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2004 DIGILAW 358 (AP)

Central Warehousing Corporation, New Delhi v. Gowthami Engineering Corporation, Visakhapatnam

2004-03-23

L.NARASIMHA REDDY

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L. NARASIMHA REDDY, J. ( 1 ) THE petitioner-Central Warehousing corporation, as part of its activity undertook construction of certain warehouses at visakhapatnam in the year 1980. The contract was awarded to the respondent. An agreement dated 24-12-1981 was entered into between the petitioner and the respondent. In the matter of execution of the contract, some disputes arose. In terms of the contract, recourse was had to the arbitration proceedings under the Arbitration act, 1940 (for short the Act ). ( 2 ) THE arbitrator gave an award on 28-4-1986, allowing some of the claims made by the respondent. He has also awarded interest at the rate of 10% p. a. , from the date of award till the date of payment of the amounts awarded, or till the date of passing of decree by the Civil Court, in the event of proceedings being initiated for making the award, a rule of the Court. ( 3 ) THE petitioner filed O. P. 242 of 1986 before I Addl. Senior Civil Judge, visakhapatnam, under Section 33 of the Act, to set aside the award. Conversely, the respondent filed O. S. 245 of 1986 under section 17 of the Act to make the award, the rule of the Court. Both the matters were tried and heard together. Through a common judgment dated 3-4-1995, the trial Court allowed O. P. 242 of 1986 and dismissed o. S. No. 245 of 1986, thereby setting aside the award. The respondent filed C. M. A. No. 874 of 1995 against the decree in O. S. 245 of 1986 and CRP. No. 2221 of 1995 against the order in O. P. No. 242 of 1986. Through a Common Judgment dt. 19-4-2000, this Court partly allowed the appeal and revision. The award of the arbitrator, only in so far as it relates to claim No. 11 for a sum of Rs. 11,53,671 -90ps was upheld and as regards the rest, the decree of the trial Court was confirmed. The judgment of this Court was upheld by the Supreme Court in a special Leave Petition filed by the petitioner. Thus the matter assumed finality. ( 4 ) THE respondent filed E. P. 77 of 2003 to execute the decree. It calculated the interest at the rate of 10% p. a. , from the date of award viz. The judgment of this Court was upheld by the Supreme Court in a special Leave Petition filed by the petitioner. Thus the matter assumed finality. ( 4 ) THE respondent filed E. P. 77 of 2003 to execute the decree. It calculated the interest at the rate of 10% p. a. , from the date of award viz. , 28-4-1986 till the date of judgment in the appeal and revision i. e. , 19-4-2000. The executing Court passed an order dated 29-11-2003 accepting the claim and calculation of interest made by the respondent and directed steps to be taken to recover the amount. This CRP is filed against the order dated 29-11-2003 in e. P. 77 of 2003. ( 5 ) THE learned Counsel for the petitioner sri V. Ramgopal submits that the interest at the rate of 10% p. a. , was payable on claim no. 11 from the date of award till the date of decree passed by the trial Court viz. , 3-4-1995. He submits that the date of the decree referred to in the award cannot be interpreted to mean the date of judgment rendered by this Court in the appeal and the revision, simply because the suit filed by the respondent was dismissed by the trial Court. He contends that though the award was made the rule of the Court by virtue of the judgment of this Court, it dates back to the decree in O. S. 245 of 1986. ( 6 ) SRI D. V. Sita Rama Murthy, learned counsel for the respondent, on the other hand submits that the term date of decree employed by the arbitrator has to be given an effective and practical meaning. According to him, the decree referred to therein means the one, which is capable of being executed, and not the decree dismissing the Suit, filed under Section 17 of the Act to make the award as the rule of the court. ( 7 ) THE short controversy in this revision is as to the date up to which the interest ordered by the arbitrator is to be calculated. The arbitration proceedings, which were initiated for resolution of the disputes between the petitioner and the respondent ended in the manner, referred to in the preceding paragraphs. The award was passed on 28-4-1986. There is no dispute that the arbitrator awarded 10% interest. The arbitration proceedings, which were initiated for resolution of the disputes between the petitioner and the respondent ended in the manner, referred to in the preceding paragraphs. The award was passed on 28-4-1986. There is no dispute that the arbitrator awarded 10% interest. The award was specific as to the period for which the interest at that rate was payable. The arbitrator was conscious and aware of the uncertainty in the matter of implementation of award. It was for this reason that he provided for various eventualities, in the matter of calculation of the interest. Two situations were contemplated viz. , (a) Petitioner accepting the award as it is, and paying the awarded amount and; (b) the proceedings being initiated under the Act by the respondent to make the award as the rule of the Court, under Section 17 of the act. It was in this context, the arbitrator stipulated that the interest shall be payable till the date of payment of the