Progetto Grano S.P.A. vs Shri Lal Mahal Limited
2014 Latest Caselaw 2777 Del

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*     IN THE HIGH COURT OF DELHI AT NEW DELHI

                                   Judgment Pronounced on: 29th May 2014

+     Ex.P. No. 52/2012

      PROGETTO GRANO S.P.A.                      .....Decree Holder
                  Through             Mr.Jayant Mehta, Advocate.

                          versus

      SHRI LAL MAHAL LIMITED             .....Judgment Debtor
                   Through   Mr.Nidhesh Gupta, Senior Advocate
                             with Mr.Sanjay Jain, Ms.Rachna
                             Golchha and Mr.Vishrut Raj,
                             Advocates.

      CORAM:
      HON'BLE MR. JUSTICE JAYANT NATH


JAYANT NATH, J.

1. The present petition is filed by the decree holder under Section 49 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 1996 Act) for enforcement/execution of the Foreign Awards being Appeal Award No.3782 and Appeal Award No.3783 both dated 21.09.1998 passed by the Board of Appeal of the Grain and Feed Trade Association (GAFTA), London. By a contract dated 12.05.1994 between Shivnath Rai Harnarain (India) Company (Sellers) (now succeeded by the judgment debtor) and Italgrani Spa, Naples, Italy (Buyers) (now succeeded by the decree holder) a transaction for sale of 20,000 MT of Durum wheat, Indian origin was concluded. After the goods reached its destination, the buyers sent a fax advising that as per the analysis carried out by SGS, Genava, the wheat

loaded was soft common wheat and not durum wheat as required under the contract. The buyers considered the sellers in breach of the contract and hence the arbitration commenced with the Arbitral Tribunal GAFTA.

2. Following the commencement of the arbitration proceedings, the sellers contested the jurisdiction of the Arbitral Tribunal and filed a petition in the Delhi High Court for declaration that there was no arbitration agreement between the parties. Though initially interim orders were passed but the petition was finally dismissed by the Delhi High Court. Special Leave Petition arising from that order was also dismissed by the Supreme Court.

3. The Arbitral Tribunal, GAFTA, London in its Award dated 04.12.1997 accepted the buyers‟ case.

4. On 05.02.1997, the buyers made a separate claim for arbitration for sellers‟ alleged breach of the arbitration agreement in bringing legal proceedings in India concerning the first dispute. Regarding this claim the Arbitral Tribunal, GAFTA was constituted and a second Award also dated 04.12.1997 came to be passed.

5. From the above two Awards, two appeals being Appeal Award No. 3782 and Appeal Award no. 3783 were filed by the sellers before the Board of Appeal. The Board of Appeal disposed of the appeal awards on 21.09.1998 and passed the following Award:-

"We do hereby award that Sellers shall forthwith pay to Buyers the sum of US$ 1,023,750.00 (one million, twenty three thousand seven hundred and fifty United States Dollars) being the difference in value of US$ 48.75 per ton between the goods supplied and goods of the contractual description calculated on 21,000 tonnes, together with interest thereon at 7% (Seven per centum) per annum from 24th August, 1994 to the date of this Award.

We further award that Sellers shall forthwith pay to Buyers the sum of US $ 138,590.28 (one hundred and thirty eight thousand five hundred and ninety United States Dollars and twenty eight cents), being demurrage incurred at load, together with interest thereon at 7% (seven per centum) per annum from 30 th September 1994 to the date of this Award.

We further award that Buyers‟ claim for consequential damages fails.

We further award that Sellers shall forthwith pay to Buyers the sum of £4,340.00 (four thousand three hundred and forty pounds sterling only), being the fees and expenses of Arbitration 11715A.

We further award that Sellers shall forthwith pay to Buyers the sum of £1,750 (one thousand seven hundred and fifty pounds only), being the costs and expenses of Buyers‟ Representative in preparing and presenting this case."

