Bombay High Court
Mohit Minerals Pvt. Ltd vs Maharashtra Small Scale Industries ... on 20 December, 2023
Author: Bharati Dangre
Bench: Bharati Dangre
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
CHAMBER SUMMONS NO.287 OF 2017
IN
COMMERCIAL EXECUTION APPLICATION NO.94 OF 2017
Mohit Minerals Pvt. Ltd. .. Applicant
Versus
Maharashtra Small Scale Industries .. Respondent
Development Corporation Limited
...
Mr.Sharan Jagtiani, Senior Advocate with Mr.Priyank
Kapadia, Mr.Tejas Gupta and Mr.Amir Shah i/b Yasmin
Bhansali & Co. for the Applicant/Judgment Creditor.
Mr.Rishabh Sheth with Mr.Nirav Shah i/b Little & Co. for the
Respondent.
...
CORAM: BHARATI DANGRE, J.
DATED : 20th DECEMBER, 2023
P.C:-
1. On 20/04/2017, the Arbitral Tribunal declared an Award
in favour of Mohit Minerals Pvt. Ltd., a company incorporated
under the Companies Act and directed the Respondent-
Maharashtra Small Scale Industries Development Corporation
Limited (hereinafter referred to as, "MSSIDCL") as under :-
(a) that the Respondent is ordered and directed to pay to the
Claimant the sum of Rs.15,00,00,000/- (Rupees Fifteen Crores
only) being the amount of Bank Guarantee encashed by the
Respondent together with interest thereon at the rate of 9% per
annum to be calculated from 01.08.2012 till payment or realization,
whichever is earlier.
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(b) that the Respondent is ordered and directed to pay to the
Claimant the sum of Rs.50,00,000/- (Rupees Fifty Lakhs only)
being the cash deposit amount forfeited by the Respondent together
with interest thereon at the rate of 9% per annum to be calculated
from 01.08.2012 till payment or realization, whichever is earlier."
2. The Award was subjected to challenge in Commercial
Arbitration Petition No.408 of 2017 and a Notice of Motion
sought stay of the Arbitral Award, pending the disposal of the
Arbitration Petition.
On 22/11/2017, the impugned Award was stayed subject
to the following conditions:-
"(a) The Petitioner/Applicant would in terms of the arbitral
award dated 20th April, 2017 deposit in Court the amount of
Rs.15,00,00,000/- (being the bank guarantee encashed)
Rs.50,00,000/- (security deposit) and Rs.6,50,00,000/- (being part
of interest awarded of Rs.6,59,13,752/-) within eight weeks from
today;
(b) On the aforesaid deposit of Rs.22 crores being made by
the Petitioner, the Respondent would be entitled to withdraw it
within a period of eight weeks from the date of communication to
the Respondent of the deposit in this Court.
(c) However, the aforesaid withdrawal by the Respondent
would be subject to it furnishing a bank guarantee of a nationalized
bank for the aforesaid aggregate amount of Rs.22,00,00,000/- and
undertakings of the Respondent and its Managing Director/CEO
that in case the Petitioner succeeds at the fnal hearing of this
petition, it would bring the aforesaid amount of Rs.22,00,00,000/-
to this Court along with such interest as may be determined by the
Court at the fnal hearing. Both the bank guarantee as well as the
undertaking would be subject to the satisfaction of the
Prothonotary and Senior Master of this Court.
(d) In case the Respondent does not exercise its option of
withdrawing the aforesaid aggregate amount of Rs.22,00,00,000/-
within the time stipulated above, the Registry is directed to invest
the aforesaid amount in fxed deposit in a Nationalized Bank and
keep it renewed till the fnal disposal of this petition. Needless to
state this deposit for the benefts of the successful litigant in the
pending petition."
