Allahabad High Court
Goenka Leasing And Finance Pvt. Ltd. ... vs State Of U.P.Through Its Secy. Public ... on 11 November, 2019
Author: Jaspreet Singh
Bench: Jaspreet Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
AFR
RESERVED
Case :- CIVIL REVISION No. - 26 of 2009
Revisionist :- Goenka Leasing And Finance Pvt. Ltd. Through Its Director
Opposite Party :- State Of U.P.Through Its Secy. Public Works Department Luckn
Counsel for Revisionist :- Sachin Garg,Vivek Raj Singh
Counsel for Opposite Party :- C S C
ALONG WITH
Case :- CIVIL REVISION No. - 96 of 2009
Revisionist :- Goenka Leasing And Finance Pvt.Ltd.
Opposite Party :- State Of U.P. Through Tis Secy.
Counsel for Revisionist :- Sachin Garg,Vivek Raj Singh
Counsel for Opposite Party :- C.S.C
*****
Hon'ble Jaspreet Singh,J.
1. Heard Shri N.K. Seth, learned Senior Advocate ably assisted by Shri Sachin Garg, learned counsel for the revisionist and Shri Uttam Kumar Srivastava, learned standing counsel for the State-respondents.
2. As both the above revisions are in between the same parties arising out of an execution case and assail two different orders and primarily the controversy is one and the same, accordingly, both the above revisions have been connected and heard together and accordingly is being decided by this common judgment.
3. This is a classic case which deals with difficulties faced by a decree holder in execution of a decree. In relation to the difficulties faced by a decree-holder in exercise of the decree, in 1872, the Privy Council had observed that : (MIA p.612) "... the difficulties of a litigant of India begin when he has obtained a decree".
4. Even today, in 2019, the position has not improved and still the decree-holder faces the same problem which was being faced in the past.
5. To put the controversy in a perspective, certain facts giving rise to the aforesaid revisions are being noticed first.
6. That some times in the year 1964, the State of Uttar Pradesh was assigned the work of construction of a Bund by the Public Works Department in District Bahraich. M/s. East Jamuria Company Pvt. Ltd., (the predecessor in interest of the revisionist company i.e. Goenka Leasing & Finance Pvt. Ltd., (hereinafter referred to as "the Company / revisionist) had submitted its tender for the aforesaid work, which was accepted. Certain disputes arose between the parties which led the revisionist company to invoke the provisions of Section 20 of the Arbitration Act, 1940 (hereinafter referred to as "the Act of 1940"). The aforesaid proceedings were initiated before the High Court at Calcutta and the aforesaid High Court by means of its order dated 20.02.1966 directed the parties to appoint their Arbitrators. Both the parties appointed their Arbitrators and the nominee Arbitrators agreed that in case of difference of opinion, the matter would be referred to an Umpire. The matter proceeded before the Arbitrators, who ultimately had a difference of opinion and thus referred the matter to the Umpire in the year 1970. The Umpire pronounced his award on 29.10.1973. The aforesaid award was assailed by the State of U.P., by filing their objections under Section 30 of the Act of 1940 which was decided by the High Court at Calcutta by means of the order dated 28.04.1977 and by the aforesaid order, the award passed by the Umpire was modified only to a small extent relating to the power of the Arbitrator to grant pentente lite interest. Learned Single Judge of the Calcutta High Court held that the Arbitrator did not have a power to grant interest pentente lite.
7. This modification made by the learned Single Judge was assailed in an Appeal before a Division Bench of the Calcutta High Court which was allowed and the Division Bench of the Calcutta High Court clearly held that the Arbitrator had the power to award pentente lite interest while relying upon a decision of the Hon'ble Apex Court and with the aforesaid, the appeal of the company was allowed. However, it was noticed that there was a typographical error in the said order for which the revisionist made an application. The said application was allowed and the order passed by the Division Bench of the Calcutta High Court dated 17.03.2006 was corrected. Thereafter, since the decree was prepared, which was to be executed against the State of U.P., which was primarily based out of Lucknow, accordingly an application was moved before the Calcutta High Court for seeking a transfer of the decree at Lucknow. The said application was allowed and the decree was transferred before the District Judge at Lucknow to be executed in accordance with law which came to be registered as Execution Case No.51/2008.
8. That during the pendency of the aforesaid execution case at Lucknow, the State of U.P., made an application before the Division Bench of the Calcutta High Court for recall of the order dated 17.03.2006. The said application was dismissed by the Division Bench of the Calcutta High Court by noticing that it was an abuse of process of law. The State of U.P., thereafter preferred a Special Leave Petition before the Hon'ble Apex Court which also came to be dismissed on 25.11.2008.
