The main legal point established in the judgment is that interest ceases to run on the amount paid to the decree holder upon withdrawal, and the judgment debtor is not liable to pay interest on the amount already paid.

JUDGMENT :

Sanjiv Khanna, J.

1. By award dated 14.04.2000, the appellant, M/s Nepa Limited, was held liable to pay Rs. 14,49,300/- to the respondent, Manoj Kumar Agrawal. The amount was towards refund of the balance security deposit, which was made by Manoj Kumar Agrawal in terms of the agreement dated 25.10.1996. The award had stipulated that Rs. 14,49,300/- would carry an interest @ the rate of 18% per annum from the date of the award, till payment.

2. It is an accepted case that the appellant paid an amount of Rs. 1,50,000/- to the respondent on 22.10.2001. It is also undisputed that this payment would be adjusted/set-off against the interest, and not from the principal amount of the award, i.e., Rs.14,49,300/-.

3. The objections filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996, ¹[For short, the “Act”], were dismissed on 28.02.2001.

4. The appellant had thereupon preferred an appeal under Section 37 of the Act before the Division Bench of the High Court. On 30.10.2001, the Division Bench passed an order whereby, on the appellant depositing 50% of the awarded amount within ten days from the date of the order before the executing court, the execution proceedings for the balance amount were to remain stayed. The respondent was entitled to withdraw the deposited amount after furnishing personal undertaking for restitution of the amount if he is so directed, within three months from the date of the final disposal of the appeal. The direction/order attaching the properties of the appellant was to continue.

5. Pursuant to the interim order, the appellant had deposited Rs. 7,78,280/- on 05.11.2001. On 08.11.2001, the respondent withdrew Rs.7,78,280/-, after furnishing personal undertaking in terms of the order dated 30.10.2001.

6. The appeal preferred by the appellant under Section 37 of the Act was dismissed by the Division Bench on 02.02.2012.

7. It may be stated here that the respondent had also challenged the award by filing objections under Section 34 of the Act, which were dismissed. Thereupon, the respondent had filed an appeal under Section 37 of the Act which was also dismissed. It is stated by the respondent, who appears in-person, that both the appellant and the respondent had preferred a special leave petition before this Court, which were dismissed.

8. Learned counsel appearing for the appellant accepts that the payment of Rs.7,78,280/-, which was withdrawn by the respondent on 08.11.2001, would be first adjusted/set-off against the interest element payable in terms of the decree, which in this case, is the award. The balance amount would be set off/adjusted towards the principal amount payable. To this extent also, there is no dispute.

9. The dispute before us is whether the respondent is entitled to interest @ the rate of 18% as per the award on the principal amount of Rs. 14,49,300/- till the decision of the appeal under Section 37 of the Act on 02.02.2012, or interest @ the rate of 18% is payable on the net principal amount²[See paragraph 25 below. As per calculations made by the appellant vide Annexure ‘A’ to this judgment the net principal amount payable is Rs. 9,13,483/-. As per the calculations made by the respondent vide Annexure ‘B’ to this judgment the net principal amount payable is Rs.9,30,300/-.] after the set-off/adjustment of interest due on 08.11.2001 from Rs.7,78,280/- which was withdrawn by the respondent on 08.11.2001.

10. On 01.08.2012, the respondent had filed an application for recovery of amount of Rs. 3,97,382/- along with the interest. On 18.08.2012, the respondent had filed another application stating and claiming that he was entitled to interest on Rs.14,06,259/-, i.e., the principal amount awarded along with the 18% interest till the decision of the appeal under Section 37 of the Act, which was decided on 02.02.2012³[It appears that some payments were made by the app