3. For enforcement of the Award, the Claimant fled an
Execution Application, which is numbered as Execution
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Application No.94 of 2017 under Order XXI Rule 11(2) of the
Code of Civil Procedure (for short, "the Code"), and Column (G)
set out the decreetal amount as Rs.15,50,00,000/- and
computing interest at the rate of 9% from 01/08/2012 till
31/07/2017 i.e. till the date fling, a sum of Rs.6,97,50,000/-
being due and payable. The Execution Application, sought
payment of total amount of Rs.22,47,50,000/- alongwith
further interest @ 9% p.a., on the decreetal amount from
1/08/2017 till its actual realization.
The assistance of the Court is sought by fling Chamber
Summons under Order XXI Rule 41 of the Code for disclosure
of assets of the Respondent on oath.
4. On 08/12/2023, when the Chamber Summons was being
heard, the question arose, whether the Award dated
20/04/2017 in favour of the Claimant/Applicant has received
accord and satisfaction and as per Mr.Rishabh Sheth, the
learned counsel representing the Respondent/ MSSIDCL, there
are three stages of payments, the frst being till date of passing
of the Award, the second being the interim order passed in the
Notice of Motion, when the Award was stayed and ultimately
upon Section 34 Petition having been dismissed on
23/01/2023, the Award being ready for enforcement.
5. An additional affdavit is fled on behalf of the Applicant/
Claimant, indicating the amount due and payable to it under
the Award being computed as Rs.1,67,25,559/-.
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After some submissions, the Chamber Summons was
adjourned so as to enable the contesting parties to submit the
computation of the outstanding amount, at the distinct
milestones i.e. on the date of the passing of the Award and the
date of it's deposit and, accordingly, the Chamber Summons is
listed today.
6. I have also heard learned senior counsel Mr.Sharan
Jagtiani for the Applicant/Claimant, who has invited my
attention to the additional affdavit, which has computed the
amount, which is due and payable from the
Respondent/MSSIDCL in terms of the Award, and being
Rs.1.78 crores, worked out in the following manner :-
(A) Principal Amount Rs.15.50 Crores
(B) Interest due from 01.08.2012 to 01.03.2023 10 year and 7 months
(C) Rate of Interest 9% per year
(D) Interest amount (A)*(B)*© 14.763 Crores
(E) Total Amount Due (A) + (D) 30.26 Crores
(F) Received (Copy of Bank Statement is attached) 28.48 Crores
(G) Due from MSSIDC (E)-(F) 1.78 Crores
Mr.Jagtiani provided response to the query raised by me on
the previous hearing, earlier date as to on deposit of the
amount on 15/01/2018 as per the Award dated 20/04/2017,
whether the interest shall continue to accrue.
7. Mr.Jagtiani has drawn my attention to Order XXI Rule 1
of the Code captioned as, "Modes of paying money under
decree" and according to him, sub-rule (1) contemplates three
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modes of paying money, which is payable under a decree and
sub-rules (2) and (3) are the offshoots to these modes, in
which the money under the decree is paid.
Sub-rule (4) of Rule (1) of Order XXI clearly stipulate
that any amount paid by depositing it into the Court or sending
it to the Court by postal money order or through bank or as
per the direction of the Court which had made the decree, the
interest if payable, shall cease to run from the date of service
of notice referred to in sub-rule (2), whereas if an amount is
paid out of Court by a postal money order or through a bank or
by any other mode, in that case, the interest, if any, shall cease
to run from the date of that payment.
According to Mr.Jagtiani, Order XXI Rule (1) clearly
contemplate the 'payment' of money under the decree.
Juxtaposing the aforesaid provision as against Section
36 of the Arbitration and Conciliation Act, 1996, which
prescribe the manner of enforcement of the Arbitral Award, it
is the submission of the learned counsel, that the Award is
liable to be enforced in accordance with the provisions of the
Code of Civil Procedure, in the same manner as if it is a decree
of the Court. Referring to sub-section (3), it is submitted that
upon fling of an application for stay of the operation of the
Arbitral Award, the Court may subject to such terms and
conditions as it may deem ft, grant stay of such Award for the
reasons to be recorded in writing, provided that the Court
shall, while considering the application for grant of stay in the
case of an Arbitral Award for payment of money, have due
regard to the provisions for grant of stay of a money decree
under the provisions of the Code and it may necessarily
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contemplate deposit of the money, under the Award as if it was
a money decree.