9. Instead of complying with the aforesaid award, it is at this stage, the State of U.P., made an application purportedly under Section 47 CPC. The District Judge by means of the order dated 13.01.2009 entertained the said objections despite opposition by the revisionist. This order dated 13.01.2009 entertaining the objections under Section 47 CPC was assailed by the revisionist before this Court by means of civil revision registered as Civil Revision No.26 of 2009 which is connected with Civil Revision No.96 of 2009.
10. This Court by means of the order dated 23.03.2009, provided that the further proceedings of the Misc. Case No.11/C/2009 (objections filed by the State of U.P., under Section 47 CPC) was stayed. However, thereafter, the matter proceeded before the District Judge as the above revision came to be dismissed in default on 22.10.2009. Though an application for recall was moved later and the order was recalled. However, in the meantime, the District Judge after hearing the parties by means of its order dated 25.05.2009 allowed the objections and passed a final order in the Execution Case No.51/2008 and being aggrieved against the same, the revisionist preferred another revision bearing Civil Revision No.96/2009.
11. This Court by means of the order dated 25.08.2009 provided as an interim measures that insofar as the order passed by the District Judge allowing adjustment of Rs.7,88,367/- is concerned, the same shall remain stayed, however, the executing court may proceed expeditiously for recovery of rest of the amount. It is in this fashion that both the revisions have been connected and have been heard together.
12. Shri N.K. Seth, learned Senior counsel has assailed the order dated 25.05.2009 primarily on two grounds. He has submitted that the District Judge in execution of the decree which was passed upon the confirmation of arbitral award did not possess jurisdiction to go behind the decree and read something into the decree which was not provided. It has also been urged that the District Judge has committed a jurisdictional error in entertaining the objections of the State of U.P., purportedly in exercise of powers under Section 47 CPC. It has further been urged that the District Judge could not have entertained the application under Order 21 Rule 2 CPC which sought to achieve indirectly what the State of U.P., could not achieve by moving an application under Section 47 CPC. Since, the objections which were raised in the petition under Section 47 CPC were similar and identical to the averments made in the application under Order 21 Rule 2 CPC coupled with the fact that the same objections were raised by the State of U.P., when it had made an application for recall before the Calcutta High Court seeking recall of the judgment of the Division Bench dated 17.03.2006 which came to be dismissed by the Cacultta High Court on 17.08.2008 as well as the fact that the State of U.P., assailed the same before the Hon'ble Apex Court and the Hon'ble Apex Court had also dismissed the special leave petition. Thus, the submission is that all these ground had attained finality and, therefore, the executing Court was not justified in going behind the decree and permitting the State of U.P., to re-agitate all those issues which it had already urged in the proceedings as mentioned above.
13. Shri Seth has further contended that insofar as the award passed by the Umpire is concerned, as the record would indicate that the learned Umpire had awarded interest @ 9% per annum specifically for the period i.e. from the date of institution of the proceedings in the Calcutta High Court (referring to the proceedings under Section 20 of the Act of 1940) till the date of the award i.e. 29.10.1973. Thereafter, once the State of U.P., assailed the same before the learned Single Judge of the Calcutta High Court, who also after considering the same upheld the award passed by the learned Umpire except modifying the award to the extent that the interest as awarded by the Umpire will be payable from 10.10.1969 i.e. from the date when the Reference court under Section 20 of the Act of 1940 had allowed the petition. Further in exercise of powers under Section 29 of the Act of 1940, it is provided that a decree shall also carry interest on the principal amount of Rs.34,50,000/- along with 6% interest along with costs.
14. Shri Seth has further clarified that this grant of interest @ 6% related to a period from the date when the award was made rule of the High Court in terms of Section 14 and a decree drawn in terms thereof which amounts to pendente lite interest. This is not to be confused with the grant of interest made by the Umpire @ 9% from the date of proceedings till the date of the award. It has also been pointed that from the record that the State of U.P., preferred an appeal before the Division Bench and in the said order dated 17.03.2006, the Division Bench clearly held that the Arbitrators had the right to award interest pendente lite and set aside the modification as made by the learned Single Judge and the award passed by the Umpire was upheld. It has further been submitted that apart from setting aside the modification as made by the learned Single Judge insofar as the award of the interest pentente lite from the date of the decree as granted by the learned Single Judge, @ 6% per annum, was neither set aside / disturbed by the Division Bench in its judgment dated 17.03.2006.
