Orissa High Court
Bharat Sanchar Nigam Ltd vs M/S. Subash Chandra Kanchan .... ... on 18 July, 2025
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 23-Jul-2025 14:05:19
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 19952 of 2024
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).
Bharat Sanchar Nigam Ltd., .... Petitioner(s)
Bhubaneswar
-versus-
M/s. Subash Chandra Kanchan .... Opposite Party (s)
Advocates appeared in the case through Hybrid Mode:
For Petitioner(s) : Mr.Mr. U.C. Mohanty, Adv.
Mr. Ashok Kumar Mohanty, Adv.
For Opposite Party (s) : Mr. Jatindra Kumar Mohapatra, Adv.
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-08.05.2025
DATE OF JUDGMENT: -18.07.2025
Dr. S.K. Panigrahi, J.
1. In this Writ Petition, the Petitioner seeks a direction from this Court to set aside the impugned orders dated 24.02.2024 and 28.06.2024 passed by the Commercial Court, Bhubaneswar, and to remand the matter for proper adjudication of objections under Section 47 CPC.
I. FACTUAL MATRIX OF THE CASE:
2. The brief facts of the case are as follows:
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(i) A Sole Arbitrator, Mr. B.C. Bhattacharya, passed an award in favour of the Opposite Party (Contractor), granting ₹24,78,311.40 under Claim Nos. 68(I) to 68(XXII) along with ₹50,000/- as cost. Interest was also awarded at various rates (15% and 18%) on specified claims and a post- award interest of 18% per annum if payment was not made within 90 days.
(ii) The award was challenged by BSNL under Section 34 of the Arbitration and Conciliation Act, 1996, which was dismissed by the District Judge, Khurda on 22.02.2018. Thereafter, BSNL accepted the award and issued a letter dated 01.06.2018 offering to settle the awarded amount, calculated by BSNL at Rs. 73,53,287 as on 30.06.2018.
(iii) The Opposite Party responded with its own calculation dated 07.06.2018, claiming Rs. 1,73,39,341.14, creating a dispute over applicable interest rates and computation.
(iv) On 03.07.2018, BSNL invoked Clause 29-A of the contract to withhold Rs. 41,85,995/- from the decretal amount, citing a pending liability under a separate arbitration award dated 25.05.2016 (Agreement No. 28/CDB/98-99), which was under challenge in ARBP No. 34/2016.
(v) BSNL tendered a cheque dated 15.11.2018 for ₹31,91,349/- to the Opp.
Party. The Opp. Party refused to accept the cheque, citing conditionality and lack of deposit before the executing court.
(vi) The Opposite Party filed Execution Case No. 444/2018 on 10.07.2018 under Section 36 of the A&C Act, seeking execution of the award. Notice was served on BSNL only on 01.07.2023 due to delay in curing defects.
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(vii) The Opp. Party filed a fresh calculation sheet on 29.01.2024, stating a total due of Rs. 1,30,86,549.66. BSNL objected to this on 15.02.2024 under Section 47 CPC, particularly opposing the inclusion of Rs. 2,41,051/- under Claim No. 68(iii), where only Rs. 18,998/- had been awarded.
(viii) The Executing Court accepted the Opp. Party's calculation sheet by order dated 24.02.2024. BSNL's recall petition dated 22.03.2024 was dismissed on 28.06.2024, leading to the filing of the present writ petition under Article 227 of the Constitution II. SUBMISSIONS ON BEHALF OF THE PETITIONER:
3. Learned counsel for the Petitioner earnestly made the following submissions in support of his contentions:
(i) The Executing Court has travelled beyond its jurisdiction by directing execution of ₹2,41,051/- under Claim No. 68(iii), despite the arbitral award having expressly limited the award under this head to ₹18,998/-
, thereby violating the settled principle that an executing court cannot go behind the decree.
(ii) The Petitioner has rightfully exercised its contractual lien under Clause 29-A of the General Conditions of Contract to withhold ₹42,24,189/- from the awarded dues, in view of pending dues recoverable under a separate contract, and such withholding, being contractually sanctioned, carries no obligation to pay interest.
(iii) The tender of ₹31,91,349/- through cheque dated 15.11.2018 was wrongly refused by the Opp. Party, and under Order XXI Rule 5 CPC, interest on the said amount must be held to have ceased from the date Page 3 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 of such refusal, disentitling the Opp. Party from claiming any further interest on the tendered amount.
(iv) The writ petition is maintainable under Article 227 of the Constitution as the impugned orders dated 28.06.2024 and 29.01.2024 are not appealable under Section 13 of the Commercial Courts Act, 2015, being orders neither falling within the scope of Order XLIII CPC nor within Section 37 of the A&C Act.
(v) The Executing Court has failed to adjudicate the objections filed under Section 47 CPC with due application of mind, and has arbitrarily accepted the Opp. Party's inflated calculation sheets, ignoring the existence of a subsisting cross-decree and the mandatory requirement of set-off under Order XXI Rule 18 CPC.
