgment Debtor under Section 37 of the Arbitration and Conciliation Act, 1996 against the decision of this Court rejecting the Judgment Debtor's challenge to the Arbitral Award, has been heard and orders are reserved by the Division Bench of this Court.
2. At his request, list on 27.04.2022.
3. In the meanwhile, the Judgement Debtor shall deposit the balance awarded amount with the Registry of this Court within a period of four weeks from today."
9. In addition, the judgement debtor on 27.04.2022 sought further time to deposit the balance amount. Subsequently, the matter was listed before the Registrar General on 19.05.2022 for consideration of the amount deposited and the actual amount required to be deposited in view of the orders passed by this court in OMP(ENF.) (COMM.) 26/2022.
10. The Judgement debtor filed an appeal under section 37 of the Arbitration and Conciliation Act, 1996 being FAO (OS) (COMM) 69/2022 against the order dated 05.01.2022 passed in O.M.P (COMM) 432/2019 which also got dismissed on 31.05.2022.
11. Pursuant to the Appeal getting dismissed by this court, the judgment- debtor again opposed the amount to be released in favor of the decree-holder on 07.07.2022 in OMP(ENF.) (COMM.) 26/2022, to pursue the remedy of the filing an SLP before the Hon'ble Supreme Court. The operative portion This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/08/2024 at 22:04:52 of the order dated 07.07.2022 reads as under:-
"6. Mr. Yashvardhan, learned counsel for the respondent-JD, on the one hand, submits that it is in the process of filing a Special Leave Petition ["SLP"] against the judgment of the Division Bench dated 31.05.2022. He contends that the release of the deposited amount to the petitioner-AH at this stage would jeopardise the interest of the respondent-JD, in the event it succeeds in the SLP.
7. With the consent of learned counsel for the parties, it is directed, at this stage, that the amount of ₹1 Crore be released to the petitioner-AH, subject to the petitioner giving security by way of title deeds of immovable property to the satisfaction of the Registrar."
12. Thereafter, on 14.07.2022, the decree-holder placed five original sale deeds as security for release of Rs. 1 crore but in view of some defects, the same were taken back by the decree-holder.
13. Meanwhile, the judgement debtor filed an SLP assailing the order dated 31.05.2022. However, the SLP was dismissed by the Hon'ble Supreme Court on 08.09.2022 and the awarded amount with accrued interest in terms of the Arbitral Award dated 13.06.2019 deposited by the Judgement debtor was released in favor of the decree-holder.
14. Ms. Nagpal, learned counsel for the judgment-debtor relied upon the judgment in "Himachal Pradesh Housing and Urban Development Authority and Another vs. Ranjit Singh Rana" 2012 4 SCC 505 and states that once the amount has been deposited in this court in order to execute the decree, no interest is payable on the deposited amount. The operative portion of the judgement reads as under:
"15. The word "payment" may have different meaning in This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/08/2024 at 22:04:53 different context but in the context of Section 37(1)(b); it means extinguishment of the liability arising under the award. It signifies satisfaction of the award. The deposit of the award amount into the court is nothing but a payment to the credit of the decree-holder. In this view, once the award amount was deposited by the appellants before the High Court on 24-5-2001, the liability of post-award interest from 24-5-2001 ceased. The High Court, thus, was not right in directing the appellants to pay the interest @ 18% p.a. beyond 24-5-2001."
15. I have heard learned counsel for the parties.
16. The Coordinate Bench of this court in "Oswal Agro Mills Ltd vs Oswal Woollen Mills Ltd." 2019 SCC OnLine Delhi 9197 has considered the entire law and answered the same. The operative portion of the judgment reads as under:-
"1. The instant petition raises an issue which falls in a narrow compass. The issue which arises for consideration is : as to how money deposited by the judgment debtor with the Registry of this Court under an interim order passed by the Division Bench of this Court in an appeal is to be appropriated towards the satisfaction of the decree.