15. Shri Seth however submits that, inadvertently in the order passed by the Division Bench, the line that the decree will be in terms of the award published by the Umpire interest on judgment is granted at 6% per annum was incorporated. However, upon an application for correction being made, the same was allowed and the Division Bench by means of its order dated 13.07.2006 corrected the same. Thus, the submission is that once the aforesaid correction was made, what needs to be noticed is that the Umpire whose award was upheld by the Division Bench confirmed the grant of pentente lite interest, right from the date of institution of the proceedings before the Calcutta High Court under Section 20 of the Act of 1940 till making of the award by the Umpire on 29.10.1973 @ 9% per annum. The interest granted by the learned Single Judge from the date of the decree @ 6% per annum was additional and the same had not been disturbed by the Division Bench and this has been misconstrued by the State of U.P., and also the District Judge, who fell in error in considering the same as part of the same interest which was granted by the Umpire and, therefore, the order passed by the District Judge is bad.
16. Shri Seth has also contended that the question of grant of adjustment for a sum of Rs.7,88,367/- as provided by the District Judge is also erroneous on two grounds:
(i) Neither the adjustment could have been granted as the same is not in accordance with the process and procedure as provided under Order 21 Rule 2 CPC. More so when the same was barred by limitation as the specific limitation is provided for such an application in terms of Article 125 of the Limitation Act. Shri Seth has further stated that the ground of adjustment is also bad for another reason that the same was considered and raised before the Division Bench of the Calcutta High Court, when the State of U.P., had made an application for recall of the order dated 17.03.2006 during the pendency of the execution proceedings before the District Judge, Lucknow. Once the Division Bench of the Calcutta High Court had dismissed the application for recall noticing it to be process of abuse of law and further the said order was also confirmed by the Hon'ble Apex Court in special leave petition preferred by the State of U.P., which came to be dismissed, the same ought not has been same considered by the District Judge. Thus, the ground of adjustment is bad and the findings given by the District Judge so far as the issue No.1 decided by him in the order dated 25.05.2009 is concerned, is bad and accordingly deserve to be set aside.
17. Per contra, Shri Uttam Kumar Srivastava, learned standing counsel has defended the order passed by the District Judge, Lucknow dated 25.05.2009 with his following submissions:
(i) It has been submitted that the scope of Section 47 CPC includes the right of the Executing Court to decide such questions as relate to the execution, discharge or satisfaction of a decree. He has submitted that since a sum of Rs.7.5 lacs had already been paid to the decree holder in a Suit bearing No.627/1967, therefore, the said amount could not be paid twice nor the decree holder was justified in claiming the aforesaid sum a second time and this issue relates to the adjustment and discharge of a decree, hence, it was within the domain of the Executing Court to look into this aspect of the matter and while doing so, the District Judge has recorded a finding which is based on facts as well as material on record, hence, such a finding cannot be treated as a jurisdictional error, hence, the same is not susceptible to be challenged in a revision purporting to be under Section 115 CPC.
(ii) It has further been urged that the interest being claimed by the decree holder was not in consonance with the award which was put to execution and, therefore, the decree holder cannot be permitted to execute a decree in a fashion which is contrary to the terms upon which the decree has been issued. Elaborating his submissions, learned standing counsel has submitted that from the perusal of the award passed by the Umpire it would indicate that so far as it relates to the interest component, the Umpire had awarded interest @ 9% per annum from the date of institution of the proceedings before the Calcutta High Court till the date of the award. This was challenged by the State of U.P., before the learned Single Judge of the Calcutta High Court, who by means of his judgment dated 28.04.1977 did not interfere with the merits of the award, however, insofar as grant of interest was concerned, the same was modified and the interest @ 9% per annum was awarded from the date when the reference was confirmed by the Court i.e. 10.10.1969 till the date of the award. It has further been urged that this order dated 28.04.1977 was assailed before the Division Bench of the Calcutta High Court, who by means of the order dated 17.03.2006 restored the position as given by the Umpire and permitted the pendente lite interest from the date when the reference was filed till the date of award. It further provided that the decree would be in terms of the award published by the Umpire with interest on the judgment granted @ 6% per annum.
18. Much emphasis has been laid by the learned standing counsel to the following lines which have been made in the order of the Division Bench dated 17.03.2006 which reads as under:-
"There will be a decree in terms of the award published by the Umpire. Interest on judgment is granted at 6% per annum"
19. Thus, the submission is that the Division Bench of the Calcutta High Court while restoring the time from which the interest was to be calculated i.e. from the date of filing of the reference before the Calcutta High Court, who had reduced the rate of interest @ 6% per annum and that too upto the date of the award. It has specifically submitted that the Umpire did not grant any future interest i.e. from the date of award till its realization. It has further been submitted that subsequently, the Division Bench of the Calcutta High Court by means of its order dated 13.07.2006 was pleased to correct its order and deleted the aforesaid lines which have been quoted hereinabove and in its place it held, which reads below:-
"The decree passed in terms of the award do stands modified as above".
