A deposit of funds into court does not constitute satisfaction of a money decree or stop interest accrual unless it adheres to the procedure prescribed under civil procedure law. Unnecessary litigation following a recorded settlement constitutes 'undue delay,' entitling the decree-holder to recovery of interest.

ORDER :

1. These execution proceedings have been instituted by Man Infraconstruction Limited seeking execution in terms of Column J to the Execution Application dated 30th June 2023.

2. Mr.Vashi, learned Senior Counsel appearing for the Applicant submits that the limited issue is whether the Judgment Debtor / Respondent State has unduly delayed the payment to the Applicant as per Clause 12 of the Consent Terms dated 10th December 2019 (the “said Consent Terms”).

3. Mr.Vashi has submitted that the Respondent State being the Judgment Debtor has unduly delayed the payment by more than twenty months from 6th January 2020 till September 2021 and the Applicant is therefore entitled to the execution of the Award to the extent of the remaining dues of the Award Sum described in the said Consent Terms taken on record on 12th December 2019.

4. However, before proceeding further, certain background facts would be necessary.

5. Since the State of Maharashtra viz. the Public Works Department (PWD), admittedly had not complied with its obligations under the contract agreement signed between the parties, the Applicant invoked arbitration clause which was referred to the sole arbitration of a retired Judge of this Court. After a trial, the sole arbitrator awarded an amount of Rs.332,66,39,870/- as on 16th August 2018 with future interest at the rate of 15% per annum.

6. The Respondent State of Maharashtra challenged the Award by filing an application under Section 34 of the Arbitration and Conciliation Act, 1996 before the District Court, Pune. Since there was no stay granted, the Applicant had put the Award in execution. In the execution proceedings negotiations took place between the Applicant and the Respondent and a negotiated settlement amount of Rs.358,79,18,000/- as on 15th November 2019 was arrived at. The Respondent State’s PWD put up a note for approval of several senior officers of the Respondent State and approvals were granted by the Additional Chief Secretary (PWD) and the Chief Secretary to the Government on 20th November 2019. Mr.Vashi, learned Senior Counsel has submitted that by way of a negotiated settlement, the Applicant had granted a concession of Rs.22,80,20,918/- to the Respondent which was reflected in the Consent Terms and that the said concession was in public interest of which the Respondent also benefited.

7. After filing of the Consent Terms, the Respondent State acted upon the said Consent Terms by first making a payment of Rs.1,00,00,000/- to the Applicant on 19th December 2019 and also thereafter withdrew the proceedings/application under Section 34 of the Arbitration and Conciliation Act, 1996 filed before the District Court, Pune.

8. Mr.Vashi, learned Senior Counsel, has submitted that on 27th December 2019, the Respondent State also obtained budgetary approval from both the houses of legislature for payment of the decretal amount.

9. Since no payment was received under the Consent Terms, the Applicant filed contempt proceedings being Contempt Petition (Lodging) No.9 of 2020 on 17th January 2020 and on 27th January 2020, the Respondent State