JUDGMENT :

JASGURPREET SINGH PURI, J.

1. The present Civil Revision Petition has been filed under Article 227 of the Constitution of India for setting aside the impugned order dated 08.07.2025 (Annexure P-1) passed by the learned Additional District Judge, Narnaul, vide which the learned Additional District Judge has ordered to pay a sum of Rs.11,27,43,037/- as on 01.07.2025, whereby interest on interest has been allowed, which is against the mandate of award dated 27.12.2016 (Annexure P-2), while deciding calculations of both the parties in Execution Petition No.EXE/28/2021 titled as KCC Buildcon Private Limited versus State of Haryana and others.

2. Mr. Chirag Wadhwa, DAG, Haryana submitted that an award was passed against the petitioners-State by the learned Arbitrator and thereafter, objections under Section 34 of the Arbitration and Conciliation Act, 1996 were filed by the petitioners-State, which were dismissed. He further submitted that the respondent had filed an execution application before the learned Additional District Judge, Narnaul and by way of the impugned order dated 08.07.2025 (Annexure P-1), the prayer of the petitioners-State/judgment debtors with regard to the calculation of the outstanding amount has been wrongly decided and therefore, the present petition has been filed challenging the aforesaid order passed by the learned Additional District Judge, Narnaul vide Annexure P-1.

3. Learned State counsel further submitted that in the award which was passed, 12% per annum simple interest on the claims was awarded with effect from 90 days after the expiry of the agreement i.e. 18.04.2012 till the date of the award, with a further direction that if the payment of arbitral award is made within a period of three months from the receipt of a signed copy thereof, then no future interest would be payable, however, if the same is not settled within the aforesaid period of three months, then the claimant shall also be entitled to future interest at the rate of 12% per annum simple interest till the actual date of payment. He further submitted that it is undisputed that the amount has not been paid by the petitioners/judgment debtors to the respondent/decree-holder at the time of the passing of the impugned order. He also submitted that the present petition has been filed on the ground that when simple interest @ 12% per annum was granted from 90 days after the expiry of the agreement i.e. 18.04.2012 till the date of the award, then after passing of the award if any interest is to be paid, the same has to be paid on the basis of calculation made on the principal amount and it cannot be calculated on the basis of cumulative sum amount i.e. the principal amount plus interest, which has accrued from the date as aforesaid till the passing of the award because that would amount to interest on interest and therefore, the aforesaid order passed by the learned Additional District Judge, Narnaul vide Annexure P-1 was erroneous as interest on interest cannot be charged.

4. On the other hand, Mr. Amit Jhanji, learned Senior Counsel appearing on behalf of the respondent submitted that the aforesaid issue as to whether the grant of interest would amount to interest on interest, as well as the meaning and scope of the expression “sum” under Section 31(7)(a) of the Arbitration and Conciliation Act, 1996, is no longer res integra. In this regard, he referred to the judgment of Hon’ble Supreme Court in Hyder Consulting (UK) Limited versus Governor, State of Orissa, (2015) 2 SCC 189 to contend that when interest is awarded from an earlier date till the passing of the award, then the interest which has accrued till the passing of the award will merge into the principal amount and therefore, it becomes the sum due under the provisions of Section 31(7)(a) and Section 31(7)(b) of the Arbitration and Conciliation Act, 1996. He also relied upon the judgment passed by this Court in Quadrant Televentures Limited versus Elevar Digital Infrastructure