Hence, according to him, when the money is deposited in
the Court to procure stay, this in no manner shall be construed
as a voluntary act of deposit, but a compulsive act to deposit
the same in order to avoid the execution of the Award/Decree.
According to Mr.Jagtiani, such deposit of money is not
"payment", as contemplated under Order XXI Rule (1) of the
Code.
8. With this scenario prevailing, he would submit that when
the learned Single Judge (Justice M.S.Sanklecha, as His Lordship
was then), on 22/11/2017, granted stay of the impugned Award,
it was conditional i.e. subject to the deposit of an amount of
Rs.15,00,00,0000/- plus Rs.50,00,000/-, the principal amount
under the Award of Rs.6,50,00,000/-, (it being computed as part
of the interest awarded of Rs.6,59,13,752/-) within eight weeks.
On the deposit of Rs.22,00,00,000/-, the Respondent/
Decree Holder was held entitled to withdraw the same on receipt
of communication of the deposit. However, in terms of clause (c)
of paragraph 6, the withdrawal by the Award Holder was subject
to furnishing a Bank Guarantee (BG) of a Nationalized Bank for
the aggregate amount of Rs.22,00,00,000/-, with the undertaking
of the Respondent, it's Managing Director/CEO that in case the
Petitioner succeeds at the fnal hearing of the Petition, it would
bring the amount of Rs.22,00,00,000/- in the Court alongwith
such interest, as may be determined by the Court at fnal hearing.
In case the amount was not withdrawn, by the
Respondent then it was directed to be invested in the
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Nationalized Bank in a fxed deposit, to be renewed till fnal
disposal of the Petition.
9. In the light of the aforesaid order, Mr.Jagtiani would
submit that when the amount is deposited by the Judgment
Debtor/the Respondent to the Execution Application on
15/01/2018, it is not a "payment", as it did not amount to
absolute vesting of money in him, since it was hedged with a
condition of furnishing BG, which defnitely contemplate an
amount to be kept invested with the bank plus an interest
accruing upon the same.
In absence of such a condition, if the withdrawal would
have been permitted unconditionally, according to him, it
would have amounted to "payment" under a decree and upon
such withdrawal, it would carry no interest, but since the
withdrawal of the amount of Rs.22,00,00,000/- was
conditional, the interest in terms of the Award did not stop to
run/accrue as the Award dated 20/04/2017 had held the
Claimant to be entitled for a sum of Rs.15,00,00,000/- plus
Rs.50,00,000/- together with interest at the rate of 9% p.a., to
be calculated from 01/08/2012 till payment or realization,
whichever is earlier.
It is the submission of Mr.Jagtiani that the term
"payment" is contrasting to the term "realization", as the
realization of the amount may be through an execution
process by attaching the assets, its sale etc. but payment is
understood as contemplated under Order XXI Rule (1) of the
Code.
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The learned senior counsel would, therefore, justify the
amount deposited to carry an interest at the rate of 9% p.a., as
directed in the Award till its actual realization, by the Award
Holder.
10. Mr.Jagtiani would place reliance upon the decision of the
Apex Court in the case of P.S.L. Ramanathan Chettiar & Ors. Vs.
O.R.M.P.R.M Ramanathan Chettiar1 to support his submission
that, when on the Judgment Debtor depositing a sum payable
under the decree in the Court to purchase peace, by way of stay
of execution of the decree on the terms that the Decree Holder
can withdraw the amount, on furnishing security, it could not
pass title of money to the Decree Holder and in such a case, there
is no stoppage of interest on the deposit. He would also place
reliance upon the recent decision of the learned Single Judge of
Delhi High Court in the case of Cobra Instalaciones Y Servicios,
S.A. & M/s.Shyam Indus Power Solution Pvt. Ltd. (JV) Vs.
