M/s Ahluwalia Contracts (I) Ltd. vs Union of India

Reva Khetrapal, J.—A very short controversy arises for resolution in this execution petition filed by the Decree Holder against the Union of India. In this case, the learned Arbitrator rendered his award on 15.05.2010, wherein on the aspect of interest, in the concluding portion of the award, it was stated as under:-

In addition to the total amount of award the interest is payable @ 18% per annum one month after date of award i.e. from 16.06.2010 till date of payment.

The admitted position is that on an application dated 04.06.2010 moved by the Judgment Debtor u/s 33 of the Arbitration & Conciliation Act, 1996 to modify the award by correction of certain computation errors which had crept into the award, the Decree Holder was requested by the Arbitral Tribunal to verify the details given by the Judgment Debtor and to send his report. The Decree Holder vide his letter dated 07.06.2010 agreed with the proposed correction on account of the clerical errors in computation referred by the Judgment Debtor and on the basis thereof, the Arbitral Tribunal ordered that the total amount of award should be read as Rs. 2,73,07,955/- instead of Rs. 2,73,07,154/-. The application dated 04.06.2010 of the respondent was disposed of with the aforesaid correction in the award on 12.06.2010. Thus, the award amount stood increased by Rs. 801/- only. Admittedly, objections to the award filed subsequently were dismissed and the amount stands paid by the Judgment Debtor to the Decree Holder. A dispute has, however, arisen between the parties in view of the fact that the Decree Holder now claims interest at the rate of 18% per annum from 16.06.2010 and not from 12.07.2010, that is, one month after the date the award was corrected.

Mr. Sushil Dutt Salwan, the Learned Counsel for the Judgment Debtor heavily relies upon the judgment of the Supreme Court in Akkayanaicker Vs. A.A.A. Kotchadainaidu and Another, to contend that the original award/decree cannot be enforced and it is only the amended decree which can be enforced. Mr. S.K. Chandwani, the Learned Counsel for the Decree Holder, on the other hand, relies upon the judgment of a learned Single Judge of this Court (Hon''ble Dr. Justice M.K. Sharma as his Lordship then was) in M/s Global Company vs. M/s National Fertilizers Ltd., 1999 A I H C 3644 to contend that the executing court cannot assume the power and jurisdiction to interpret the award or correct the mistake or error sought for by the applicant.

Having heard the counsel for the parties and considered the matter, this Court is of the view that the plea of the Judgment Debtor that interest be awarded from 12.07.2010, that is, one month after the date the award was corrected, cannot be upheld. It is not in dispute and indeed it is beyond dispute that the sum of Rs. 2,73,07,154/- was payable to the Decree Holder as per the award dated 15.5.2010. Merely because the award was corrected on the application of the Judgment Debtor made before the Arbitral Tribunal on 12th June, 2010 and the amount increased from Rs. 2,73,07,154/- to Rs. 2,73,07,955/-, it would be both inequitable and unjust to deprive the Decree Holder of interest on the amount earlier awarded and found due in favour of the Decree Holder.

Reliance placed by the counsel for Judgment Debtor in the case of Akkayanaicker (Supra) is totally misplaced as the facts in the said case were altogether different.

In the said case, a question had arisen before the Hon''ble Supreme Court as to the starting point of limitation under Article 136 of the Limitation Act, 1963, in view of the words "when the decree or order becomes enforceable" occurring in Article 136 of the Limitation Act, 1963. In the said case, the Decree Holder had filed an execution petition seeking execution of a decree dated 2.5.1973 but the execution proceedings were closed and adjourned sine die because of the legislative intervention of the Tamil Nadu Indebted Agriculturists (Temporary Relief) Ordinance, 1975 and thereafter by Tamil Nadu Indebted Agriculturists (Temporary Relief) Act, 1975 (Act 10 of 1975) and Tamil Nadu Indebted Agriculturists (Temporary Relief) Act, 1976 (Act 15 of 1976), which barred the institution of the suits or applications for execution of a decree for payment of money passed in a suit against an agriculturist for a period of one year from the date of commencement of the Act. On 18.10.1979, at the instance of the Judgment Debtor, the executing court scaled down the decree in terms of the Tamil Nadu Debt Relief Act, 1978. The Decree Holder then filed execution petition in the year 1989, which was contested by the Judgment Debtor on the ground that the execution petition having been filed after 12 years of the date of the passing of the original decree dated 2.5.1973, was time barred. Rejecting his contention, the executing court held that the amendment carried out in the decree in the present case was substantial and not inconsequential. It was the decree so amended, which became enforceable. Prior to that date, the Decree Holder could not enforce his decree because of the legislative intervention. Therefore, limitation for the enforceability of the decree would commence when the bar ceases or from the date the decree was amended or scaled down.

In the instant case, the interest on the award amount is payable from the passing of one month from the date of the original award. However, in relation to the enhanced amount under the corrected award made on the application of the Judgment Debtor, the claim for interest can only be granted from the date of the award, that is, from 12th June, 2010 and not for the period prior thereto. That being the position, the Judgment Debtor is held liable to pay interest as awarded by the learned Arbitrator on the sum of Rs. 2,73,07,154/- from 16.06.2010, that is, one month after the date of award i.e. 15.5.2010 and on the amount of Rs. 801/- from 12.07.2010, that is, one month from the date the award was corrected. The judgment debtor is directed to make the aforesaid payment by depositing the same in the Registry of this Court positively within four weeks from today. The amount on being deposited shall be released to the Decree Holder. Execution Petition stands disposed of with the aforesaid clarification.