6. Appeal Award No.3783 was also disposed of with the following directions :-

"We do hereby award that sellers shall forthwith pay to Buyers as part of their damages the sum of £1,762.90 (one thousand seven hundred and sixty two pounds and ninety pence), being the reasonable charges and disbursements of Middleton Potts incurred in considering and responding to the proceedings taken by Sellers in India.

We further award that Sellers shall pay to Buyers as the balance of their damages the sum of £15,924.00 (fifteen thousand nine hundred and twenty four pounds), being the total of O.P.Kaitan‟s four invoices nos.ATP/804 of 1995/6, ATP/206 of 1996/7, ATP/286 of 1996/7 and ATP/737 of 1996/7, or such lesser sum as shall be agreed by the parties or assessed by an appropriate sterling as being the reasonable fees, expenses, etc. incurred in considering and responding to the proceedings taken by Sellers in India. But we reserve to ourselves the right to assess these fees, expenses, etc. upon application of one or both of the parties, in the event that the parties are neither able to

agree them, nor able to agree upon an appropriate officer or person in India to assess them.

We further award that Sellers shall forthwith pay to Buyers the costs and expenses of the first tier arbitration No.12159 in the amount of £ 2,190.00 (two thousand one hundred and ninety pounds) together with £ 85.00 (eighty five pounds), being the fee for appointment of an arbitrator on Sellers‟ behalf.

We further award that Sellers shall forthwith pay to Buyers the sum of £500 (five hundred pounds only) being the costs and expenses of Buyers‟ Representative in preparing and presenting this case."

7. The sellers challenged the Appeal Award No. 3782 in the High Court of Justice at London. The appeal was dismissed on 21.12.1998.

8. Thereafter the buyers (now succeeded by the decree holder) filed the present petition for enforcement of the two Awards dated 21.09.1998 passed by the appellate board. This petition was registered as a suit. The sellers (now succeeded by the judgment debtor) filed objections. Parties led evidence.

9. Vide order dated 09.02.2012 this court held that none of the grounds enumerated in Section 48 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 1996 Act) have been established by the judgment debtor. The objections of the judgment debtor to the enforcement of the two Appeal Awards dated 21.09.1998 were rejected and the Appeal Awards were held to be enforceable under Chapter-I Part-II of the Act. The order did not dispose of all the prayers of the decree holder and the matter was adjourned to consider the same. It was also directed that the present proceedings shall not be treated as a civil suit and the Registry should assign a new category of proceedings which should be read as an OMP.

10. Against the said order dated 09.02.2012 the judgment debtor filed a

special leave petition before the Supreme Court. The said special leave petition being CA No.5085/2013 was dismissed by order dated 03.07.2013.

11. In view of the above, the foreign awards dated 21.09.1998 become binding on the parties and enforceable under Section 49 of the 1996 Act.

12. In the meantime this Court on 18.05.2012, noting the submission of the judgment debtor that according to them as per the Award a sum of `6,49,76,539/- is payable, directed without prejudice to the rights and contentions of the judgment debtor in the SLP, to deposit the said amount in the court. The judgment debtor deposited the said amount in court. On 23.09.2013 learned counsel appearing for the judgment debtor had in view of the fact that the appeal to the Supreme Court had been dismissed on 03.07.2013 submitted that their clients have no objection if the admitted amount without accumulated interest is released in favour of the decree holder. The order to the said effect was accordingly passed.

13. Learned counsel appearing for the decree holder submits that now two issues survive for adjudication. Firstly is the determination of the relevant date for the purpose of determining the rate of exchange for quantifying the rupees equivalent of the amount awarded and secondly, to award pendente lite interest from the date of institution of the present proceedings in this court till judgment dated 09.02.2012 and for the period subsequent thereto until realization on the awarded amount.

