Delhi High Court
I.T.D.C. vs Ballwant Singh Virdee on 10 March, 2011
Author: Dipak Misra
Bench: Chief Justice, Sanjiv Khanna
* THE HIGH COURT OF DELHI AT NEW DELHI
Judgment Reserved on: 3rd March, 2011
% Judgment delivered on: 10th March, 2011
+ LPA No. 2304/2006
I.T.D.C. ..... Appellant
Through: Mr. V.K. Rao, Sr. Advocate with
Mr. Karunesh Tandon, Adv.
versus
BALLWANT SINGH VIRDEE ..... Respondent
Through: Mr. Rajesh Yadav, Ms.Ruchira,
Advocates
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA
1. Whether reporters of the local papers be allowed to see the judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the Digest? Yes
DIPAK MISRA, CJ
The present intra-court appeal is directed against the order
dated October 6, 2006 passed by the learned Single Judge in
Execution Petition No.70/2003 arising out of C.S. No. 1494/1993.
LPA No.2304/2006 Page 1 of 17
2. At the very outset, we may note with profit that the present
appeal was initially registered as EFA (OS) No.23/2006 and
thereafter, on 5.1.2006, recording the submission of the learned
counsel for the appellant that the same should have been registered
as an LPA, it was directed that it should be registered as an LPA.
The issue of maintainability of the appeal was kept open. In the
course of hearing of the appeal, the learned counsel for the parties
fairly conceded that the appeal be decided on merits without
adverting to the issue whether EFA would lie or an LPA would lie.
Accordingly, we proceed to deal with the merits of the appeal
keeping the issue of maintainability open.
3. The facts which are essential to be stated for adjudication of
the appeal are that the respondent was awarded the work of
supply, installation, testing and commission of electrical system at
Hotel Ashok, Bhopal (MP) by the India Tourism Development
Corporation (ITDC) vide Work Order dated 11.10.1985. As
disputes arose between the parties, the matter was referred for
arbitration. The learned arbitrator passed an award on 26.5.1993
LPA No.2304/2006 Page 2 of 17
and sent the proceedings to this Court which was registered as Suit
No. 1494/1993. The notice of filing of the award was issued to the
parties and in response to the said notice, the ITDC filed objections
resisting the award in relation to the allowing of the contractor‟s
claims 1(a) and 1(b). This Court, vide order dated 9.1.1998, upheld
the award in all aspects except the award passed pertaining to
claim item Nos. 1(a) and 1(b). It was held that the arbitrator had
not quantified the amount awarded to the contractor in respect of
claim No. 1(a) and, therefore, to that extent, the award was
indefinite and incapable of execution. As regards claim No.1(b),
the contractor was awarded a sum of Rs.3 lakhs. The learned
Single Judge scanning the anatomy of Clause 18 of the agreement,
which stipulated that if the amount awarded was Rs.50,000/- or
more, came to hold that the arbitrator was under obligation to give
reasons, but the arbitrator had ascribed no reasons
4. In view of the aforesaid analysis, the matter was remitted to
the arbitrator only in respect of the aforesaid two claims.
LPA No.2304/2006 Page 3 of 17
5. After the award was passed, the appellant filed its objections
but the same were rejected and the award was made Rule of Court
vide order dated 27.1.2003. Thereafter, the respondent filed
execution petition for execution of the award dated 10.5.1998 and
in pursuance of the decree, the appellant paid the entire amount to
the respondent and satisfied the decree. After the amount was
paid, the respondent filed an application under Section 152 of the
Code of Civil Procedure stating that at the time of preparation of
the decree sheet, on account of accidental slip, certain clerical
mistake had crept-in in the decree sheet and due to such a
ministerial mistake, the date of filing of the award was mentioned
20th May, 1998 in place of 15th December, 1993 and, therefore, the
said mistake should be rectified and he should be entitled to the
interest from the first date, i.e., 15.12.1993.
6. After the remit, the learned arbitrator considered the matter
and passed an award dated 10.5.1998. In the said award, the
learned arbitrator quantified the amount in respect of claim No.1(a)
LPA No.2304/2006 Page 4 of 17
and also ascribed the reasons for the amount awarded under claim
No.1(b).
