Delhi High Court
Dda vs M/S Paragon ... on 19 January, 2015
Author: Badar Durrez Ahmed
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 19.01.2015
+ FAO(OS) 28/2015
DDA ... Appellant
versus
M/S PARAGON CONSTRUCTION(INDIA)PVT LTD... Respondent
Advocates who appeared in this case:
For the Appellant : Mr Anupam Sharma
For the Respondent : Mr Sandeep Sharma
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SANJEEV SACHDEVA
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
CM 926/2015
The delay of 4 days in filing the appeal is condoned.
This application stands disposed of.
CM 928/2015
Allowed subject to all just exceptions.
CAVEAT 67/2015
The learned counsel for the respondent/ caveator is present.
The caveat stands discharged.
FAO(OS) 28/2015 & CM 927/2015
1. The only point raised in this appeal with regard to the order dated
10.11.2014 passed in OMP 365/2010 pertains to the question of interest.
2. Earlier, an Award was made under the Arbitration Act, 1940 on
29.03.1986. That was set aside and the matter was remanded to the
Arbitrator by virtue of an order of a Division Bench of this Court dated
03.11.2009 in FAO(OS) 695/2006. On that occasion, the Arbitrator had
awarded an interest at the rate of 10% per annum. The same has been
enhanced by the learned Single Judge to 12% per annum. However, the
Award and the order passed by the learned Single Judge were set aside and
the matter was remitted to the Arbitrator, as indicated above.
3. The learned Arbitrator, on the second round, awarded the interest at
the rate of 12% per annum. The learned counsel for the appellant submits
that the rate of interest should be 10% and not 12% inasmuch as the
appellant had deposited the principal amount along with interest at the rate of
12% in April, 2007, when the matter was pending before the Division
Bench.
4. The learned counsel for the appellant submits that since the amount
had already been deposited in Court, the rate of interest should not be
enhanced to 12% and the appropriate rate of interest should be 10% per
annum.
5. The learned counsel for the respondent submitted that, although the
principal amount, along with interest at the rate of 12%, was deposited in
April, 2007 during the pendency of the matter before the Division Bench, the
same was not allowed to be withdrawn by the respondent and, therefore, the
respondent did not have the advantage of the said sum at any point of time.
6. We would like to point out the observations of the Supreme Court in
the case of P.S.L. Ramanathan Chettiar and Others v. O. Rm. P. Rm.
Ramanathan Chettiar: (1968) 3 SCR 367, wherein the Supreme Court
observed as under:-
"12. On principle, it appears to us that the facts of a judgment-
debtor's depositing a sum in court to purchase peace by way of
stay of execution of the decree on terms that the decree-holder
can draw it out on furnishing security, does not pass title to the
money to the decree-holder. He can if he likes take the money
out in terms of the order; but so long as he does not do it, there
is nothing to prevent the judgment-debtor from taking it out by
furnishing other security, say, of immovable property, if the
court allows him to do so and on his losing the appeal putting
the decretal amount in court in terms of Order 21 rule 1 C.P.C.
in satisfaction of the decree.
13. The real effect of deposit of money in court as was done
in this case is to put the money beyond the reach of the parties
pending the disposal of the appeal. The decree-holder could
only take it out on furnishing security which means that the
payment was not in satisfaction of the decree and the security
could be proceeded against by the judgment-debtor in case of
his success in the appeal. Pending the determination of the
same, it was beyond the reach of the judgment-debtor.
14. The observations in Chowthmull's case I.L.R. 51 Cal.
1010 do not help the respondent. In that case, the appeal was
not proceeded with by the Official Assignee. Consequently, the
decree-holder could not be deprived of the money which had
been put into court to obtain stay of execution of the decree as
but for the order, the decree-holder could have levied execution
and obtained satisfaction of the decree even before the disposal
of the appeal.
15. The last contention raised on behalf of the respondent
was that at any rate the decree-holder cannot claim any amount
by way of interest after the deposit of the money in court. There
is no substance in this point because the deposit in this case was
not unconditional and the decree-holder was not free to
withdraw it whenever he liked even before the disposal of the
appeal. In case he wanted to do so, he had to give security in
terms of the order. The deposit was not in terms of Order 21
rule 1 C.P.C. and as such, there is no question of the stoppage
of interest after the deposit."
(underlining added)
Since the respondent was not at liberty to withdraw the said amount, which
was deposited before the Division Bench, the same cannot be regarded as
payment in satisfaction of the decree and, therefore, the appellant would be
liable to pay interest.
7. The learned counsel for the appellant referred to the decision of the
Supreme Court in Krishna Bhagya Jala Nigam Ltd. v. G. Harischandra
Reddy and Another: (2007) 2 SCC 720 and, in particular, to paragraph 11
thereof, which reads as under:-
"11. On the merits of the claims made by the contractor we find
from the impugned Award dated 25.6.2000 that it contains
several Heads. The Arbitrator has meticulously examined the
claims of the contractor under each separate Heads. We do not
see any reason to interfere except on the rates of interest and on
the quantum awarded for letting machines of the contractor
remaining idle for the periods mentioned in the Award. Here also
we may add that we do not wish to interfere with the Award
except to say that after economic reforms in our country the
interest regime has changed and the rates have substantially
reduced and, therefore, we are of the view that the interest
awarded by the Arbitrator at 18% for the pre-arbitration period,
for the pendente lite period and future interest be reduced to 9%."
According to the learned counsel for the appellant, the rate of interest should
likewise be reduced in the present case. We see no merit in the contention
raised by the learned counsel for the appellant inasmuch as we agree with the
finding of the learned Single Judge that the rate of 12% per annum is a
reasonable rate and is not so outlandish or high pitched as a rate of interest of
18% would be.
8. Accordingly, we see no reason to interfere with the impugned order
passed by the learned Single Judge. The appeal is dismissed.
BADAR DURREZ AHMED, J
JANUARY 19, 2015 SANJEEV SACHDEVA, J
SR