14. On the first issue i.e. the relevant date for conversion to rupees it is submitted that the decretal amounts in the two appeal awards are expressed mostly in US dollars. The Awards are being executed in India and hence the decretal amount has to be converted into Indian rupees. Learned counsel for the decree holder relies upon judgment of the Supreme Court in the case of Forasol vs. Oil and Natural Gas Commission, 1984 Supp SCC 263 to

submit that the date on which a decree is passed in terms of the foreign award is the most appropriate date for directing conversion of the decretal amounts into Indian rupees. The learned counsel has further stressed that a decree holder has to be put back in the same position as directed in the award. He submits that until the objections under Section 48 of the 1996 Act are disposed of, the award does not become enforceable. It is only on disposal of the objections under Section 48 of the 1996 Act that the award becomes enforceable under Section 49 of the said Act. Hence it is urged that the said date would be the most appropriate date for determination of the exchange rate to quantify the awarded amount in Indian currency. Hence he submits that the relevant date for the said purpose will be the date on which the decree holder receives the money or alternatively it would be 03.07.2013 when the Supreme Court dismissed the appeal of the judgment debtor. On the said issue reliance is also placed on the judgment of this High Court in the case of Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd., 194 (2012) DLT 439.

15. On the second aspect it is urged by the learned counsel for the decree holder that the Awards grant interest at rate of 7% per annum till the date of the Award. No interest is awarded thereafter. Reliance is placed on the judgment of the Supreme Court in the case of Renusagar Power Co.Ltd. vs. General Electric Co., 1994 Supp (1) SCC 644 where the Supreme Court held that the interest for the two periods, namely, from the date of filing of the present proceedings till the decree is passed and for the period thereafter till recovery, is governed by „lex fori‟ i.e. the law of the forum where award is sought to be enforced.

16. It is further submitted that in the judgment of Renusagar Power Co.Ltd. vs. General Electric Co. (supra) the Supreme Court was

interpreting the Foreign Awards (Recognition and Enforcement) Act, 1961. It is urged that the provisions of the said 1961 Act are pari materia with Part-II Chapter I of the 1996 Act. For the said purpose, reliance is placed on the judgments of the Supreme Court in the case of Thyssen Stahlunion GMBH vs. Steel Authority of India Ltd., 1999 (9) SCC 334 and Fuerst Day Lawson Limited vs. Jindal Exports Limited, (2011) 8 SCC 333. Based on these submissions, it is stated that in the case of Renusagar Power Co.Ltd. vs. General Electric Co.(supra) the Hon'ble Supreme Court had directed future interest @ 18% per annum. Reliance is also placed on Section 31(7) of the 1996 Act. Hence, it is stated that the decree holder is entitled to pendente lite and future interest @ 18% per annum.

17. Learned senior counsel appearing of the judgment debtor has opposed the contentions of the decree holder. It is urged that the rate of exchange would be the date of the decree. Reliance is placed on Section 49 of the 1996 Act to argue that a foreign award which is enforceable shall in view of Section 49 be deemed to be a decree of the court. The Award itself being a decree, it is urged that the exchange rate has to be the rate as on the date of the Award. It is further stated that the judgment of this court passed in the case of Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd. (supra) is per incuriam and not binding on this court as the said judgment ignores the judgments of the Supreme Court in the case of Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd. (2001) 6 SCC 356 and Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd. (2011) 8 SCC 333.

18. It is further submitted that even if the judgment of this High Court in the case of Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd. (supra) is applicable to the facts of the present case, then also the relevant date would have to be the date of judgment of this Court dismissing the objections under

Section 48 of the 1996 Act namely 9.2.2012. It is urged that in various pleadings and in the written submissions filed by the decree holder, this is the date which is sought for by the decree holder and the relevant date for conversion for calculating the rupee equivalent of the amount awarded. It is further urged that the date of the judgment of the Supreme Court namely 8.7.2013 cannot be taken in to account.