Haryana Vidyut Prasaran Nigam Ltd. (HVPNL)2, which has
followed the principle laid down in P.S.L. Ramanathan Chettiar
(supra) and has also considered a converse view of the Two-
Judge Bench of the Apex Court in the case of Himachal Pradesh
Housing and Urban Development Authority Vs. Ranjit Singh
Rana3 and in the case of Union of India & Anr. Vs. M.P.Trading
and Investment RAC Corporation Limited 4.
11. Mr.Rishabh Sheth, the learned counsel for the MSSIDCL
has submitted his calculation of interest and he has
contemplated two situations; frstly on computing the interest
1 1968 SCC OnLine SC 28
2 2023 SCC OnLine Del 5439
3 (2012) 2 SCC (Civ) 639
4 (2016) 16 SCC 699
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from the date of the Award till the date of deposit i.e.
15.01.18/18.01.18 and going by the said principle, the balance
interest which is not deposited is worked as Rs.9,13,752/- and
interest on the principal amount under the Award from
21/04/2017 till 15.01.18/18.01.18 i.e. 273 days is computed as
Rs.1,04,33,835/-. According to him, in scenario one, by
considering the interest at the rate of 9% p.a. in terms of the
Award from 01/08/2012 till it's payment, the amount would be
worked out as Rs.1,13,47,587/-.
Posing the second scenario i.e. computing the interest
from the date of Award i.e. 20/04/2017 till the date of the
order of the learned Single Judge in Section 34 Petition i.e.
22/11/2017, the amount would work out to be
Rs.6,59,13,752/-. But, according to him, the amount of
Rs.22,00,00,000/- as per the order dated 22/11/2017, already
included the interest of Rs.6,50,00,000/- and the balance
interest which is not deposited, according to the calculation of
MSSIDCL, is Rs.9,13,752/- and by computing the interest on
the principal amount under the Award from 21/04/2017 till
22/11/2017 i.e. the date of the stay, the amount of interest is
Rs.82,55,342/-. Thus, according to the Respondent/ MSSIDCL,
under the second scenario, the amount payable would be
Rs.91,69,094/-.
As per Mr.Sheth, the Award was challenged by fling a
Petition under Section 34, which was fnally disposed off on
23/01/2023 and since the amount under the Award was
already deposited on 15/01/2018, the Execution Application
for enforcement of the Award is not maintainable as the Award
stand satisfed by depositing the amount of Rs.22,00,00,000/-,
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which also included the interest component, as directed by the
learned Single Judge.
12. Order XXI of the Code provide for Execution of Decrees
and Orders. The modes of paying money under decree are
contemplated under Rule (1) and three distinct modes by
which, the money under the decree shall be paid, are provided
therein.
Whenever the money payable under a decree is deposited
in the Court, which is to execute the decree or is send to the
Court by postal money order or through a bank, then the
Judgment Debtor shall give notice thereof to the Decree
Holder, either through the Court or directly, by registered post
acknowledgment due, of making the payment under the
decree. Similarly, when the money payable is paid as per the
direction of the Court, the Decree Holder shall be notifed about
the payment in terms of direction of the Court.
Sub-Rules (4) and (5) are inserted in Rule (1) of Order XXI
in the year 1977 by Act 104 of 1976 and the legislative intent in
enacting the sub-rules is plain and clear to the effect that the
interest should cease on the deposit being made and the notice
given or on the amount being tendered outside the Court in the
manner provided. A Constitution Bench of the Apex Court in the
case of Gurpreet Singh Vs. Union of India 5 noted the objects and
reasons for the amendment, in the following paragraph :-
"25. In the Objects and Reasons for amendment of Order 21
Rule 1, it was set out as follows :
5 (2006) 8 SCC 457
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The Committee notes that there is no provision in the
Code in relation to cessation of interest on the money paid under a
decree, out of court, to a decree-holder, by postal money order or
through a bank or by any other mode wherein payment is
evidenced in writing. The Committee is of the view that, in such a
case, the interest should cease to run from the date of such
payment. In case the decree-holder refuses to accept the postal
money order or payment through a bank, interest should cease to
run from the date on which the money was tendered to him in
ordinary course of business of the postal authorities or the bank.
