The court clarified that post-award interest includes both principal and pre-award interest, overruling previous decisions that restricted such calculations.

JUDGMENT :

UJJAL BHUYAN, J.

1. Heard learned counsel for the parties.

2. This civil appeal by special leave is directed against the impugned order dated 01.07.2019 passed by a Division Bench of the High Court of Delhi at New Delhi (‘High Court’) disposing of EFA (OS) No. 17/2017 and C.M. No. 20662/2017 (North Delhi Municipal Corporation vs. M/s. S.A. Builders Ltd).

3. By the impugned order dated 01.07.2019, the Division Bench held that this Court vide the order dated 12.03.2015 had directed the High Court to decide the issue of interest component payable to the respondent in accordance with the law laid down in M/s. Hyder Consulting (UK) Ltd. vs. Governor, State of Orissa, (2015) 2 SCC 189 and not in accordance with the law laid down in State of Haryana vs. S.L. Arora, (2010) 3 SCC 690 declaring that the matter relating to amount payable to the respondent had attained finality and could not be interfered with. The Division Bench set aside that part of the order of the learned Single Judge dated 19.04.2017 passed in E.A. (OS) No. 34/2016 pertaining only to the calculations and permitted both the parties (appellant and respondent) to make submissions before the learned Single Judge restricted to the quantum of the amount payable to the respondent. The appeal and the miscellaneous application were disposed of with the observation that learned Single Judge would decide the amount payable by the appellant to the respondent after hearing both the sides.

4. At the outset, it would be appropriate to advert to the relevant facts having a material bearing on the lis.

Facts

5. Respondent was awarded a contract work relating to construction of approaches to flyover at the level crossing on New Rohtak Road with clover-leaf slip road and service road etc. by the appellant. A contract agreement was entered into between the parties in this regard on 11.11.1983. The work however could not be completed even beyond the stipulated date of completion till March, 1990 and, therefore, the work had to be closed in an incomplete form. The main reason for closing the work was non- availability of site.

5.1. The last payment to the tune of Rs. 4,71,48,122.00 was made to the respondent on 09.02.1988. Thereafter, no payments were made to the respondent for the work done upto March, 1990 when the contract was closed. Respondent submitted its final bill which the appellant failed to pay. As a result, dispute arose between the parties.

6. Thereafter, respondent filed an application under Section 20 of the Arbitration Act, 1940 before the High Court seeking appointment of an arbitrator to arbitrate the dispute between the parties. High Court appointed Sh. S.P. Rai, Ex- Member (Personnel), Postal Services Board and Additional Secretary to the Government of India, Ministry of Communications, as the sole Arbitrator. It may be mentioned that on the consent of both the parties, the arbitration proceedings were carried out in terms of the Arbitration and Conciliation Act, 1996 whereafter award was passed by the sole Arbitrator on 16.12.1997. Learned Arbitrator awarded various sums under different heads out of the 26 claims, while rejecting a few of the claims of the respondent. Counter claim of the appellant was also allowed to a limited extent under three heads. After adjusting the two, an amount of Rs. 1,70,70,720.80 was awarded to the respondent with simple interest @ 18% per annum on the award amount w.e.f. 01.04.1990 upto the date of actual payment except on claim No. 23(b) which related to expenses incurred by the respondent on account of bank guarantee commission, margin money etc. for keeping the bank guarantee alive.

6.1. Thereafter, the sole Arbitrator issued a corrigendum dated 18.12.1997 pointing out certain typographical errors in the award, whereafter it was mentioned that the net amount payable to the respondent would be Rs. 1,70,40,720.80 instead of Rs. 1,70,70,720.80, further clarifying that the above correction would form part of the award dated 16.12.199