19. On the aspect of interest it is urged by the learned senior counsel that no interest can be awarded by this Court as sought for by the decree holder. It is urged that this court is an executing court and it is not for this court to add or vary the award or the decree that was passed by the appellate board. The executing court, it is urged, cannot go behind the decree. It is further urged that the judgment of the Supreme Court in the case of Renusagar Power Co.Ltd. vs. General Electric Co. (supra) would not be applicable to the present case as that judgment was based on the provisions of the Arbitration Act, 1940 and the Foreign Awards Act, 1961 both of which have been repealed. It is further urged that Section 31(7) of the 1996 Act also would have no application to the arbitration proceedings which are covered under Part-II of the 1996 Act. Reliance is also placed on the judgments of this court in the case of Jindal exports Limited vs. Fuerst Day Lawson Ltd. dated 11.12.2009 passed in OMP NO. 29/2003 (MANU/TE/3204/2009) where this court held that the court has no power to award interest as the court is only enforcing a foreign award. The court further held that a court dealing with enforcement and execution of a foreign award has no power to go behind the award.

20. I will first look at the first issue relating to the relevant date for currency conversion to calculate the rupee equivalent of the awarded amount. Reference may be had to the relevant portion of paras 43 and 53 of

the judgment of the Supreme Court in the case of Forasol vs. Oil and Natural Gas Commission (supra) which read as follows:-

"43. ...An objection which can, however, be taken to selecting this date is that the decree of the trial court is not the final decree for there may be appeals or other proceedings against it in superior courts and by the time the matter is finally determined, the rate of exchange prevailing on that date may be nowhere near that which prevailed at the date of the decree of the trial court. To select the date of the decree of the trial court as the conversion date would, therefore, be to adopt as unrealistic a standard as the breach date". This difficulty is, however, easily overcome by selecting the date when the action is finally disposed of, in the sense that the decree becomes final and binding between the parties after all remedies against it are exhausted. This can be achieved by the court which hears the appeal providing that the date of its decree or other proceeding in which the decree is challenged would be the date for conversion of the foreign currency sum into Indian rupees in cases where the decree has not been executed in the meantime. ..."

"53. This then leaves us with only three dates from which to make our selection, namely, the date when the amount became payable, the date of the filing of the suit and the date of the judgment, that is, the date of passing the decree. It would be fairer to both the parties for the court to take the latest of these dates, namely, the date of passing the decree, that is, the date of the judgment."

21. In the case of Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd.,(supra) this High court relying on the aforesaid judgment of Forasol vs. Oil and Natural Gas Commission (supra)in para 17 held as follows:-

"17. By analogy, under the 1996 Act, the crucial date would be the date on which the objections to the enforcement of the foreign Award are finally rejected and the foreign Award becomes enforceable as such. That is when "the award should be deemed to be a decree" under Section 49 of the 1996 Act. Therefore, under the scheme of 1996 Act, where the enforcement to the foreign Award is sought, the relevant date for conversion of the decreetal amount expressed in foreign currency into Indian Rupees would be the date of final rejection

of the objections to the enforcement of the foreign Award. In the present cases, that date is undoubtedly 30th August 2012, the date on which the SLPs filed by the JD were finally dismissed by the Supreme Court. It was then, in terms of Section 49 of the 1996 Act, that both the foreign Awards became enforceable and were deemed to be decrees."

22. There is no reason to differ with the above view taken by this High Court in the case of Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd., (supra). This court held the relevant date to be the date of dismissal of the appeal by the Supreme Court.

23. Section 49 of the 1996 Act which is the relevant provision deems a foreign award to be a decree of the court only when the court is satisfied that the foreign award is enforceable. Section 49 of the 1996 Act reads as follows:-

"49. Enforcement of foreign awards.--Where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that Court.

24. It would follow that only after objections filed by the person opposing the execution of the award are adjudicated upon by the court, and rejected, the award would become enforceable. These objections would be filed under Section 48 of the 1996 Act. In view of the above there is no merit in the contentions of the judgment debtor claiming that the date of the Award is the relevant date. In the present case the date would be date of dismissal of the appeal by the Supreme Court.