amount under the award, or the date of decree that may be passed in the proceedings initiated by the parties under the Act. ( 8 ) IT is not in dispute that the first eventuality did not take place. The petitioner as well as the respondent approached the trial Court to enforce their respective rights under the Act. The suit as well as the O. P. were tried together. A common Judgment was rendered on 3-4-1995. The award was set aside and the suit filed to make it as the rule cf the Court was dismissed. The matters were carried to this Court by way of appeal and revision. Through a common Judgment dated 19-4-2000, this Court upheld the award in part only in so far as it related to claim No. 11 for a sum of Rs. 11, 53,671-90ps. For all practical purposes, and in reality, a decree, partly in terms of the award, came into existence for the first time on 19-4-2000. ( 9 ) THE contention of the petitioner that the date of decree referred to in the award was the one on which the trial Court passed the decree, is too difficult to be accepted. The trial Court dismissed the suit. The decree in such a case is nothing but a formal expression of the adjudication and not an instrument, which entitles the respondent to reap any benefit out of it. The trial Court dismissed the suit. The decree in such a case is nothing but a formal expression of the adjudication and not an instrument, which entitles the respondent to reap any benefit out of it. The date of decree referred to by the arbitrator is not something, which is to operate in vaccum. A decree, by its very nature and in the context of calculation of interest, is the one, which is capable of being executed, and not a formal and simple expression of the outcome of the suit. The reference to the date of actual payment , which preceded the reference to date of decree lends support to the view that the decree is the one, which entitles the respondent to recover the amount. If no amount was recoverable under the decree of the trial Court, its date becomes hardly of any significance in the matter of calculation of interest. ( 10 ) THE purpose of drawing a decree even when a suit is dismissed in its entirety is nothing more than to enable the aggrieved party to pursue the remedy of appeal. Award of interest either by a Court or by an arbitrator is ancillary to the grant of relief of awarding a specified amount. When no relief as to payment of amount is granted, it is unimaginable to think of calculation of interest. ( 11 ) THE contention of the petitioner can be examined from another angle. If in fact interest was payable till the date of decree irrespective of the nature of the decree or result of the suit, it obligated the petitioner itself to pay the interest on the entire award till the date of decree viz. , 3-4-1995 not withstanding the fact that the suit filed by the respondent to make the award as the rule of the Court was dismissed. Such an approach conforms neither to logic nor to law. Accepting the other contention viz. , that irrespective of the date on which an appellate Court reverses the judgment of a trial Court dismissing the suit, and decrees the suit in its entirety and partly at a later point of time, it dates back to the decree of the trial is fraught with its own vagaries. Accepting the other contention viz. , that irrespective of the date on which an appellate Court reverses the judgment of a trial Court dismissing the suit, and decrees the suit in its entirety and partly at a later point of time, it dates back to the decree of the trial is fraught with its own vagaries. The provisions of an enactment or the judgment of a Court, are to operate prospectively, except where a different intention is conveyed expressly or through necessary implication. Viewed from any angle the contention of the petitioner cannot be accepted. ( 12 ) A similar question, in a different context, fell for consideration before the supreme Court in Chand Dhawan v. Jawaharlal Dhawan. It was, as to whether, permanent alimony can be granted by a court, under Section 25 of the Hindu marriage Act; even when no relief of any kind is granted. Opinions of the High Court varied. After discussing the matter at length, the Supreme Court held that the expression any decree employed Section 25 (1) of hindu Marriage Act, in the context of granting permanent alimony, shall mean the one granting any reliefs under Sections 9 to 14 of that Act and not one which simply dismisses the petitions. Similarly, in the context of calculation of interest from the date of decree, the decree must be the one under which, its holder is entitled to recover the amount. A decree, drawn on dismissal of claim, only is a formal expression of an adjudication, for the limited purpose of enabling the aggrieved party to pursue- a furtner remedy, cannot fit into the circumstances. ( 13 ) HENCE, the Civil Revision Petition is dismissed. ( 14 ) THE learned Counsel for the petitioner makes a grievance that the respondent calculated the interest beyond the date of the judgment of this Court dated 19-4-2000. The learned Counsel for the respondent on the other hand submits that though a mistaken calculation was made at an initial stage, the same was rectified. Be that as it may, it is made clear that the respondent shall be entitled to be paid interest at 10% p. a. , on rs. 11, 53,671-90ps only till 19-4-2000 and not beyond that. No costs.