S.K. Construction Co. vs New Delhi Municipal Council

Mukul Mudgal, J.—This is an execution application claiming interest u/s 31(7)(b) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the ''Act'').

The relevant portions of Section 31 read as follows :

"(7)(a). "Unless otherwise agreed by the parties, where and insofar as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.

(7)(b). A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the award to the date of payment."

A perusal of the sub-section 7(b) clearly shows that unless the arbitral award directs otherwise the amount awarded is to carry interest at the rate of eighteen per cent per annum from the date of the award to the date of payment. In this case there is no dispute that the award was passed on 13.6.1997 and the payment has been made on 25.11.1997.

In view of the clear provision of Section 37(7)(b) of the Act, the decree holder is entitled to an interest at the rate of 18% per cent per annum from the date of the award, i.e., 13.6.97 to the date of payment, i.e. 25.11.97. The said interest be paid within six weeks from today.

In view of the above, the execution application stands disposed of.