25. The judgment debtor has taken various objections arguing that the relevant date should be the date of the Award. I will deal with the said objections.

26. The objection of the judgment debtor that the judgment of this High

Court in the case of Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd. (supra) is per incuriam, is a contention without merits. In the judgments of the Supreme Court with the same title namely Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd. (2001) 6 SCC 356 and Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd. (2011) 8 SCC 333, the Supreme Court had reiterated that the Award itself would be deemed to be a decree of the Court. This proposition does not, in any way, change the fact that decree becomes executable only after the objections under Section 48 of the 1996 Act are finally adjudicated upon and thereafter in case of rejection of the same the Award becomes enforceable under Section 49 of the said Act.

27. There is also no merit in the second contention of the judgment debtor that at best, if the arguments of the decree holder are accepted, it is the date when the objection under Section 48 of the 1996 Act were dismissed by this Court, that would be the relevant date namely, 9.02.2012. Against the said order dated 9.02.2012, the judgment debtor had filed an appeal before the Supreme Court which was finally disposed of on 8.07.2013. It is only thereafter that the Award became enforceable as envisaged under Section 49 of the 1996 Act.

28. In fact, a perusal of the order of this Court dated 8.08.2012 would show that the Supreme Court had passed certain interim orders. Hence the judgment debtor could not execute the Award at that stage. It is only after the disposal of the appeal by the Supreme Court that the amount deposited in the Court was directed to be released to the decree holder on 23.09.2013.

29. There is also no merit in the next submission of the judgment debtor that the relevant date would at best be 9.2.2012, as in the pleadings, written submissions and calculations as filed on affidavit, the decree holder has only sought the date of conversion for calculation of rupee equivalent as on

9.02.2012. The learned counsel for the decree holder has explained that all these pleadings which are being referred to by the judgment debtor were filed before the judgment of the Supreme Court dated 8.07.2013.

30. Accordingly, I hold that the relevant date for calculation of the rupee equivalent of the Award amount to Indian rupees is 8.07.2013.

31. Second issue now is as to whether decree holder would be entitled to interest from the date of the Award till recovery of its dues. For the said purpose reliance has been placed by the decree holder on the judgment of the Supreme Court in the case of Renusagar Power Co.Ltd. vs. General Electric Co. (supra.) The court while dealing with the issue of pendente lite and future interest held as follows:-

"134. In an international commercial arbitration, like any domestic arbitration, the award of interest would fall under the following periods :

(i) period prior to the date of reference to arbitration:

(ii) period during which the arbitration proceedings were pending before the arbitrators;

(iii) period from the date of award till the date of institution of proceedings in a court for enforcement of the award;

(iv) period from the date of institution of proceedings in a court till the passing of the decree; and

(v) period subsequent to the decree till payment.

135. The interest in respect of the period covered by item (i), namely, prior to the date of reference to arbitration would be governed by the proper law of the contract and the interest covered by items (ii) and (iii), i.e., during the pendency of the arbitral proceedings and subsequent to the award till the date of institution of the proceedings in the court for the enforcement of the award would be governed by the law governing the arbitral proceedings. These are matters which have to be dealt with by the arbitrators in the award and the award in relation to

these matters cannot be questioned at the stage of enforcement of the award. At that stage the court is only required to deal with interest covered by items (iv) and (v). The award of interest in respect of these periods would be governed by lex fori, i.e., the law of the forum where the award is sought to be enforced. According to Alien Redfern and Martin Hunter "once an arbitral award is enforced in a particular country as a judgment of a court, the arbitral post-award interest rate may by overtaken by the rate applicable to civil judgments." [See : Redfern & Hunter, Law and Practice of International Commercial Arbitration, 2nd Edn., p. 406].