7. Before the learned Single Judge who was dealing with the
execution case arising out of the suit, it was contended that when
the suit was pending and the matter was remanded to the
arbitrator in respect of a particular claim on two scores, namely, to
quantify a particular claim and to ascribe the reasons on the other,
the award remained alive and the order of remit does not amount
to a fresh reference of disputes to the arbitrator to arbitrate upon or
send the reference back to him for re-consideration within the
parameters of Section 16 of the Arbitration Act, 1940 (for short „the
1940 Act‟). In this backdrop, it was further urged that the decree
holder is entitled to get interest from the date of the first award and
not from the second award and he was legitimately entitled to the
interest from the initial award.
8. The learned Single Judge, considering the submissions and
placing reliance on the decision in Union of India v. M/s Swadeshi
Karyalaya & Anr., AIR 1991 Delhi 53, came to hold that the
LPA No.2304/2006 Page 5 of 17
respondent-contractor is entitled to interest on the decretal amount
from the date of the first award dated 26.5.1993.
9. In M/s Swadeshi Karyalaya (supra), this Court has opined
thus:
"The original award is dated 21st June, 1977
and was filed in Court on 7th November, 1977
for making it rule of the Court. Thereafter, as
noted above, the award was remitted under
Section 16 of the Act for re-consideration
limited to the question of limitation.
Thereafter, the arbitrator submitted his
decision on 25th May, 1984. This was within
the time as fixed earlier at the time of
remitting the award and as extended by
subsequent orders of the court. When the
award was first filed UOI did not file any
objections to the claim which had been upheld
by the arbitrator. Interest from the date of the
award would, therefore, be calculated from
21st June, 1977 and not the date when the
arbitrator submitted his decision after
reconsideration under Section 16 of the Act as,
to my mind, when the award is remitted for
re-consideration on any point, the arbitrator
has to give his decision within the time fixed
by the Court otherwise the award which is
remitted becomes void. In a case like this
Court remains seized of the matter till the
award is re-submitted by the arbitrator after
re-consideration."
LPA No.2304/2006 Page 6 of 17
10. The said opinion was expressed in the context of accrual of
interest regard being had to the date of passing of the award but in
the instant case, the fulcrum of the matter is whether the learned
Single Judge while dealing with an application in an execution
proceeding could have granted the interest as prayed for. To
appreciate the ratio laid down therein, it is necessary to see while
remanding the matter on the earlier occasion, what the learned
Single Judge had stated:
"However, I find that the learned arbitrator
has not worked out or determined the exact
amount awardable to the contractor as against
the claimed amount of Rs.25,44,910.95 paise
against claim no.1(a). The amount for which
award on claim no.1(a) could be said to have
been made is neither specified in the award
nor has it been shown to what figure it comes
to and how. The award to that extent, being
indefinite, is incapable of execution and
deserves to be remitted to the learned
arbitrator for quantification of the exact
amount. It is ordered accordingly.
Against claim no.1(b), for Rs.25,44,911.05
paise, which formed part of the consolidated
claim no.1 in the sum of Rs.50,89,822/-,
claimed as escalation in labour and material
LPA No.2304/2006 Page 7 of 17
for the period from July 1986 to June 1990, to
which period the work procrastinated due to
non-competition of civil work by the ITDC
and other delays on its part, the learned
arbitrator has awarded a sum of Rs.3 lacs. It
is true that the arbitrator is not supposed to
give detailed reasons for his findings but it
has to be discerned from the award as to how
his mind operated to come to a finding.
Having perused the award, I find that while
adjudicating on the said claim, though the
learned arbitrator has observed that work
could not be completed due to non-
completion of civil work and there was delay
of nearly four years, but it is not possible to
discern therefore any basis for the award of a
sum of Rs.3 lacs against the claim of
Rs.25,44,911.05 paise. In view of clause 48 of
the agreement, making it obligatory for the
arbitrator to give reasons for the award of any
amount, where the amount of the claim in
dispute is Rs.50,000/- or more, the objection
of the ITDC, regarding the legality of the
award as being non-speaking, deserves to be
accepted.
In view of the above, the award on claim
no.1(a) and extra items no.2 to 7, being
indefinite and inexecutable and no reason in
support of finding on claim no.1(b) having
been indicated, I am constrained to remit the
award back to the learned arbitrator for
quantifying the amount awardable against
claim 1(a) and extra items no.2 to 7 and for
recording his reasons for the award of the
sum of Rs.3 lacs. The learned arbitrator shall
LPA No.2304/2006 Page 8 of 17
submit his decision to the Court on the above
points within four months from today after
affording reasonable opportunity to the
parties of being heard. The arbitrator‟s record
be sent back to him immediately on his
present address, being furnished by the
contractor within a week from today."
