Research › Search › Judgment

Himachal Pradesh High Court · body

2019 DIGILAW 485 (HP)

Harbans Lal Vaidya v. State of Himachal Pradesh

2019-04-29

AJAY MOHAN GOEL

body2019
JUDGMENT : AJAY MOHAN GOEL, J. 1. By way of this petition, the petitioner has prayed for the following reliefs:- "It is, therefore, respectfully prayed that the present writ petition may kindly be allowed and this Hon'ble Court may be pleased to grant the following reliefs:- (a) That the impugned Annexure P-8, dated 12.10.2011 may be quashed and set aside. (b) That the entire record pertaining to the case may kindly be summoned for the kind perusal of this Hon'ble Court. (c) That cost of the writ petition may also be awarded in favour of the petitioners. (d) Any other or further relief as this Hon'ble Court may deem just and proper keeping in view the facts and circumstances of the case may also be passed in favour of the petitioners and against the respondents." 2. Petitioner before this Court availed a Cash Credit Limit from respondent No. 4-Bank amounting to Rs. 90,000/- @ 15% per annum which was later on increased to Rs. 1.5 Lac in the year 1990 and to Rs. 4.00 Lac in the year 1991. This Cash Credit Limit was availed in March 1998. As the petitioner failed to pay the amount as was due from him towards the Bank, recovery proceedings stood initiated against him, which ultimately culminated into a ex parte award passed by the learned Arbitrator against the petitioner dated 22.01.2003. Learned Arbitrator passed an award of Rs. 9,10,536.15 alongwith simple interest @ 15% per annum against the petitioner. 3. Feeling aggrieved by the award so passed against him, the petitioner filed an appeal under Section 93 of the H.P. Co-operative Societies Act, 1968, which stood adjudicated upon by the Appellate Authority vide order dated 07.05.2004 (Annexure P-3). The appeal of the petitioner was partially allowed and the same was disposed of by the learned Appellate Court in the following terms:- "Therefore, after giving a careful thought upon the entire issue, I order that the claim of respondent bank to recover the amount shown recoverable through these two disputed cheques bearing No. 105823 and 105824 amounting to Rs. 275000/- and 75000/- respectively totalling Rs. 345000/- is hereby disallowed and rest of the payment shall be made by the appellant as per agreement entered in between alongwith interest @ 15% on the principal amount upto period. The detail of the actionable claim is as under:- P.19,10,536-15 as on 10.8.1992 Disallowed amount 3,40,000.00 5,65,536.15 Intt. 275000/- and 75000/- respectively totalling Rs. 345000/- is hereby disallowed and rest of the payment shall be made by the appellant as per agreement entered in between alongwith interest @ 15% on the principal amount upto period. The detail of the actionable claim is as under:- P.19,10,536-15 as on 10.8.1992 Disallowed amount 3,40,000.00 5,65,536.15 Intt. From 11.8.1992 to 22.1.2003 8,86884.66 10 years 166 days @ 15% 14,52,420.80 Intt. w.e.f. 23.12.2003 to 7.5.2004, 1 year 106 days @ 15% 1,09,466.10 Total 15,61,886.90 The appellant shall deposit this amount within four months from the announcement of this order in equal installment failing which the respondent bank shall have every right to recover the amount by way of arrear of land-revenue. If the amount still remains un-recovered it be recovered in the same manner from guarantor Sh. Kushal Kapoor S/o Sh. Mayyadhar and Sh. Rajender Vaidya S/o Sh. Mansukh in equal proportion to that extent for which they stood as guarantees." 4. Thus while arriving at the final amount, which as per the Appellate Authority was payable by the petitioner to the respondent-Bank, interest upon the same in the event of non-payment by the petitioner was not awarded in favour of the respondent-Bank by the Appellate Authority. Though said order was assailed by way of a Revision Petition by the present petitioner, however, the same was not challenged by the respondent-bank. 5. The said Revision was initially adjudicated upon against the petitioner and the decision therein was assailed by the petitioner before this Court. After the remand of the matter back to the Revisional Authority, said Revision Petition was withdrawn by the present petitioner. 