The Divisional Superintending Engineer/C Northern Railway Vs. Rajiv Rai Mehta - Court Judgment

SooperKanoon Citationsooperkanoon.com/1068406
CourtPunjab and Haryana High Court
Decided OnAug-02-2013
AppellantThe Divisional Superintending Engineer/C Northern Railway
RespondentRajiv Rai Mehta
Excerpt:
civil revision no.8208 of 2010 -1- in the high court of punjab & haryana at chandigarh civil revision no.8208 of 2010 date of decision : august 02, 2013 the divisional superintending engineer/c, northern railway ....petitioner versus rajiv rai mehta ....respondent coram: hon'ble mr.justice l.n.mittal present : mr.puneet jindal, advocate, for the petitioner mr.ps rana, advocate, for the respondent l.n.mittal, j. (oral) judgment debtor (jd) - divisional superintending engineer, northern railway has, by filing the instant revision petition under article 227 of the constitution of india, assailed order dated 10.11.2010 annexure p/3 passed by the executing court. dispute between the parties was referred to arbitrators who gave award dated 19.2.2003 thereby awarding rs 4,41,000/- in all to the respondent-contractor payable by the petitioner. in addition to the said amount, the arbitrators also awarded simple interest @ 12% per annum with tiwana dalbir singh 2013.08.05 11:14 i attest to the accuracy and integrity of this document. high court, chandigarh civil revision no.8208 of 2010 -2- effect from 1.4.1987 on the awarded amount with stipulation that if the awarded amount is not paid within 90 days from the publishing of the award, the interest shall be payable @ 18% per annum. respondent-contractor filed application under sections 14(2) and 17 of the arbitration act, 1940 (in short, the act) for making the award as rule of the court. the petitioner herein tendered bank draft for rs 12,81,920/- on 3.2.2004 which included the principal amount of rs 4,41,000/- awarded by the arbitrators with simple interest thereon @ 12% with effect from 1.4.1987 till the date of payment. the said amount was accepted by the respondent-contractor under protest. learned trial court vide order dated 15.3.2005 annexure p/1 made award rule of the court and passed decree accordingly. respondent – decree holder (dh) filed execution petition for execution of the said decree. judgment debtor-petitioner herein filed objections annexure p/2 in the execution proceedings alleging that the entire awarded amount already stood paid and nothing remained due. however, respondent – decree holder alleged that since the payment was made after expiry of 90 days from the date of award, the petitioner j.had to pay interest @ 18% per annum but has paid interest @ 12% per annum and therefore, balance amount is recoverable after calculating interest @ 18% tiwana dalbir singh 2013.08.05 11:14 i attest to the accuracy and integrity of this document. high court, chandigarh civil revision no.8208 of 2010 -3- per annum. learned executing court vide impugned order annexure p/3 has dismissed the objections of the j.and has allowed interest @ 18% per annum and has calculated the balance amount. feeling aggrieved, j.has filed this revision petition. i have heard counsel for the parties and perused the case file. counsel for the petitioner contended that the period of 90 days for paying the awarded amount with interest @ 12% per annum would have started from the date of order annexure p/1 whereby award was made rule of the court and since payment was made prior thereto, the respondent-dh is not entitled to interest at the enhanced rate of 18% per annum because there was no default on behalf of petitioner-jd. on the other hand, counsel for the respondent-dh contended that since no objection was filed against award of the arbitrators.it became enforceable on expiry of period of 30 days stipulated for filing objections and since thereafter payment was not made within 90 days, respondent is entitled to interest @ 18% per annum as rightly awarded by the executing court. before proceeding to discuss the aforesaid rival contentions, it needs mention that the arbitrators awarded only simple interest on the awarded amount of rs 4,41,000/-, but the executing court by way of tiwana dalbir singh 2013.08.05 11:14 i attest to the accuracy and integrity of this document. high court, chandigarh civil revision no.8208 of 2010 -4- impugned order has awarded compound interest @ 18% per annum. compounding of interest by the executing court in the impugned order is patently pervers.and illegal and suffers from jurisdictional error. even if the plea of respondent-dh regarding the interest @ 18% per annum is accepted, the balance amount of interest would come to about rs 4,20,000/- only and not rs 9,71,091.14 as calculated by the executing court to be due upto the date of filing of execution petition. as regards entitlement of respondent for interest at the enhanced rate of 18% per annum, the same cannot be accepted. the award became enforceable under the act only after it was made rule of court vide order dated 15.3.2005 annexure p/1 and therefore, the period of 90 days stipulated in the award, whereafter interest at enhanced rate of 18% per annum would have become payable, commenced on the date of passing of order annexure p/1 dated 15.3.2005 and since payment of the awarded amount with interest @ 12% per annum was made on 3.2.2004 i.e.long prior to the order dated 15.3.2005 annexure p/1, the respondent dh is not entitled to interest at enhanced rate of 18% per annum. contention of counsel for the respondent that the award became enforceable when no objection was filed within prescribed period of 30 days, cannot be accepted because under the act, the award, without being made rule of court and without passing of decree, was not enforceable. it became enforceable tiwana dalbir singh 2013.08.05 11:14 i attest to the accuracy and integrity of this document. high court, chandigarh civil revision no.8208 of 2010 -5- only after the award was made rule of the court vide order dated 15.3.2005 annexure p/1 and decree was passed accordingly. prior to it, the award was not enforceable. consequently, period of 90 days during which petitioner could make payment with interest @ 12% per annum commenced on 15.3.2005, the date of order annexure p/1 and since payment of the awarded amount with interest had been made long prior to it, respondent dh is not entitled to interest @ 18% per annum. impugned order of the executing court in this regard is patently illegal and suffers from jurisdictional error. there is also no material on record as to when the period for filing objections against the award expired. consequently it cannot be said that payment made on 03.02.2004 was not within period of 90 days after expiry of period for filing objections against the award. for this reason also, dh is not entitled to interest at enhanced rate of 18% per annum and contention of counsel for dh cannot be accepted. resultantly, the instant revision petition is allowed. impugned order annexure p/3 passed by the executing court is set aside. objections annexure p/2 filed by the petitioner-j.are accepted and it is held that the entire payment as per award, which has been made rule of the court vide order annexure p/1 with resultant decree, already stands made and the award and the resultant decree already stand satisfied. consequently, the execution petition filed by the respondent stands disposed of as satisfied. ( l.n.mittal ) august 02, 2013 judge 'dalbir' tiwana dalbir singh 2013.08.05 11:14 i attest to the accuracy and integrity of this document. high court, chandigarh civil revision no.8208 of 2010 -6- tiwana dalbir singh 2013.08.05 11:14 i attest to the accuracy and integrity of this document. high court, chandigarh
Judgment:

