M/S N.K. Garg & Co. vs Union Of India
2009 Latest Caselaw 877 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                 Ex. 336/2008


%18.03.2009                        Date of decision: 18.03.2009


M/S N.K. GARG & CO.                   .......        Decree Holder
                        Through: Mr. Raman Kapur with Mr. R.P. Singh,
                                 Advocates.

                                Versus

UNION OF INDIA                       .......   Judgment Debtor
                        Through: Mr. Jitender Kumar Singh, Advocate


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may
      be allowed to see the judgment?   Yes

2.    To be referred to the reporter or not?     Yes

3.    Whether the judgment should be reported
      in the Digest?                                   Yes


RAJIV SAHAI ENDLAW, J.

1. The only question remaining for adjudication in this execution

is, as to till which date the decree holder is entitled to interest, till

the date of filing of the execution application in this court or till the

date of receipt of monies in this court pursuant to warrants of

attachment or till the date of payment thereof to the decree holder.

2. Execution was sought of an arbitral award having the force of a

decree under Section 35 of the Arbitration & Conciliation Act, 1996.

The award directed the respondent/judgment debtor to pay the

awarded amount within 90 days of the publication of the award,

failing which interest at 18% was payable by the judgment debtor to

the decree holder till the payment of the arbitration award. The

record reveals that the judgment debtor preferred an application

under Section 34 of the Arbitration Act with respect to the said

award. The same was registered as OMP No.327/2002 and was

dismissed on 9th March, 2008. The appeal preferred by the judgment

debtor against the order of dismissal of its application under Section

34 of the Act was also dismissed by a Division Bench of this court on

26th May, 2008. The decree holder applied for execution on 3rd

September, 2008. It was stated in the execution application that as

on 4th September, 2008 a sum of Rs.29,64,402/- was due under the

award. Execution was sought by attachment and sale of the

properties of the judgment debtor.

3. Notice of the execution application was issued to the judgment

debtor on 5th September, 2008. The judgment debtor was served on

15th October, 2008 but none appeared for the judgment debtor on

22nd October, 2008. In the circumstances, warrants of attachment of

the monies to the extent of Rs.29,64,402/- in the name of the Office

of the Chief Administration/Construction Officer, Northern Railway,

Kashmere Gate, Delhi and in the name of F.A. & CAO/Construction

with the Reserve Bank of India returnable on 6th January, 2009 were

issued. The Reserve Bank of India was also directed to make the pay

order for the said amount in the name of the Registrar General of

this court and to have the same transmitted to this court on or before

the said date.

4. The judgment debtor on or about 10th November, 2008 filed

E.A. No.530/2008 stating that it had preferred an SLP in the Apex

court against the dismissal of its appeal by the Division Bench and

the same was likely to be listed. It was further urged that thus the

award had not become final and the execution was not maintainable.

The decree holder thus sought stay of execution as well as of

attachment till the decision of the SLP stated to have been preferred

by it.

5. E.A. No.530/2008 came up before this court first on 17 th

November, 2008. It was informed that the attachment had already

been affected. In fact the cheque was received in the registry of this

court on 18th November, 2008. The counsel for the judgment debtor

thus on 17th November, 2008 only made a request for staying the

release of the money to the decree holder. However, it was noted in

the order dated 17th November, 2008 that till then there was no

order for release of the money to the decree holder.

6. The decree holder thereafter filed E.A.No.548/2008 stating

that the attachment in fact had been affected on 14th November,

2008; and seeking release of the sum of Rs.29,64,402/- received in

this court pursuant to the attachment. The said application being

E.A. No.548/2008 came up before this court on 26th November, 2008

and notice thereof was issued to the judgment debtor for 6th January,

2009.

7. E.As. No.530/2008 and 548/2008 both were heard on 6th

January, 2009. After hearing, the E.A. No.530/2008 of the judgment

debtor was dismissed. It may be noticed that it was informed on that

date that the judgment debtor had since then withdrawn the SLP

preferred in the Apex court. The counsel for the judgment debtor,

however even on that date opposed the release of the monies to the

decree holder by stating that the decree holder had not correctly

calculated the amounts. It was further stated that only about

Rs.28,50,000/- were due under the award to the decree holder. In

the circumstances, on 6th January, 2009 it was ordered that out of the

monies received on attachment in this court, the sum of

Rs.28,50,000/- be released to the decree holder and the balance

amount was ordered to be retained in the court subject to final

orders. The Registrar General of this court was requested to report

on the amount due under the award.

8. The Registrar General of this court has in his order dated 4th

February, 2009 recorded that the only dispute between the parties is

that while the judgment debtor has calculated the interest on the

award amount up to 4th September, 2008, the decree holder has

calculated the interest up to the date of 18th November, 2008 when

the monies were received in the registry of this court and in fact was

claiming interest till 15th January, 2009 when the sum of

Rs.28,50,000/- was actually released in favour of the decree holder.

If the interest is to be calculated till 4th September, 2008 then the

amount due is Rs.29,04,401/-. If the interest is calculated till 18th

November, 2008, then the amount due under the award is

Rs.29,52,418/- and if the interest is calculated up to 15th January,

2009 then the amount due under the award is Rs.29,89,847/-.

9. There is no basis whatsoever for the judgment debtor to

calculate the interest till 4th September, 2009 only. Though in the

execution application the decree holder disclosed the amount due as

on 4th September, 2008 as Rs.29,64,402/- but has now admitted the

calculation of the judgment debtor of the amount due as on that date

being Rs.29,04,401/-only. However, the said fact is irrelevant for the

present purposes.