20. Thus, it has been argued that there was no grant of any future interest and moreover the rate of interest, it was also reduced from 9% to 6% per annum. Accordingly, the amount now sought to be recovered under the decree was excessive and this being a question regarding execution, discharge and satisfaction of a decree is within the domain of the Executing Court to consider and decide. The Executing Court after considering the aforesaid has rightly held that no future interest is admissible and accordingly the order dated 25.05.2009 passed by the Executing Court does not require any interference from this Court and the revision being devoid of merits deserves to be dismissed.
21. Having considered the rival submissions and on perusal of the record, twin issues arise before this Court for consideration are (a) whether the plea of the adjustment of Rs.7.5 lacs could have been allowed by the Executing Court; (b) whether the Executing Court has rightly construed the award and decree made in light of the orders passed by the Calcutta High Court from time to time.
22. Dealing with the first issue regarding adjustment, learned counsel for the revisionist has pointed out that the payment of Rs.12.00 lacs said to have been deposited by the State of U.P., before the Registrar of the High Court at Calcutta in Regular Suit No.629/1977 related to a different proceedings altogether which was a suit between Shanker Industries Pvt. Ltd. vs. M/s. East Jamuria Company Pvt. Ltd., and the said sum was paid on 04.05.1967.It has also been pointed that the aforesaid award passed by the Umpire is dated 29.10.1973, therefore, any amount paid in Regular Suit No.627/1967 on 04.05.1967 had nothing to do with the award of the Umpire which came to be in respect of different claims between M/s. East Jamuria Company Pvt. Ltd., and the State of U.P. The Umpire while passing the award has categorically taken note of the issue regarding the boulder in that context it awarded a sum of Rs.7.5 lacs and the relevant portion of the award passed by the Umpire in this regard reads as under:-
"As regards the price of the boulder etc., which admittedly were taken over by the Department and which were the property, I fix the price at seven and a half lacs keeping in view the fact that some unauthorized deduction had been made by the Department and there was difference in the right of price between the parties."
23. From the perusal of the same, it would indicate that the award of the Arbitrator compromised of two components (i) a sum of Rs.27.00 lacs has been granted on account of damages and (ii) a sum of Rs.7.5 lacs has been awarded towards the price of the material etc., which in context of the above quoted paragraph indicates that it relates to the boulder as well. Thus, it would be seen that a total sum of Rs.34.50 lacs was awarded by the Umpire in favour of the decree holder. This amount was part of the award of the Umpire and principally is the subject matter which was to be entertained and assailed on the merits of the award rather than to rake up this issue at the stage of execution. It is settled law that the Executing Court cannot go behind the decree and has to take the decree as it stands.
24. In the present case at hand, it cannot be said that this issue was neither raised by the decree holder. The record reveals that the award of the Umpire was assailed by the State of U.P., by filing a petition before the learned Single Judge of the Calcutta High Court. A copy of the said judgment dated 28.04.1977 is on the record as Annexure No.2 with the application for interim relief filed by the revisionist.
25. From the perusal of the said judgment, it indicates that the State of U.P., had assailed the issue regarding the award of Rs.7.5 lacs as well as the rate of interest on the award. The learned Single Judge of the Calcutta High Court specifically noted the submissions of the State and the relevant part reads as under:-
"It was then contended that the Umpire had acted arbitrarily in awarding Rs.7.5 lacs for the trade of the boulders. It is not disputed that the boulders were taken over by the Department. Therefore, it is apparent that the contractor was entitled to the price of the sum. It is apparent from the recital of the award. It was documentary evidence before the Umpire. He has, therefore, on the evidence fixed Rs.7.5 lacs and this aspect also he has not invalidated the reason for fixing such a price. It is in my opinion, not necessary, provided that there was evidence for such finding, to indicate that what basis he has arrived at that figure. I am, therefore, unable to accept this challenge of this aspect of the matter."
26. Thus, it would be seen that a specific challenge was laid to the grant of Rs.7.5 lacs towards the costs of the material which included boulders. This challenge was repealed by the learned Single Judge. This was further carried in an appeal before the Division Bench of the Calcutta High Court, who also rejected the same. Thus, insofar as the findings of the Umpire insofar as the grant of Rs.7.5 lacs is concerned, the same attained finality. Once, the decree is prepared, it is not open for the judgment-debtor to assail the same findings in Section 47 CPC and thus, the objections raised by the judgment-debtor in his application before the Executing Court seeking adjustment of Rs.67.50 lacs is misguided and unfounded.