(vi) The Opp. Party delayed removal of defects in the Execution Petition for nearly five years, yet has been permitted to compute interest for this period, resulting in manifest unjust enrichment contrary to equity and settled law that disentitles a negligent decree-holder from such benefit. III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTY:
4. Learned counsel for the Opposite Party earnestly made the following submissions in support of his contentions
(i) The Writ Petition challenges the order dated 28.06.2024 passed by the Commercial Court, Bhubaneswar in Execution Petition No. 444/2018, rejecting the Petitioner's application for recall of the earlier order dated 24.02.2024 which had accepted the calculation sheet of the Opp. Party.Page 4 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
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(ii) The award in favour of the Opp. Party dated 05.08.2009 reached finality after dismissal of the Section 34 challenge by the District Judge, Khurda. The amount awarded has, thus, acquired the status of a decree.
(iii) The Petitioner had earlier proposed settlement by letter dated 01.06.2018, but without attaching calculations or an unconditional cheque. The Opp. Party replied with its own calculations on 07.06.2018 which the Petitioner did not accept.
(iv) The Petitioner unilaterally withheld ₹41,85,995/- citing Clause 29-A of the contract, based on an unrelated arbitration award passed by a different arbitrator in a different contract (Agreement No. 28/CDB/98-
99), which is still under challenge under Section 34 of the Arbitration Act.
(v) The cheque for Rs.31,91,349/- dated 15.11.2018 was allegedly sent by BSNL but not deposited in court. The Opp. Party refused to accept it on the ground that the Petitioner had imposed conditions requiring a full and final settlement undertaking.
(vi) The calculation sheet dated 29.01.2024 was filed by the Opp. Party to update the executable amount in conformity with the arbitral award, and after considering objections of BSNL, the court accepted the calculations on 24.02.2024.
(vii) The Petitioner's subsequent recall application dated 22.03.2024 was rejected by the court on 28.06.2024, leading to the present writ petition.
(viii) The Opp. Party claims the attempt to raise cross-claims based on a pending arbitral proceeding (ARBP No. 34/2016) has no nexus with the award under execution and is thus inadmissible.
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(ix) No part of the decree under execution can be modified or reduced by importing extraneous claims from other proceedings; the only award in question has attained finality and must be executed as such.
(x) The narrative of cross-claims, pending proceedings, or internal communications within BSNL are irrelevant and extraneous to the legal issue under adjudication in the writ petition.
IV. ISSUES FOR CONSIDERATION: (i) Whether the Executing Court acted without jurisdiction in allowing
execution of ₹2,41,051/- under Claim No. 68(iii), despite the arbitral award specifically awarding only ₹18,998/- under the said head.
(ii) Whether BSNL was legally entitled to withhold ₹42,24,189/- from the awarded amount by invoking Clause 29-A of the General Conditions of Contract in light of a pending arbitral claim in a separate contract.
(iii) Whether interest on ₹31,91,349/- ceased to run from 15.11.2018 under Order XXI Rule 5 CPC, upon BSNL's alleged tender of the said amount by cheque and the Opp. Party's refusal to accept the same.
(iv) Whether the writ petition is maintainable under Article 227 of the Constitution, notwithstanding the provisions of Section 13 of the Commercial Courts Act, 2015, in the absence of an appealable order under Order XLIII CPC or Section 37 of the Arbitration and Conciliation Act, 1996.
(v) Whether the Executing Court committed a jurisdictional error in rejecting the Petitioner's objections under Section 47 CPC and in failing to consider the effect of a cross-decree and the applicability of set-off under Order XXI Rule 18 CPC.
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(vi) Whether the Opp. Party is entitled to claim interest for the period during which the Execution Petition remained defective and unattended (2018-2023), and whether allowing such computation results in unjust enrichment.
V. COURT'S REASONING AND ANALYSIS:
5. Heard Learned Counsel for the petitioner and perused the documents placed before this Court.
6. The Opposite Party (Contractor) was awarded ₹24,78,311 plus ₹50,000 as costs in an arbitral award dated 05.08.2009, under Claim Nos. 68(I) to 68(XXII), with interest at 15% and 18% on specified claims, and post- award interest at 18% p.a. if unpaid after 90 days. BSNL challenged the award under Section 34 of the Arbitration and Conciliation Act, but the petition was dismissed on 22.02.2018. Subsequently, BSNL attempted a settlement by offering ₹73.53 lakh as of 30.06.2018, but the Opposite Party disputed this, claiming ₹1,73,39,000 as due. The dispute centered around interest rates and calculation methods. On 03.07.2018, BSNL invoked Clause 29A of the contract, withholding ₹41.85 lakh (later revised to ₹42.24 lakh) due to a pending liability in another arbitration. BSNL tendered a cheque of ₹31,91,349 on 15.11.2018, but the Opposite Party refused it due to conditions and failure to deposit the amount in court. The Opposite Party filed Execution Petition No. 444/2018 on 10.07.2018, but the notice to BSNL was issued only on 01.07.2023 after curing defects. On 29.01.2024, the Opposite Party filed a fresh calculation of ₹1,30,86,549.66, which BSNL contested under Section 47 CPC on 15.02.2024, alleging incorrect computation of Claim 68(iii). The Page 7 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 Executing Court accepted the Opposite Party's calculation on 24.02.2024, and BSNL's recall application was dismissed on 28.06.2024.
7. Now that the factual matrix of the case is clear, this Court shall address each issue in turn.
I. Whether the Executing Court acted without jurisdiction in allowing execution of ₹2,41,051/- under Claim No. 68(iii), despite the arbitral award specifically awarding only ₹18,998/- under the said head.
