M/S Jaiprakash Associates Limited vs Nhpc Limited on 8 April, 2019

[Cites 9, Cited by 1]

Delhi High Court

M/S Jaiprakash Associates Limited vs Nhpc Limited on 8 April, 2019

1. The captioned interlocutory application represents objections filed on behalf of the defendant i.e. NHPC Limited (hereafter referred to as „NHPC‟) under Sections 30 & 33 of the Arbitration Act, 1940 (in short "1940 Act").

2. The application was heard by me at some length on 04.04.2019. In the proceedings held on that date, I had recorded the submission of counsel for parties with regard to the main issue at hand. While I wanted to dispose of the matter on 04.04.2019, I was persuaded by Mr. Nath, who, appears for NHPC, to stand over the matter as he wanted to place on record certain judgments for my consideration.

2.1 Therefore, after recording the submission of counsel of both sides, CS (COMM.) 907/2018 Page 1 of 18 and after setting out my prima facie view, I had stood over the matter till today i.e. 08.04.2019.

2.2 Thus, in order to avoid repetition, and for the sake of convenience, the relevant part of my order dated 04.04.2019 is extracted hereafter.

"2. These objections have been preferred by NHPC Limited company (NHPC), qua the award dated 09.02.2018, as clarified by the order dated 28.03.2018.

3. Upon notice being issued in CS(Comm.) 907/2018, the arbitral tribunal, concededly, filed the aforementioned award and the follow- up clarificatory order in this Court.

4. It is thereupon that NHPC preferred the instant objections via the captioned application.

5. The principal objection which NHPC raises with regard to the directions contained in the award dated 09.02.2018 pertains payment of interest.

5.1 This objection is pivoted on the provisions contained in Clause 49.5 of the General Conditions of Contract (in short "GCC").

6. It is the contention of Mr. Nath, Advocate, appearing on behalf of NHPC, that the arbitral tribunal could not have awarded interest as there is a bar in the said clause on the payment of interest with regard to the monies withheld and/or retained by NHPC.

7. Mr. Sawhney, who appears on behalf of non-applicant/plaintiff, contends otherwise.

7.1 Learned counsel submits that the bar obtains only if money was otherwise due and payable to the non-applicant/plaintiff.

8. According to Mr. Sawhney, since NHPC raised disputes qua the claims raised by the non-applicant/plaintiff, Clause 49.5 of the GCC would have no applicability.

CS (COMM.) 907/2018 Page 2 of 18

8.1 In the alternative, Mr. Sawhney says even if the clause is construed to mean that it permits NHPC to mark a lien on the sums which the contractor claimed under the subject contract, the lien can hold and therefore, monies can be withheld and/or retained only against monies payable to NHPC in respect of any other contract obtaining between the parties. Learned counsel says that there are no sums payable to NHPC under any other contract.

9. I have heard learned counsel for the parties.

10. For the purpose of disposal of the objection raised by NHPC, one would have to examine the width and scope of Clause 49.5 of the GCC. Thus, for the sake of convenience, the same is extracted hereafter:

"49.5..any sum of money due and payable to the contractor (including the security deposit returnable to him) under the contract may be withheld or retained by way of lien by the Engineer In charge or corporation against any claim of the corporation or such other persons or persons in respect of payment of a sum of money arising out of or under any other contract made by the contractor with the Engineer-in-

charge or corporation or with such other person or persons.

The sum of money so withheld or retained under this clause by the Engineer-in-charge or Corporation will be kept withheld or retained as such by the Engineer- in-charge or Corporation or till his claim arising out of in the same contract or any other contract is either mutually settled or determined by the Arbitrator, if the contract is governed by the arbitration clause under the clause 55 or by the competent court hereinafter provided, as the case may be, and the contractor shall have no claim for interest or damages whatsoever on this account or any other ground in respect of any sum of money withheld or retained under this clause."