27. The judgment-debtor was prevented from raising the aforesaid issue again, as it had already been taken note and assailed at the time when the award was under challenged. Once, the award had attained finality, the Executing Court could not have gone beyond the decree nor could have assessed its merits. This can be seen from another angle. It is not disputed that the decree was made by the Calcutta High Court. It is in terms of Sections 38 and 39 CPC that the decree was transferred and transmitted to the Court at Lucknow for its execution. The Courts at Lucknow was required to execute the decree as it stands and it was not within the domain of the transferee court to entertain the objections of the judgment-debtor on merits. The scope of the execution of a decree before the transferee court is limited inasmuch it is only required to execute the decree. The judgment-debtor, if has any objections, the same has to be raised before the Court which had originally passed the decree.
28. In the present case, it is not disputed that the Calcutta High Court continued to have jurisdiction over the dispute and it is only because the properties from where the decree could be satisfied were not available within the jurisdiction of the Calcutta High Court, consequently the decree was transferred for execution at Lucknow. Thus, in light of the Order 21 Rule 28 CPC read with Sections 38 and 39 CPC if at all the judgment-debtor had any objections, the same were to be raised before the Calcutta High Court and it was not open for the transferee court at Lucknow in execution to have entertained the objections on merit.
29. This Court is fortified in its view in light of the decision of the Hon'ble Apex Court in the case of Shaukat Hussain alias Ali Akram & Ors. vs. Smt. Bhuneshwari Devi (dead) by LRs., & Ors., 1972 (2) SCC page 731.
30. The record also indicates that while execution proceedings were pending before the transferee court at Lucknow, the judgment-debtor i.e. State of U.P., had made an application for recall of the order passed by the Division Bench of the Calcutta High Court on 17.03.2006. The said application which came up before the Calcutta High Court has been brought on record as Annexure No.12 with the application for interim relief and from the perusal of the same, the issue regarding the grant of interest and the award has been raised in the said application. This application was moved on 01.02.2008 and was rejected by the Calcutta High Court by means of order dated 07.08.2008 wherein it has specifically noted that the application was an abuse of process of law and the relevant portion of the order dated 07.08.2008 reads as under:-
"We have been informed that the decree has already been transmitted before the Hon'ble Lucknow Court and the Hon'ble Lucknow Court has scisin over the matter and has passed an order in execution and that too by attaching the bank account of the petitioner. We keep it on record that the instant application has been filed in abuse of the process of law and the Court should not be taken as a right. Accordingly, we do not find any reason nor any sufficient cause has been shown in the application to recall the order dated 17.03.2006 and to condone the delay about 722 days. Hence, this application must fail and is hereby dismissed."
31. From the perusal of the aforesaid order, it is clear as the light of the day, that the Division Bench of the Calcutta High Court was in complete knowledge of the proceedings pending for execution of the decree at Lucknow and after considering the application on merits as well as on question of delay, the same was dismissed. The judgment-debtor did not stop there. It further carried the matter before the Hon'ble Supreme Court by filing a Special Leave Petition against the order dated 07.08.2008 and the Hon'ble Supreme Court by means of the order dated 25.11.2008 dismissed the said SLP.
32. The position as obtained is that the judgment-debtor had assailed the award on merits which attained finality. After the decree was put to execution it yet again attempted to assail the same by filing an application for recall which was again dismissed and it was further carried to the Hon'ble Apex Court which also dismissed the challenge raised by the State of U.P. Thus, once the effort of the judgment-debtor had failed and the matter had attained finality upto the Hon'ble Apex Court, it was absolutely not justified for the Executing Court at Lucknow to have re-entertained the same objections which was raised earlier inasmuch as the Executing Court at Lucknow has transgressed its jurisdiction on two grounds. Firstly, it being a transferee court entertained the objections on merit which the executing court could not. Secondly, despite the attempt of the judgment-debtor to assail the award and seeking recall of the order passed by the Division Bench and raising similar issues before the Hon'ble Apex Court which was also rejected could not be permitted to be raised before the Executing Court which was entertained by passing the impugned order.
33. Thus, this Court is of the considered view that so far as the issue regarding grant of adjustment of Rs.7.5 lacs is concerned is completely in excess of jurisdiction conferred upon the Executing Court and from the perusal of the impugned order wherein the District Judge has quoted extensively the paragraphs, affidavits and orders relating to the proceedings of R.S.No.67/1967 amplifies the fact that the court below has exceeded its jurisdiction by going behind the decree and it is not within the domain of the Executing Court. Thus, the findings on Issue No.1 as discussed by the District Judge in its impugned order dated 25.05.2009 cannot be sustained and is accordingly set aside.
34. As far as the other issue relating to grant of future interest is concerned, yet again this Court is constrained to note that the District Judge while passing of the impugned order dated 25.05.2009 did not apprise itself of the settled legal principles.