....
62. The facts, as obtaining in the instant case, would show that the judgment debtor had deposited, as a condition of stay, albeit, under order of Division Bench dated 5.8.2008, the principal sum and 30% of the interest component as envisaged in the judgment of the Single Judge dated 17.4.2007. The fact that the decree holder had notice of the deposit which led to the withdrawal of the first tranche amounting to Rs. Rs. 1,00,97,252/- will not, to my mind, trigger the provisions of Sub- rule (4) of Rule 1 of the Order XXI of the Code.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/08/2024 at 22:04:53
63. The judgment debtor had deposited the aforementioned amount only to protect itself from the consequences of an execution proceeding. The receipt of money by the decree holder was concededly against security and hence cannot be treated at par with payment of the decretal debt. (See A. Tosh & Sons India Ltd. v. N.N. Khanna, (2006) 89 DRJ 248, wherein learned Single Judge has cited with approval, a judgment of another Single Judge in the matter of Hindustan Construction Corporation v. DDA, (2002) 65 DRJ 43.) ....
68. A deposit made with the Court which is conditional can never be construed in law as payment by the judgment debtor towards satisfaction of the decretal debt as the decretal holder can seek its release only upon fulfilment of the condition. The judgment of the Supreme Court in the case of Gurpreet Singh does not in any way dilute the general rule of appropriation of payment made towards satisfaction of the decretal debt, as articulated hereinabove by me. This aspect has been noticed by the Supreme Court in another judgment rendered in Bharat Heavy Electrical Limited. The Supreme Court in this judgment, after noticing the ratio of the Constitution Bench in Gurpreet Singh case in paragraph 26 to 30, culls out the following principles that are required to be followed for appropriation of the amounts paid towards satisfaction of the decretal debt:
"31.1. The general rule of appropriation towards a decretal amount was that such an amount was to be adjusted strictly in accordance with the directions contained in the decree and in the absence of such directions adjustments be made firstly towards payment of interest and costs and thereafter towards payment of the principal amount subject, of course, to any agreement between the parties.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/08/2024 at 22:04:53 31.2. The legislative intent in enacting sub-rules (4) and (5) is a clear pointer that interest should cease to run on the deposit made by the judgment-debtor and notice given or on the amount being tendered outside the court in the manner provided in Order 21 Rule 1(1)(b).
31.3. If the payment made by the judgment-debtor falls short of the decreed amount, the decree-holder will be entitled to apply the general rule of appropriation by appropriating the amount deposited towards the interest, then towards costs and finally towards the principal amount due under the decree.
31.4. Thereafter, no further interest would run on the sum appropriated towards the principal. In other words if a part of the principal amount has been paid along with interest due thereon as on the date of issuance of notice of deposit interest on that part of the principal sum will cease to run thereafter. 31.5. In cases where there is a shortfall in deposit of the principal amount, the decree-holder would be entitled to adjust interest and costs first and the balance towards the principal and beyond that the decree-holder cannot seek to reopen the entire transaction and proceed to recalculate the interest on the whole of the principal amount and seek for reappropriation."
17. In "Pramod Kumar Mittal and Anr. Vs M/S Kiri Associates (P) Ltd." 2017 SCC OnLine Delhi 11861, the operative portion of the judgement reads as under:
"13. Order XXI Rule 1 of the CPC provides for mode of payment of money by the judgment debtor in satisfaction of the decree. Such payment can be made out of Court or through deposit into Court whose duty it is to execute the decree. As noted above, the This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/08/2024 at 22:04:54 deposit was not made to the Court executing the decree but to the Court exercising its jurisdiction under Section 9 of the Act. Secondly, Order XXI Rule 1 would require an unconditional deposit of the decretal amount by the judgment debtor. In the present case, the deposit was not unconditional in satisfaction of the decree but only to prevent an adverse order being passed under Section 9 of the Act and pending the appeal that had been filed by the judgment debtor before the Division Bench of this Court.
