K.R.Builders vs Dda
2009 Latest Caselaw 3967 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI


                                                      Date of Reserve: July 30, 2009
                                                      Date of Order: September 25, 2009

+EA No.417 of 2005 in Ex.P. 123/2002
%                                                            25.09.2009
     K.R. Builders                                    ...Decree Holder
     Through: Mr. Raman Kapur with Ms. Honey Taneja, Advocates

       Versus

       DDA                                                           ...Judgment Debtor
       Through: Ms. Geeta Malhotra, Advocate

AND

+EA No.290 of 2005 in Ex.P. 28/2003
%
     K.R. Builders                                    ...Decree Holder
     Through: Mr. Raman Kapur with Ms. Honey Taneja, Advocates

       Versus

       DDA                                                           ...Judgment Debtor
       Through: Ms. Geeta Malhotra, Advocate

       JUSTICE SHIV NARAYAN DHINGRA

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 judgment should be reported in Digest?                                  Yes.



       JUDGMENT

These applications under Section 151 CPC raise an issue up to

what date the Judgment Debtor was liable to pay interest to the Decree Holder.

2. This Court while entertaining the applications framed following two

issues:

EA No. 417/2005 in Ex.P.123/ 2002 & EA No.290/2005 in Ex.P.28/2003             Page 1 Of 6
                 "(a)    whether this application is maintainable as the
                        payment was not pursuant to any orders passed in
                        this execution petition, but by the judgment debtor of
                        its own;

                (b)     in case this applicable is held to be maintainable,
                        other question relates to the date upto which the
                        interest is to be payable."

3. As far as issue "(a)" is concerned, a perusal of record would show

that it is only during the pendency of the Execution Petition before this Court that

an order was made by the Court directing Judgment Debtor to deposit the

amount in the Court and the amount was deposited by the Judgment Debtor in

Court. Thereafter, under the instructions of this Court the Decree Holder was

paid this amount. I therefore consider that the application filed by the Judgment

Debtor for refund of excess amount was entertainable since the decreetal amount

was paid under the instructions of this Court to the Decree Holder.

4. The second issue ("b") is about the date up to which the interest is

payable. The award in question was passed under the Arbitration Act, 1940

since the reference was made to the Arbitrator under the old Arbitration Act. The

Arbitrator while passing the awards dated 27.8.1996 & 12.8.1996 made an order

that the Decree Holder will be entitled to 12% p.a. interest from 1.1.1994 &

16.11.1993 respectively till date of award and, interest @ 16% p.a. from the date

of award till the payment of the amount or date of decree whichever was earlier.

Since the award was passed under the Arbitration Act, 1940, the Decree Holder

filed petitions under Section 14/17 of the Arbitration Act, 1940 and Judgment

EA No. 417/2005 in Ex.P.123/ 2002 & EA No.290/2005 in Ex.P.28/2003 Page 2 Of 6 Debtor filed objections to the awards under Section 30/33 of the Arbitration Act,

1940. This Court however dismissed the objections of the Judgment Debtor vide

an order dated 19.3.2002 by deciding an issue whether the objection proceedings

were governed by the Arbitration Act of 1940 or the Arbitration & Conciliation

Act, 1996. The Court observed that the objections had been filed under Section

30/33 of the Arbitration Act, 1940 but the plaintiff (Decree Holder) had taken the

plea that the objections, if any, could have been filed only under the provisions of

Section 34 of the Arbitration & Conciliation Act, 1996 as the award was passed

after coming into force of the Arbitration & Conciliation Act, 1996. The Court

upheld the plea taken by the Decree Holder and dismissed objections under

Section 30/33 of the Arbitration Act, 1940 on the grounds that these objections

were not maintainable. The court also dismissed the petition under Section 14/17

of the Arbitration Act, 1940 made by the Decree Holder on the same ground. The

reason for this Court to pass such an order were the various judgments of

Supreme Court holding ground at that time wherein a view was taken that if an

award was passed after coming into force of the Arbitration & Conciliation Act,

1996 the provisions of the Arbitration & Conciliation Act, 1996 would govern the

objections. This order of the Court became final and the objections of the

Judgment Debtor were not entertained even under Section 34 since they were

barred by time. However, the view of Supreme Court changed later on in

decision rendered in Milkfood Ltd. v. M/s GMC Ice Cream (P) Ltd. JT 2004 (4) sc

393.

