M/S. Aadhar Stumbh vs N.D.M.C.
2001 Latest Caselaw 768 Del

ORDER

A.K. Sikri, J.

1. Decree Holder has filed this Execution Petition under Section 36 of the Arbitration and Conciliation Act, 1996 read with provisions of Order XXI of the Code of Civil Procedure. Execution is sought of award dated 5th November, 1999 passed by Shri S.B. Jhamba, Arbitrator, Chief Engineer, CPWD. As per this award learned Arbitrator awarded the following amounts against respective claims to the Decree Holder:-

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     CLAIM                  AMOUNT AWARDED
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1. Claim no.1(a)            Rs. 19,150/-
2. Claim no.1(b)            Rs. 4,817/-
3. Claim no.1(c)            Rs. 21,810/-
4. Claim no.1(d)            Rs. 2,505/-
5. Claim no.1(e)            Rs. 2,25,105/-
6. Claim no.1(f)            Rs. 12,000/-
7. Claim no.2               Rs.
8. Claim no.3               Rs. 5,000/-
9. Claim no.5(a)            Rs. 71,584.70
10. Claim no.6              Rs. 4,000/-
11. Claim no.5(b)           Rs. 39,814.63
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          Total :           RS. 4,05,796.33p
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 2. The Judgment Debtor had preferred counter claims. The Arbitrator in the award awarded a sum of Rs. 14,249/- against counter claim no.1 and another sum of Rs. 20,000/- against counter claim no.3. 

 

3. After adjusting this claim awarded against counter claims as well as another sum of Rs. 15,000/- and calculating interest till 7th March, 2000 the Judgment Debtor offered cheque of Rs. 3,27,950/- to the Decree Holder which the Decree Holder did not accept for the reasons stated later at the appropriate stage. This cheque was handed over to the Decree Holder in the Court on 7th August, 2000. According to the Judgment Debtor, after making this payment no further amount remained to be payable under the decree. On the other hand, learned counsel for the Decree Holder submits that the Decree Holder is also entitled to interest from 7th March, 2000 to 7th August, 2000 as well as another sum of Rs. 15,000/- with interest thereon which was wrongly deducted by the Judgment Debtor. This controversy arises in the following background:-

The Judgment Debtor had preferred counter claim no.2 for Rs. 15,000/- on account of levy of compensation under Clause 2 of the Agreement for delay in completion of work. In the award the Arbitrator did not adjudicate on this counter claim on the ground that in view of the provisions of Clause 25 read with Clause 2 of the contract this was an excepted matter and therefore outside the purview of the Arbitration. Notwithstanding the non-adjudication of the dispute on the aforesaid ground, while offering payment to the Decree Holder under the award, the Judgment Debtor sought to adjust this amount of Rs. 15,000/- from the decretal amount. After adjusting the same and calculating interest up to 7th March, 2000 a sum of Rs. 3,27,950/- was offered on that date. The Judgment Debtor however wanted the Decree Holder to sign full and final receipt against the aforesaid cheque. The decree Holder contested the stand of the Judgment Debtor in adjusting the amount of Rs. 15,000/- and was not ready to sign receipt in full and final. he was agreeable to receive the amount under protest which was not acceptable to the Judgment Debtor. In view of this controversy the cheque was not given to the Decree Holder and therefore the Decree Holder filed the present execution petition and as mentioned above, during the pendency of this petition, on 7th August, 2000 a cheque in the sum of Rs. 3,27,950/- was handed over to the Decree Holder. In this background the Decree Holder is now claiming interest from 7th March, 2000 to 7th August, 2000 i.e. the date on which payment was received by the Decree Holder. he is also challenging the action of the Judgment Debtor in adjusting the amount of Rs. 15,000/-.

4. Learned counsel for the Decree Holder has argued that once there was no adjudication of the claim of the Judgment Debtor in respect of levy of compensation of Rs. 15,000/-, the Judgment Debtor had no right to adjust this amount. It was further argued, that the amount payable to the Decree Holder under the award, which is an executable decree under Section 36 of the Arbitration & Conciliation Act, 1996 was a decretal amount and the Judgment Debtor could not adjust this amount.

5. There is force in the submission made by learned counsel for the Decree Holder. As the amount recoverable by the Decree Holder under the award can be executed as Decree under Section 36 of the Arbitration and Conciliation Act, 1996 the decree had to be satisfied as such without any deductions. if the Judgment Debtor had any claim of compensation, the said amount could not have been deducted from the decretal amount. Under Order XXI Rule 19 of the Code of Civil Procedure the Judgment Debtor could set off the amount payable under a decree only. This is the view taken by the Division Bench of this Court tin Prakash Sharma (deceased) though Smt. Parwati Devi and others versus Delhi Development Authority reported in 2000 VII AD (DELHI) 1192.

