J.P. Saini vs Municipal Corporation Of Delhi
2013 Latest Caselaw 277 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                Judgment delivered on: January 17, 2013

+                         Ex.P.No.127/2006

J.P. SAINI                                               ..... Decree Holder
               Represented by:    Mr.Abhinav Tathagat, Adv.

                         versus

MUNICIPAL CORPORATION OF DELHI              ..... Judgment Debtor
        Represented by: Ms.Mini Pushkarna, Adv. with Mr.Shantanu
                        Tyagi, Adv.

CORAM:
HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. By award dated 12th June, 2005, the learned Arbitrator awarded a sum of `22,41,175/- in favour of the contractor towards the gross amount of bills passed by the Municipal Corporation. The learned Arbitrator further awarded interest @8% on the outstanding payments from the date the bills were passed till the date of payment. Further, an amount of `43,000/- was awarded as cost and `2400/- was awarded as statutory cost of stamp of award.

2. The Municipal Corporation filed objections to the award, which was dismissed and the award passed by the learned Arbitrator was upheld by the Division Bench vide order dated 15th September, 2006 passed in FAO (OS) No.571/2006. Subsequently, Special Leave Petition was filed by the judgment-debtor before the Supreme Court against the order dated 15th September, 2006 passed by the Division Bench. By order dated 9 th July,

2007 passed by the Supreme Court in Special Leave Petition (Civil) No.3100/2007 in view of pendency of present execution petition, it was directed to the Municipal Corporation to deposit `10 lac in the said Court and the decree holder was allowed to withdraw the said amount from the Court, as pursuant to the aforesaid order, a sum of `10 lac was deposited before the Supreme Court on 12th November, 2007 which was also withdrawn by the decree-holder. Thereafter, only certain disputes are left with regard to interest part. Both the parties have filed the calculations prepared by them on the basis of the award dated 12 th June, 2005.

3. The contention of the judgment debtor is that the gross amount of all the bills comes to `22,41,175/-. After statutory deductions like income tax, water charges etc., the net principal amount comes to a total sum of `21,01,196/-. The interest @8 per month has been calculated on the net principal amount of `21,01,196/- from different dates of passing of bills till 12th November, 2007 when the payment of `10 lac was made to the contractor. After `10 lac was released in favour of the decree holder on 12th November, 2007, said amount was deducted from principal amount of `21,01,196/-. Therefore, the principal amount of `11,01,196/- remained due with effect from 13th November, 2007 for the purpose of calculation of interest. Hence, the interest has been calculated @8% per month by the judgment debtor on the reduced principal amount of `11,01,196/- for all the 13 work orders awarded in favour of decree holder. The total amount comes to `37,15,486/-. Since `10 lac had already been paid to the decree holder, the remaining amount of `27,15,486/- has been deposited by the judgment debtor on 21st September, 2012 before this Court by cheque dated 20th September, 2012. The same amount has also been released to the decree holder. Thus, nothing remains due. The said calculation of the judgment

debtor is denied by the learned counsel appearing on behalf of the decree holder. He has referred the calculation filed by the decree holder.

4. Before dealing with calculation filed by the decree holder, it is necessary to reproduce operative portion of the award which reads as under:

"1. The claimant is awarded a sum of Rs.22,41,175/- (Rupees twenty two lakhs forty one thousand one hundred and seventy five) and interest @8% on the outstanding payments from the date the bills were passed, till the date of payment.

2. The claimant is further awarded costs of Rs.43,000/- (Forty Three Thousand) and the statutory cost of stamp of award of Rs.2400/- paid by the Claimant."

5. The details of calculation of an amount due by the decree holder reads as under:

"Amount due towards the work orders dated 01.01.2001 = Rs.10,87,212/- Interest accrued @8% p.a. for the period of 11 years 8 months and 29 days = Rs.10,21,641.69/-

Total amount = Rs.21,08,853.69/-

Amount due towards the work orders dated 05.02.2001 = Rs.3,02,359/- Interest accrued @8% p.a. for the period of 11 years 7 months and 25 days = Rs.2,81,842.16/-

Total amount = Rs.5,84,201.76/-

Amount due towards the work orders dated 08.03.2001 = Rs.8,51,604/- Interest accrued @8% p.a. for the period of 11 years 6 months and 22 days = Rs.7,87,582.04/-

Total amount = Rs.16,39,186.04/-

Total amount due with interest as per the award dated 12.06.2005 = Rs.43,32,241.49/-

                           Cost         = Rs.45,400/-
               Amount already received = Rs.10,00,000/-

                Final amount due          = Rs.33,77,641.49/-"

6. The learned counsel appearing on behalf of the decree holder has not denied the receipt of `27,15,486/-. It was also confirmed by the counsel that `10 lac was also released by the decree holder in terms of the order passed by the Hon'ble Supreme Court on 9th July, 2007. However, according to him before depositing of `27,15,486/-, the amount due was `33,77,641.49 paise.

7. In case, the calculation chart produced by the decree holder with regard to the amount due in accordance with award dated 12th June, 2005 is read with the operative portion of the award, it appears that after calculating interest @8% per annum along with principal amount, the total amount due on 12th June, 2005 was `43,32,241.49 paise and cost was `45,000/-. The Apex Court passed the order on 9th July, 2007 and the credit of the said amount was duly mentioned by the decree holder and after deducting the said amount, it appears that the calculation of the decree holder is correct that `33,77,641.49 paise were due after deduction of `10 lac. Since the order in Special Leave Petition (Civil) No.3100/2007 was passed on 9th July, 2007, the amount of `10 lac has to be deducted from total sum due on that date and not from the date when the bills were passed on 8 th March, 2001.

8. The learned counsel for the decree holder has also referred to the decision in the case of Leela Hotels Ltd. v. Housing & Urban Development Corporation Ltd., 2012 (1) Arb.LR 73 (SC), it was observed:

"26. Admittedly, there was no agreement between the parties as to how the amounts to be paid in terms of the award were to appropriated by the appellant. Accordingly, in terms of the well settled principle that in such cases it was for the creditor to appropriate such

payment firstly against the interest payable, would, in our view, be squarely attracted to the facts of this case. As was laid down by the Privy Council in Meka Venkatadri Appa Rao Bahadur Zamindar Garu and others vs. Raja Parthasarathy Appa Rao Bahadur Zamindar Garu, AIR 1922 PC 233, and later reiterated in Rai Bahadur Seth Nemichand's case when money is received without a definite appropriation on the one side or the other, the rule which is well-established in ordinary cases is that in those circumstances, the money is first applied in payment of interest and when that is satisfied, in payment of the capital. In the latter case, the said principal was restated and it was indicated that a creditor to whom principal and interest are owed is entitled to appropriate any indefinite payment which he gets from a debtor to the payment of interest. It was also indicated that a debtor might in making a payment stipulate that it was to be applied only towards the principal. If he did so, the creditor was at liberty to refuse payment on such terms, but then he would have to give back the money or the cheque by which the money is proffered and if the same is accepted, the creditor would then be bound by the appropriation as proposed by the debtor."

9. Considering the operative portion of the award as well as the calculation chart produced by the decree holder, I am of the view that judgment debtor is liable to pay the remaining sum of `6,62,155.49 paise. The said amount shall be paid by the judgment debtor to the decree holder directly, within eight weeks from today and an affidavit of compliance be filed within two weeks thereafter. The petition is disposed of. In case, there is no compliance made, the decree-holder is granted liberty to move an appropriate application of non-compliance.

(MANMOHAN SINGH) JUDGE JANUARY 17, 2013