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HIGH COURT OF CALCUTTA
BACHAWAT, A.K.MUKHERJI, JJ.
Brahmaswaoop Gupta - Appellant
Versus
Diwan Chand Minotra – Respondent
Decided On : May 28, 1963
ARBITRATION - AWARD - INTEREST - POWER OF ARBITRATOR - ORDER OF REFERENCE BACK - EFFECT - INTEREST AFTER DATE OF AWARD - INTEREST AFTER DATE OF DECREE - SECTION 29 OF THE ARBITRATION ACT.
Fact of the Case:
The appellant and the respondent submitted their disputes to arbitration. The arbitrator made an award directing the appellant to pay a sum of Rs. 20,000/- to the respondent within a fortnight from the date of the award and the respondent to deliver 200 ordinary shares held by him in the capital of the Eagle Paint and Pigment Industries Ltd. to the appellant against payment of the said sum of Rs. 20,000/-. The appellant moved for the setting aside of the award. The court held that the arbitrator had omitted to consider a certain question and remitted the award to the arbitrator for reconsideration of that question. The arbitrator made a supplementary award deciding the question remitted to him. The court passed judgment and decree in terms of the two awards. The appellant paid the principal sum of Rs. 20,000/- on December 18, 1959. The respondent filed a tabular statement claiming interest on the principal sum from the date of the award till the date of payment. The court passed an order directing the issue of a writ of attachment of a decree passed in favour of the respondent against a third party for realization of the respondent's claim and costs.
Finding of the Court:
The court held that the appellant was liable to pay interest on the principal sum awarded from the date of the award till the date of the decree passed by the court. The court further held that the appellant was not liable to pay any interest on the principal sum awarded as from the date of the decree.
Issues: 1. Whether the appellant was liable to pay interest on the principal sum awarded from the date of the award till the date of the decree passed by the court? 2. Whether the appellant was liable to pay any interest on the principal sum awarded as from the date of the decree?
Ratio Decidendi: 1. The court held that the appellant was liable to pay interest on the principal sum awarded from the date of the award till the date of the decree passed by the court on the following grounds: * Clause 7 of the award directed that interest would be paid from the expiry of a period of a fortnight from the date of the award. * The award did not expressly specify the period upto which interest would be paid. * Had the arbitrator power to award interest after the passing of the decree on the award, the court would have read clause 7 as directing by necessary implication that interest would be paid until payment or realization of the principal sum awarded. * However, the arbitrator has no power to award interest on the principal sum awarded as from the date of the decree on the award. * Therefore, clause 7 should not be read as providing by necessary implication that interest would continue to be paid after the passing of the decree. 2. The court held that the appellant was not liable to pay any interest on the principal sum awarded as from the date of the decree on the following grounds: * The award did not expressly direct the appellant to pay interest on the principal sum awarded as from the date of the decree. * The court did not direct payment of interest from the date of the decree under section 29 of the Arbitration act. * Therefore, it must be held that the appellant is liable to pay interest only upto the date of the decree passed by the court.
Final Decision: The court allowed the appeal in part and held that the respondent was entitled to realize from the appellant interest at 6 per cent, per annum on the principal sum of Rs. 20,000/- from the 14th May, 1956 upto the 24th March, 1958 and was not entitled to realize from the appellant any other sum on account of interest.
1. This is an appeal from an order directing the issue of a writ of attachment in execution of a decree. On December 19, 1955, the appellant and the respondent submitted their disputes to the arbitration of Sri ram Chandra Singhi. On April 30, 1956 the arbitrator made his award. Clauses 2, 4 and 7 of the award read as follows: clause2:
"the said Brahma swaroop Gupta do pay a sum of rupees Twenty thousand to the said Diwanchand Minotra within a fortnight from the date hereof and the said Diwanchand Minotra to deliver two hundred ordinary shares held by him in the capital of the said Eagle Paint and Pigment industries Ltd., in his own name or in the names of his friends and relatives to, and also make over the relative transfer deeds duly executed in favour of Brahma swaroop Gupta or his nominee or nominees against payment of the said sum of Rs. 20,000/- (Rupees twenty thousand) only. "
Clause4:
"the said Brahma swarup Gupta will pay a sum of rupees Five thousand to the said diwanchand Minotra, within a period of fortnight from the date hereof in full settlement of all claims and demands of the said diwanchand Minotra in respect of the said partnership of Messrs. Reno Trading Co. "
Clause7:
"if the payments referred to in clauses 2 and 4 herein above will not be made by brahma Swarup Gupta to Diwanchand Minotra within the time mentioned therein, then interest at the rate of 6 per cent, shall be paid by Brahma Swarup Gupta to Diwanchand Minotra from the expiry of a period of fortnight from date hereof. "
2. The appellant moved for the setting aside of the award. On December 18, 1956, the court held, inter alia, that the arbitrator had omitted to consider the question mentioned in paragraph 9 (j) of the petition and passed an order the material part of which reads as follows:
" it is further ordered that the said Award be and the same is hereby remitted to the Arbitrator herein to come to a decision on the question mentioned in paragraph 9 (j) of the said petition. And it is further ordered that the said Arbitrator do within two months from the date of receipt of the papers make and submit his Award on the said question so to be remitted as aforesaid. "
On April 16, 1957, the arbitrator made a supplementary award deciding the question remitted to him. The supplementary award recited the making of the first award and the order of the court dated December 18, 1956. On march 24, 1958, the court passed judgment and decree in terms of the two awards. The principal sum of Rs. 20,000/- payable under clause 2 of the first award was paid on December 18, 1959. On March 24, 1960 the respondent filed a tabular statement claiming that a sum of Rs. 4313/- was due to him on account of interest at 6 per cent, per annum from the 14th May, 1956 up to the 18th December, 1959 on the aforesaid principal sum of Rs. 20,000/- and a further sum of Rs. 250/- was due to him on account of interest at 6 per cent, per annum from the 16th February, 1959 up to the 18th December, 1959 on the principal sum of Rs. 5,000/- payable under clause 4 of the award and prayed for the issue of a writ of' attachment of a decree passed in favour of the respondent against a third party and for realisation of the respondent's claim and costs. On August 31, 1960 the learned Judge passed an order directing the issue of writ of attachment as prayed for.
3. On behalf of the appellant it is urged firstly that as the respondent did not tender the shares mentioned in clause 2 to the appellant, the appellant cannot be said to have defaulted in payment of Rs. 20,000/- and consequently he is not liable to pay any interest thereon. There is no substance in this contention. Clause 2 of the award fixed a definite time for payment of the sum of Rs. 20,000/- and clause 7 provided that in default of such payment interest would be paid. The fact that clause 7 provide for the consequences of non-payment of the aforesaid sum, and did not provide for the consequences of non-delivery of the shares
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