Interest on decreed amounts will not cease upon deposit in a court other than the executing court; actual payment to the decree holder is required to stop interest accrual.

JUDGMENT :

ANIL L. PANSARE, J.

Issue Rule returnable forthwith. Learned counsel waives service of Rule on behalf of the respondents. With consent of learned counsel for the parties, the petition is taken up for final hearing.

2. The question that arises for consideration is, whether interest will stop accruing once the amount awarded to the Decree Holder is deposited by the Judgment Debtor in the Court other than the Executing Court?

3. According to the petitioner - Decree Holder, the liability of the Judgment Debtor to pay interest on the amount awarded would not stop on the date of its deposit in the Court but would instead continue till actual payment is made to him.

4. In support of his contention, Mr. C. B. Dharmadhikari, learned counsel for the petitioner, has relied upon judgment passed by Division Bench of Delhi High Court, in Delhi Development Authority .Vs. Bhai Sardar Singh & Sons, 2009 (109) DRJ 384 . The facts before the Court were that an award was passed in favour of the respondent therein in relation to the construction contract between the parties. The petitioner therein challenged the award by filing objection under Sections 30 and 31 of the Arbitration Act, 1940. The respondent took an objection that provisions of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the, “Act of 1996”) will apply and thus the objections in the petition were not maintainable. Learned Single Judge accepted this plea and dismissed the objection preferred by the petitioner. The petitioner preferred appeal against the dismissal of objection. The Appellate Court stayed the execution of decree, subject to the petitioner depositing entire amount due and payable under the decree within a period of four weeks. The petitioner deposited the entire amount before the First Appellate Court. During the pendency of appeal, the respondent moved an application seeking permission to withdraw the amount deposited by the petitioner. The application, however, remained pending. Eventually, the appeal was allowed and the order rejecting the petitioner’s objection to the award was set aside. The appellate Court held that the objection to award ought to have been considered under the Arbitration Act, 1940. Accordingly, the learned Single Judge was directed to decide the objections afresh, in accordance with law.

5. Learned Single Judge then heard objections and having found no substance, dismissed the same. Consequently, the respondent was held to be entitled to receive specified sum with interest with effect from 13.03.1986. The only variation made in the award was that the interest was reduced to 9% if the payment in terms of modification of rate of interest is made within six weeks from the date of judgment, failing which the interest was to revert back to the rate of 18% per annum as awarded by the Arbitral Tribunal. Thus, the concession granted in the interest was conditional upon payment of amount within six weeks from the date of judgment.

6. The respondent therein preferred an execution petition. The notice was issued to the petitioner. Pending the execution proceeding, the petitioner – Judgment Debtor made a submission that money had already been deposited and was lying in the first appeal and that the petitioner has no objection if the respondent – Decree Holder moves for withdrawal of such an amount. The respondent contended that the amount so deposited by the petitioner, is short of decretal amount. The Court directed the respondent to first withdraw the amount and, thereafter, file execution proceedings, if necessary. The respondent accordingly withdrew the amount lying before the First Appellate Court. The p