35. At this juncture, it will be relevant to point out that so far as the impugned order dated 25.05.2009 is concerned, large part of the same is dedicated to the issue of adjustment which has been discussed above. So far as the question regarding the interest is concerned, it has been dealt in an inappropriate manner without dealing with the contentions as well as the law applicable on the said point. Thus, for the reasons mentioned hereinafter, this Court finds that the said findings on Issue No.2 cannot be sustained.
36. As far as the facts are concerned, the same are not disputed between the parties. It is not disputed that the Umpire in its award dated 29.10.1973 clearly awarded pentente lite interest on the principal sum of Rs.34.50 lacs from 25.11.1966 i.e. the date of institution of the proceedings before the Calcutta High Court upto 29.10.1973 i.e. upto the date of the award. Once this matter was challenged before the learned Single Judge of the Calcutta High Court, it only modified the award to the extent that the interest at 9% shall be payable from the date when the reference was affirmed i.e. from 10.10.1969. Thus, it would be seen that the only modification in the award made by the Umpire was that the rate of interest @ 9% which was allowed by the Umpire from the date of the institution of the proceedings was curtailed by the learned Single Judge and was made payable from 10.10.1969.
37. However, the controversy is in respect of the effect of the grant of interest by the learned Single Judge @ 6% per annum from the date of the decree and the relevant portion of the order passed by the learned Single Judge dated 28.04.1977 reads as under:-
"I therefore modify this finding of the award to the extent that interest will be payable at the rate mentioned in the award from 10th of October, 1969 when the order of reference was confirmed by the Judgment of the Division Bench of this Court. Subject to the modification as aforesaid the award is confirmed. There will be no further order in this application.
In the facts and circumstances of this case, each party will pay and bear its own costs.
There will be a Judgment in terms of the award as modified by the order made in the application. Interest on the principal amount of Rs.34,50,000/- from the date of the decree at 6% and costs of obtaining and filing the award".
38. This indicates that while the learned Single Judge had reduced the period for the payment of interest. It further provided the interest @ 6% from the date of the decree till realization i.e. future interest. The Division Bench of the Calcutta High Court before whom the question of modification of the award made by the learned Single Judge was in issue. It held that the Arbitrator had the jurisdiction to grant pendente lite interest. It found that the modification made by the learned Single Judge for the grant of interest from the date when the reference was confirmed was uncalled for and to that extent it set aside the order passed by the learned Single Judge and restored the grant of pendente lite interest as awarded by the Umpire i.e. the interest @ 9% would be available to the decree holder from the date of institution of the proceedings before the Calcutta High Court till the date of award.
39. The Division Bench thereafter had incorporated two lines in its order dated 17.03.2006 which has already been noted hereinabove. However for ready reference it is being reproduced at the cost of repetition, however, only for the purposes of clearly understanding the issue.
"Hence, we come to the conclusion that the order so passed by the Hon'ble First Court modifying the Award published by the ld. Arbitrator in respect of granting pendentilite interest cannot be accepted by us since the rule of law has already given an authority to the Arbitrator to grant pendentilite interest. Hence we set aside the order and we affirm the award so published by the Umpire dated 29th October, 1973.
There will be a decree in terms of the award published by the Umpire. Interest on judgment is granted @ 6% p.a. Both the appeals are disposed of accordingly."
40. This has already noted above was deleted by the Division Bench by means of the order dated 13.07.2006 and its place, it incorporated the following lines, which reads as under:-
"The sentences "There will be a decree in terms of the award published by the Umpire. Interest on judgment is granted @ 6% p.a." appearing at 2nd paragraph at page-2 of the judgment dated 17.03.2006 has gone down due to inadvertence. The above sentences be deleted and in its place the sentence "The decree passed in terms of the award do stands modified as above" be incorporated.
Let this order be incorporated in the judgment dated 17.03.2006".
