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IN THE HIGH COURT OF PUNJAB AND HARYANA
SUDIP AHLUWALIA, J.
Shastri Construction Co. - Appellant
Versus
Union of India - Respondent
Civil Revision No. 3697 of 2016
Decided On : 14-02-2019
In the present case, however, the interest was directed to be levied at 12% from the date of award till the date of the same becoming `decree`, which was the necessary requirement in the old Act. Suffice it to say, award under the old Act could not become executable from the moments of its pronouncement itself but had to necessarily go through the process involved till it would finally become a `Court decree` by way of a `Rule of the Court`. We may examine the situation from a common sense analogy. A loan of Rs.100/- is grated to the defendant for one year at the rate of interest of 10%. He however, defaults in such payment on account of which a suit for recovery of the principal amount along with the interest is filed against him for that period which comes to Rs.100/-+Rs.10/- =Rs.110/-. If the suit is decreed on these facts, this figure of Rs.110/- actually becomes the `decretal amount`, on which future interest as applicable is liable to be further imposed if the decree is not satisfied forthwith, and the same has to be executed in accordance with law.
On the face, therefore, there is no irregularity or impropriety in concluding that the accrued interest for the period between the date of `pronouncement of award` and the date of `decree` when it became actually enforceable, would automatically get merged into the awarded amount to be recovered subsequently, and so there can be no fallacy that such inclusion in the awarded amount before the decree amounts to imposing any `compound interest` on the respondent/Judgment Debtor.
SUDIP AHLUWALIA, J.
1. This revision is directed against the impugned order dated 25.02.2016 passed by the Ld. Civil Judge (Junior Division), Chandigarh.
2. Background of the matter is that an award in favour of the petitioner-Company dated 19.06.1987 (Annexure P-2) was passed by the Ld. Arbitrator, which was subsequently made a Rule of the Court vide the Decree dated 02.12.1988 (Annexure P-3). The disputed observation in the said order was in relation to issue No.3 i.e. The relief to which the claimant/petitioner was entitled, and the observations of the Ld. Trial Court in this regard were "In view of my findings on the above stated issues, I do not find any reason to interfere in the award given by Arbitrator Sh. A. K. Mullick except to set aside the award allowing pendente lite interest. The petitioner will be liable to pay the interest @12% per annum in case the objector-petitioner failed to make the payment of the awarded amount within a period of one month".
3. In this manner, the final decree in the form of 'Rule of the Court' was pronounced, which was challenged in appeal by both the parties, which were both dismissed. Thereafter, the revisions preferred by both the parties were in turn also dismissed.
4. The petitioner/claimant thereafter filed execution for enforcement of the decree, but the execution petition was initially dismissed in view of the objections filed by the respondent. The revisional application thereafter preferred on behalf of the petitioner (CR No.1522 of 2010) was disposed off by this Court with the following observations:-
"Before this Court, the only contention raised by the learned counsel for the petitioner was that as per award of the Arbitrator dated 29.6.1987, the petitioner was entitled to interest at the rate of 12% per annum upto the date of payment or Court's decree, if the awarded amount was not paid within 60 days from the date of pronouncement/publication of the award. Learned counsel appearing on behalf of the respondent very fairly could not dispute the fact that vide award dated 29.6.1987, the payment of net amount of award was to be made within 60 days from the date of publication of the award and in case of default, simple interest on the net awarded amount at the rate of 12% per annum was to be paid by the respondent to the claimants upto the date of payment or the Court's decree whichever was earlier. Thus, there is no dispute that the Arbitrator awarded the interest at the rate of 12% per annum on the awarded amount to the petitioner-Company in case the awarded amount was not paid within the stipulated period of 60 days. Admittedly, the net awarded amount was not paid within 60 days as stipulated aforesaid.
It may be relevant to mention at this stage that the Hon'ble Supreme Court of India in the case of Secretary to Government of Orissa & others v. Rathunath Mahapatra, (1991) 6 JT 349 has held that in every case where the arbitration agreement does not exclude the jurisdiction of the Arbitrator to award interest pendente lite, such powers must be inferred and the award as such is to be maintained. It is not the case of the parties that in this case, the arbitration agreement has excluded the jurisdiction of the Arbitrator to award interest pendente lite.
In this view of the matter, no fault can be found with the interest awarded by the Arbitrator as stipulated vide award dated 29.6.1987. Moreover, while making the award as the rule of the Court, the Civil Court has not excluded the aforesaid period w.e.f. 29.6.1987 upto 2.12.1988 and what has been set aside is the part of the award of the Arbitrator allowing pendente lite interest for the period it remained pending before the Arbitrator on the claims made under item No.39 under the head "pendente lite interest".
Learned counsel for the respondent was unable to point out any other interpretation of decree dated 2.12.1988 before this Court.
In view of the aforesaid, this revision petition is accepted. The impugned order is set
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