Sub-rule (5) in Rule 1 Order 21 has been inserted accordingly."
13. Order XXI has applied the words "payment under
decree". As per Concise Oxford English Dictionay (10 th Edn.,
Revised), "payment" is the action of paying or the process of
being paid or an amount paid or payable. As per the Law
Lexicon by P. Ramanatha Aiyer, (2nd Edn.), "payment is
defned to be the act of paying, or that which is paid; discharge
of a debt, obligation or duty; satisfaction of claim; recompense;
the fulfllment of a promise or the performance of an
agreement; the discharge in money of a sum due".
The word "payment" may assume different meaning in
different context, but in normal parlance, it would indicate
extinguishment or discharge of a liability of money in
reference to Section 37(1)(b) of the Arbitration and
Conciliation Act. It signifes the satisfaction of the Award and
in reference to Order XXI Rule 2, which provide for payment
under the decree, it shall imply deposit of the money payable
under the decree in the Court, or its payment to the Decree
Holder out of Court, by postal money order or through bank or
the payment made, as per the direction of the Court, which
made the decree. The deposit of the amount under the decree
or Award into the Court is nothing but a payment to the credit
of the Decree Holder.
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The question which arise is, on deposit of this amount
towards satisfaction of the Award or Decree in the Court,
whether it shall carry the liability of interest.
14. Upon deposit of the amount of money payable under a
decree, a liberty may be conferred on the Decree Holder to
seek its withdrawal. The withdrawal, may either be
unconditional or it may be hedged with a condition.
Under Order XXI Rule 1(1a), the deposit of the amount
by the Judgment Debtor in the Court would amount to
payment and a court notice is required to be given to the
Decree Holder about such deposit. The proviso appended to
Rule (1) provide that when the Decree Holder refuses to
accept the payment, the interest shall cease to run from the
date on which the money was tendered to him. Under sub-
rule(4) of Rule 1 of Order XXI, on any amount deposited in the
Court or sent to the Court or paid to the Decree Holder, as
directed by the Court, the interest shall cease to run from the
date of service of the notice to the Decree Holder.
However, when the withdrawal of the amount deposited is
permitted, but subject to certain conditions in the order, then in
such a situation, there is no absolute vesting of money in him and
the title of money would not pass to the Decree Holder.
In P.S.L. Ramanathan Chettiar (supra), the Apex Court has
pronounced upon this issue in comprehensible way, in the
following words :-
"12. On principle, it appears to us that the facts of a judgment-
debtor's depositing a sum in court to purchase peace by way of stay
of execution of the decree on terms that the decree-holder can draw
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it out on furnishing security, does not pass title to the money to the
decree- holder. He can if he likes take the money out in terms of the
order; but so long as he does not do it, there is nothing to prevent
the judgment debtor from taking it out by furnishing other security,
say, of immovable property, if the court allows him to do so and on
his losing the appeal putting the decretal amount in court in terms
of Order 21 Rule 1 CPC in satisfaction of the decree.
13. The real effect of deposit of money in court as was done in
this case is to put the money beyond the reach of the parties
pending the disposal of the appeal. The decree-holder could only
take it out on furnishing security which means that the payment
was not in satisfaction of the decree and the security could be
proceeded against by the judgment-debtor in case of his success in
the appeal. Pending The determination of the same, it was beyond
the reach of the judgment-debtor.
14. The observations in Chowthmull case do not help the
respondent. In that case, the appeal was not proceeded with by the
Offcial Assignee. Consequently, the decree-holder could not be
deprived of the money which had been put into court to obtain stay
of execution of the decree as but for the order, the decree-holder
could have levied execution and obtained satisfaction of the decree
even before the disposal of the appeal.