10. In my view, the decree being for payment of interest till the

date of payment, the date of filing of execution application is

irrelevant and the interest allowed under the decree would not cease

to run merely because the execution has been filed. Thus, the

interest will continue to run notwithstanding the filing of the

execution application.

11. The next question to be considered is as to whether the

interest will cease to run on the date when the attachment is

affected or will continue to run even thereafter till the money is

released to the judgment debtor. The CPC does not provide the

answer to the said question. The question really is whether the

future interest allowed under a decree ceases the moment the

monies are out of the pocket of the judgment debtor or continues to

run till payment to decree holder.

12. This court is an executing court and cannot go behind the

decree. The decree is not of payment of interest till attachment but

is for payment of interest till the date of payment of the awarded

decretal amounts to the decree holder. Can the attachment of

monies on the execution application of the decree holder be

regarded as payment to the decree holder? In my opinion the same

cannot be so regarded. The purpose of attachment is merely to

prevent further alienation/encumbrance and to make the attached

goods/money available for execution.

13. Help in this regard can be derived from Order 21 Rule 1

providing mode of paying money under the decree. It provides for

the judgment debtor to deposit the monies in the court and to give

notice to the decree holder either directly or by Registered Post AD

through court of such deposit. Sub-rule 4 provides that on amounts

so deposited the interest shall cease to run from the date of service

of such notice on the decree holder. The purport of law appears to be

that the interest will cease to run on the day when the decree holder

has knowledge that money is deposited in the court and there is no

impediment to his withdrawing the same. The decree holder

thereafter cannot be heard to say that he withdrew the money after a

few months and since the money was received by him on that date

only, he is entitled to interest till then. In these circumstances, the

payment unto court with intimation to the decree holder is deemed

to be the payment to the decree holder.

14. Applying the aforesaid principles to the present case the

following factors are relevant:-

a. The judgment debtor did not pay/deposit money on its own and compelled the decree holder to apply for execution.

b. The judgment debtor did not appear before the court pursuant to the notice of execution.

c. Though the judgment debtor filed E.A. No.530/2008 on 10th November, 2008 i.e. prior to execution of warrants of attachment but did not have the same listed till after the execution of warrants of attachment; even after the warrants of attachment had been executed a prayer was made for not releasing the monies attached and received in the court to the decree holder.

d. On 6th January, 2009 also inspite of withdrawal of the SLP objections were raised. It was only after disposal of the said objections on 6th January, 2009 itself that the order for release was made.

15. It would thus be seen that till 6th January, 2009, inspite of the

money having been received pursuant to warrants of attachment in

this court, the same was not in a position to be released to the

decree holder.

16. Drawing the analogy of Order 23 Rule 1 aforesaid, the decree

holder would be entitled to interest till 6th January, 2009, in as much

as on that date the decree holder had notice that the monies

attached were releasable to it. The amount due till 6th January, 2009

as reported by the Registrar General of this court and which has not

been disputed by any of the parties is Rs.29,52,418/-.

17. The decree holder is not entitled to interest till 15th January,

2009 on which date the monies were actually released to the decree

holder, in as much as the order of release was made on 6th January,

2009 itself. The delay, if any, in release of the money thereafter is

not attributable to the judgment debtor and the judgment debtor

cannot be made liable for interest for such delay.

18. I may before concluding notice M.B. Patel & Co. Vs. ONGC

(2008) 8 SCC 251 relied upon by the counsel for the judgment

debtor. In that case the arbitral award awarding interest when the

agreement between the parties expressly provided that no interest

shall be allowed was remanded for reconsideration. The counsel for

the judgment debtor has argued that the agreement between the

parties in the present case is also to the same effect and thus no

interest whatsoever is payable to the decree holder and the

judgment debtor is entitled to refund out of the amount of

Rs.28,50,000/- already released to the decree holder.

19. I do not find any merit in the contention of the counsel for the

judgment debtor. The Apex court in M.B. Patel & Co. was

concerned with appeal/SLP arising from proceedings challenging the

award. However, in the present case, the award admittedly directs

payment of interest and application under Section 34 with respect to

the said award has been dismissed and the appeal against the said

order has also been dismissed and the SLP preferred to the Apex

court has been withdrawn. Thus the award has attained finality and

now has the force of the decree. This court is merely executing the

award and cannot go behind the award.

20. The counsel for the decree holder had also relied upon the full

bench of the Madras High Court in O.RM. P RM. Ramanathan

Chettiar Vs. S.L.Ramanathan Chettiar AIR 1960 Madras 207

holding that payment under Order 21 Rule 1 must be unconditional

and if any restrictions are placed while depositing the money in the

court, the interest does not cease to run. He has also relied upon the

judgment of this court in Kali Charan Sharma Vs. NOIDA

MANU/DE/1367/2008 holding that interest does not cease to run

where monies are deposited as security for stay of execution.

21. The conclusion reached by me is inconsonance with the

principle leading to the aforesaid two judgments.

22. Accordingly, it is directed that out of the monies received in

this court pursuant to attachment, a further sum of Rs.1,02,418/- be

released to the decree holder within ten days of today and the

balance amount, if any, be refunded to the judgment debtor; with

these directions the execution petition is disposed of as satisfied.

RAJIV SAHAI ENDLAW (JUDGE) March 18, 2009 PP