Haryana Supply Agency (Regd.) vs National Seeds Corporation Ltd.
1999 Latest Caselaw 351 Del

JUDGMENT

S.N. Kapoor, J.

1. In this execution petition, briefly stated the facts giving rise to the dispute are as under:

2. The arbitrator Shri V.M. Rao gave an award dated 11th December, 1994. The award has been made rule of the Court subject to certain modifications as would be evident from the following orders making the award rule of the Court:

" Accordingly, there shall be a decree directing the respondents, National Seeds Corporation Ltd., "to pay to the Petitioner total amount as awarded by the arbitrator with interest @ 12% per annum compoundable every three months from the date of the award till the date of decree. From the date of the decree till the date of realisation the Petitioner shall be entitled to simple interest @ 12% per annum on the total amount awarded by the arbitrator from the date of decree till the date of realisation."

2. It is apparent from the above that two rates of interest are applicable: "(i) 12% per annum compoundable every three months from the date of the award till the date of decree; and (ii) 12% simple interest per annum on the total amount awarded from the date of decree till the date of realisation."

3. According to the decree holder, this total amount of award with interest comes to Rs. 17,67,623/- on 26th February, 1997. Accordingly, the decree holder sought execution by attachment of the current bank account/cash credit account or any type of

account of the judgment debtor at SBI, NSC, Beej Bhawan Branch, Pusa Complex, New Delhi as the judgment debtor has failed to pay the said amount.

4. The judgment debtor is contesting the execution application objecting to the amount claimed.

4.1.1. In regard to claim No. A, for balance payment of Rs. 1,77,600/- claimed, a sum of Rs. 1,65,645.23 was given to the decree holder in full and final settlement of his payment in writing vide his letter dated 16th June, 1993. Consequently, no interest was payable on the amount of Rs. 1,77,600/-. Even if some interest was payable it should be payable only on the amount of Rs. 1,65,645.23 after adjusting the payment of Rs. 11,594.77 which was found due from the decree holder. (This adjustment has been accepted in rejoinder as typographical error by the decree holder). The interest could not be calculated @ 12% per annum compoundable with quarterly rests, for the amount could not have been claimed under the Interest Act.

4.1.2.The second amount claimed under claim No. A of Rs. 40,000/- was paid on 7th July, 1993 in full and final settlement vide annexures J-3 and J-4 and therefore, the question of payment of interest would not arise. Since the payment was accepted by the decree holder without reserving his right to claim interest at the most he could claim simple interest @ 12% per annum.

4.2. As regards claim No. B, a cheque of Rs. 2,54,760/- on 9th September, 1997 to the counsel for the decree holder as against Rs. 2,99,378.23. According to the judgment debtor refund on the said amount comes to Rs. 44,618.23 only. Firstly, no calculation has been given about it, claimed as interest on 2,54,760/-. Therefore, the claim of Rs. 2,99,378.23/- is not justified. Secondly, only simple interest @ 12% could be allowed thereon. Cheque of Rs. 2,54,760/- has already been given on 9th September, 1997 in Court.

4.3. In regard to claim No. C, relating to interest on a sum of Rs. 40,000/-, the amount has been received by the decree holder without protest to his claim for interest vide annexure J-5 dated 2nd June, 1993. Firstly, no interest is payable and secondly, if it is payable, it would be simple interest only @ 12% per annum thereon.

4.4. As regards claim No. D, a sum of Rs. 7,30,749.60 was returned on 10th June, 1992 and in view of the understanding, no interest is payable on the said amount for the said amount was received on 10th to 16th June vide Annexure J-6 to J-9 without any reservation for claiming any interest. The interest, if any, could be simple interest payable @ 12% per annum.

4.5. As regards claim D relating to Rs. 40,000/-, the amount was refunded to the petitioner vide refund order Annexure J-10 dated 9th July, 1992; receipt dated 15th July, 1997 annexures J-11. Consequently, compound interest could not be claimed and if interest could be claimed, if at all, it could be claimed at simple interest @ 12% per annum.

4.6. Thus, only a sum of Rs. 2,54,760/- was payable and cheque was delivered in Court on 29th September, 1997.

4.7. It is also claimed that there is no decree. The award directs payment of the awarded amount within sixty days "failing which the claimant will be entitled to further interest at the rate of 12% per annum to be compounded quarterly with three months rest from the date of its award till the date of decree or realisation whichever is earlier.

4.8. It is being contended on behalf of the judgment debtor that in terms of the judgment in Bhavan Vaja and Ors. v. Solanki Hanuji Khodaji Mansang and Anr., , the Supreme Court has laid down that while it is true that an executing court cannot go behind the decree, for the purpose of construing a decree, the executing court in appropriate cases ought to take into consideration the pleadings as well as proceedings upto the decree in order to find the meaning of the word employed in the decree. Consequently, the question of interest could be raised and agitated for Section 3(3)(c) of The Interest Act, 1978 does not authorise even the court to award interest upon interest. Provisions of The Interest on Delayed Payments to Small Scale Ancillary Undertakings Act, 1993 are not applicable any more, for the arbitrator applied those provisions only with regard to the amount finally awarded in part G of the award and not to the other claims which have already been decreed with interest.

