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Punjab High Court · body

2016 DIGILAW 2741 (PNJ)

Union of India v. Sarup Singh

2016-09-26

AMIT RAWAL

body2016
JUDGMENT Mr. Amit Rawal J. (Oral) - The counsel for the petitioners contends that the calculation submitted before the Arbitrator amounts to inclusion of interest on the principal which is not the scope of the Award as per the provisions of the Arbitration and Conciliation Act, 1996. 2. He submits that the Award dated 11.05.1988 was challenged in this Court and vide order dated 13.12.1993 (Annexure P-1), 50% of the awarded amount along with interest within two months was ordered to be paid. The interest accrued on principal amount from 25.5.1988 to 24.1.1994 to the tune of ‘4,01,898/- was paid on 29.05.1994. Thereafter, the petitioners have not been able to pay interest on the half of the principal amount. The calculation contains the payment of interest on the principal, which cannot be scope of the arbitral award. 3. I have heard learned counsel for the petitioners and appraised the paper book. The impugned order under challenge reads thus:- “Calculation again submitted by DH. Heard on fact ofoutstanding amount if any against the JD. Admittedly,principal amount is `4,78,499.46 and is to be paid from25.05.1988 till payment along with interest @ 12% per annum.Part payment of `4,01,898/- was made on 29.05.1994 and `10,14,315/- on 24.05.2015 by JD. Payment of `4,01,898/-made on 29.05.1994 was pursuant to order dated 13.12.1993 ofHon’ble High Court. JD made the payment and adjusted thesame against 50% of principal amount to reduce the principalamount and interest thereafter, was calculated on said 50% ofprincipal amount. Payment of `4,01,898/- was to be adjustedagainst the entire outstanding amount i.e. principal plusinterest. Calculation of amount due towards JD are as under: Sr.No. Particulars Amount 1 Decretal amount Rs 4,78,499.46 2 Interest @ 12% P.A, w.e.f25.05.1988 to 29.05.1994 Rs 3,44,556/- 3 Total liability on 29.05.1994 Rs 8,23,055.46 4 Payment made on 29.05.1994 Rs 4,01,898/- 5 Liability as on 29.05.1994 Rs 4,21,157.46 6 Interest @ 12% p.a from 30.05.1994 to 01.05.2015 Rs 10,57,023/- 7 Liability as on 01.05.2015 Rs 14,78,180.46 8 Payment made on 01.05.2015 Rs 10,14,315/- 9 Liability as on 01.05.2015 Rs 4,63,865/- 10 Interest @ 12% p.a from 01.05.2015 to 31.08.2016 Rs 74,421/- 11 Total Liability on 31.08.2016 Rs 5,38,285/- Liability as on 01.05.2015 of ‘4,63,865/- includes principalamount and interest also. Question is if interest is to be paid oninterest. If payment of interest is delayed then it merges intoprincipal and interest be also paid over interest. Question is if interest is to be paid oninterest. If payment of interest is delayed then it merges intoprincipal and interest be also paid over interest. Some analogyhas been applied and liability of JD comes to Rs. 5,38,285/- as on31.08.2016. Let, payment of said amount be made on31.08.2016. -sd Aashish Abrol, PCSACJSD/16.08.2016" 4. The calculation aforementioned is perfectly in accordance with the Award and the petitioners deposited ‘4,01,898/- on 29.05.1994 by that time on principal amount of Rs.4,78,499.46. The interest rate @12% w.e.f. date of the Award i.e. 25.05.1988 to 29.05.1994 had arrived at a figure of Rs.3,44,556/-. After deduction of the deposited amount, the balance was Rs. 4,21,157.46 and thereafter, interest @12% p.a. from 30.05.1994 to 01.05.2015 accrued to ‘10,57,023/- and a payment of Rs.10,14,315/- was made on 01.05.2015 against the liability of Rs.14,78,180.46. 5. In my view, the calculation arrived at by the trial Court is perfectly in consonance with the judgment rendered by the Hon’ble Supreme Court inHyder Consulting (UK) Limitd Vs. State of Orissathrough Chief Engineer (2016) 6 SCC 362 wherein the view expressed in M/s Hyder Consulting (UK) Ltd. Vs. Governor, State of Orissa throughChief Engineer 2015 (2) SCC 189 has been reiterated holding that the amount awarded whether with interest or without interest constitutes a sum for which the award is made and therefore, it would not be against the provisions of the 1996 Act. 6. The impugned order is perfectly legal and just in view of the ratio decidendi referred to above. No ground for interference is made out. The revision petition is dismissed.