Research › Search › Judgment

Himachal Pradesh High Court · body

2001 DIGILAW 325 (HP)

J. C. JHINA v. H. P. HOUSING BOARD

2001-11-09

R.L.KHURANA

body2001
JUDGMENT R.L. Khurana, J.—On a dispute having arisen between the parties qua agreement No. 5 of 1987-88 regarding construction of Central Jail Building at Kanda, Shimla (SH: Construction of Main Outer Boundary Wall from R.D. 870 to 1088), the matter was referred to arbitration. 2. The Arbitrator entered upon the reference on 1.1.1992. He gave his Award dated 29.3.1994. Such award was filed in the Court for being made the rule of the Court and the same came to be registered as Civil Suit No. 102 of 1994. Both the parties preferred objections to the award under Sections 30/33, Arbitration Act, 1940. A learned Single Judge of this Court on 9.9.1996 allowed the objections and after setting aside the award dated 29.3.1994 remitted it back to the Arbitrator for decision afresh after examining the points raised by the parties before the Court. 3. The Arbitrator on the matter having been remitted back to him for decision afresh, reheard the parties and on consideration of the material placed before him made his award on 18.11.1997 whereby he allowed the following claims of the petitioner-decree holder : Claim No. Particulars of the claim Amount claimed Amount awarded 1. Price escalation due under clause 10(c) Rs. 79,770.46P Rs. 24,809.66P 2. Payment under clause (12-A) Rs. 4,59,236 Rs. 2,87,442.24P 3. Payment of brick work in super structure Rs. 10,718.72P Rs. 10,718.72P 4. Cost of material lying at site Rs. 50,283 Rs. 47,254.39P 7. Interest on the amounts withheld at the rate of 18% per annum 4,64,262 Total sum awarded Rs. 8,34,487.01P 4. The award dated 18.11.1997 was filed in Court for being made the rule of the Court. It came to be registered as Civil Suit No. 20 of 1998. Notices of the award having been filed in Court were issued to the parties. Consequent upon such notices, the respondent-judgment debtor, Housing Board, preferred objections under Sections 30/33, Arbitration Act, 1940 to the award being made the rule of the court. Such objections were dismissed on 4.1.1999. The award dated 18.11.1997 was made the rule of the court and a decree in terms thereof came to be passed in favour of the petitioner-decree holder and against the respondent-judgment debtor. Such objections were dismissed on 4.1.1999. The award dated 18.11.1997 was made the rule of the court and a decree in terms thereof came to be passed in favour of the petitioner-decree holder and against the respondent-judgment debtor. The operative part of the judgment dated 4.1.1999 passed in Civil Suit No. 20 of 1998 reads : "Consequent upon the dismissal of the objections preferred by the defendant Housing Board under Sections 30/33 of the Arbitration Act, 1940, the award dated 18.11.1997 of the Arbitrator is made the rule of the court and a decree in terms thereof is passed in favour of the plaintiff and against the defendant Housing Board. The plaintiff shall also the entitled to interest on the decretal amount at the rate awarded by the Arbitrator from the date of the award till realisation. No orders as to costs." (Emphasis supplied) 5. No appeal was preferred by the respondent-judgment debtor against the judgment and decree dated 4.1.1999. The same thus became final. 6. The petitioner-decree holder sought the enforcement of the decree dated 4.1.1999 vide execution petition No. 12 of 1999. Admittedly, a sum of Rs. 9,25,410.21P was received by the petitioner-decree holder from the respondent-judgment debtor in such proceedings as under: (i) Amount of award Rs. 8,34,487.01P (ii) Interest on Rs. 3,70,225.01P at the rate of 18% per annum with effect from 19.11.1997 (the date of award) to 31.3.1999 (the date of payment) Rs. 90,923.20P Total Rs. 9,25,410.21P 7. The petitioner-decree holder has filed the present execution petition seeking to recover another sum of Rs. 1,14,360.60P alleged to be due under the decree dated 4.1.1999 after adjusting the amount of Rs. 9,25,410.21P received from the respondent judgment-debtor. The outstanding amount claimed has been calculated as under : (i) Principal amount due under the decree Rs. 8,34,487.01P (ii) Interest at the rate of 18% per annum on the decretal amount from 18.11.1997 (date of award) to 31.3.1999 (date of receipt of the amount) Rs. 2,05,283.80P (iii) Total amount due on 31.3.1999 Rs. 10,39,770.81P (iv) Less amount received Rs. 9,25,410.21P (v) Balance outstanding amount under the decree Rs. l,14,360.60P 8. The respondent-judgment debtor has resisted the petition. It has been averred vide reply dated 11.7.2001 that the entire amount due under the decree stands paid. The decree stands satisfied and nothing is due there under. It was further averred that the decretal amount was only Rs. 3,70,225.01? 9,25,410.21P (v) Balance outstanding amount under the decree Rs. l,14,360.60P 8. The respondent-judgment debtor has resisted the petition. It has been averred vide reply dated 11.7.2001 that the entire amount due under the decree stands paid. The decree stands satisfied and nothing is due there under. It was further averred that the decretal amount was only Rs. 3,70,225.01? and only on this amount interest at the rate of 18% per annum from the date of the award till the date of realisation of the amount was payable. No interest is payable on the amount of Rs. 4,64,262 awarded as interest under claim No. 7 by the Arbitrator. Be it stated that though the award of the Arbitrator dated 18.11.1997 was dealt with and made the rule of the court under, the provisions of the Arbitration Act, 1940, it is not disputed by the parties that the matter has now to be dealt with in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (for short the Act of 1996) in view of the ratio laid down by the Honble Apex Court in Thyssen Stahlunion Gmbh v. Steel Authority of India Ltd., (1999) 9 SCC 334. 9. Shri Deepak Gupta, Advocate, appearing for the respondent-judgment debtor has contended that a sum of Rs. 4,64,262 was awarded by the learned Arbitrator as interest at the rate of 18% per annum on a sum of Rs. 3,70,225.01P awarded under various heads of claim, for the period 1.12.1990 to the date of the award, that is, 18.11.1997. He, therefore, has submitted that no interest is payable on the amount of interest. 10. The learned Counsel for the decree holder/petitioner, on the other hand, relying upon the words "a sum directed to be paid by an arbitral award" appearing in clause (b) of sub-section (7) of Section 31 of the Act, has contended that Rs. 4,64,262 awarded by the learned Arbitrator as interest for the period 1.12.1990 to 18.11.1997, was a sum directed to be paid by an arbitral award within the meaning of Section 31(7)(b) of the Act and as such the respondent-judgment debtor is liable to pay interest thereon at the rate of 18% per annum from the date of award till the date of payment. 11. Section 31 of the Act of 1996 in so far as it is material for the purpose of the present case reads: "(1)................................................................................................... 11. Section 31 of the Act of 1996 in so far as it is material for the purpose of the present case reads: "(1)................................................................................................... (2) ................................................................................................... (3) ................................................................................................... (4) ................................................................................................... (5)................................................................................................... (6).................................................................................................... (7) (a). Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. (b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the a-ward to the date of payment. (8) .................................................................................................. 12. The sole question thus depends on the meaning of the expression "a sum directed to be paid by an arbitral award" appearing in clause (b) of sub-section (7) of Section 31 of the Act. 13. In Oil and Natural Gas Commission v. M.C. Clelland Engineers S.A, (1999) 4 Supreme Court Cases 327, the arbitrators by their award had directed the appellants therein to pay the following sums to the respondents: (i) US 1004.50 being interest on US