136. Moreover, Section 4(1) of the Foreign Awards Act lays down that the foreign award shall, subject to the provisions of this Act, be enforceable in India as if it were an award made on a matter referred to arbitration in India. The provisions of the Arbitration Act, 1940 would, therefore, apply in the matter of enforcement of awards subject to the provisions of the Foreign Awards Act. With regard to interest, the following provisions, is made in Section 29 of the Indian Arbitration Act :

"INTEREST OF AWARDS - Where and in so far as award is for the payment of money the Court may in the decree order interest, form the date of the decree at such rate as the Court deems reasonable, to be paid on the principal sum as adjudged by the award and confirmed by the decree."

137. Unlike Section 34 of the CPC, whereunder the Court can award interest for the period of pendency of the suit as well as for the period subsequent to the decree till realisation, Section 29 of the Arbitration Act empowers the court to award interest from the date of decree only. It has, however, been held that while passing a decree in terms of the award, the Court can award interest for the period during which the proceedings were pending in the court, i.e., the period from the date of institution of proceedings for the enforcement of the award in the court till the passing of the decree in case arising after the Interest Act, 1978." (See: Gujarat Water Supply & Sewerage Board s. Unique Evictions (Gujarat) (P) Ltd. (1989) 1 SCC 532).

32. The above judgment of the Supreme Court has relying on Section 4(1) of the Foreign Awards Act, section 29 of the Indian Arbitration Act 1940 and based on observations of the Supreme Court arising in the case of Gujarat Water Supply & Sewerage Board v. Unique Erectors (Gujarat) (P) Ltd. & Anr., held that the Court would have powers to grant interest for the period after the date of institution of the proceedings in court. Learned counsel for the decree holder has argued that Part II of the 1996 Act is pari materia to the Foreign Award Act and hence the judgment of the Supreme Court in the above case will still hold the field.

33. The legal position that stands today is that under section 85 of the 1996 Act, the Indian Arbitration Act, 1940 and the Foreign Award 1961 is repealed.

34. If we see the 1996 Act the only provision that deals with post award interest is section 31(7). The same stipulates that unless the award otherwise directs, where the award is for payment of money it shall carry interest @ 18% per annum from the date of the award to the date of payment. This section is placed in part I of the said 1996 Act.

35. The constitution bench of the Supreme Court in the case of Bharat Aluminium Company vs. Kaiser Aluminium Technical Services, 2012 (9) SCC 552, held that there is no overlapping or intermingling of the provisions contained in part I and the provisions contained in part II of the Arbitration and Conciliation Act, 1996. Para 194 of the above said judgment reads as follows:-

"194. In view of the above discussion, we are of the considered opinion that the Arbitration Act, 1996 has accepted the territoriality principle which has been adopted in the UNCITRAL Model Law. Section 2(2) makes a declaration that Part I of the Arbitration Act, 1996 shall apply to all arbitrations which take place within India. We are of the considered opinion

that Part I of the Arbitration Act, 1996 would have no application to International Commercial Arbitration held outside India. Therefore, such awards would only be subject to the jurisdiction of the Indian courts when the same are sought to be enforced in India in accordance with the provisions contained in Part II of the Arbitration Act, 1996. In our opinion, the provisions contained in Arbitration Act, 1996 make it crystal clear that there can be no overlapping or intermingling of the provisions contained in Part I with the provisions contained in Part II of the Arbitration Act, 1996."

36. In view of the said legal position Section 31(7) of the 1996 Act which falls in Part I of the Act cannot be made applicable to Foreign Awards. Part II of the Act deals with Foreign Awards. Part II of the 1996 Act has no provision regarding interest to be awarded for the period from the date of the award till payment on the analogy of section 31(7) of the said Act.