11. After the remit, the arbitrator passed the award on 10.5.1998
and, while dealing with the interest component, he has held thus:
"Interest As given in Award dated
26.05.1993 no pre-suit and pendentlite interest
is payable. The claimant has not be paid the
money for nearly 6 years, therefore, the
amount of Rs.6,61,461.31 is to be paid to the
Respondent within 4 weeks from the date of
this Award. In case the payment is not made
within 4 weeks, future interest at the rate of
15% simple interest shall be payable till the
date of payable. The bank guarantee may also
be released.
The Award is made this 10th of May, 1998."
12. The learned Single Judge, while repelling the objection and
making the award Rule of Court, has initially in paragraphs 4, 5, 6
and 7 stated that:
LPA No.2304/2006 Page 9 of 17
"4. It is the agreed position that in relation
to the amount awarded against Claim No.1(a)
being Rs.3,59,911.31, there are no objections
by respondent / ITDC at all. Accordingly, the
said amount alongwith interest thereon at
15% p.a. from the date of the award, as
directed by the Sole Arbitrator in the second
award, is therefore clearly payable to and
receivable by the petitioner.
5. Since the said amount has not been
deposited by M/s ITDC with this Court, even
though there no objections have been filed in
relation to this awarded amount, I cannot
agree with the submission of learned counsel
for the respondent - ITDC, that the rate of
interest should be reduced.
6. It is also to be noted that no pre-suit or
pendent lite interest had been awarded, and
this aspect has become final as a result of the
earlier round of proceedings, and therefore
the only interest which the petitioner stands
to receive, is for the post award period.
7. In this view of the matter, interest at
15% is fair and reasonable, and the petitioner
will be entitled to receive the same upto the
date of payment."
13. Thereafter, the learned Single Judge proceeded to state as
follows:
LPA No.2304/2006 Page 10 of 17
"14. In this view of the matter, and there
being no prohibitive clause cited by the
respondent which bars the grant of escalation
in the event of prolonging of the contract
works, and keeping in view the clear-cut
finding of the arbitrator to the effect that for
no fault of petitioner‟s work which was to
have been completed within 6-9 months,
actually took more than four years, no
interference is warranted with the award in
question.
15. Moreover learned Sole Arbitrator has
adopted the CPWD methodology for
calculating the escalation which is a time
tested and well-established method.
16. In view of the above, I find no merit in
the objections of the defendant / ITDC which
are accordingly dismissed as unsustainable.
The award is made a Rule of the Court.
17. The plaintiff will also be entitled to
interest at 15% for the date of the award and
upto the date when payment is received. No
order as to costs."
14. Thus, from the perusal of the award passed by the arbitrator
after remit and the order passed by the learned Single Judge on
earlier occasion, it is quite vivid that the interest component was
not paid from 1993 but from the date of the award upto the date of
the payment for the post award period. The post award period has
LPA No.2304/2006 Page 11 of 17
to be understood in the context in which the arbitrator has
awarded the interest. We have already reproduced the said
paragraph from the award. The arbitrator has mentioned that
amount of Rs.6,61,461.31 is to be paid to the respondent within
four weeks from the "date of this award" with the further
stipulation that in case the same is not paid within four weeks,
future interest @ 15% simple interest shall be payable till the date
of payment. The terms used in the award and the grant of four
weeks have their own signification.
15. The learned Single Judge made the said award Rule of
Court. Thus, he accepted the award in entirety. The question that
emerges for consideration is whether there is any justification to
modify the decree on the ground that for the purpose of calculating
interest, the date should have been 15.12.1993. The arbitrator on
the earlier occasion, while passing claim on the earlier award, had
specifically not awarded interest in respect of the amount and
rightly so as the same was not quantified. He has clarified the
position in the second award which was accepted by the learned
LPA No.2304/2006 Page 12 of 17
Single Judge. No objection was filed by the contractor. On the
contrary, there was an agreed position. Under these
circumstances, the question that emerges for consideration is
whether a petition for rectification / modification of the decree
under Section 152 of the Code of Civil Procedure, 1908 could have
entertained by the learned Single Judge on the ground that there
was no justification to deny the interest component in view of the
decision rendered by this Court in M/s Swadeshi Karyalaya
(supra). The decision in M/s Swadeshi Karyalaya (supra) dealt
with a situation where the question arose after the award was
remitted for reconsideration by the arbitrator and the arbitrator
submitted the award after reconsideration. Thereafter, the Court
was dealing with the objections raised before it. In that factual
backdrop, this Court held that the interest from the date of the
original award deserved to be calculated. In our considered
opinion, there cannot be any quarrel over the said legal
proposition. But, in the case at hand, as is perceived, after the
award was made Rule of Court by the learned Single Judge a
LPA No.2304/2006 Page 13 of 17
decree was drawn up in accordance with the terms of the award.