15. The last contention raised on behalf of the respondent
was that at any rate the decree-holder cannot claim any amount by
way of interest after the deposit of the money in court. There is no
substance in this point because the deposit in this case was not
unconditional and the decree-holder was not free to withdraw it
whenever he liked even before the disposal of the appeal. In case he
wanted to do so, he had to give security in terms of the order. The
deposit was not in terms of Order 21 Rule 1 CPC and as such, there
is no question of the stoppage of interest after the deposit."
The above observation clearly brings out a distinction
between the two terms; "payment" and "realization".
15. In the present case, the learned Single Judge, while
staying the Award under execution, permitted the withdrawal
of the amount, subject to furnishing a bank guarantee of the
same amount, in order to secure the amount withdrawn and
also an undertaking being furnished that in case the Petition is
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decided against the Decree Holder and in favour of the
Judgment Debtor, the money shall be brought to the Court
alongwith such interest, as the Court may deem ft to impose.
The deposit of the amount under the Award alongwith
the interest shall, therefore, is not payment of the money, but
was a deposit, made in order to avoid the execution of the
Award and in such a situation, when the deposit is not a
payment under Order XXI Rule 1, there is no question of the
interest ceasing to run. Deposit of the amount as a condition
for grant of stay for execution of decree, therefore, shall not
stop the interest running, from the date of deposit. Such a
deposit with the sole purpose of avoiding execution of the
decree, is not to be construed as 'payment' to the Decree
Holder, as it do not satisfy the requirement of Order XXI Rule 1
of the Code.
16. When Order XXI Rule (1) contemplate the payment of
money under the decree by either of the three modes stipulated
therein, it necessarily contemplate a positive act on part of the
Judgment Debtor, by deposit of the amount into the Court or
making the payment out of the Court, wherein the payment is
evidenced in writing. Thus, all the three modes are indicative of
the payment made by the Judgment debtor to the Decree Holder
towards the satisfaction of the decree. Such payment in form of a
deposit or direct payment to the Decree Holder, which is
evidenced in writing, if it is in an unconditional manner, but if
such payment is constricted by any condition for it's withdrawal,
it goes out of purview of Order XXI Rule (1).
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Order XXI Rule (1)(1a), necessarily contemplate the
deposit with the executing Court or the money being brought to
the executing Court, by either mode prescribed and by issuing
the notice thereof to the Decree holder. This necessarily connote,
that if deposit of the money payable, is in a Court other than the
executing Court, it will not fall within clause (a) of sub-rule (1) of
Order XXI.
17. The payment of money made according to modes
contemplated in Rule (1) of Order XXI, would be considered as
payment towards the satisfaction of the decree, but when the
Decree Holder, in absence of the payment of the money under
the decree, execute the decree and orders under Order XXI, by
resorting to the modes stipulated therein, i.e. by attachment of
the assets/accounts of the Judgment Debtors and by sale of those
assets and when the money due under the decree is realized, it
shall not contribute to the "payment" but it would be realization
of the money, by executing the decree. The payment of money
under Order XXI Rule (1) contemplates a voluntary act,
converse to this is, when the Decree Holder receives the money
during the process of execution, by crossing various steps for
realizing the money under the Decree, being an involuntary act,
the money being realized with the assistance of the Court.
The thin line of distinction between payment and
realization in terms of Order XXI is, therefore, apparent.
18. The reliance by Mr.Jagtiani on the decision of the Delhi
High Court in the case of Cobra Instalaciones Y Servicios, S.A.