8. It is undisputed that the arbitral award itself fixed Claim No. 68(iii) at Rs. 18,998. In the execution calculation, however, the Opposite Party insisted on execution of Rs. 2,41,051 for Claim 68(iii), an amount far exceeding the awarded sum. Law in this regard is well settled. An executing court must give effect exactly to the decree or award and it is bound to act in terms of the decree/award. There are a plethora of judicial precedents affirming this stance. One such precedent is that of the Supreme Court in the case of Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman1 wherein it was held as follows:
"6. A court executing a decree cannot go behind the decree:
between the parties or their representatives it must take the decree according to its tenor, and cannot entertain any objection that the decree was incorrect in law or on facts. Until it is set aside by an appropriate proceeding in appeal or revision, a decree even if it be erroneous is still binding between the parties."1
(1970) 1 SCC 670.
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9. A similar stance was taken by the Supreme Court in the case if Mumtaz Yarud Dowla Wakf v. M/s Badam Balakrishna Hotel Pvt. Ltd.2 wherein it was held as follows:
"The legal principle that an Executing Court cannot go beyond the decree stands fortified, subject to the rigor of Section 47 read with Order XXI of the Code. As a matter of course, an Executing Court is enjoined with the duty to give effect to the decree. Any interference, including on a question involving jurisdiction, should be undertaken very sparsely as a matter of exception. The onus lies heavily on the judgment-debtor to convince the Court that a decree is inexecutable. When an exercise is likely to involve a factual adjudication, it should better be avoided."
10. In the present case, allowing execution of Rs. 2,41,051 on a claim decreed at Rs. 18,998 is beyond the decree's bounds and thus beyond jurisdiction. There is no plausible basis (e.g. addition of interest or costs) to justify the inflated amount. It appears as a calculation error or overstatement. The executing court's acceptance of the decree-holder's sheet and direction to pay Rs. 2,41,051 on Claim 68(iii) was therefore ultra vires. This is a manifest jurisdictional error and a grave injustice to BSNL. The execution order on this point must be set aside. II. Whether BSNL was legally entitled to withhold ₹42,24,189/- from the awarded amount by invoking Clause 29-A of the General Conditions of Contract in light of a pending arbitral claim in a separate contract.
11. The next issue pertaining to the case in hand is in relation to Contractual Lien under Clause 29A. This clause of the GCC empowers BSNL to withhold contract payments due to the contractor in order to 2 2023 INSC 949.
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Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 satisfy claims in other contracts. The relevant excerpts of this Clause are produced below:
"Clause 29A- Lien in respect of claims in other contracts 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 the Government or any other contracting person or persons or through Engineer-in- Charge against any claim of the Engineer-in-Charge of Government or such other person or persons in respect of payment of a sum of money arising out or under any other contract made by the contractor with the Engineer-in- Charge or of the Government or with such other person or persons.
It is an agreed term of the contract that the sum of money so withheld or retained under this clause by the Engineer-in-Charge or the Government will be kept withheld or retained as such by the Engineer-in- Charge or the Government or till his claim arising out of the same contract or any other contract is either mutually settled or determined by the arbitration clause or by the competent court, as the case may be and that the contractor shall have no claim for interest or damages whatsoever on this account or on any other ground in respect of any sum of money withheld or retained under this clause and duly notified as such to the contractor." (Emphasis Supplied)
12. In plain terms, BSNL could retain the Rs. 42,24,189 because of outstanding claims (and arbitrations) in other work orders. Such clause has been upheld as a lawful contractual lien by courts. For instance, the Delhi High Court in the case of Union of India v. Shapoorji Pallonji and Co. Pvt. Ltd.3 interpreted a similar Clause 29, observing that it 3 LPA 206/2019 & CM Nos. 13660-63/2019.
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Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 enables the Government to withhold money pending adjudication of any such claim. The Delhi High Court quoted the judgment of the single judge bench which read as follows:
"Sub-clause (i) of Clause 29 of the GCC enables the Government to withhold sums due and payable to the contractor on account of any claim pending adjudication of such claims... It is clearly incumbent on the Government to take steps for adjudication of such claims and in the absence of taking any such steps the question of invoking Clause 29(i) of the GCC for withholding any amount would not arise."
13. The Delhi High Court, in affirming the judgment, categorically held that Clause 29 could only be invoked where the Government had initiated steps for adjudication, such as filing of counterclaims in arbitration or instituting a suit. The failure to initiate such adjudicatory process disentitles the employer from relying on the lien provision. Importantly, in that case, CPWD's demand was premised on a PAC report and not on a pending legal proceeding, which the Court held insufficient to invoke Clause 29.
14. In contrast, BSNL in the present case has substantiated its withholding by reference to a separate arbitration award dated 25.05.2016 (Agreement No. 28/CDB/98-99), which is currently under challenge in ARBP No. 34/2016. This demonstrates that the claim for which the lien is being exercised is not speculative or administrative in origin, but one grounded in a formal adjudicatory process.
15. Moreover, Clause 29A, like its CPWD counterpart, expressly states that the contractor shall have no claim for interest or damages in respect of Page 11 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 such withholding, provided the same is duly notified. In the present case, BSNL's invocation of the clause was communicated on 03.07.2018 and the precise withheld amount was quantified and explained. Hence, the requirement of due notification has been fulfilled.
16. Therefore, the invocation of Clause 29A in the facts of the present case not only satisfies the text of the clause, but also the judicial threshold articulated by the Delhi High Court in Shapoorji (Supra). It must be held that the Executing Court erred in treating BSNL's lien as a non- existent or irrelevant factor. The amount withheld was not in derogation of the arbitral award, but in exercise of a parallel contractual right expressly preserved and recognized by courts.