CS (COMM.) 907/2018 Page 3 of 18

11. A careful perusal of the said clause shows that it prohibits payment of interest to the contractor in the following scenario:

11.1 Where any sum is due and payable to the contractor including by way of security deposit under the contract, the same can be withheld or retained by way of lien, inter alia, by NHPC against any claim it may have vis-a-vis the contractor arising out of or under "any other" contract between the parties.

11.2 The clause goes on to provide that the sum so withheld or retained will be kept withheld or retained by NHPC. This part of the clause also provides for termination of the lien in two situations.

First, where "his claim" (and this could be only the contractor's claim) arising out of the same contract or any other contract is settled. Second, where his claim, that is, the contractor's claim whether arising out of the same contract or any other contract is determined by an Arbitrator or a competent court.

12. It is only when such a situation arises that the respondent is not obliged to pay interest or damages to the contractor qua money withheld or retained.

13. Mr. Sawhney submits that apart from the monies claimed under the subject contract, no other sums are due and payable to the contractor either under the subject contract or any other contract.

14. Furthermore, Mr. Sawhney submits that insofar as the subject contract is concerned the dispute between parties pertained to finalisation of the rates qua extra work. The learned counsel submitted that since the rates were not finalised by the respondent, monies were not released to the contractor against the claims made in respect of extra work.

14.1 The argument was that the contractor's claims were fluid as CS (COMM.) 907/2018 Page 4 of 18 there was no crystallisation of dues.

15. In any event, according to Mr. Sawhney, no lien was ever marked by NHPC vis-a-vis plausible claims of the non- applicant/plaintiff arising out of the subject contract.

16. It is also the contention of Mr. Sawhney that NHPC did not raise any independent claim against the non-applicant/plaintiff. According to learned counsel, the claimant before the arbitral tribunal was only the non-applicant/plaintiff.

16.1 Learned counsel re-emphasized the point that assuming without admitting lien could be marked or as contended was marked there were no sums due and payable under any other contract to NHPC. 16.2 I must put on record that this aspect is not disputed by Mr. Nath.

17. Mr. Nath, Advocate, appearing on behalf of NHPC, contends to the contrary.

17.1 According to the learned counsel, the clause takes within its ambit even the subject claims which stand determined by the arbitrator via the award dated 9.2.2018. In other words, the contention is that qua the claim determined by the arbitrator with respect to the subject contract no interest would be payable.

18. Prima facie, I am of the view that the construction placed on Clause 49.5 of the GCC by Mr. Nath is not tenable.

19. However, Mr. Nath seeks time to place on record before me certain judgements to persuade me to his point of view.

20. Besides this, Mr. Nath says that there are two other issues which are required to be considered.

20.1 First, as to whether the rate of interest granted by the arbitral tribunal ought to be sustained.

CS (COMM.) 907/2018 Page 5 of 18

20.2 Second, the date from which the liability, if any, to pay interest, should commence."

3. A perusal of the aforesaid extract of my order dated 04.04.2019 would demonstrate that the objections taken by NHPC to the impugned Award and the clarification issued thereafter by the learned Arbitrator veers around one principal issue, which is, the directions contained in the impugned Award qua payment of interest by NHPC to the non-applicant/plaintiff i.e. Jai Prakash Associates Limited (in short „JAL‟).

4. The other objections raised by NHPC are consequential in nature. These pertain to, as is evident from the proceedings dated 04.04.2019, the rate and the period for which the interest, if at all, is payable by NHPC to JAL/non-applicant/plaintiff.

5. Insofar as the objection to the direction for payment of interest is concerned, the same is based on the provisions of Clause 49.5 of the GCC. I have already extracted Clause 49.5 of the GCC in the earlier part of my order. According to NHPC, no direction could have been issued by the learned Arbitrator qua interest as Clause 49.5 of the GCC prohibits payment of interest in a situation where money is withheld or retained by NHPC. 5.1 As regard the issue concerning rate and the period for which interest has been directed to be paid, it has been argued on behalf of NHPC by Mr. Nath that if the Award is enforced in terms of directions contained therein with regard to rate and period, then, NHPC will be required to pay interest at the rate of 14% per annum over a period spanning between 03.11.1993 and 31.03.2019. According to Mr. Nath, in absolute terms, interest could work out to a figure of Rs.21,00,30,320/-. Mr. Nath says that interest component would be huge when compared to the principal amount awarded in favour of JAL/non-applicant/plaintiff.

