Gujarat State Coop. Grain ... vs Union Of India (Uoi)
2006 Latest Caselaw 2142 Del

JUDGMENT

Mukundakam Sharma, J.

1. This appeal is directed against the judgment and order passed by the learned Single Judge on 13th January, 2005 in Execution Petition No. 38/1999. By the aforesaid order, the execution petition was disposed of with certain directions as contained in the said order.

2. Disputes having arisen between the parties, the said disputes were referred to the sole arbitrator in terms of the arbitration clause between the parties. The learned arbitrator, after hearing the parties, published his award on 31st December, 1998. The award was published under the Arbitration and Conciliation Act, 1996 and, therefore, objections were filed by the respondent herein under Section 34 of the said Act. The objections were considered and the same were dismissed by the court on 27th July, 2001. The appeal filed by the Union of India before the Division Bench was also dismissed under order dated 4th December, 2001.

3. During the pendency of the aforesaid objections of the Union of India in this Court, an execution petition being Ex. Petition No. 38/1999 was filed by the appellant herein for implementation of the award in terms of provisions of the Arbitration and Conciliation Act,1996. However, since petition under Section 34 of the Arbitration and Conciliation Act, 1996 was filed and was pending, the said execution petition could not be proceeded with.

4. On 18th December, 2001, the Union of India deposited a sum of Rs. 84,73,319/- in this Court, which according to it was the amount payable under the award, together with interest in terms of the award till the date of deposit i.e. 18th December, 2001. In the meantime, the respondent herein preferred a special leave petition before the Supreme Court against the order of the Division Bench dated 4th December, 2001 affirming the order passed by the learned Single Judge on 27th July, 2001.

5. Under order dated 8th April, 2002, the Supreme Court stayed further proceedings in the execution petition. However, before the said order was passed by the Supreme Court on 4th January, 2001, the execution petition was taken up by the Single Judge for consideration, when an order was passed recording objection of the decree holder for deposit of the amount in court on the ground that as per the award, the decree holder was entitled to interest at 12% p.a. thereon, which it will be losing. The aforesaid special leave petition, which was registered as SLP (Civil) No. 7158/2002, was disposed of by an order passed on 1st November, 2002 with the following three directions:

(i) The respondent No. 1 shall within a period of two weeks from today furnish duplicate bills (If the original bills are not available) to the appellants and shall thereupon be entitled to withdraw the amount of Rs. 6,81,642/-.

(ii) The amount of Rs. 13,36,883.22 p. plus the amount of Rs. 5,21,384/- shall be withdrawn back by the appellants and shall be retained by them for being made available for disbursement in compliance with the decision in OMP No. 266/2000 against the Award dated 26.3.2000.

(iii)The balance amount of Rs. 59,33, 410/- ( that is the amount after deducting the amount forming subject matter of directions (i) and (ii) above from out of the amount deposited by the appellants) shall be available to be withdrawn by the respondent No. 1 forthwith.

6. So far as the first direction is concerned, permission was granted to the appellant to furnish duplicate copies of the bills to the respondents if the original bills were not available, with the direction that upon furnishing of the said bills, it would be entitled to withdraw the amount of Rs. 6,81,642/-. Pursuant to the said order, duplicate copies of the bills were furnished by the appellant to the respondent but on receipt of the said bills amounting to Rs. 6,81,642/-, Union of India proceeded to audit the bills and as per the decision on the audited bills, only an amount of Rs. 6,35,893/- as against the amount of Rs. 6,81,642/- was released to the decree holder/appellant. The aforesaid issue with regard to release of lesser amount than entitlement was also raised before the learned Single Judge and on consideration of the records, the learned Single Judge held that the order passed by the Supreme Court did not entitle Union of India to audit the bills, consequent upon which, the decree holder has received only a sum of Rs. 6,35,983/- thereby causing a shortfall in payment of an amount of Rs. 45,749/-. It was, however, ordered that no interest shall be payable on the aforesaid amount in view of the fact that the said amount was lying deposited in this Court but was not released by the Registry as there was no clear order for release of the aforesaid amount by the learned Single Judge and such order came to be passed only on 13th January, 2005.

7. So far as the second direction contained in the above order of the Supreme Court relating to payment of Rs. 13,36,883.22 being the principal sum together with interest till 18th December, 2001 of a sum of Rs. 5,21,384/- is concerned, the said amount was not to be released in favor of the decree holder, which is also an admitted position on behalf of the appellant. A statement to that effect is categorically made in para 14 of the impugned judgment and, therefore, we are not required to consider and scrutinize the aforesaid aspect.

8. So far as the third direction is concerned, which is in respect of a sum of Rs. 59,33,410/- in which there are two components i.e. sum awarded and interest thereon @12% p.a up to 18th December, 2001, the said sum stands released in favor of the decree holder. What was claimed before the learned Single Judge and was rejected by the learned Single Judge was regarding claim for payment of interest on the relatable part of the awarded amount apportionable to the sum of Rs. 59,33,410/-. It was submitted on behalf of the appellant before us also that the order dated 4th January, 2002 envisaged that decree holder would be compensated with interest @ 12% p.a on the deposited amount till release of the payment. The aforesaid claim was disposed of with direction No. (iii), as stated hereinabove, and was allowed to be withdrawn by the Union of India. Therefore, it was rightly held by the learned Single Judge that the said amount having been directed to be withdrawn by the judgment debtor, no interest was payable to the appellant. The order passed by the learned Single Judge in this regard is reasonable, fair and based on cogent reasons.

9. So far as the amount of interest payable on Rs. 45,749/- is concerned, in our view, the order passed by the learned Single Judge declining to pay any interest on the said amount requires to be set aside. In our considered opinion, while the learned Single Judge was justified in holding that what was executable was the decree as passed vide order dated 1st November, 2002 by the Supreme Court disposing of the appeal filed by the Union of India, it is undisputed that the appellant was unable to withdraw the amount of Rs. 45,749/- being the balance amount of Rs. 6,81,642/-, subject-matter of the first direction of the Supreme Court, on account of the audit conducted by Union of India of the duplicate bills submitted by the appellant.

10. Duplicate bills were directed to be furnished, which were received and on receipt of the same, the entire amount was released except for the aforesaid amount of Rs. 45,749/- in respect of which audit objections were raised and which although lying deposited in the Registry, was not released in favor of the appellant. The same came to be paid only when the learned Single Judge held that there could be no additional condition imposed by the Union of India, in the order of the Supreme Court requiring audit as a condition precedent for release of the said amount. As it has been held by the learned Single Judge that Union of India was not entitled to and permitted to audit the bills of the appellant, a natural corollary thereto ought to have been a direction to the Union of India to compensate the appellant for not permitting release of the amount of Rs. 45,749/- in its favor, by paying interest thereon, @9% p.a., in terms of the award. It was only after the aforesaid order was passed that the amount was released and, therefore, in our opinion, the appellant is entitled to receive interest from the Union of India on Rs. 45,749/- @ 9% p.a. from 23rd June, 2003, the date on which Rs. 6,35,893/- out of a total of Rs. 6,81,642/- was released by the Registry of this Court to the appellant, as intimated by the appellant to the learned Single Judge and so recorded in the order dated 13th January, 2005, till the date of the impugned order, i.e. 13th January, 2005.

11. In this view of the matter, the appeal is partly allowed and the impugned order is modified only to the extent as clarified hereinabove. No order as to costs.