(supra), make this distinction evident and by referring to an
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earlier decision of the Delhi High Court in the case of Delhi
Development Authority Vs. Bhai Sardar Singh & Sons , Justice
Manoj Kumar Ohri, has succinctly noted the distinction in the
following words :-
"22. The decision of Division Bench of this Court in Delhi
Development Authority v. Bhai Sardar Singh & Sons, was rendered
in the context of dismissal of an application fled by the judgment
debtor seeking a direction for refund of the amount deposited in the
Court. Taking note of the decision in Chettiar (Supra), the Division
Bench noted that the amount deposited in the appeal fled against
the dismissal of the objections against the arbitral award, was not
released to the decree holder till passing of the order. It was
observed that the amount lying in deposit in the appeal was not a
deposit made in the executing court in terms of Order XXI Rule 1
and as such the deposit could not be construed as direct payment
made to the decree holder. The decision of the Division Bench was
carried to the Supreme Court. Noting the controversy, the Supreme
Court after traversing through the entire gamut of case law,
instructively held as under :-
"13. Sub-rule 1 to Rule 1 of Order XXI of the Code prescribes three
modes for paying money under a decree, namely : (a) by deposit of
money in the court which is to execute the decree, which deposit can
be through postal money order or through bank; (b) by making
payment to the decree holder by postal money order or through bank
or any other mode wherein payment is evidenced in writing; or (c) as
the court which made the decree directs. Sub-rule 3 prescribes the
details which have to be furnished by the judgment debtor where
money is paid by postal money order or through bank under clauses
(a) or (b). Sub-rule 3 also permits the judgment-debtor to stipulate
apportionment or adjustment where amount is payable to more than
one person or towards the principal sum or interest or cost. Sub-rule
2, which applies to payment made under clauses (a) or (c) sub-rule 1,
requires the judgment debtor to give notice to the decree holder either
through the court or directly to the decree holder by registered post,
acknowledgment due. Sub-rule 4 states that where an amount is paid
under clause (a) or (c) of sub-rule 1, interest, if any, shall cease to run
from the date of service of notice referred to in sub-rule 2. As per sub-
rule 5, where amount is paid under clause (b) of sub-rule 1, interest, if
any, ceases to run from the date of such payment.
XXX
15. A reading of the aforesaid sub-rules clarifes that when
money is paid under a decree, the interest, if any, shall cease to run
either from the date of direct payment or from the date of service of
notice to the decree holder, wherever applicable. Sub-rules 4 and 5 do
not stipulate that the interest would stop running only and only when
the entire amount as per the decree shall stand paid. This Court, as
will be seen below, has held that money even when paid in part towards
the decree would cease to accrue interest to the extent of the amount
paid."
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The decision in the case of Himachal Pradesh Housing &
Urban Development Authority (supra) has failed to consider
the Three-Judge Bench decision in the case of P.S.L.
Ramanathan Chettiar (supra), when it held that once the
Award amount was deposited before the High Court, the
liability of post Award interest cease to operate.
19. In the present case, it is evident that the amount which
is deposited by the Judgment Debtor is to avoid the execution
of the decree and though the withdrawal was permitted, it was
attached with a condition of furnishing the bank guarantee of
the aggregate amount, permitted to be withdrawn. On account
of the condition attached to the withdrawal, the title of
Rs.22,00,00,000/- deposited did not pass over to the Applicant
and though withdrawal was permitted, it was not an absolute
stipulation, as the amount withdrawn was to be secured by the
bank guarantee and thus the ownership of the amount
deposited never passed to the Decree Holder/Applicant and as
such, the payment of interest from the date of deposit did not
cease on run.
Principally, agreeing with the submission of Mr.Jagtiani,
I deem it appropriate to direct the parties to furnish the
computation of the amount under the Award, since due
weightage would be required to be given to the interest that
has been accrued on the amount having been invested in the
Fixed Deposit, which has also incurred some rate of interest.
M.M.Salgaonkar
18/18 10 CHSCD-287-17.odt
Let Mr.Jagtiani in consultation with Mr.Sheth, the
counsel for the Respondent/ MSSIDCL, furnish the details of
such computation on the next date of hearing.
Re-notify to 19/01/2024 for this limited purpose.
( SMT. BHARATI DANGRE, J.)
M.M.Salgaonkar