17. Accordingly, this Court finds that BSNL was well within its contractual rights in withholding Rs. 42,24,189 under Clause 29A of the GCC, and that such withholding did not attract any obligation to pay interest nor did it constitute an act of bad faith or evasion of the arbitral award. The Executing Court's failure to consider this aspect amounts to an error apparent on the face of the record and warrants interference under Article 227 of the Constitution.
III. Whether the writ petition is maintainable under Article 227 of the Constitution, notwithstanding the provisions of Section 13 of the Commercial Courts Act, 2015, in the absence of an appealable order under Order XLIII CPC or Section 37 of the Arbitration and Conciliation Act, 1996.
18. The third issue arises from the tender of Rs. 31,91,349/- by BSNL via cheque dated 15.11.2018, and the question is whether this act was Page 12 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 sufficient to stop the accrual of interest under Order XXI Rule 5 of Code of Civil Procedure, 1908. The Rule reads:
"Where a decree directs payment of money, the payment may be made by the judgment-debtor into the court whose duty it is to execute the decree, or out of Court to the decree- holder by postal money order or through a bank or by any other mode wherein payment is evidenced in writing; and, in such cases, interest shall cease to run from the date of service of notice of such payment to the decree-holder, or the date of tender, whichever is earlier."
19. Judicial interpretation of this provision makes it clear that tender of payment, even if not accepted by the decree-holder, is deemed valid so long as it is unconditional and evidenced in writing. In the present case, BSNL issued a cheque dated 15.11.2018 in favour of Opposite Party, which was refused on the ground that it was conditional and not deposited in court. However, there is no cogent evidence before the Court to establish that BSNL's tender was in fact conditional in law. Even assuming there was some language expressing a preference for "full and final settlement," the Supreme Court in Gurpreet Singh v. Union of India4, held that where the judgment-debtor deposits or tenders an amount in discharge of the decree, interest ceases to run from such date, provided the decree-holder is not prevented from accepting it. The relevant excerpts are produced below:
"Thus, in cases of execution of money decrees or award decrees, or rather, decrees other than mortgage decrees, interest ceases to run on the amount deposited, to the extent of the deposit. It is true that if the amount falls short, the decree holder may be entitled to apply the rule of 4 (2006) 8 SCC 457 Page 13 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 appropriation by appropriating the amount first towards the interest, then towards the costs and then towards the principal amount due under the decree. But the fact remains that to the extent of the deposit, no further interest is payable thereon to the decree holder and there is no question of the decree holder claiming a re-appropriation when it is found that more amounts are due to him and the same is also deposited by the judgment debtor. In other words, the scheme does not contemplate a reopening of the satisfaction to the extent it has occurred by the deposit. No further interest would run on the sum appropriated towards the principal."
20. The Supreme Court's judgment in MP Trading and Investment RAC Corporation Ltd. v. Union of India 5 further fortifies this principle. In para 4 and 5 of the judgment, the Court held as follows:
"4. In the present case, we find that the amount was to be deposited in a fixed deposit at the request made by the respondent and it is not seen that the respondent has made any request before the High Court for withdrawal of the amount deposited as per the directions by the High Court. However, it is submitted that the appellants have not deposited the full amount in terms of the award.
5. In the above facts and circumstances of the case, we are of the view that the appellants shall be entitled to interest as per award from the date of award till the principal amount was deposited in the High Court on 3-3-2003. From the said date of 3- 3-2003 till it was withdrawn, the respondent shall be entitled only to the interest accrued on the principal amount in terms of the fixed deposit made as per the direction by the High Court. However, the respondent shall be entitled to the interest in terms of the award on the balance of the award amount which the appellants failed to deposit in Court, as per the award."5
(2009) 2 SCC 513.
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21. Applying the aforementioned judicial precedents to the facts of the present case, it is clear that the tender by BSNL of Rs. 31,91,349/- via cheque dated 15.11.2018 satisfies the requirements under Order XXI Rule 5 CPC. The cheque, accompanied by a covering letter, was a written and evidenced form of tender. There is no indication that BSNL imposed any legally binding pre-condition or extracted any waiver of rights in exchange for acceptance of the payment. Even assuming that the tender letter suggested the payment be considered in full and final settlement, the Supreme Court has made it abundantly clear that such phraseology, unless expressly made conditional to extinguish the decree-holder's remaining rights, does not vitiate the tender for the purposes of stopping interest accrual.
22. Further, the refusal of the decree-holder to accept the cheque cannot retrospectively invalidate the tender, particularly when there is no legal bar or pending stay preventing the decree-holder from encashing the amount. In this context, the Delhi High Court's judgment in Ramacivil India Constructions Pvt. Ltd. v. Union of India6 is instructive. The Court held that where a decree-holder fails to withdraw an amount deposited in court or refuses an available tender, interest does not continue to accrue merely because of such non-withdrawal.
23. In the facts at hand, BSNL's tender of Rs. 31,91,349/- on 15.11.2018, even if not deposited in court, constituted a valid tender in terms of Order XXI Rule 5 CPC. The refusal by the Opposite Party, without sufficient cause, does not disentitle BSNL from the benefit conferred by the Rule. 6 2023 SCC OnLine Del 6669.
