Delhi High Court
Delhi Development Authority vs Prem Chand Sharma & Co on 22 November, 2016
$~28
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ EX.P. 123/2012
DELHI DEVELOPMENT AUTHORITY ..... Decree Holder
Through Mr Pawan Mathur, Advocate Standing
Counsel for DDA.
versus
PREM CHAND SHARMA & CO ..... Judgement Debtor
Through Mr Sandeep Sharma, Advocate with
Mr Amit Choudhary, Advocate.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 22.11.2016
VIBHU BAKHRU, J
1. The Delhi Development Authority (hereafter „DDA‟) has filed the
present petition for execution of the order dated 20.01.2009 passed by a
Division Bench of this Court whereby the Judgment Debtor (hereafter 'JD')
was directed to refund the excess amount paid by DDA in satisfaction of an
arbitral award. The said order of the Division Bench was subsequently
modified by an order dated 17.04.2009 passed by the Supreme Court (in
SLP (C) 8289/2009) and the time for making the payment was extended for
a further period of eight weeks from the date of the order.
2. The short question that arises for consideration is whether the JD is
liable to pay interest for the period 11.03.2005 to 05.06.2009 on the part
payment admittedly made within the time as extended by the Supreme
Court.
3. Briefly stated the relevant facts necessary to address the controversy
are as under:-
3.1. Certain disputes had arisen between the parties which were
adjudicated by a sole arbitrator, Mr M.S. Bhatia, who conducted the
arbitration proceedings under the Arbitration Act, 1940 and rendered the
arbitral award dated 27.03.1991 (hereafter 'the award'). DDA being
aggrieved by the same filed objections against the award under Section 30
and 33 of the Arbitration Act 1940. The said objections were disposed of by
this Court by a judgment dated 04.02.2005 (in CS (OS) 1326/1991) and the
award as modified was made the rule of court.
3.2. In terms of the said judgment dated 04.02.2005, DDA was liable to
pay the amount awarded along with pendente lite interest @ 18% per annum
from the date of the arbitrator entering upon the reference till the date of the
award.
3.3. The aforesaid decision dated 04.02.2005 was carried in appeal by the
DDA before a Division Bench of this Court in FAO (OS) 122/2005. The
Division Bench disposed of the aforesaid appeal by a judgment dated
20.01.2009 upholding the decision of the Single Judge but modifying the
rate of interest from 18% per annum to 12% per annum. Consequent to
reduction of interest, certain sums were refundable by the JD to the DDA as
DDA had already paid the amount in accordance with the decision of the
Single Judge. The relevant extract from the decision of the Division Bench
is set out below:-
"The award is modified and the quantum of interest is
reduced to 12% p.a. Learned Counsel for the respondent
states that the entire payment in terms of decree was made
three years ago along with interest @ 18% p.a.
Consequently, due to the lowering of rate of interest from
18% p.a. to 12% p.a. the respondent would now be liable to
refund the difference in the interest amount. In the interests of
justice, we direct that in case the respondent refunds the
excess amount within a period of 60 days, the respondent
shall not be liable to pay any interest on the amount to be
refunded. However, in case, the said payment is not made,
the respondent shall refund the amount with interest at the
rate of 12% p.a. from the date of receipt of the amount by the
respondent till realization."
3.4. Admittedly, a sum of `19,60,704/- was paid in excess by DDA to the
JD and the same was liable to be refunded in terms of the order passed by
the Division Bench on 20.01.2009.
3.5. The JD filed a Special Leave Petition against the aforesaid decision of
the Division Bench, which was rejected by the Supreme Court by an order
dated 17.04.2009. However, the Supreme Court extended the time for
making the refund by a further period of eight weeks from the date of its
order.
3.6. The JD made a payment of `14,86,275/- on 06.06.2009 and thereafter,
made a further payment of `9,95,552/- on 07.06.2014.
4. According to DDA, since the payment of `14,86,275/- made by the
JD on 06.06.2009 was only a part payment, the JD would be liable to pay
interest on the sum of `19,60,704/- (the sum admittedly paid in excess by
DDA). In terms of the order passed by the Division Bench, the said sum was
to be refunded within a period of two months from the date of the order
passed by the Supreme Court, that is, 17.04.2009 failing which the JD was
liable to pay interest @ 12% per annum. It is not disputed that the sum of
`14,86,275/- was paid within the aforesaid period. However, DDA claims
that since the entire sum of `19,60,704/- was not paid by the JD within the
time specified, the JD would be liable to pay interest @ 12% per annum on
the entire sum of `19,60,704/- even though it had made a substantial
payment of `14,86,275/- within the specified period.
5. The learned counsel appearing for the JD submits that there is no
dispute that if the excess amount paid was not refunded within the time as
granted by the Supreme Court, the JD would be liable to pay interest on the
said sum from 11.03.2005 till the date of payment. However, he submits
that since the sum of `14,86,275/- was paid within the prescribed period, at
least to that extent no interest would run. He, however, does not dispute that
for the balance amount not paid within the specified time, the JD would be
liable to pay interest from 11.03.2005 upto the date of payment.
6. In view of the above, the controversy is limited to considering the
question, whether the JD would be liable to pay interest for the period from
11.03.2005 to 05.06.2009 even on the sum of `14,86,275/- which was paid
by the JD within the prescribed time.
7. The Division Bench had granted the JD 60 days time to refund the
amount failing which the JD would be liable to pay interest at the rate of
12% per annum. This period was extended by the Supreme Court by a
further period of eight weeks from 17.04.2009. The entire object of the said
direction was to incentivise the JD to refund the amounts to DDA within the
period of 60 days. It is also necessary to bear in mind that the question of
refund had arisen only on account of the Division Bench reducing the rate of
interest decreed by the Single Judge from 18% to 12%. Thus, in my view,
the order dated 20.01.2009 must be interpreted to mean that to the extent,
the JD refunds the sum within the prescribed period it would not be liable to
pay any interest. This is the only reasonable interpretation possible because
to hold otherwise would mean that the JD would be liable to pay interest
even if a single rupee was not paid within the specified time. As indicated
above, the object of the direction issued by the Division Bench was to
incentivise the JD to refund the excess payment expeditiously and not to
inflict a punitive measure.
8. Since the JD had admittedly paid the sum of `14,86,275/- within the
time prescribed by the Division Bench (as extended by the Supreme Court),
no interest on the said sum is payable by the JD. However, to the extent that
the JD did not refund the aforesaid amount, that is, a sum of `4,74,429/-
(`19,60,704/- less `14,86,275/-), the JD would be liable to pay interest from
10.03.2005 (the date on which excess payment had been made by the DDA)
till the date of payment.
9. The JD had made a payment of `9,95,552/- on 07.06.2014 (by a
cheque dated 21.04.2014) and, admittedly, the sum includes the principal
amount of `4,74,429/- plus interest on the said amount from 11.03.2005 till
the date of payment.
10. It is not disputed that if no interest is payable on `14,86,275/- as has
been held above - no further sum is payable to DDA. The learned counsel
for the JD also confirms that no sum is due from DDA.
11. In view of the above, no further orders are required to be passed in
this petition. The same is, accordingly, disposed of.
VIBHU BAKHRU, J
NOVEMBER 22, 2016
pkv