What is sought to be modified is the decree under Section 152 of
the Code. Section 152 of the Code of Civil Procedure, 1908 reads as
follows:
"152. Amendment of judgments, decrees or
orders. - Clerical or arithmetical mistakes in
judgments, decrees or orders or errors arising
therein from any accidental slip or omission
may at any time be correct by the Court either
of its own motion or on the application of any
of the parties."
16. In this context, we may refer with profit to a passage from
Shyamal Bihari Mishra and others v. Girish Narain Missir and
another, AIR 1962 Patna 116 wherein it has been held thus:
"17. It is a cardinal principle of the law of
procedure that the decree should agree with
the judgment. Where, therefore, its decree is
at variance with its judgment, and, when the
decree does not correctly express what was
really decided and intended by the Court, it
has an inherent power to vary or amend its
own decree or order so as to carry out its own
meaning and intention. In doing so, it does
nothing but exercise a power to correct a
mistake of its ministerial officer by whom the
decree or order was drawn up. It only insists
LPA No.2304/2006 Page 14 of 17
that the decree drawn up in the office of the
Court should correctly express the judgment
given by the Court. In the words of Lindley,
L. J. in re Swire; Mellor v. Swire (1885) 3 Ch.
D. 239 at page 246:
"there is no such magic in passing and
entering an order as to deprive the court
of jurisdiction to make its own records
true, and if an order as passed and
entered does not express the real order
of the Court, it would, as it appears to
me, be shocking to say that the party
aggrieved cannot come here to have the
record set right but must go to the
House of Lords by way of appeal."
X X X X
23. Section 152 however, permits clerical or
arithmetical mistakes in judgments decrees or
orders to be corrected at any time. Section 152,
therefore, deals with one of the two cases,
stated above, in which only the Court can
amend or vary a decree or order after it is
drawn up and signed. Under this section,
where there has been a clerical or arithmetical
mistake, or an error arising from an accidental
slip or omission in a judgment, decree or
order, it may, at any time, be corrected by the
Court either on its own motion or on the
application of any of the parties. The
amendment petition under Section 152 of the
Code is not a continuation of the suit or
proceedings therein. It is in the nature of an
independent proceeding, though connected
with the order of which the amendment is
LPA No.2304/2006 Page 15 of 17
sought. The jurisdiction of the Court to amend
its decree or order on the ground that by
inadvertence, because of any clerical mistake,
the decree or order as drawn up does not give
effect to the intention of the Court as
expressed in its judgment is undoubted. In
order that the manifest rights of a party,
which were intended to be effected by its
decision may not be defeated, the Court
always exercises its right to amend its decree
or order, if as drawn up, it is not in
conformity with its judgment due to a clerical
or arithmetical mistake in it."
[Emphasis supplied]
17. In Century Textiles Industries Limited v. Deepak Jain and
another, (2009) 5 SCC 634, the Apex Court has ruled thus:
"22. We are unable to persuade ourselves to
agree with the High Court that the only
course available to the decree-holder was to
seek amendment of the decree under Section
152 CPC, as was canvassed before us by
learned counsel for the respondents. A bare
reading of Section 152 CPC makes it clear that
the power of the court under the said
provision is limited to rectification of clerical
and arithmetical errors arising from any
accidental slip or omission. There cannot be
reconsideration of the merits of the matter
and the sole object of the provision is based on
the maxim actus curiae neminem gravabit i.e.
an act of court shall prejudice no man. In our
LPA No.2304/2006 Page 16 of 17
judgment, the issue requiring adjudication by
the executing court did not call for and was
clearly beyond the scope of Section 152 CPC."
[Emphasis added]
18. In the case at hand, as is evincible, the decree is not at
variance with the judgment and, therefore, we have no agitation in
holding that the learned Single Judge has fallen into error by
directing modification / rectification of the decree under Section
152 of the Code of Civil Procedure, 1908.
19. Consequently, the appeal is allowed and the order passed by
the learned Single Judge is set aside. There shall be no order as to
costs.
CHIEF JUSTICE
MARCH 10, 2011 SANJIV KHANNA, J.
pk,dk LPA No.2304/2006 Page 17 of 17