Delhi High Court
Shankar Construction Company vs National Building Construction ... on 23 April, 2003
Equivalent citations: AIR2003DELHI374, 2003(3)ARBLR333(DELHI), 2003(3)RAJ603, AIR 2003 DELHI 374, 2003 CLC 1304 (DEL) (2003) 3 ARBILR 333, (2003) 3 ARBILR 333
Author: Manmohan Sarin
Bench: Manmohan Sarin
ORDER Manmohan Sarin, J.
1. EA 200/03 is an application by which judgment debtor seeks modification of the order dated 31-1-2003, to adjust the payment of Rs. 43,205/- against a sum of Rs. 50,000/- to be paid by the judgment debtor to the decree holder, vide orders dated 31st January, 2003. EA 201/2003 is an application by which condensation of delay in filing of the review application is sought. As the matter is being disposed of on merits, EA 201/2003 is allowed.
2. Recapitulation of the relevant facts would be necessary to appreciate the contentions sought to be raised by the judgment debtor as it does not flow lucidly from the application.
3. Petitioner filed the execution petition seeking enforcement of the award dated 31st March, 2001, in favor of the decree holder and against the judgment debtor-National Building Construction Co. Ltd. The judgment debtor/applicant claims that against a sum of Rs. 6,74,969/- which was due and payable to petitioner/decree holder a sum of Rs. 7,18.174/- had been paid. The petitioner/decree holder, it is claimed, has received Rs. 43,208/- in excess. When the matter had come before the Court on 31st January, 2003, it was recorded that as per the decree holder a sum of Rs. 1,08,000/-would be due on account of interest for the balance period of one year at the rate of 15% p.a. as awarded by the arbitrator. Petitioner/ decree holder also gave a concession that if the judgment debtor paid a sum of Rs. 50,000/- within four weeks, then the said payment would be accepted as full and final payment subject to encashment of the cheque for Rs. 7,18,174/-, as already given. The judgment debtor-applicant now contends that it is not liable to pay interest from the period 1st June, 2001, based on the stipulation in the award. It would be relevant to reproduce the relevant clause of the award :--
"Award : Under the Interest Act notice is required for claiming interest. Notice was given by claimant in his letter dated 17-3-98 mark C 10. As such the claimant be paid presuit interest on amount of award for claim Nos. 1 and 2 and 8 i.e. from 17-3-98 to 29-6-99 (r) 12% per annum.
The claimant be paid further interest @ 12% per annum on amount of award from 30-6-99 to the date of award i.e. 31-3-2001.
If the payment of amount as per award is not made by respondent by 31-5-2001, claimant would be entitled to interest @ 15% from 1-6-2001 to date of payment or date of decree whichever is earlier."
4. The submission of learned counsel for the respondent is that the date of decree in this case would be 31st March, 2001, which was an earlier date to 1-6-2001. Hence entitlement to interest is confined up to the date of the award. The two months' time under the award to make the payment of interest would commence from 1st June, 2001.
5. The above, to my mind, is misreading of the award as also the provisions of Section 31(7)(b) of the Arbitration & Conciliation Act, 1996 Section 31(7)(a) enables the arbitrator to grant an award of interest from the date of cause of action up to the date when the award is made at such rate as it deems reasonable. Further Clause (b) is in the following terms :
"A sum directed to be paid by an arbitral award shall, unless the award otherwise direct, carry interest @ 18% per annum from the date of the award to the date of payment."
6. This clause would empower payment of interest @ 18% unless the arbitrator otherwise directs. In the instant case, the arbitrator has directed a lower rate of interest. The statutory provision provides for payment of interest from the date of award to the date of payment. The submission of the counsel is that because of the arbitrator directing interest @ 15% from 1st June to date of payment or date of decree whichever is earlier, it would disentitle the petitioner to payment of interest on the ground that the date of decree would be the date of award is misreading of the said stipulation. Section 37 of the Act only provides for "enforcement of the award as if it were the decree of the Court". It is a legal fiction which is created. The date of award cannot be treated as a date of decree for the purpose of avoiding payment of future interest especially when there is a specific provision made for payment of interest from a stipulated date, to the date of payment. The application has no merit and is dismissed.
At this stage, learned counsel for the respondent also press that the concession as originally offered by the decree holder be still made available to him. Mr. Naveen Chawla does not object in case payment of Rs. 50,000/- is made within one week from today. Mr. Gupta, on instruction from Mr. Randhir Singh, Law Officer of the respondent, states that payment of Rs. 50,000/- would be made within two weeks from today.