5.2 Notably, as per the impugned Award, post-correction, the principal CS (COMM.) 907/2018 Page 6 of 18 sum payable by NHPC is Rs.5,90,40,294/-. Mr. Nath has submitted that if at all, interest is directed to be paid at the rate of 14%, then, it should run for the period between 25.04.2015, that is, when the arbitration proceedings recommenced between the parties after the remand and, end with the date when the amount is realized by JAL/non-applicant/plaintiff. 5.3 In support of his submission, Mr. Nath has relied upon the following judgments: (i) Tehri Hydro Development Corporation Limited and Another Vs. Jai Prakash Associates Limited, (2012) 12 SCC 10, (ii) A.P. State Trading Corporation Ltd. Vs. G.V. Malla Reddy; 2010 (6) R.A.J. 382 (SC) (iii) Sh. Suresh Kumar Gola Vs. M/s Puja Cooperative GHS Ltd., 2012 (5) R.A.J. 262 (Del.).

5.4 Insofar as the arguments advanced on behalf of JAL/non- applicant/plaintiff, by Mr. Sawhney are concerned, qua the principal objection taken on behalf of NHPC, these have already been recorded in my proceedings of 04.04.2019. Therefore, I need not repeat the same. However, as regards the submissions made on behalf of NHPC with regard to rate and period for which interest has been directed to be paid by NHPC to JAL/non- applicant/plaintiff, Mr. Sawhney made the following submissions:

(i) Interest at the rate of 14% was awarded in view of NHPC having charged the same rate of interest against money advanced to JAL/non-

applicant/plaintiff. This, according to the counsel, was a good reason to sustain the rate of interest.

(ii) NHPC, in the past, had paid interest to JAL/non-applicant/plaintiff against sums due under the subject contract at the rate of 12% per annum.

(ii)(a) In other words, it was Mr. Sawhney‟s contention that in case this Court was inclined to reduce the rate of interest, given the period involved, it should not be below 12% (simple) per annum.

(ii)(b) On a specific query being put to learned counsel as to whether CS (COMM.) 907/2018 Page 7 of 18 JAL/non-applicant/plaintiff would live with the grant of interest at the rate of 12% (simple) per annum, learned counsel answered in affirmative.

(iii) As regard the period for which the interest has been directed to be paid, Mr. Sawhney submitted that it would be fair that interest should be paid from the date when the arbitration was triggered and not from the date when the Arbitrator entered upon reference on remand.

(iii)(a) In a nutshell, Mr. Sawhney submitted that period of interest should commence from 03.11.1993 when JAL‟s/non-applicant‟s/plaintiff‟s letter dated 28.10.1993, invoking arbitration agreement, was received by NHPC. 5.5 In support of his submissions, Mr. Sawhney relied upon the following judgments: (i) Bhagawati Oxygen Ltd. Vs. Hindustan Copper Ltd.; (2005) 6 SCC 462 and (ii) Reliance Cellulose Products Limited Vs. Oil and Natural Gas Corporation Limited; (2018) 9 SCC 266.

Analysis and Reasons

6. Having heard the learned counsel for the parties and perused the record, before I proceed further, the following dates and events, to the extent they are necessary for disposal of objections of NHPC, need to be noted. 6.1 The subject contract was awarded to JAL/non-applicant/plaintiff on 27.05.1986. The contract required JAL/non-applicant/plaintiff to construct a main concrete dam and coffer dams across river Ravi at Chamera Hydroelectric Project. The value of the contract was Rs.82.18 crores. The scheduled date of completion was 31.12.1989.

