S. Kumar vs Delhi Development Authority And ...
2003 Latest Caselaw 248 Del

JUDGMENT

J.D. Kapoor, J.

1. This is an application moved by the Decree Holder for enforcement of the award. The limited grievance of the Decree Holder is with respect to the interest as according to the Decree Holder , Judgment Debtor has not paid full payment towards interest as per provisions of section 31(7)(b) of the Arbitration and Conciliation Act, 1996.

2. Perusal of the award shows that the Arbitrator passed an award of Rs.5,21,886/- with interest @ 18% per annum from 24.8.1990 to 11.5.1997 as pre-suit interest and at the same rate from 12.5.1997 to 8.4.1998 towards pendente lite interest and from 8.4.1998 to the date of payment or decree whichever is earlier as future interest. Through this application, the Decree Holder is seeking payment of future interest till the date of payment.

3. Decree Holder is entitled to future interest in terms of provisions of section 31(7)(b) of the Act which provides as under:-

" A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the award to the date of payment"

4. According to Mr. Deepak Khadaria, learned counsel for the Judgment Debtor since the award otherwise directs payment of future interest from 8.4.1998 to the date of payment or decree whichever is earlier. The Judgment Debtor was liable to pay interest up to the date of decree and in this case the decree became enforcemable only from the date of dismissal of objections.

5. The objections filed by the respondent-Judgment Debtor were dismissed on 21.12.2001. Subsequent thereto, respondent/Judgment Debtor handed over cheques of payment on 20.3.2002. These cheques included the interest @ 18% per annum up to December 21, 2001. In the view of learned counsel for the Judgment Debtor award became decree on dismissal of the objections i.e on 21.12.2001 and therefore the interest payable by the respondent was up to the date of dismissal of the objections. As against this, Mr. Moitra, learned counsel for the petitioner/Decree Holder contends that in terms of award future interest was payable from 8.4.1998 to the date of payment or decree whichever was earlier.

6. In terms of provisions of section 36 of the Act which relates to the enforcement of the award, an award becomes enforceable in two eventualities; firstly where the time for making an application to set aside the arbitral award under section 34 has expired and secondly if such application having been made, is refused. In the instant case, the application under section 34 was refused on 21.12.2001. In view of provisions of Section 36 of new Act, the award is a decree and is enforceable in terms thereof as in the old Act a party had to apply to the court for making the award rule of the court.

7. In view of the fact that award itself is a decree, the directions of the Arbitrator that the pendente lite interest shall be paid from 8.4.1998 to the date of payment or date of decree whichever is earlier actually meant that interest was payable up to date of payment. Filing of objections by a party under Section 34 and refusal thereof is of no relevance so far as payment of future interest is concerned. The application under section 34 is only relevant for the purpose of enforcement of the decree. The moment this application is refused, the decree becomes enforceable and the date of decree remains the same as that of the award.

8. In view of this legal position, Judgment Debtor/respondent was obliged to make the payment of future interest up to the date of payment and not up to the date when the objections were dismissed. In view of the foregoing reasons, the application is allowed. The Judgment Debtor/respondent is directed to make payment of balance interest from 21.12.2001 to 20.3.2002 within one month.

List on 27th May, 2003.