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Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 Consequently, interest on the said sum must be held to have ceased from the date of the tender, i.e., 15.11.2018.
24. The Executing Court, however, continued to allow interest computation on this sum until 2024, which is clearly impermissible in light of the above judicial precedents. This amounts to an error apparent on the face of the record, and has resulted in an inflated and legally unsustainable dues computation to the prejudice of the Petitioner. The impugned orders, insofar as they fail to take cognizance of this legal effect of tender, warrant interference under Article 227 of the Constitution.
IV. Whether the writ petition is maintainable under Article 227 of the Constitution, notwithstanding the provisions of Section 13 of the Commercial Courts Act, 2015, in the absence of an appealable order under Order XLIII CPC or Section 37 of the Arbitration and Conciliation Act, 1996.
25. The fourth issue is in relation to maintainability of writ under Article
227. BSNL relies on Article 227 to challenge interlocutory execution order. Although Section 13 CCA bars appeals except those specified, like appeals under Order XLII CPC and Section 37 A&C Act, it does not expressly oust writ jurisdiction. Here, the orders impugned are not appealable under Order XLIII or Section 37, they interlocutory execution matters, so no statutory remedy exists. In such cases, High Courts routinely allow Article 227 petitions to prevent miscarriage of justice.
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26. The scope of Article 227 has been outlined Estralla Rubber v. Dass Estate Pvt. Ltd.7 wherein it was held as follows:
"6. The scope and ambit of exercise of power and jurisdiction by a High Court under Article 227 of the Constitution of India is examined and explained in a number of decisions of this Court. The exercise of power under this article involves a duty on the High Court to keep inferior courts and tribunals within the bounds of their authority and to see that they do the duty expected or required of them in a legal manner. The High Court is not vested with any unlimited prerogative to correct all kinds of hardship or wrong decisions made within the limits of the jurisdiction of the subordinate courts or tribunals. Exercise of this power and interfering with the orders of the courts or tribunals is restricted to cases of serious dereliction of duty and flagrant violation of fundamental principles of law or justice, where if the High Court does not interfere, a grave injustice remains uncorrected. It is also well settled that the High Court while acting under this article cannot exercise its power as an appellate court or substitute its own judgment in place of that of the subordinate court to correct an error, which is not apparent on the face of the record. The High Court can set aside or ignore the findings of facts of an inferior court or tribunal, if there is no evidence at all to justify or the finding is so perverse, that no reasonable person can possibly come to such a conclusion, which the court or tribunal has come to.
7. This Court in Ahmedabad Mfg. & Calico Ptg. Co. Ltd. v. Ram Tahel Ramnand [(1972) 1 SCC 898 : AIR 1972 SC 1598] in AIR para 12 has stated that the power under Article 227 of the Constitution is intended to be used sparingly and only in appropriate cases, for the purpose of keeping the subordinate 7 AIR 2001 SUPREME COURT 3295.Page 17 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 courts and tribunals within the bounds of their authority and, not for correcting mere errors. Reference also has been made in this regard to the case Waryam Singh v. Amarnath [AIR 1954 SC 215 : 1954 SCR 565] . This Court in Bathutmal Raichand Oswal v. Laxmibai R. Tarte [(1975) 1 SCC 858 : AIR 1975 SC 1297] has observed that the power of superintendence under Article 227 cannot be invoked to correct an error of fact which only a superior court can do in exercise of its statutory power as a court of appeal and that the High Court in exercising its jurisdiction under Article 227 cannot convert itself into a court of appeal when the legislature has not conferred a right of appeal. Judged by these pronounced principles, the High Court clearly exceeded its jurisdiction under Article 227 in passing the impugned order." (Emphasis Supplied)
27. This Court agrees with this stance. There is no alternative forum for BSNL; its objections in execution have been disposed of, and Section 13 does not grant a right to appeal these specific orders. Therefore, this writ is maintainable. Of course, interference will be limited to glaring jurisdictional or legal errors, but those appear on these facts. V. Whether the Executing Court committed a jurisdictional error in rejecting the Petitioner's objections under Section 47 CPC and in failing to consider the effect of a cross-decree and the applicability of set-off under Order XXI Rule 18 CPC.
28. The 5th issue pertains to objections under Section 47 and set-off. Section 47 of CPC mandates that all questions arising between the parties to the suit relating to the execution, discharge, or satisfaction of the decree shall be determined by the executing court itself and not by a separate suit. The provision embodies the principle that the executing court is not a mere post office, but is bound to examine issues of executability Page 18 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 raised by the judgment-debtor, if they are within the scope of the decree and its satisfaction. The statutory mandate is clear: where a legitimate execution-related dispute is raised, the court must apply its mind and render a reasoned adjudication.
29. In the present case, BSNL filed a detailed objection under Section 47 CPC raising the following substantial issues:
a) First, that the calculation sheet submitted by the Opposite Party sought an execution of an amount of Rs. 2,41,051/- under Claim No. 68(iii), whereas the award had categorically restricted this claim to Rs. 18,998/- thereby resulting in execution beyond the decree.
b) Second, that BSNL was entitled to invoke Clause 29-A of the General Conditions of Contract to withhold ₹42,24,189/- from the awarded sum in light of a pending counterclaim arising out of a separate arbitration involving the same contractor, which was under challenge in ARBP No. 34/2016.
c) Third, and most crucially, BSNL submitted that a claim for set-off arose under Order XXI Rule 18 CPC by virtue of the cross-liability owed by the Contractor under a different arbitral award.