6.2 During the course of the execution of the contract, disputes arose between the parties with regard to JAL‟s/non-applicant‟s/plaintiff‟s entitlement concerning mark up percentage on extra and deviated items. 6.3 JAL/non-applicant/plaintiff being aggrieved by the fact that despite the subject contract providing for mark-up charges, the stipulated provision CS (COMM.) 907/2018 Page 8 of 18 was not applied, decided to trigger the arbitration agreement. Consequently, JAL/non-applicant/plaintiff vide letter dated 28.10.1993 triggered the arbitration agreement. This communication was received by NHPC on 03.11.1993.

6.4 Consequent thereto, one, Mr. Hari Swarup, was appointed as an Arbitrator, who, rendered the Award on 21.12.1996. Via this Award, Mr. Hari Swarup, briefly, held that JAL/non-applicant/plaintiff was not entitled to additional sums as claimed under schedule „D‟ appended to the subject contract qua overheads, profits, supervision and other charges on the cost of material supplied by NHPC for execution of the work in issue under Clause 18.2 (iii) of the Contract. In sum the mark-up percentage claimed by JAL/non-applicant/plaintiff on extra and deviated items was denied. 6.5 Since, JAL/non-applicant/plaintiff was aggrieved by the Award, it assailed the same by filing a petition in this Court. A Single Judge of this Court, vide judgment dated 11.02.2010 set aside the Award and remanded the matter to the learned Arbitrator.

6.6 The NHPC being aggrieved, preferred an appeal against the judgment of the Single Judge. The Division Bench, however, sustained the Single Judge‟s judgment. The Division Bench rendered its judgment on 04.11.2011.

6.7 NHPC escalated the matter to the Supreme Court; an endeavour which failed. The Special Leave Petition filed by NHPC was dismissed on 18.11.2014.

6.8 It appears that in the interregnum, Mr. Hari Swarup had expired and, therefore, NHPC appointed another Arbitrator in the matter on 25.04.2015. 6.9 Evidently, in between, a Settlement Committee was constituted on 25.07.2016 to attempt a compromise in the matter. Since, no settlement could be reached, inter se disputes were finally adjudicated upon by the CS (COMM.) 907/2018 Page 9 of 18 learned Arbitrator. An Award dated 09.02.2018 was passed whereby a sum of Rs.6,23,39,157/- was awarded in favour of JAL/non-applicant/plaintiff. This Award was, however, corrected on 28.03.2018 and the amount awarded in favour of JAL/non-applicant/plaintiff was scaled down to Rs.5,90,40,294/-. In sum, JAL/non-applicant/plaintiff was awarded the aforementioned amount along with interest pegged at the rate of 14% (simple) per annum, albeit, from the date of reference till the date of realization.

7. Consequent thereto, JAL/non-applicant/plaintiff filed a suit under Section 14 of the 1940 Act. Upon notice being issued, learned Arbitrator filed the Award in this Court.

7.1 It is, thereupon, that the captioned application was filed by NHPC by way of objections under Sections 30 and 33 of the 1940 Act.

8. In the background of the aforementioned broad facts that the following two objections, raised on behalf of NHPC, are required to be dealt with by me:

(i) First, as to whether a direction could have been issued by the learned Arbitrator for payment of interest in view of the provisions of Clause 49.5 of the GCC.

(ii) Second, whether in the fact and circumstances of the case, the learned Arbitrator ought to have awarded payment of interest at the rate of 14% per annum spanning between date of reference and date of realization.

9. Insofar the first objection is concerned, it is clear upon a plain reading of Clause 49.5 of GCC that NHPC can withhold or retain monies due and payable to the contractor, who, in this case is JAL/non-applicant/plaintiff, by way of lien against a claim arising out of or under any other contract between the parties. The sum due and payable could also include a security deposit made over by the contractor (i.e. JAL/non-applicant/plaintiff) in CS (COMM.) 907/2018 Page 10 of 18 favour of NHPC.

9.1 Furthermore, Clause 49.5 of the GCC provides for termination of lien in a situation when either the contractor‟s (in this case JAL‟s/non- applicant‟s/plaintiff‟s) claim arising out of the subject contract or any other contract is settled or determined by an Arbitrator or a competent Court. 9.2 If the scenario, as envisaged under Clause 49.5 of the GCC obtains, then, NHPC cannot be called upon to pay interest or damages on the amount withheld or retained by way of lien.