6. As petitioner did not pay the amount in terms of the order of the Appellate Authority dated 07.05.2004, respondent No. 4-Bank took steps for recovery of the said amount from the petitioner as arrears of land-revenue. In the said process, Annexure P-8 stood issued by the concerned Authority and in terms of the said order, Authority levied interest @ 15% upon the principal amount of Rs. 15,61,886.90 amounting to Rs. 17,14,438/-. It is this levy of interest by the Authority vide Annexure P-8, which stands assailed by way of present petition. 7. Mr. J.S. Bhogal, learned Senior Counsel appearing for the petitioner has argued that as no interest was awarded by the Appellate Authority on the amount of Rs. 15,61,886.90 amounting to Rs. 17,14,438/-. It is this levy of interest by the Authority vide Annexure P-8, which stands assailed by way of present petition. 7. Mr. J.S. Bhogal, learned Senior Counsel appearing for the petitioner has argued that as no interest was awarded by the Appellate Authority on the amount of Rs. 15,61,886.90, imposition of the same @ 15% per annum vide Annexure P-8, is prima-facie illegal, not in consonance with the order of the Appellate Authority and on this account, Annexure P-8 is liable to be quashed and set aside to the extent it levies interest upon principal amount as envisaged in Annexure P3. 8. On the other hand, learned Counsel for respondent-Bank has argued that the Arbitrator had awarded interest @ 15% per annum in favour of respondent No. 4 and even after the adjudication by the Appellate Authority, the principal amount was not paid by the petitioner, in lieu of that, imposition of interest @ 15% per annum vide Annexure P-8 is sustainable in law. 9. I have heard learned Counsel for the parties and perused the record of the case, including Annexure P-8. 10. I have already quoted the relevant portion of the order passed by the Appellate Authority vide which it allowed the appeal filed by the present petitioner against the award of the Arbitrator. It is evident and apparent from the perusal of the relevant portion of the award that after arriving at the figure of 15,61,886.90, no interest upon the same was granted by the Appellate Authority in the event of default of payment of the same by the petitioner. Now, it is a matter of record that said order has not been assailed by the respondent-Bank. 11. In this view of the matter, moot issue is as to whether in the absence of interest having been granted by the Appellate Authority, could interest have been awarded vide Annexure P-8 or not? 12. It is settled law that in arbitration proceedings whether or not interest is to be awarded is the discretion of the Arbitrator. In the present case, learned Arbitrator, vide award announced by him awarded interest in favour of the claimant/Bank. However, in appeal, the Appellate Authority, while modifying the award passed by the learned Arbitrator did not award interest in favour of the claimant/Bank. In the present case, learned Arbitrator, vide award announced by him awarded interest in favour of the claimant/Bank. However, in appeal, the Appellate Authority, while modifying the award passed by the learned Arbitrator did not award interest in favour of the claimant/Bank. The award passed by the Arbitrator merged in the order passed by the Appellate Authority and the order passed by the Appellate Authority has attained finality. In the absence of the said order having been assailed by the respondent-Bank to the extent it did not award any interest to the respondent-bank, the Authority under the Land Revenue Act, could not have had imposed interest on the principal amount, as has been done vide Annexure P-8. In fact, while doing so, it has supplanted the terms of the order passed by the Appellate Authority. Therefore, Recovery Order Annexure P-8 to the extent it imposes interest to the tune of Rs. 17,14,438/- upon the petitioner is bad in law and liable to be quashed and set aside. Ordered accordingly. 13. At this stage, learned Senior Counsel appearing for the petitioner informs that in terms of Appellate Authority order, award amount already stands deposited with 4th respondent. The same is not disputed by learned Counsel for the respondent-Bank. Accordingly, while setting aside the imposition of interest imposed vide Annexure P-8, as the order passed by the Appellate Authority admittedly already stands complied with by the petitioner, it is directed that Annexure P-8 otherwise also shall not be given effect to. 14. The petition stands disposed of in above terms of, so also pending miscellaneous applications, if any.