Delhi High Court
Adidas India Marketing Pvt. Ltd. vs Hicare India Properties Pvt. Ltd. on 5 October, 2015
$~5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Decided on: 05.10.2015
+ FAO(OS) 262/2013
ADIDAS INDIA MARKETING PVT LTD. ..... Appellant
Through: Mr Niraj Singh and Ms Jyoti
Nagpal, Advs.
versus
HICARE INDIA PROPERTIES PVT LTD. ..... Respondent
Through: Mr Shoeb Alam, Mr Santosh
Kumar and Mr Ujjwal Singh, Advs.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MS. JUSTICE DEEPA SHARMA
MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)
%
CM No.11128/2015 (for release of amounts)
1. The report of the Registrar containing ordersheet dated
07.08.2015 reflects the amounts lying deposited in the Court. As per
the Registrar's order, the principal amount to be re-paid is
`74,70,210/- to the agreement of the parties. The dispute that arises
now is as to the payment of interest. The applicant's submission is
that the award directed payment of interest at 12% on the principal
amount of ` 74,70,210/- from 01.04.2009 till date of award, i.e.,
31.11.2010 and future interest at 12%. As such the entire amounts
lying in the Registry should be made over to the applicant. According
to the appellant/non-applicant, interest is payable only till time of
FAO(OS) 262/2013 Page 1
deposit in the Court and any amount in excess of ` 1,20,88,761/- (the
aggregate of (i) the principal amount with interest till the date of the
award i.e. ` 88,89,550/- (ii) future interest for the period from
01.12.2010 to 19.08.2013 being the time of actual deposit i.e., `
28,99,211/- and (iii) costs of ` 3,00,000/-).
2. It is submitted on behalf of the appellant/non-applicant that on
the deposit of the amount in the Court Registry, the appellant/non-
applicant's liabilities ceased and future interest must only be
calculated until the date of deposit. In support of this contention,
learned counsel relied upon the observations of the Supreme Court in
Himachal Pradesh Housing and Urban Development Authority and
Another vs. Ranjit Singh Rana (2012) 4 SCC 505. The Supreme
Court, inter alia, noticed the meaning of the term "payment" and held
that though it might be capable of different connotations, it essentially
means extinguishment of the liability and in that case, it meant
extinguishment of liability arising under an award and signified its
satisfaction. The Supreme Court, therefore, held that deposit of
amount in Court signified payment and in that sense, further liability
to pay interest ceased. Learned counsel for the applicant, on the other
hand, contended that the amounts over ` 1,20,88,781/- cannot be
termed as excess. It is stated that the deposit in Court would not, in
any way, curtail or limit the judgment debtor's liabilities. Learned
counsel relied upon a previous ruling of larger Bench of three Judges
in P.S.L. Ramanathan Chettiar vs. O.Rm.Pm. Ramanathan Chettiar
(1968) 3 SCR 367, where it was held that the deposit of money in
Court effectively puts it beyond the reach of the parties and that this
FAO(OS) 262/2013 Page 2
would not, in any way, amounts to satisfaction. The counsel also
relied upon the previous Division Bench judgment of this Court in
M/s Engineering Projects (India) Limited vs. Arvind Construction
Company Limited (EFA (OS) No.4/2008, decided on 29.05.2009).
3. The narrow issue which this Court has to decide--as is evident
from the above discussion--is whether the entire amounts lying in
Court are to be handed over to the applicant, i.e., the successful party.
It is not in dispute that the said party succeeded in arbitration
proceedings as well as in the proceedings before the learned Single
Judge under Section 34 of the Arbitration and Conciliation Act. It was
only with a view to suspend the appellant/non-applicant's liabilities
during the pendency of the appeal that the Court directed deposit of
the amounts due till then. The amounts clearly were not made
available to the respondent/Decree Holder. Under the Act, the award
itself has the force of the decree. The unsuccessful party aggrieved by
the award has a right to approach the Court in which event by virtue
of Section 36, the right of the successful party to insist upon its
compliance is suspended for the duration of pendency of such
application. In the present case, there is no dispute that the
petition/application under Section 34 was finally decided on
27.02.2013. The appellant/non-applicant had not even made any
payment to the respondent till then. It is only as a condition for the
admission of this appeal that the appellant deposited the amounts
directed. We see no force in the submission of the appellant that the
ruling in P.S.L. Ramanathan Chettiar (supra) was in a different
FAO(OS) 262/2013 Page 3
context, i.e., in execution proceedings. The observations in that
judgment are to the following effect:-
"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 CPC 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.
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 CPC and as such, there is no question of the
stoppage of interest after the deposit."
FAO(OS) 262/2013 Page 4
4. Likewise, in M/s Engineering Projects (India) Limited
(supra), although the context was in execution proceeding, the Court
followed the ruling in P.S.L. Ramanathan Chettiar (supra). In both
these cases, the deposits were made during the pendency of an appeal
at an earlier stage. Per se, the deposits were not made in execution
proceedings. Furthermore, there is no dispute that the respondent, i.e.,
the successful party was deprived of the use of the money. No comfort
is derived from the fact that it might have applied and been allowed to
withdraw the amount subject to further conditions, such as furnishing
of security or bank guarantee. In these circumstances, we are of the
opinion that there is no merit in the non-applicant's contentions. The
entire amounts lying in the Court shall be made over to the
respondent/applicant by the Registry.
The application is allowed in above terms.
S. RAVINDRA BHAT
(JUDGE)
DEEPA SHARMA
(JUDGE)
OCTOBER 05, 2015
BG
FAO(OS) 262/2013 Page 5