9.3 I must indicate herein that Mr. Nath did try to argue that the amount withheld, as against that which was retained by lien, presented two different situations.

9.4 To my mind, this submission of Mr. Nath is untenable, simply for the reason as it fails to take into account the latter part of Clause 49.5 of the GCC, which connects these two expressions with the expression "in respect of payment of a sum or money arising out of or under any other contract"

made by the contractor with the Engineer-In-Charge or NHPC. 9.5 Thus, both for the amount withheld and the amount retained, the expression which follows i.e. by way of lien etcetera in respect of payment of sum of money arising out of or under any other contract made by the contractor with the Engineer-In-Charge or NHPC are common. 9.6 Therefore, in my view, NHPC could have withheld or retained monies by way of lien insofar as the amounts which were due and payable to the contractor (i.e. JAL/non-applicant/plaintiff), only if, the contractor in turn was required to pay moneys to NHPC arising out of or under any other contract. This is, insofar as the first part of Clause 49.5 is concerned. 9.7 The second part of Clause 49.5 speaks about the period for which the money withheld or retained could be, by way of lien, kept back by NHPC. This part of Clause 49.5 makes it clear that the lien would end if the CS (COMM.) 907/2018 Page 11 of 18 contractor‟s (in this case JAL‟s/non-applicant‟s/plaintiff‟s) claim arising out of the subject contract or any other contract with NHPC were to be either mutually settled or determined by the Arbitrator or competent Court. 9.8 The fact situation obtaining in the instant case, qua which, there is no dispute, is that there was no amount payable to NHPC, arising out of or under any other contract obtaining between the contractor i.e. JAL/non- applicant/plaintiff. This observation should be read with what I have noted hereafter; an aspect which emerged on perusal of the record.

10. Though, Mr. Nath had indicated during the course of hearing that no sum was due and payable to NHPC, I find on record a letter dated 06.12.2018 (i.e. document No. 2) addressed by NHPC to JAL/non- applicant/plaintiff. In this communication, NHPC has indicated JAL/non- applicant/plaintiff that it has adjusted the principal awarded amount of Rs.5,90,40,294/- against the purported dues payable to it in respect of another project i.e. Dulhasti Power Station. As indicated during the course of my narration, the Award pertains to Chamera Power Station. It appears that JAL/non-applicant/plaintiff, vide letter dated 18.12.2018, had protested against the said adjustment and, accordingly, sought payment of a sum of Rs.26,65,86,920/- as due on 30.11.2018, which obviously factors in the awarded interest.

10.1 What is clear, though, upon reading the aforementioned letter is that no details qua the amount which was purportedly due to NHPC against Dulhasti Power Station is indicated in the letter dated 06.12.2018. Furthermore, there is nothing on record to show that as to when lien was marked on the amounts due and payable under the subject contract towards the purported payments due to NHPC under Dulhasti Power Station. As a matter of fact, a perusal of the Award qua the aspect of interest would show that this argument was not pressed before the learned Arbitrator. The CS (COMM.) 907/2018 Page 12 of 18 relevant portion of the Award dealing with interest is extracted hereafter to demonstrate this aspect of the matter.

" Issue No. 5 Is Claimant entitled to interest?

Answer is yes. Respondent in order to contest this claim relied on clause 49.5 of the GCC which bars grant of interest. The reliance by respondent on clause 49.5 is misplaced. Reading of clause 49.5 makes it clear that claimant would not have been entitled to interest if his amount had been retained or withheld by the respondent. It is only in these two eventuality that interest is barred but that is not the case in hand. Hence claimant is entitled to interest @ 14% p.a. which interest respondent charged from the claimant for the advance provided to claimant. Interest is payable from the date of reference till realization."

10.2 Lastly, and most importantly, this letter was issued well after the subject Award was passed and rectified, which is, perhaps the reason Mr. Nath had indicated both at the hearing held on 04.04.2019 and 08.04.2019 that nothing was payable to NHPC against any other contract obtaining between the parties.