5.1. In response to these objections, the case of the decree holder is that the petitioners have lost this point upto the Supreme Court in appeal. Therefore, this question of payment of interest in terms of the decree of this Court read with the award could not be questioned. Calculations have been correctly made ignoring the typographical mistake.

5.2. In response to the contention of compound interest, it is contended that findings on issue No. 2 were not disturbed while part G of the award has been modified by the Court. The finding on issues No. 2 and G in the award is as under:

"Issue No. 2a

The claimant - M/s. Haryana Supply Agency - has filed a photocopy of the certificate that their firm is a small Scale Industrial Unit in terms of Gazette Notification dated 03-04-1993 published by the Authority. The respondent had contended in their arguments that such notification is not at all applicable in awarding interest in favour of the claimant but the respondent could not produce any concrete documentary evidence in support of their contention. In view of the papers on record, I am of the opinion that the claimant is awarded interest of 12% to be compounded quarterly with three months rests as per usual banking system to meet the ends of justice.

G. The respondents are directed to pay the total amount of the award, as above, within 60 days from the date of award failing which the claimant will be entitled to further interest at 12% per annum to be compounded quarterly with three months rests from the date of this award till decree or realisation whichever is earlier.

6. Part G of the award was modified by the Court but issue No. 2 was not disturbed. It is contended, therefore, on behalf of the decree holder that the submission made are mis-conceived.

7. I have heard the parties' counsel and gone through the record. It appears that the question of interest has been dealt by the learned arbitrator in two phases. One phase relates to question of interest upto the date of award and another is from the date of award till realisation. As is apparent from the submissions made, it appears that the learned arbitrator considered the decree holder as a small scale industrial unit and awarded interest in terms of the Interest on Delayed Payments to Small Scale Ancillary Undertakings Act, 1993. It may be mentioned that the learned arbitrator had power to award interest. If the arbitrator's award of interest is reasonable, the law forbids the Court to interfere with it. It may also be mentioned that in respect of various claims of interest regarding various amounts, the intention of the award appears to be to award interest in terms of the finding on issue No. 2. In view of these facts, the Court did not modify the finding on issue No. 2 and modified only the para G. The submission of the learned counsel for the judgment debtor in this regard is therefore, mis-conceived after having lost upto the Supreme Court. It is not such a matter which could be re-agitated at this stage, for the award as well as the finding on issue No. 2 as well as the order of the Court modifying para G the award is crystal clear and modifies only para G without modifying the finding on issue No. 2.

8.1 I have also gone through the statement of calculation submitted by the decree holder.

8.2. It appears that so far as interest on claims A-4, A-5 and A-6 are concerned, interest has been compounded at yearly rests and not compounded quarterly with three monthly rests as per usual banking system, as has been decided by issue No. 2. Thus, the total amount of claim No. A comes to Rs. 3,65,538.68 as against Rs. 1,89,734.75.

8.3. In regard to claim No. B, a sum of Rs. 2,54,760/- was allowed. The claim pertaining to the interest thereon being the sum deducted as L.D. penalty from the date of such deduction upto 31st December, 1988 is allowed and a sum of Rs. 6,01,147.90 has rightly been claimed, including the refund of Rs. 2,54,760/-. Since cheque of Rs. 2,54,760/- has been paid on 6th September, 1997, the total amount due in this respect is Rs. 6,01,147.90/- minus Rs. 2,54,760/-i.e. Rs. 3,46,387.90/.

8.4. Similarly, the amount of Rs. 33,539.93 in respect of claim No. C has rightly been claimed in terms of calculation, and a sum of Rs. 21,626.30 paisa stands paid on 3rd July, 1993 and remaining amount of Rs. 11,913.63 paisa remained payable.

8.5. The same appears to be true in respect of claim No. D of the amounts of Rs. 2,18,084.93, Rs. 11,093.00 and Rs. 77,509.43 - total amounting to Rs. 3,06,686.89 - upto 11th December, 1994.

8.6. Thus, the awarded amount came to Rs. 13, 06,913.40. Interest thereon from 12th December, 1994 to 11th December, 1995 was Rs. 1,64,029.10 paisa and from 12th

December, 1995 upto 26th August, 1996 came to Rs. 1,31,001.63/- and thus, the amount in all comes to Rs. 2,95,030.73 paisa.

8.7. On 26th August, 1996, the date of decree, a sum of Rs. 16,01,943.90 was due. Simple interest from 26th August, 1996 to 9th September, 1997 amounts to Rs. 2,200,242.98 and thus, the total amount came to Rs. 18,02,186.80. Since on 9th September, 1997 a sum of Rs. 2,54,760/- already stands paid the balance due on 9th September, 1997 remained at Rs. 15,47,426.80. Further, simple interest @ 12% per annum from 9th September, 1997 to 17th April,. 1998 comes to Rs. 1,12,188.44. Accordingly, a sum of Rs. 16,59,615.20 was due and since this amount has not been paid so far, the execution application has to be allowed for recovery of the same. Attachment order of the current bank account/cash credit account or any type of account of the judgment debtor at SBI, NSC, Beej Bhawan Branch, Pusa Complex, New Delhi, may be accordingly issued for recovery of Rs. 16,59,615.20 plus 12% simple interest thereon with effect from 18th April, 1998 till the date of actual recovery.

9. The execution application is accordingly disposed of.