37. In the case of Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd.(supra) the Supreme Court held that the 1996 Act is a self contained code and only such acts as are mentioned in the Act are permissible to be done. Para 89 of the said judgment reads as follows:-

"89. It is, thus, to be seen that Arbitration Act 1940, from its inception and right through 2004 (in P.S. Sathappan) was held to be a self-contained code. Now, if Arbitration Act, 1940 was held to be a self-contained code, on matters pertaining to arbitration, the Arbitration and Conciliation Act, 1996, which consolidates, amends and designs the law relating to arbitration to bring it, as much as possible, in harmony with the UNCITRAL Model must be held only to be more so. Once it is held that the Arbitration Act is a self-contained code and exhaustive, then it must also be held, using the lucid expression of Tulzapurkar, J., that it carries with it "a negative import that only such acts as are mentioned in the Act are permissible to be done and acts or things not mentioned therein are not permissible to be done". In other words, a Letters Patent Appeal would be excluded by application of one of the general principles that where the special Act sets out a self-contained

code the applicability of the general law procedure would be impliedly excluded."

38. This High Court in the case of Jindal Exports Ltd. Vs. Fuerst Day Lawson Ltd., MANU/TE/3204/2009 held that this Court has no powers to award interest in the case of a foreign award. The Court was of the opinion that a Court dealing with the enforcement and execution of a foreign award has no power to go behind the awards. Para 67 of the said judgment reads as follows:-

"67. As far as Mr.Kumar's prayer for grant of interest is concerned, I am of the view that I have no power to award interest as I am only enforcing a foreign award. In my opinion, a Court dealing with enforcement and execution of a foreign award has no power to go behind the awards. Accordingly, Mr.Kumar's prayer for award of interest is rejected."

39. Against the above order of this Court a special leave petition was filed being SLP No.11945/2010. However, the parties compromised as recorded in the order dated 13.12.2012 of the Supreme Court.

40. Hence, the 1996 Act does not permit this Court to grant interest from the date of commencement of the proceedings till recovery. In any case, this High Court has already settled this legal position and I am bound by the same. The above view has also been taken by the Bombay High Court in the case of Toepfer International Asia Pvt. Ltd. vs. Thapar Ispat Limited, AIR 1999 Bombay 417.

The Andhra Pradesh High Court in the case of International Investor KCSC vs. Sanghi Polyesters Ltd. 2002(5) ALD 647 however took the view that in view of Section 31(7) of the 1996 Act the legal position as elaborated by the Supreme Court in the case of Renusagar Power Co.Ltd. vs. General Electric Co., (supra) would continue to apply.

However, in view of the judgment of the Supreme Court in the case of Bharat Aluminium Company vs. Kaiser Aluminium Technical Services, 2012 (9) SCC 552 (supra) the said judgment may not be the correct law now.

41. I would however like to note the observations of the Bombay High Court in the present background passed in the case of Toepfer International Asia Pvt. Ltd. vs. Thapar Ispat Limited (supra). The Court held that under the 1996 Act it is not open for the Court to make an order for interest. The Court further noted that this was a serious lacunae in the Act inasmuch as the parties who succeed in the claim would be put to great loss due to delay and it would put a premium to dishonest objections to the award which are meant to delay execution without risk of incurring charges.

42. In view of the said legal position, I decline grant of any interest to the decree holder for the period sought for.

43. In view of the above whatever additional amount the judgment debtor has to pay pursuant to observations made by this Court may be deposited by the Judgment Debtor in Court within six weeks from today. The decree holder may seek release of the said amount thereafter.

44. The issue of interest on the fixed deposit made by the judgment debtor also remains undecided. Pursuant to interim orders passed, the judgment debtor had deposited in Court a sum of `6,49,76,539/- in terms of Order dated May 18, 2012. That amount was directed to be kept in a Fixed Deposit. This amount was directed to be released to the decree holder vide order dated September 23, 2013 but the interest thereon was retained by the Court. There is no reason to retain the said interest. It is in the interest of justice that the said interest amount be released to the decree holder.

45. The matter would now stand adjourned to 20.07.2014.

JAYANT NATH (JUDGE) MAY 29, 2014 rb/raj