Civil Revision No.8208 of 2010 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Civil Revision No.8208 of 2010 Date of decision : August 02, 2013 The Divisional Superintending Engineer/C, Northern Railway ....Petitioner versus Rajiv Rai Mehta ....Respondent Coram: Hon'ble Mr.Justice L.N.Mittal Present : Mr.Puneet Jindal, Advocate, for the petitioner Mr.PS Rana, Advocate, for the respondent L.N.Mittal, J.

(Oral) Judgment debtor (JD) - Divisional Superintending Engineer, Northern Railway has, by filing the instant revision petition under Article 227 of the Constitution of India, assailed order dated 10.11.2010 Annexure P/3 passed by the executing court.

Dispute between the parties was referred to Arbitrators who gave award dated 19.2.2003 thereby awarding Rs 4,41,000/- in all to the respondent-contractor payable by the petitioner.

In addition to the said amount, the Arbitrators also awarded simple interest @ 12% per annum with Tiwana Dalbir Singh 2013.08.05 11:14 I attest to the accuracy and integrity of this document.

High Court, Chandigarh Civil Revision No.8208 of 2010 -2- effect from 1.4.1987 on the awarded amount with stipulation that if the awarded amount is not paid within 90 days from the publishing of the award, the interest shall be payable @ 18% per annum.

Respondent-contractor filed application under sections 14(2) and 17 of the Arbitration Act, 1940 (in short, the Act) for making the award as rule of the court.

The petitioner herein tendered bank draft for Rs 12,81,920/- on 3.2.2004 which included the principal amount of Rs 4,41,000/- awarded by the Arbitrators with simple interest thereon @ 12% with effect from 1.4.1987 till the date of payment.

The said amount was accepted by the respondent-contractor under protest.

Learned trial court vide order dated 15.3.2005 Annexure P/1 made award rule of the court and passed decree accordingly.

Respondent – decree holder (DH) filed execution petition for execution of the said decree.

Judgment debtor-petitioner herein filed objections Annexure P/2 in the execution proceedings alleging that the entire awarded amount already stood paid and nothing remained due.