30. The Executing Court, by a brief order dated 24.02.2024, dismissed these objections without any substantial engagement with the contentions. Such an omission defeats the very object of Section 47 CPC and renders the order vulnerable to interference under Article 227 of the Constitution.
Page 19 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19
31. Turning to the legal framework, Order XXI Rule 18 CPC provides the machinery for adjustment or set-off where two cross-decrees exist between the same parties and are both capable of execution by the same court. The bare text of the rule reads:
"(1) Where applications are made to a Court for the execution of cross-decrees in separate suits for the payment of two sums of money passed between the same parties and capable of execution at the same time by such Court, then--
(a) if the two sums are equal, satisfaction shall be entered upon both decrees; and
(b) if the two sums are unequal, execution may be taken out only by the holder of the decree for the larger sum and for so much only as remains after deducting the smaller sum, and satisfaction for the smaller sum shall be entered on the decree for the larger sum as well as satisfaction on the decree for the smaller sum.
..."
32. Sub-rule (3) further clarifies that the rule applies only when:
"(a) the decree-holder in one of the suits in which the decrees have been made is the judgment-debtor in the other and each party files the same character in both suits; and
(b) the sums due under the decrees are definite."
33. In the present case, BSNL asserted that a cross-claim had matured into an award in its favour dated 25.05.2016, under Agreement No. 28/CDB/98-99, and that such award was the subject of a Section 34 challenge in ARBP No. 34/2016. The Court notes that while the award may not yet have become a decree for the purposes of Rule 18(1), the objection was not speculative. The award was rendered by a duly appointed arbitrator and challenged in accordance with law. The amount awarded to BSNL was definite, and the parties were identical. Page 20 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19
34. The Executing Court ought to have, at the very least, addressed the question of whether Rule 18 applied and whether the preconditions under sub-rule (3) were satisfied or not. Even if the court was to ultimately hold that Rule 18 was inapplicable due to lack of concurrent decree status, it was nonetheless incumbent on the court to reason through that conclusion under Section 47. Failure to do so amounts to non-application of mind and dereliction of statutory duty.
35. However, this Court clarifies that for a set-off to be permissible under Order XXI Rule 18 CPC, both the decrees, i.e., the one under execution and the one claimed in set-off, must be final, executable money decrees capable of being executed by the same court. A pending arbitral award, even if definite in terms, cannot qualify as a "decree" for the purposes of Rule 18 until it is either converted into a decree under Section 36 of the Arbitration and Conciliation Act, 1996, or otherwise attains enforceable status. Therefore, unless BSNL's arbitral award is converted into a decree and becomes executable, the plea for legal set- off under Order XXI Rule 18 CPC cannot be sustained.
36. That said, the Executing Court cannot summarily reject the Section 47 objection without examining its legal tenability in light of the applicable requirements under Rule 18. Even if the claim ultimately fails due to absence of a decree, the Court was duty-bound to evaluate the plea and record findings. By refusing to examine the objections raised under Section 47, particularly on (a) erroneous calculations, (b) the right of withholding under Clause 29-A, and (c) the set-off mechanism under Order XXI Rule 18, the Executing Court essentially denied BSNL an Page 21 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 opportunity of hearing on core execution-related matters. This goes beyond a mere irregularity and amounts to a jurisdictional defect warranting interference under Article 227 of the Constitution. VI. Whether the Opp. Party is entitled to claim interest for the period during which the Execution Petition remained defective and unattended (2018-2023), and whether allowing such computation results in unjust enrichment.
37. The final issue of this case pertains to the accrual of interest on Money Decrees until payment or tender. Under CPC, a judgment-debtor remains liable for post-decree interest on a money decree untile the decree is fully satisfied by payment or a valid tender/deposit in terms of law. Order XXI Rule 1 CPC specifies the modes of paying a money decree, and makes clear that interest ceases only when the amount is actually paid to the decree-holder or unconditionally deposited with notice to the decree-holder. In other words, mere delay in execution or inactivity by the decree-holder does not stop the clock on accruing interest; the onus is on the judgment-debtor to either pay the decretal amount or deposit it in court with proper notice if it wishes to halt further interest.
38. Importantly, even depositing the amount in the court is not enough per se; it must meet the requirements of Order XXI Rule 1. The Supreme Court in the case of P.S.L. Ramanathan Chettiar v. O.R.M.P.R.M. Ramanathan Chettiar8 explained that a conditional deposit (such as one made merely to obtain a stay of execution) is not a "payment" that 8 1968 AIR 1047 Page 22 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 discharges the decree; thus interest continues to run until the decree- holder is free to withdraw the money. In that case, the judgment-debtor had deposited the amount in court to seek a stay, but the deposit was conditional (the decree-holder could only withdraw against security). The Court held as follows:
"15. The last contention raised on behalf of the respondent was that at any rate the decree-holder cannot claim any amount by way of interest after the deposit of the money in court. There is no substance in this point because the deposit in this case was not unconditional and the decree- holder was not free to withdraw it whenever he liked even before the disposal of the appeal. In case he wanted to do so, he had to give security in terms of the order. The deposit was not in terms of Order 21 Rule 1 CPC and as such, there is no question of the stoppage of interest after the deposit."
