Liberty Pesticides And ... vs Mmtc
2005 Latest Caselaw 1672 Del

JUDGMENT

A.K. Sikri, J.

1. There is some dispute as to how much amount is payable under this decree which arises from the execution of the award dated 2nd May, 2002 published by the Arbitral Tribunal. The perusal of the award would show that some claims of the Decree Holder (DH) were accepted. Likewise, some counter claims of the Judgment Debtor (JD) were accepted. After adjusting the counter claims of the JD, the DH was entitled to certain amounts, details whereof would be noted at an appropriate stage hereinafter. Since those amounts were not paid, present execution petition has been filed by the DH.

2. In so far as the DH is concerned, the award is given in respect of three claims and total of this comes to Rs.65,50,812/-. The counter claims of the JD were awarded to the extent of Rs.2,70,558/-. Interest at the rate of 12 per cent per annum was also awarded to both the parties from the date of statement of claims and counter claims respectively. It is an accepted position that amount in respect of two claims along with interest had been paid by the JD to the DH during the present proceedings.

3. The dispute now revolves around the computation of interest component on the claim regarding subsidy. Against this claim, the DH has been awarded a sum of Rs.40,06,939/-. From which date interest is to be calculated on this amount is the moot question. As mentioned above, while discussing the question of interest the Arbitral Tribunal held that the DH shall be entitled to the interest from the date of statement of claim. However, learned counsel for the JD submits that this was the interest payable in respect of other claims. In so far as interest payable on subsidy is concerned, specific stipulation is made while awarding this claim itself and as per the observations made by the Arbitral Tribunal while dealing with that claim, interest is to be calculated after the expiry of 8 months from the date of award.

4. In order to appreciate the rival contentions, it is necessary to examine the award in respect of the claim of subsidy. 5. Claim regarding subsidy as set up by the DH was on the ground that it was entitled to claim an amount at the rate of Rs.340/-MT on account of subsidy for the goods supplied to the JD. According to the claimant it was part of the agreement and the JD was under obligation, as per the agreement, to give a letter of authorisation to the claimant on the basis of which the claimant could claim subsidy from the Government. The grievance of the claimant was that this authorisation was not given because of which the claimant could not claim the subsidy from the State Government. The discussion contained in the award reveals that even during the proceedings, the Arbitral Tribunal had directed the parties to sort out this issue. Joint meetings had taken place. Minutes of one such meeting recorded on 16th April, 2001 were placed before the Arbitral Tribunal. These minutes are reproduced in the award in extenso. It would be necessary to reproduce these minutes again as it has some bearing on the question of interest:

As regards subsidy claim of M/s. Liberty Pesticides and Fertilizers Limited, it was decided that MMTC would hand over all the invoices and certificates thereof to M/s LPFL by 22.4.2001 for the remaining quantity for which claim has not been lodged by LPFL/LPL. It was also decided that MMTC and M/s LPFL/LPL would also make efforts jointly and visit the concerned authorities for acceptance of the claims. Upon acceptance of the above by State Govt., M/s LPFL/LPL's claim shall be dropped. It was further decided that upon acceptance of the claim by State Government M/s LPFL/LPL would release the differential subsidy amount to MMTC after receipt from the Govt.of India.

6. It was, thus, agreed between the parties that the JD would hand over all invoices and certificates on the basis of which the claimant shall lodge its claim before the Government for grant of the subsidy. The JD also agreed that joint efforts shall be made in this behalf with the authorities for acceptance of the subsidy. The claimant specifically agreed that if the claim of subsidy is proved by the Government this claim shall be dropped. Thus the claimant was happy and satisfied with getting the approval of this claim by the State Government and amount of subsidy from it. Keeping in view the aforesaid minutes, the Arbitral Tribunal opined that one more opportunity should be afforded to the JD to pursue the claim of subsidy with the authorities concerned. The modalities for this which were to be worked out have been stated in the award itself in the following manner:

So we direct that the respondent would issue fresh authorisation letter for 11,785.155 Mts in proper form and accompanied by all the relevant documents and the necessary material in favor of the claimants within one month from the date of Award. The claimants would submit the authorisation with the concerned authorities for claiming the Subsidy amount.

7. It was also directed that both the parties will pursue the claim with the authorities concerned. Reading of the aforesaid directions in conjunction with the minutes dated 16th April, 2001 of the meeting between the parties, one can clearly infer that on acceptance of the claim by the authorities nothing was to be payable to the DH under this claim. However, the Arbitral Tribunal issued further directions for payment of this amount by the JD to the DH in the event the Government/concerned authorities rejected the claim of subsidy of the DH. The Arbitral Tribunal recorded that in case the claim is not proved and the amount on account of subsidy is not paid to the claimant within a period of 6 months from the statement of claim with the authorities concerned, then the JD would be liable to pay an amount of Rs.40,06,939/- to the claimants calculated at the rate of Rs.340 PMT within one month thereafter.

8. Thus one month time was given for making necessary application; six months' time was granted for the Government to decide the issue and in case of non- approval of the claim by the authorities, one month time was given to the JD to make the payment. In such an eventuality, the inevitable conclusion would be that if the JD is to make the payment, interest on the aforesaid amount should be calculated after the expiry of 8 months period granted by the Arbitral Tribunal.

9. I may point out at this stage that in order to sort out this controversy, this court had appointed Mr.J.P.Aggarwal, Joint Registrar of this court as local commissioner. He has submitted his report wherein he has recorded that interest should be calculated after the expiry of 8 months.

10. In view of the foregoing discussion, I agree with the said view taken by the local commissioner and consequently I also agree with the calculations made by the local commissioner in his report.

11. One more aspect needs to be adverted to, namely, objections of the JD to the said report. The JD has contended that no interest is payable at all on the award in respect of subsidy as it was the prime responsibility of the Government authorities to make this payment and was payable by the JD as and when this amount is received. I do not agree with this submission. In the award specifically interest at the rate of 12 per cent per annum is granted and it is granted on all the claims. The dispute could only be the date from which it was payable and that has been sorted out above. I do not find any substance in this objection to the report.

12. As per the calculation made by the Local Commissioner, a sum of Rs.47,37,615/- was payable as on 24th April, 2004 Further interest on Rs.41,07,592/- at the rate of 12 per cent per annum was to be paid with effect from 24th April, 2004 The JD had deposited a sum of Rs.47,37,615/- on 14th July, 2004 Out of this, Rs.40,06,939/- has been released to the DH. The remaining amount along with interest which has accrued on the entire deposit shall be released in favor of the DH by the registry. Therefore, the only amount which is payable now is interest for the period from 25th April, 2004 to 14th July, 2004 on Rs.41,07,592/- to be calculated at the rate of 12 per cent per annum. Learned counsel for the JD assures and undertakes that with the clarification today, this amount shall be paid to the DH within four weeks. 13. In view thereof, this execution petition as well as EAs are disposed of. In case the aforesaid interest component is not paid, the DH shall be entitled to get the execution petition revived.