5. In view of the above situation, the order dated 19.3.2002 passed by

this Court having become final inter se parties, the award passed by the learned

Arbitrator became a decree of the Court as no objections were preferred against

EA No. 417/2005 in Ex.P.123/ 2002 & EA No.290/2005 in Ex.P.28/2003 Page 3 Of 6 this award under Section 34 the Arbitration & Conciliation Act, 1996 after the

expiry of the period as provided under the Act. In terms of the award, the

Judgment Debtor was liable to pay interest either up to the date of decree or up

to the date of payment whichever was earlier. In this case, the date of decree

was earlier. Since the award became decree after expiry of 90 days from the

date of its passing as no objections under Section 34 of the Arbitration &

Conciliation Act, 1996 were filed by the Judgment Debtor and nor the objections

of Judgment Debtor under Section 30/33 of the Arbitration Act, 1940 were

entertained.

6. It is argued by the Counsel for the Decree Holder that Decree

Holder would be entitled to interest up to the date of payment. Decree Holder

relied on Shankar Construction Company v. National Building Construction

Corporation Ltd. 2003(3) Arb. L.R. 333 (Delhi) and S.Kumar v. DDA & Anr. 103

(2003) DLT 502 wherein the Court observed that date of award cannot be

treated as date of decree for the purpose of awarding future interest when there

is a specific provision made for payment of interest from a stipulated date to the

date of payment.

7. The Judgment Debtor on the other hand relied on a Division Bench

of this Court's decision in EFA (OS) No. 12/2006 decided on 22nd July, 2008

wherein this Court observed that a decree became executable on dismissal of

Section 34 and if the Arbitrator had observed that the interest was payable by

Judgment Debtor till the date of payment or decree whichever was earlier then

the date till Judgment Debtor was liable to pay interest was the date when

objections under Section 34 were dismissed and the order of Single Judge

EA No. 417/2005 in Ex.P.123/ 2002 & EA No.290/2005 in Ex.P.28/2003 Page 4 Of 6 holding that the applicant would be entitled to interest up to 15th December, 2003

i.e. date of dismissal of objections was upheld.

8. In the present case the situation is more peculiar. I consider that

the Judgment Debtor cannot be put to double jeopardy. The objections raised by

the Judgment Debtor were dismissed on the ground that the Judgment Debtor

should have approached the Court under Section 34 of the Arbitration &

Conciliation Act, 1996 and not under the old Act of 1940 whereas in view of the

Supreme Court's later Judgment, the Judgment Debtor had rightly filed objections

under Section 30/33 of the Arbitration Act, 1940. Thus, the Judgment Debtor was

put under incapacity to file objections against the award and the award became a

decree under the Arbitration & Conciliation Act, 1996 on expiry of three months'

period. Now, the Judgment Debtor cannot be told that the Decree Holder was

not bound by the judgment and the Judgment Debtor would be liable to pay

interest even after the award became decree till the payment is made.

9. I consider that the Judgment Debtor was liable to pay interest only

in accordance with the terms of the decree. The decree in this case became final

once the Court did not entertain objections of the Judgment Debtor under Section

30/33 and observed that the award could only be challenged under Section 34

and this Court dismissed the petition of Decree Holder under Section 14/17 of

Arbitration Act, 1940 also. Thus, the award passed by the Arbitrator on

27.8.1996 became decree of the Court after expiry of 90 days i.e. 27 th November,

1996 and the Judgment Debtor was liable to pay interest up to 27 th November,

1996. The Decree Holder could have executed the award after 27 th November,

2006. It is also settled law that the Executing Court cannot go behind the decree

EA No. 417/2005 in Ex.P.123/ 2002 & EA No.290/2005 in Ex.P.28/2003 Page 5 Of 6 and cannot change the decree even on the issue of interest. The Decree Holder

is entitled to receive the principal amount and interest only as per decree and if

decree provides that interest is payable either up to the date of payment or up to

the date of decree whichever is earlier, the Court cannot converse the date of

payment of interest. I, therefore, allow the applications of the Judgment Debtor

for refund of excess amount paid by the Judgment Debtor. The Decree Holder is

directed to refund the excess amount to the Judgment Debtor as stated in the

applications after verifying the calculations, within four weeks.

September , 2009                                SHIV NARAYAN DHINGRA, J.
vn

EA No. 417/2005 in Ex.P.123/ 2002 & EA No.290/2005 in Ex.P.28/2003 Page 6 Of 6