6. Learned counsel for the Judgment Debtor, relying upon Clause 29 of the Agreement, argued that it was within its right to withhold or adjust an amount of rs. 15,000/- form the claimer claims payable to the Decree Holder. The relevant portion of Clause 29 reads as under:-

(1) "Whenever any claim or claims for payment of a sum of money arises out of or under the contract against the contractor, the Engineer-in-charge or the N.D.M.C. shall be entitled to withhold and also have a lien to retain such sum or sums in whole or in part form the security, if any deposited by the contractor and for the purpose aforesaid, the Engineer-in-Charge or the N.D.M.C. shall be entitled to withhold the security deposit, if any furnished as the case may be and also have a lien over the same pending finalisation or adjudication of any such a sum. In the event of the security being insufficient to cover the claimed amount or amounts or if no security has been taken from the contractor, the Engineer-in-Charge or the N.D.M.C. shall be entitled to withhold and have a lien to retain to the extent of such claimed amounts referred to above, from any sum or sums found payable or which at any time thereafter may become payable to the contractor under the same contract or any other contract with the Engineer-in-Charge or the N.D.M.C. or any contracting person through the Engineer-in-Charge pending finalisation or adjudication of any such claim.

It is an agreed term of the contract that the sum of money or moneys so withheld or retained under the lien referred to above, by the Engineer-in-Charge or N.D.M.C. will be kept withheld or retained as such by the Engineer-in-Charge or N.D.M.C. till the claim arising out of or under the contract is determined by the Arbitrator (if the contract is governed by the arbitration clause) or by the competent court, as the case may be, and that the contractor will have no claim for interest or damages whatsoever on any account in respect of such withholding or retention under the lien referred to above and duly notified as such to the contractor. For the purpose of this clause, where the contractor is a partnership firm or a limited company, the Engineer-in-Charge or the N.D.M.C. shall be entitled to withhold and also have a lien to retain towards such claimed amount or amounts in whole or in part from any sums found payable to any partner/limited company as the case may be, whether in his individual capacity or otherwise.

7. This itself would be a debatable issue in view of the principle laid down by the Supreme Court in the case of Raman Iron Foundry versus Union of India reported in AIR 1974 SC.. Be as it may, in the instant case Clause 29 will not be applicable as the amount payable is under a decree. Clause 29 would be applicable when certain amounts are payable to the contractor after finalising his bills and the NDMC while making this payment, is applying clause 29 and adjust such an amount. However, the position would be totally different when there is an adjudication of the claim sand the money now becomes payable on the basis of decree obtained by the contractor. In such a situation when a decree is to be executed, provisions of Order XXI Rule 19 of the Code of Civil Procedure would get attracted and such a situation is to be governed by the law laid down in the case of Prakash Sharma (supra).

8. In any case there was a dispute as to whether on Judgment Debtor was entitled to adjust this amount without there being an adjudication thereof before judicial forum. The Decree Holder was still ready to accept the cheque but under protest. However, the Judgment Debtor was offering the amount only on the condition that the Decree Holder accepts the cheque by signing "full and final receipt". Decree Holder had right to atleast object to this. he was ready to take the payment as offered reserving his right to challenge the deduction. It was fair stand on his part. But Judgment Debtor was not willing to part with the payment unless accepted in full and final settlement. It was not fair on the part of the Judgment Debtor. This resulted in the delay in making the payment from 7th March, 2000 to 7th August, 2000 and for this faux pas, the Judgment Debtor is responsible. Judgment Debtor could avoid this. However, its attitude has burdened it with interest for additional period. The Decree Holder would, therefore, be entitled to interest also for the intervening period i.e. 7th March, 2000 to 7th August, 2000.

9. The Decree Holder has given the calculations in the rejoinder by calculating interest up to 7th August, 2000 as per which the Decree Holder is entitled to Rs. 3,71,537.33p and after adjusting the amount already paid i.e. Rs. 3,27,950/- balance amount of Rs. 43,587.33p is still payable. The Judgment Debtor is directed to pay the aforesaid amount of Rs. 43,587.33p subject to verification about the calculation of interest.

10. List again on 13th August, 2001 for payment of the aforesaid amount.

11. dusty to the counsel for Judgment Debtor.