.....
16. A reading of Order XXI Rule 1(2) would show that a notice of deposit has to be given by the judgment debtor to the decree holder. The relevance of this notice is to put the decree holder to notice that the amount has been deposited and if he so desires, can be withdrawn from the executing Court. As noted above, in this case the intent of deposit by the judgment debtor was not to ensure a release of the same to the decree holder but only as a security in terms of the order dated 8th September, 2016 passed by this Court. It is only with the deposit being made under Sub- Rule (1) of Rule 1 and notice thereof being sent under Sub-Rule (2) of Rule 1 of Order XXI CPC that sub-rule (4) of Rule 1 of Order XXI of CPC would be applicable and interest will cease to operate.
17. Similarly, reliance of the judgment debtor on the judgment of this Court in Engineering Projects (India) Ltd. v. Arvind Construction Company Ltd. would be of no relevance to the facts of the present case. In fact, this Court, in the above judgment has held that the payment made for obtaining a stay of the decree before the Appellate Court cannot be said to be an amount paid under Order XXI Rule 1 of the Code of Civil Procedure towards satisfaction of the decree. Payment under Order XXI Rule 1 CPC satisfies a decree holder whereas a deposit in the Court to avoid This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/08/2024 at 22:04:55 execution keeps the amount beyond the reach of the decree holder and leaves him waiting for its release. In the present case, this is exactly the factual position.
21. The learned counsel for the judgment debtor contends that there was no embargo on the decree holder withdrawing the amount of Rs. 2 crores that had been deposited by it in this Court. On the other hand, the counsel for the decree holder submits that even on 11th July, 2017, after dismissal of the appeal of the judgment debtor, when the decree holder had made a prayer for release of the amount, there was opposition on part of the judgment debtor and, therefore, it cannot be said that this amount could have been released in favour of the decree holder at an earlier date. I agree with the submission of the learned counsel for the decree holder. Be that as it may, as discussed above, the deposit itself was not in terms of Order XXI Rule 1 and therefore the question whether the decree holder could have sought the release of the same or not is of no consequence."
18. In the present case it is an admitted position that the awarded amount in terms of the Arbitral Award dated 13.06.2019 was deposited in two tranches with the Registrar General, however the amount was not available to the decree-holder for its use and enjoyment.
19. The judgment-debtor in addition, opposed release of the amounts to the decree-holder on the ground that they are availing rights to challenge the orders passed by this court from time to time.
20. In this view, the provision of Order 21 Rule 1 and 4 of CPC are clear that conditional deposits are never to be construed as payment by the judgment-debtor for satisfaction of the decretal amount.
21. In Himachal Pradesh Housing and Urban Development Authority (Supra), the Hon'ble Supreme Court held that once the amount was This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/08/2024 at 22:04:56 deposited in the court for execution of the Arbitral Award, the interest on the said amount would cease to exist. In the present case, admittedly the amounts deposited in the court towards the execution of the Award have been paid during the pendency of the Appeal and hence, the facts in the present case are clearly distinguishable.
22. It is a clear position of law that the decree-holder should be entitled to receive the entire amount specified in the decree, along with any interest or costs that may have been awarded without any compromise or diminution or condition. Partial payments or conditional deposits made by the judgment- debtor do not discharge the judgment-debtor's obligations under the decree as the satisfaction of a decree requires the full and unconditional payment of the decretal amount as stipulated by the orders/ decrees passed by the court.
23. In the present case, the decretal amount was only available to the decree holder on 08.09.2024. For the said reasons, the judgment-debtor shall pay interest at the rate of 12 % from 13.06.2019 to 08.09.2022 within 8 weeks from today.
24. The execution petition is disposed of.
JASMEET SINGH, J AUGUST 5, 2024/NG/PP Click here to check corrigendum, if any This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/08/2024 at 22:04:56