41. Thus, the cumulative effect of the aforesaid is that interest awarded by the Umpire was restored by the Division Bench in its order. The learned Single Judge, who had the power to grant interest for future i.e. from the date the award was made rule of the Court till its realization as this was solely in the domain and jurisdiction of the Court in terms of Section 29 of the Act of 1940. Thus, the learned Single Judge apart from modifying the award relating to the interest component as provided by the Umpire, it granted future interest from the date of the decree @ 6% per annum. It is the Court while dealing with the validity of the award and in its exercise of power conferred allowed 6% interest from the date of decree till realization. This aspect of the matter was never assailed before the Division Bench and for the said reason the Division Bench also restored the position so far as the interest is concerned as awarded by the Umpire. The ambiguity which had occurred in the order of the Division Bench was clarified by correcting its order and therefore, the position stood clarified. The effect is that the Umpire had awarded interest from the date of the commencement of the proceedings before the Calcutta High Court till the date of the award. The learned Single Judge awarded the interest from the date of the decree till its realization. It would been seen that no interest has been awarded to the decree holder for the period i.e. from the award till the date when the award has been made rule of the Court i.e. from 30.10.1973 till 27.04.1977. The Hon'ble Apex Court considering the issue regarding the award on interest in context with Arbitration Act, 1940 in its decision in the case of State of Orrisa vs. B.N. Agarawala, reported in 1997 (2) SCC Page 469 noticing the earlier views and considering the earlier judgments held in Paragraphs 36 to 38 which are reproduced hereinafter for ready reference:-
"36. According to Section 29 of the Arbitration Act, where the award is for payment of money the court may in the decree order interest from the date of the decree to the date of payment. This section by its plain language expressly gives the court the power to award interest from the date of the decree till the date of payment but would this imply that the arbitrator when making the award, has no jurisdiction to award interest from the date of the award till the date of payment.
37. When the arbitrator makes an award, it is not necessary that in every case the award has to be filed in a court and a decree, in terms thereof, is passed. It does happen that when an award is made, the party against whom it is made, may accept the award and comply with the same. It is rightly not disputed that from the date of passing of the award, future interest can be awarded by the arbitrator as held by this Court in the cases of Unique Erectors (Gujarat) (P) Ltd. [(1989) 1 SCC 532 : AIR 1989 SC 973] and Hindustan Construction Co. Ltd. [(1992) 4 SCC 217] The correct procedure which should be adopted by the arbitrator is to award future interest till the date of the decree or the date of payment, whichever is earlier. The effect of this would be that if the award is voluntarily accepted, which may not result in a decree being passed, then payment of interest would be made from the date of award till the date of payment. Where, however, as in the present case, the award is filed in the court and a decree is passed in terms thereof, then Mr Sanyal has rightly contended that it is for the court to determine under Section 29 of the Arbitration Act as to whether interest should be ordered to be paid and if so at what rate.
38. Under Section 29 of the Arbitration Act, the court can, even where the arbitrator has awarded interest from the date of the award till the date of payment, disallow interest from the date of the decree or determine a different rate at which the interest is to be paid or confirm the grant of interest as awarded in the award. When the court does not modify the award with regard to grant of interest from the date of the award up to the date of payment, the effect would be as if the court itself has granted interest from the date of the decree till the date of payment at the rate which was determined by the arbitrator. The future interest would be regarded as having been ordered to be paid under Section 29 of the Arbitration Act when the court does not modify the award in this respect."
42. From the perusal of the aforesaid dictum, it would be seen that the Hon'ble Apex Court has clearly held that the correct procedure to be adopted by the Arbitrator is to award future interest till the date of decree or the date of payment whichever is earlier. It also noticed that since sometimes the award is voluntarily accepted which may not result in a decree to be passed. In such circumstances, the payment of interest would be made from the date of the award till its payment. However, in the present case, since the award was filed in the Court and later a decree came to be passed in terms thereof. Accordingly, the Court was determining as to whether interest should be paid and if yes at what rate ? This deliberation is in exercise of powers conferred on the Court in terms of Section 29 of the Act of 1940.
43. In the instant case at hand, it would be seen that it was this power which was exercised by the learned Single Judge while awarding 6% interest from the date of the decree. This power of granting 6% interest was not interfered with by the Division Bench rather as already noted above, the ambiguity which had arisen was corrected by the Division Bench by means of its order dated 17.03.2006 which also noted that the decree passed in terms of the award shall stands modified. It is in terms of this that the decree came to be drawn by the Calcutta High Court wherein the position is explained above has been noticed and it is this decree which was sent to the transferee court at Lucknow for its execution.
44. The observations of the Hon'ble Apex Court in the case of B.N. Agarawala (supra) is also of much significance inasmuch as it has clearly held that where the court does not modify the award in respect of grant of interest from the date of the award up to the date of the payment. The effect would be as if the Court itself has granted interest from the date of the decree till the date of payment at the rate which as determined by the Arbitrator. The future interest would be regarded as having been ordered to be paid under Section 29 of the Act of 1940 when the Court does not modify the order in this respect. Thus, the principle as noted above is squarely applicable in the instant case and it would be seen that since the award was not modified by the Division Bench for grant of future interest which was awarded by the learned Single Judge in its order dated 28.04.1977. Thus, the District Judge in light of what has been discussed above and from the material borne out from the record, indicates that it has transgressed its jurisdiction and has entered into a realm of controversy, which was beyond its domain.
45. In light of the aforesaid, this Court has no hesitation in setting aside the finding returned on Issue No.2 as well. For all the reasons as contained in this judgment, the order dated 25.05.2009 cannot be sustained and the same is set aside.
