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2009 Supreme(Del) 299
IN THE HIGH COURT OF DELHI
MUKUL MUDGAL,VIPIN SANGHI
DELHI DEVELOPMENT AUTHORITY - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
C.M. No.5462/2007 in FAO(OS) 93/2002 & EFA(OS)9/2007
Decided On : 16-03-2009
Ms. Anusuya Salwan, Ms. Monika Sharma, Advocates
Mr. Sandeep Sethi, Sr. Advocate with Mr. P.S. Bindra, Advocate
The main legal point established in the judgment is that the mere deposit of the decretal amount does not relieve the judgment debtor of its liability to pay interest, and a positive act of payment is required to satisfy the decree.
Headnote:
Arbitration Act - Execution Appeal - Arbitration Act, 1940, Arbitration and Conciliation Act, 1996 - Sections 30, 31 - The court discussed the applicability of the Arbitration Act, 1940 and the objections preferred by the DDA. The court also considered the deposit of the decretal amount and the entitlement to interest, citing relevant legal provisions and case law.
Fact of the Case:
The appellant DDA sought a refund of a deposited amount in relation to a construction contract dispute. The respondent decree holder filed an execution petition to execute the decree for payment.
Finding of the Court:
The court found that the deposit of the decretal amount did not amount to payment to the decree holder as per Order XXI Rule 1 CPC. The court also held that the appellant did not avail of the conditional remission of interest granted in the decree.
Issues: The issues included the applicability of the Arbitration Act, 1940, the entitlement to interest on the deposited amount, and the interpretation of Order XXI Rule 1 CPC.
Ratio Decidendi: The court held that the mere deposit of the decretal amount did not relieve the appellant of its liability to pay interest. The court also emphasized the need for a positive act of payment to the decree holder as per Order XXI Rule 1 CPC.
Final Decision: The appeal by the appellant DDA was dismissed, and the respondent decree holder was entitled to payment of the amount in deposit to satisfy the decree. The remaining amount in deposit was to be released to the appellant.
1. The aforesaid execution appeal, namely, EFA(OS) 9/2007 has been preferred by the appellant DDA to impugn the judgment dated 20th March, 2007 passed by the learned Single Judge in Execution Application No. 81/2006 in Execution Petition No. 168/2005, whereby the said application preferred by the appellant herein, who was the judgment debtor in the execution petition, has been dismissed. EA No.81/2006 had been preferred by the appellant to seek a direction that the amount of Rs.19,95,291/- be refunded to the appellant/judgment debtor.
2. So far as FAO(OS) 93/2002 is concerned, the same was disposed of by this Court on 20th April, 2004. However, the respondent/decree holder thereafter moved CM No. 5462/2007 to permit the withdrawal of the amount of Rs.12,88,770/- lying deposited in this Court. On this application, the Court on 23rd April, 2008 passed an order that the same would be considered at the time of disposal of EFA(OS) 9/2007.
3. We may give a brief factual background giving rise to the execution appeal. In relation to a construction contract between the parties, some disputes arose. They were referred to arbitration. The Arbitrator rendered an Award. The Award dated 12.8.1998 was challenged by the appellant DDA by filing objections under Sections 30 and 31 of the Arbitration Act, 1940. The respondent took an objection that it is the Arbitration and Conciliation Act, 1996 which was applicable and the objections preferred by the DDA were not maintainable. This submission of the respondent was accepted by the learned Single Judge who dismissed the objections preferred by the DDA as not maintainable. The DDA preferred FAO(OS) 93/2002 against the dismissal of the objections by the learned Single Judge. On 15.3.2002, in CM No. 219/2002 the Court stayed the execution of the decree which followed the dismissal of the objections preferred by the DDA, subject to the appellant DDA depositing the amount due and payable under the decree within a period of four weeks. The amount was directed to be kept in a short term deposit by the Registry. The aforesaid appeal FAO(OS) 93/2002 was admitted. An amount of Rs.58,80,380/- was deposited by the appellant DDA and this position was recorded in the subsequent order dated 20th May, 2002 passed in the appeal. During the pendency of the appeal, the respondent moved CM No.443/2003 to seek withdrawal of the amount deposited by the appellant. Counsel for the appellant DDA repeatedly sought time to file objections to this application of the respondent. The aforesaid application for seeking withdrawal of the deposited amount, however, remained pending, as no consequential orders were passed thereon.
4. Eventually, the appeal was allowed on 20th April, 2004 and the impugned judgment dated 2.8.2001 rejecting the appellant’s objections to the award was set aside. The Division Bench held that the objections to the Award ought to have been considered under the Arbitration Act, 1940. It was, therefore, directed that the objections shall stand revived and that the learned Single Judge should decide the objections afresh according to law. No specific order was passed on the aforesaid application preferred by the respondent, namely, CM No. 443/2003. However, since the appeal had been allowed and the objections restored, obviously the respondent could not have been held to be entitled to withdraw the amount deposited by the appellant. Thereafter, the learned Single Judge heard the objections preferred by the DDA and the same were dismissed on 15.7.2005. Consequently, the respondent was held to be entitled to receive a sum of Rs.14,40,386/-with interest w.e.f. 13.03.1986. The only variation made in the award was with regard to the interest granted in favour of the respondent. The learned Single Judge directed that: “8. Interest should be awarded at 9% per annum with effect from 13th March, 1986 to the date of decree or payment, whichever is earlier. The reduced amount of inte