39. In the present case, BSNL's tender of the decretal amount on 15.11.2018 is crucial. Under the above provisions, interest on the decree continued to accrue up to that date, because prior to 15.11.2018 BSNL had neither paid the amount to the Contractor nor made any unconditional deposit with notice that would satisfy Order XXI Rule 1. BSNL's argument that the decree-holder's slow pursuit of execution should somehow stop the running of interest finds no support in law. Nothing in the CPC suggests that a decree-holder loses the right to statutory interest by mere inactivity. So long as the decree remains unsatisfied and within the period of enforceability, interest (if awarded in the decree) is a lawful accretion intended to compensate for delay in payment. The Contractor's execution application may have had procedural defects or Page 23 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 lay dormant for a time, but those procedural lapses do not extinguish BSNL's substantive liability under the decree to pay principal and accruing interest.
40. Such stance was affirmed by the Delhi High Court in the case of M/S Bhandari Engineers and Builders Pvt. Ltd. v. M/S Maharia Raj Joint Venture and Ors.9 wherein it held as follows:
"The Executing Court shall pass appropriate order of restitution to reimburse the loss suffered by the decree- holder on account of delay and obstruction in the execution proceedings caused by the judgment- debtor. The Executing Court shall endeavour to place the decree-holder in the same position as he would have had been if the decree had been satisfied soon upon it being passed."
41. In practical terms, that means the decree-holder should be made whole, including receiving the interest due for the period the payment was delayed, unless the decree is lawfully satisfied earlier. Here, BSNL only effectively attempted satisfaction on 15.11.2018; hence interest is rightly calculated up to that date (when the tender was made), and not curtailed by the decree-holder's earlier inactivity.
42. BSNL's contention that the Contractor obtained an "undeserved windfall" by letting interest run till 2023 misconstrues the purpose of post-decree interest. Interest on a decree is not a penalty or punitive measure; it is compensation for the true owner's inability to use their money during the period of delay. The Supreme Court has eloquently clarified this in recent decisions. In Authorised Officer Karnataka Bank 9 EX.P. 275/2012 & E.A. 193/2020.
Page 24 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 v. M/s R.M.S. Granites Pvt. Ltd. & Ors.10 the Court explained that if party A owes money to party B at a certain time but pays it years later, A would have had the use of that money in the interim and could earn interest on it, while B was deprived of that opportunity. The Court held as follows:
"It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say ten years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B ten years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B." (Emphasis Supplied)
43. In similar vein, the Allahabad High Court aptly explained the concept of interest in the case of Hello Minerals Pvt. Ltd. v. Union of India11 as follows:
"15. We may mention that we are passing the direction for interest since interest is the normal accretion on capital. Often there is misconception about interest. Interest is not a penalty or punishment at all.
16. For instance, if A had to pay a certain sum of money to B at a particular time, but he pays it after a delay of several years, the result will be that the money remained with A and he would have earned interest thereon by investing it somewhere. Had he paid that amount at the time when it was payable then B would have invested it somewhere, and 10 Civil Appeal No. 12294 of 2024.11
(2004) 174 ELT 422.Page 25 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 earned interest thereon. Hence, if a person has illegally retained some amount of money then he should ordinarily be directed to pay not only the principal amount but also the interest earned thereon."
44. Denying the decree-holder interest for the period of BSNL's non- payment would actually reward the delay by allowing BSNL to use that money interest-free. This is the opposite of "unjust enrichment". If anyone stood to be unjustly enriched by the delay, it would be the judgment-debtor (BSNL) unless interest accrues. The law steps in to prevent such unjust benefit.
45. In fact, the Supreme Court in the case of Dr. Poornima Advani v. Govt. of NCT of Delhi12 citing one of its landmark judgments held as follows:
"In the case of Union of India through Director of Income Tax v. Tata Chemicals Ltd., (2014) 6 SCC 335, this Court held that when the collection is illegal, the Revenue is obliged to refund such amount with interest as money so deposited was retained and enjoyed by it. No discrimination can be shown between the assessee and Revenue in paying interest on the refund of tax. Money received and retained without right, carries with it the right to interest. There being no express statutory provision for payment of interest on the refund of excess amount/tax collected by the Revenue, the Government cannot shrug off its apparent obligation to reimburse the deductors lawful monies with accrued interest for the period of undue retention of such monies."
46. Applying these principles to the present case, the Contractor is not claiming anything beyond the decree's terms. He is only claiming the lawful interest on the award amount up to the date BSNL finally made 12 2025 INSC 262 Page 26 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 a valid tender. There is no legal requirement that a decree-holder "chase" the judgment-debtor to avoid forfeiting interest; to the contrary, the executing court should protect the decree-holder's right by making the debtor bear the costs of delay, not the creditor. BSNL cannot evade interest by pointing to the decree-holder's slow execution when BSNL itself allowed the decree to remain unpaid. The proper course for a judgment-debtor who wishes to stop further interest is to promptly pay or deposit the amount in court (with notice), which BSNL eventually did in November 2018, and notably, interest was stopped from that date as the Contractor acknowledges. Prior to that tender, however, BSNL had not discharged its liability, so the interest meter rightly kept running.