46. This Court is reminded of the observations of the Hon'ble Apex Court wherein it had the occasion to consider the malaise infecting the executing proceedings. The relevant paras of the decision of the Hon'ble Apex Court in the case of Satyawati vs. Rajinder Singh & Anr., (2013) 9 SCC 491 is being gainfully reproduced:-
"12. It is really agonising to learn that the appellant-decree-holder is unable to enjoy the fruits of her success even today i.e. in 2013 though the appellant-plaintiff had finally succeeded in January 1996. As stated hereinabove, the Privy Council in General Manager of the Raj Durbhunga v. Coomar Ramaput Sing [General Manager of the Raj Durbhunga v. Coomar Ramaput Sing, (1871-72) 14 MIA 605 : 20 ER 912] had observed that the difficulties of a litigant in India begin when he has obtained a decree. Even in 1925, while quoting the aforestated judgment of the Privy Council in Kuer Jang Bahadur v. Bank of Upper India Ltd. [AIR 1925 Oudh 448 (PC)] the Court was constrained to observe that: (AIR p. 448) "Courts in India have to be careful to see that the process of the Court and the law of procedure are not abused by judgment-debtors in such a way as to make courts of law instrumental in defrauding creditors, who have obtained decrees in accordance with their rights."
13. In spite of the aforestated observation made in 1925, this Court was again constrained to observe in Babu Lal v. Hazari Lal Kishori Lal [(1982) 1 SCC 525] in para 29 that: (SCC p. 539) "29. Procedure is meant to advance the cause of justice and not to retard it. The difficulty of the decree-holder starts in getting possession in pursuance of the decree obtained by him. The judgment-debtor tries to thwart the execution by all possible objections."
14. This Court, again in Marshall Sons & Co. (I) Ltd. v. Sahi Oretrans (P) Ltd. [(1999) 2 SCC 325] was constrained to observe in para 4 of the said judgment that: (SCC p. 326) "4. ... it appears to us, prima facie, that a decree in favour of the appellant is not being executed for some reason or the other, we do not think it proper at this stage to direct the respondent to deliver the possession to the appellant since the suit filed by the respondent is still pending. It is true that proceedings are dragged for a long time on one count or the other and, on occasion, become highly technical accompanied by unending prolixity at every stage providing a legal trap to the unwary. Because of the delay, unscrupulous parties to the proceedings take undue advantage and a person who is in wrongful possession draws delight in delay in disposal of the cases by taking undue advantage of procedural complications. It is also a known fact that after obtaining a decree for possession of immovable property, its execution takes a long time."
15. Once again in Shub Karan Bubna v. Sita Saran Bubna [(2009) 9 SCC 689 : (2009) 3 SCC (Civ) 820] at para 27 this Court observed as under: (SCC p. 699) "27. In the present system, when preliminary decree for partition is passed, there is no guarantee that the plaintiff will see the fruits of the decree. The proverbial observation by the Privy Council is that the difficulties of a litigant begin when he obtains a decree. It is necessary to remember that success in a suit means nothing to a party unless he gets the relief. Therefore, to be really meaningful and efficient, the scheme of the Code should enable a party not only to get a decree quickly, but also to get the relief quickly. This requires a conceptual change regarding civil litigation, so that the emphasis is not only on disposal of suits, but also on securing relief to the litigant."
16. As stated by us hereinabove, the position has not been improved till today. We strongly feel that there should not be unreasonable delay in execution of a decree because if the decree-holder is unable to enjoy the fruits of his success by getting the decree executed, the entire effort of successful litigant would be in vain.
17. We are sure that the executing court will do the needful at an early date so as to see that the long drawn litigation which was decided in favour of the appellant is finally concluded and the appellant-plaintiff gets effective justice."
47. Thus, in view of the above, it is only in fitness of things that the District Judge, Lucknow shall take up that matter on priority inasmuch as it is distressing to note that the award which was passed in the year 1973 is still under executing and more than 45 years have lapsed while the decree holder has been unable to obtain the fruits of the decree.
48. Suffice it to state that the matter shall be taken up by the District Judge expeditiously and shall finally execute the decree and pass final orders without granting unnecessary adjournments to either parties and if possible, may take up this matter on day to day basis and in any case may not fix any date beyond the period four days at a time and conclude the proceedings.
49. In light of the observations made in this judgment, the Civil Revision No.26 of 2009 which is against an interlocutory order which merged with the final order dated 25.05.2009 passed in Civil Revision No.96 of 2009 and which has been set aside by this Court, accordingly, bot the civil revisions stand decided in terms of this judgment. The costs are made easy.
Order Date :- 11.11.2019 Rakesh/-