10.3 Therefore, clearly, the prohibition against payment of interest or damages under Clause 49.5 will not apply. The second part can be triggered only if the first part of Clause 49.5 of the GCC were to be applicable. 10.4 Since, Mr. Nath tried to press ahead his argument based on the second part of Clause 49.5 on account of not so happy wording used therein where the expression "his claim arising out of the same contract" is found, I must deal with the same as well. Mr. Nath tried to connect this expression with the expression "determined by the Arbitrator" to take forward his argument that if claims were made, as in this case, by the contractor (i.e. JAL/non-

CS (COMM.) 907/2018 Page 13 of 18

applicant/plaintiff) for payment of moneys, which were withheld or retained by NHPC till its determination by the Arbitrator, no interest was payable. 10.5 To my mind, such a construction placed on Clause 49.5 of the GCC ignores the first part of Clause 49.5 to which I have made a reference above. In short, no amounts could have been withheld or retained by way of lien by NHPC unless there were moneys due to it under another contract subsisting between itself and JAL/non-applicant/plaintiff. 10.6 The second part, in my view, only provides for point of termination of the lien. Thus, if the contractor's (i.e. JAL‟s/non-applicant‟s/plaintiff‟s) claim arising under the subject contract is either settled or determined by the Arbitrator, then, obviously, the principal amount could not have been withheld by NHPC, notwithstanding the fact that the amounts were due to NHPC against another contract. Besides this, Mr. Nath‟s argument loses focus of the fact that, firstly, plain terms of the contract do not require interpretation they require to be simply applied and, if they do apply, then, clearly, application of the term of the contract is completely within the domain of the Arbitrator. Secondly, if it is a case of interpretation of the terms of the Contract, then, whether the interpretation is right or wrong cannot be a ground for interference by the Court, even where the challenge made is under the provisions of the 1940 Act. The position of law insofar as this aspect is concerned, to my mind, is the same whether the Award which is put to scrutiny is passed under the 1940 Act or the Arbitration and Conciliation Act, 1996.

10.7 Thus, the principal objection being without merit, the same is, accordingly, rejected.

11. This takes me to the other objection with regard to the rate of interest awarded and the period for which, it has been awarded. The learned Arbitrator has awarded interest at the rate of 14% on account of the fact that CS (COMM.) 907/2018 Page 14 of 18 NHPC had imposed the same rate of interest on advances paid to JAL/non- applicant/plaintiff. Mr. Nath, on the other hand, attempted to contest the position by referring to grounds „C‟ and „D‟ of his application. Based on the assertions made therein, it was argued that the rational adopted by the Arbitrator in awarding interest at the rate of 14% per annum is erroneous as schedule „D‟ of the subject contract is applicable qua lump sum amount advanced by NHPC to JAL/non-applicant/plaintiff for purchase of plant and equipment.

11.1 It was further contended that the learned Arbitrator ought to have appreciated the fact that the dispute was with regard to material mark-up charges payable for additional work. Since NHPC had rejected the rate, the dispute was referred to the Arbitrator for adjudication. In other words, the fact situation, according to Mr. Nath, was not the same and, therefore, interest at the rate of 14 % ought not to have been granted. 11.2 Mr. Nath, however, could not render a cogent response to the submission advanced on behalf of JAL/non-applicant/plaintiff that interest at the rate of 12% had been paid by NHPC qua other claims vis-a-vis the same contract. That being said, this assertion is not a part of the reply to the objections filed on behalf of JAL/non-applicant/plaintiff. JAL/non- applicant/plaintiff has, however, asserted, in response to ground „D‟ that it had claimed interest both in the Statement of Claim as well as prior to institution of the Statement of Claim. This, by itself, will not help further the contention of JAL/non-applicant/plaintiff that, in the very least, interest should be paid at the rate of 12 % (simple) per annum.