47. The accusation of "unjust enrichment" against the Contractor fades away in light of the above legal position. The Contractor's enrichment is not "unjust" at all; it is sanctioned by the decree and the CPC. He is entitled to be made whole for the delay in receiving the money that was adjudged due to him. As noted by the Supreme Court in R.M.S. Granites (Supra), it is the normal accretion on capital and a part of the restitutive process. It ensures that the decree-holder is compensated for being kept out of his money, and that the judgment-debtor does not profit from withholding payment. In fact, denying the decree-holder interest for the period of BSNL's inaction would result in an unwarranted boon to BSNL, allowing it to use the money for free. Indian courts have repeatedly emphasized that a party who wrongfully Page 27 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 withholds money must compensate the rightful owner with interest, to prevent unjust benefit from retention of money.
48. In the present scenario, interest accrued on the decree only until 15.11.2018, which is the date BSNL finally made the amount available (by tender/deposit). From that day forward, BSNL's liability to pay interest ceased because it took the step that law requires to stop further accrual (a valid tender of payment). But for the period before that tender, when BSNL neither paid the decretal sum nor deposited it unconditionally, the continuing accrual of interest is a matter of legal right, not a bonus.
49. The executing court is bound to enforce the decree as it stands, including the interest component and has no discretion to deprive the decree-holder of interest on the notion that he slept on his rights. This stance was reiterated by the Delhi High Court in the case of M/S Bhandari (Supra) wherein it held as follows:
"The Executing Court shall pass appropriate order of restitution to reimburse the loss suffered by the decree- holder on account of delay and obstruction in the execution proceedings caused by the judgment- debtor. The Executing Court shall endeavour to place the decree-holder in the same position as he would have had been if the decree had been satisfied soon upon it being passed."
50. In sum, there is no legal or equitable basis to trim the Contractor's interest up to the 2018 tender. The continuing interest up to the date of payment (or valid tender) is expressly contemplated by Order XXI and by authoritative precedents. What BSNL labels as a "windfall" is Page 28 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 merely the sum total of what the court awarded and what the law provides as compensation for delay. The Contractor is not being enriched beyond the decree's terms; he is receiving the time-value of the money that was rightfully his but remained unpaid until 2018. BSNL, having delayed the satisfaction of the decree, cannot now invoke equity to avoid paying interest that accrued due to its own lapse. Equity and law alike favor the diligent decree-holder's right to be fully indemnified for the wait. Thus, there is no question of unjust enrichment here, only the enforcement of the decree in accordance with its terms and the CPC. The executing court would be correct in awarding interest up to 15.11.2018 (the tender date) to the Contractor, and BSNL remains liable for that interest by operation of law. VI. CONCLUSION AND DIRECTION:
51. Upon comprehensive consideration of the factual matrix and the legal issues raised, this Court is of the opinion that:
a. The Executing Court committed a jurisdictional error in allowing execution for Rs. 2,41,051 under Claim 68(iii), when the award clearly specified only ₹18,998. An executing court has no authority to expand the scope of the award.
b. BSNL was within its contractual rights to withhold Rs. 42,24,189 under Clause 29A of the General Conditions of Contract. This right was duly invoked with notice, and the withheld amount corresponded to an adjudicated claim that was under challenge.
Such withholding does not attract any liability for interest nor constitutes deviation from the decree.Page 29 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 c. Interest on the tendered sum of Rs. 31,91,349 must be held to have ceased from 15.11.2018. The cheque was a valid tender, and the decree-holder's refusal cannot revive interest beyond that date.
d. The Executing Court failed to discharge its duty under Section 47 CPC. It dismissed BSNL's objections without substantive adjudication, especially overlooking the asserted right of set-off under Order XXI Rule 18. That omission vitiates the execution process and warrants correction.
e. The claim of unjust enrichment by the Contractor due to delay in execution proceedings is unsustainable. The accrual of interest on a money decree is not contingent on the decree-holder's diligence but on the continued non-payment of the decretal dues. BSNL remained liable to pay interest until a valid tender was made, and that occurred only on 15.11.2018.
52. Accordingly, this Court directs as follows:
a. The impugned orders dated 24.02.2024 and 28.06.2024 are set aside to the extent they authorize execution beyond Rs. 18,998 under Claim 68(iii). Execution shall be limited strictly to the awarded amount, with interest applied on that sum only.
b. BSNL's invocation of Clause 29A is upheld. The withheld amount of Rs.42,24,189 shall not be executable until the related claim is adjudicated. No interest is payable on this withheld sum.
c. The interest on Rs.31,91,349 shall be deemed to have stopped accruing from 15.11.2018, the date on which BSNL validly Page 30 of 31 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Jul-2025 14:05:19 tendered the payment. The execution court shall exclude any post-tender interest on this amount.
d. The matter is remanded to the Commercial Court, Bhubaneswar, with a direction to rehear and decide BSNL's objections under Section 47 CPC, including the plea for set-off under Order XXI Rule 18 CPC, within a period of 6 weeks from the date of receipt of this order.
e. BSNL shall deposit the recalculated balance decretal amount, after adjusting the withheld and tendered sums, within 90 days.
Failure to do so will entitle the decree-holder to proceed with execution for the outstanding dues with interest at the awarded rate from the date of default till actual payment.
f. The execution court shall monitor compliance, rectify the executable figures, and pass necessary consequential orders in light of the above findings.
53. Accordingly, the Writ Petition is allowed. The impugned orders are modified in terms of the above directions. Execution proceedings shall continue in accordance with this judgment and applicable law.
54. Interim order, if any, passed earlier stands vacated.
(Dr.S.K. Panigrahi) Judge Orissa High Court, Cuttack, Dated the 18th July, 2025/ Page 31 of 31