However, respondent – decree holder alleged that since the payment was made after expiry of 90 days from the date of award, the petitioner J.had to pay interest @ 18% per annum but has paid interest @ 12% per annum and therefore, balance amount is recoverable after calculating interest @ 18% Tiwana Dalbir Singh 2013.08.05 11:14 I attest to the accuracy and integrity of this document.

High Court, Chandigarh Civil Revision No.8208 of 2010 -3- per annum.

Learned executing court vide impugned order Annexure P/3 has dismissed the objections of the J.and has allowed interest @ 18% per annum and has calculated the balance amount.

Feeling aggrieved, J.has filed this revision petition.

I have heard counsel for the parties and perused the case file.

Counsel for the petitioner contended that the period of 90 days for paying the awarded amount with interest @ 12% per annum would have started from the date of order Annexure P/1 whereby award was made rule of the court and since payment was made prior thereto, the respondent-DH is not entitled to interest at the enhanced rate of 18% per annum because there was no default on behalf of petitioner-JD.

On the other hand, counsel for the respondent-DH contended that since no objection was filed against award of the ArbitratORS.it became enforceable on expiry of period of 30 days stipulated for filing objections and since thereafter payment was not made within 90 days, respondent is entitled to interest @ 18% per annum as rightly awarded by the executing court.

Before proceeding to discuss the aforesaid rival contentions, it needs mention that the Arbitrators awarded only simple interest on the awarded amount of Rs 4,41,000/-, but the executing court by way of Tiwana Dalbir Singh 2013.08.05 11:14 I attest to the accuracy and integrity of this document.

High Court, Chandigarh Civil Revision No.8208 of 2010 -4- impugned order has awarded compound interest @ 18% per annum.

Compounding of interest by the executing court in the impugned order is patently perveRs.and illegal and suffers from jurisdictional error.

Even if the plea of respondent-DH regarding the interest @ 18% per annum is accepted, the balance amount of interest would come to about Rs 4,20,000/- only and not Rs 9,71,091.14 as calculated by the executing court to be due upto the date of filing of execution petition.

As regards entitlement of respondent for interest at the enhanced rate of 18% per annum, the same cannot be accepted.

The award became enforceable under the Act only after it was made rule of court vide order dated 15.3.2005 Annexure P/1 and therefore, the period of 90 days stipulated in the award, whereafter interest at enhanced rate of 18% per annum would have become payable, commenced on the date of passing of order Annexure P/1 dated 15.3.2005 and since payment of the awarded amount with interest @ 12% per annum was made on 3.2.2004 i.e.long prior to the order dated 15.3.2005 Annexure P/1, the respondent DH is not entitled to interest at enhanced rate of 18% per annum.

Contention of counsel for the respondent that the award became enforceable when no objection was filed within prescribed period of 30 days, cannot be accepted because under the Act, the award, without being made rule of court and without passing of decree, was not enforceable.

It became enforceable Tiwana Dalbir Singh 2013.08.05 11:14 I attest to the accuracy and integrity of this document.

High Court, Chandigarh Civil Revision No.8208 of 2010 -5- only after the award was made rule of the court vide order dated 15.3.2005 Annexure P/1 and decree was passed accordingly.

Prior to it, the award was not enforceable.

Consequently, period of 90 days during which petitioner could make payment with interest @ 12% per annum commenced on 15.3.2005, the date of order Annexure P/1 and since payment of the awarded amount with interest had been made long prior to it, respondent DH is not entitled to interest @ 18% per annum.

Impugned order of the executing court in this regard is patently illegal and suffers from jurisdictional error.

There is also no material on record as to when the period for filing objections against the award expired.

Consequently it cannot be said that payment made on 03.02.2004 was not within period of 90 days after expiry of period for filing objections against the award.

For this reason also, DH is not entitled to interest at enhanced rate of 18% per annum and contention of counsel for DH cannot be accepted.

Resultantly, the instant revision petition is allowed.

Impugned order Annexure P/3 passed by the executing court is set aside.

Objections Annexure P/2 filed by the petitioner-J.are accepted and it is held that the entire payment as per award, which has been made rule of the court vide order Annexure P/1 with resultant decree, already stands made and the award and the resultant decree already stand satisfied.

Consequently, the execution petition filed by the respondent stands disposed of as satisfied.

( L.N.Mittal ) August 02, 2013 Judge 'dalbir' Tiwana Dalbir Singh 2013.08.05 11:14 I attest to the accuracy and integrity of this document.

High Court, Chandigarh Civil Revision No.8208 of 2010 -6- Tiwana Dalbir Singh 2013.08.05 11:14 I attest to the accuracy and integrity of this document.

High Court, Chandigarh