11.3 However, I find that the judgment cited by Mr. Nath in the matter of Tehri Hydro Development Corporation Limited and Another, though, for the proposition that no interest was payable on account of purported prohibition contained in Clause 49.5 of the GCC, gives an indication that CS (COMM.) 907/2018 Page 15 of 18 interest at the rate of 12% per annum from the date of the Award till the date of the decree or realization of money, whichever is earlier, was found to be in order in respect of an Award rendered under 1940 Act. This was a judgment delivered by a Bench of three Judges.

11.4 The support that Mr. Nath sought to draw from the judgment of the Division Bench of the Supreme Court in A.P. State Trading Corporation Ltd. may not help his cause as the Supreme Court has observed, once again, in the context of an Award delivered under the 1940 Act that normally interest ought not to exceed 9% per annum. In the instant case, as noted above, though, Mr. Nath's argument that interest at the rate of 14% p.a. charged by NHPC on advances paid for purchase of plant and machinery to JAL/non-applicant/plaintiff was not accepted by me as it did not present an identical situation, it did give an indicator as to the rate around which interest should hover in relation to moneys due and payable under the subject contract to JAL/non-applicant/plaintiff. 11.5 Therefore, looking at the overall situation obtaining in this case, I am of the view that it would serve the interest of justice if interest is reduced from 14% to 12% per annum.

12. This brings me to the third and the last objection taken on behalf of NHPC with regard to period for which interest is payable. To my mind, the argument advanced on behalf of NHPC that interest should run from 25.4.2015 has no legal basis. The fact that JAL/non-applicant/plaintiff claimed interest in its Statement of Claim is not refuted by NHPC. Thus, merely because an earlier Award was rendered, which ultimately was set aside and remanded for fresh adjudication by the Arbitrator, would not shift the date from which interest should run, that is, from the date of reference when it was first claimed by JAL/non-applicant/plaintiff to the date when a substitute Arbitrator was appointed by NHPC on remand upon the death of CS (COMM.) 907/2018 Page 16 of 18 the earlier Arbitrator.

12.1 In other words, NHPC‟s stand that the interest should run from 25.04.2015 when the substitute Arbitrator was appointed, who, rendered the subject Award has no legal basis. JAL/non-applicant/plaintiff has been claiming money, if not earlier, at least since 03.11.1993 and, therefore, interest should run from that date, till the date of realization.

13. As indicated hereinabove, the objections, which are filed in the form of captioned application, has a letter dated 06.12.2018 appended to it. This letter is marked as document „2‟. In this letter, NHPC communicates to JAL/non-applicant/plaintiff that it has paid the principal sum awarded under the subject contract i.e. sum of Rs.5,90,40,294/- qua Chamera Power Station 1 on 03.12.2018 by adjusting the sum against pending dues. Interestingly, this letter, as noticed hereinabove, was issued much after the subject Award was rendered and, thereafter, rectified. Furthermore, as to whether such an adjustment is permissible is a matter which can be dealt with only at the stage of execution. Insofar as the present objections are concerned, the same are without merit and, accordingly, rejected.

CS(COMM) 907/2018

14. The suit is filed under Section 14 of the 1940 Act with a prayer that a direction be issued to the learned Arbitrator to file the Award in Court and to take up the objections filed, inter alia, under Sections 30 and 33 of the very same Act. I am inclined to pass a decree in terms of the Award since the objections filed by NHPC have been rejected by me. For this purpose, recourse is taken to the residuary prayer made in the suit action which seeks order(s) from the Court that may meet ends of justice.

15. Ordinarily, in my view, the plaintiff should have filed a suit under Sections 14 and 17 of the 1940 Act and, accordingly, prayed for a consequential relief.

CS (COMM.) 907/2018 Page 17 of 18

16. However, given the situation which has obtained in the case deferring the consequential steps, which is, to make the Award a rule of the Court and pass a decree in terms thereof would only be the next inevitable step.

17. Accordingly, the Award is made a rule of the Court. The Registry is directed to draw up a decree in terms of the Award.

18. The suit is, consequentially, disposed of in the aforesaid terms.

RAJIV SHAKDHER, J.

APRIL 08, 2019 A CS (COMM.) 907/2018 Page 18 of 18

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