Union Of India v. Atul Dhanotia
02.02.2022 Ct. No.21 A&N-1 ab Calcutta High Court (Circuit Bench at Port Blair) Appellate Side C.O. 1 of 2022 Union Of India -VersusAtul Dhanotia.
(Through Video Conference) Mr. Shatadru Chakraborty, Mr. Ramendu Agarwal, ...for the Petitioner The petitioner files affidavit of service along with a Xerox copy of the notice with postal receipt and track report. The track report does not disclose due service of notice on the opposite party. However, the revisional application is taken up for hearing. The petitioner/Union of India being aggrieved by the order of payment of Rs.3,11,452/- by 12th January, 2022 towards full satisfaction of the Execution Case passed by the learned Additional District Judge, North & Middle Andaman, Mayabunder in connection with the Money Execution Case No. 1 of 2019 on 28.12.2021 has filed the present application under Article of the constitution of India The facts necessary for determination of the present case in gist is that the Executive Engineer of Zilla Parishad of A & N Islands invited a tender for
construction of rural road from D.N. Bairagi's house towards Manindra Barai's house along with a big culvert at Tagapur-8, in Mayabunder. The opposite party being the lowest bidder, his bid was accepted and finally the work was awarded to the opposite party on 17.11.2005.
Unfortunately, the opposite party could not complete the said work even in four years, though payment of substantial amount was made in terms of the tender. The culvert constructed by the opposite party collapsed in the year 2008. Then dispute and differences arose between the parties. Enquiry was started against the opposite party. The contract allotted to the opposite party was rescinded on 01.08.2013.
The opposite party instead of participating in the enquiry proceeding filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 being AP No. 004 of 2014 before the Hon'ble High Court. Such application of the opposite party was allowed and learned Advocate Mr. Tapan Kumar Das was appointed as a sole Arbitrator to adjudicate the dispute between the parties within a period of 3 months from the date of order passed on 30.11.2015. Unfortunately, the sole Arbitrator could not complete the Arbitration Proceeding within the time frame of 3 month. Therefore, the opposite party filed C.A.N. No.
063 of 2016 in A.P. No. 004 of 2015 for substitution of learned sole Arbitrator. Such application was disposed of on 10.06.2016 with a direction to the sole Arbitrator already appointed to strictly adhere to the time limit and rejected the prayer for appointment of fresh Arbitrator. Thereafter, opposite party abandoned to take part in the Arbitral Proceeding. In the meantime the mandate of sole Arbitrator was expired and despite the mandate being expired, the learned sole Arbitrator proceeded to pass an award on 26.01.2017 directing the petitioner to pay a sum of Rs.20,27,221/- to the opposite party within three months from the date of award.
Being aggrieved by such award the petitioner filed an application under Section 34 of the Arbitration Act, 1996 on 18.09.2019, but the same was rejected on the very day being bared by limitation in terms of Section 34(3) of the Arbitration and Conciliation Act, 1996.
Being aggrieved by such order the petitioner preferred an appeal being F.M.A. No. 004 of 2019. The Hon'ble Division Bench of this Court dismissed the appeal on 02.12.2019 on the ground of limitation.
Being aggrieved by the order of dismissal passed by the Hon'ble Division Bench the petitioner
preferred Special Leave Petition viz. SLP(C) No. 29394 of before the Hon'ble Supreme Court.
Unfortunately, the said Special Leave Petition was dismissed on January, 5, 2022 upholding that the application under Section 34 is bared by limitation. However, the petitioner alleged that the award dated 26th January, 2017 was not decided on merit by any of the Courts. Award was upheld only just because the petitioner has failed to challenge the award within the prescribed period of limitation. In the meantime the opposite party/award holder filed an Money Execution Case No. 1 of 2019 before learned Additional District Judge, North & Middle Andaman, for a sum of rupees 26,12,727/-. On filling such Execution Case the petitioner made several applications seeking permission to make payment of awarded sum of Rs.20,27,221/- on 10.12.2019, 05.02.2021 and 12.07.2021 but its prayers were turned down by the learned Court below. Ultimately, the petitioner had to deposit of Rs. 26,12,727/- with the Registrar High Court, Calcutta, Circuit Bench at Port Blair on 18.11.2021.
In the meantime property of the petitioner was attached and to release the attached property the petitioner was directed to make further deposit of Rupees 5 lakh by learned ADJ, North & Middle Andaman, Mayabunder.
It has been alleged that by passing the impugned order the learned Court below has further directed it to pay additional sum of rupees 3,11,452/- to the opposite party towards full satisfaction of the Execution Case.
The learned advocate for the petitioner submits award passed by the Arbitrator is like a Money Decree and in view of the provision of order 21 Rule 1 of Civil Procedure Code, the petitioner who has deposited cheque of Rs.20,27,221/- with the Court below on three different dates and which the Court below refused to accept is not bound to pay interest on the awarded sum. The petitioner is liable to pay interest, if any, from the date of award till payment and not after payment. The petitioner submitted cheque no. 018855 dated 18.11.2021 for Rs.
26,12,727 on 18.11.2021 and which was accepted by the Court and paid another sum of Rs. 5 lakh vide cheque no. 018857 on 06.12.2021. Therefore, he alleged the impugned order suffers from illegality as petitioner has been directed to make payment of interest after deposited of the awarded sum with interest.
Perused the award dated 26.01.2017 which has reached its finality whether on merits or not shows award was passed in respect of sum of Rs.
20,27,221/- and towards full and final settlement.
The award is silent regarding the interest to be paid by the award debtor on the awarded sum till payment. Section 31(7)(b) of the Arbitration and Conciliation Act, 1996 clearly provides "a sum directed to be paid by an Arbitral Award shall, unless the award otherwise directs, carry interest at the rate of 18% per annum from the date of the award to the date of payment."
Therefore, even if the award is silent in regard to post-award interest, the claimant will be entitled to post-award interest at the higher rate of 18% per annum. Thus, the opposite party award holder is entitled to get interest at the rate of 18 % per annum on the awarded sum from 27.01.2017 till 10.12.2019 as petitioner appears to have tendered the awarded sum on that day in the Court through cheque and which the Court has refused to accept. For the refusal of the Court, the petitioner the award debtor cannot be saddle with extra liabilities of post-award interest. This Court holds the petitioner is liable to pay interest at the rate of 18 % from the date of award 27.01.2017 till first tender of cheque of 20,27,221 on 10.12.2019 before the Court below that is for 699 days. On calculation interest comes to Rs. 6,98,808.07/- . The petitioner is liable to pay in total Rs27,26,029.07/-.
In the present case the petitioner has already paid Rs.26,12,727/- on
18.11.2021 and another Rs. 5 lakh on 06.12.2021 which the opposite party has already withdrawn. Therefore, this Court hold that the petitioner has no further liability to make payment of post-award interest towards the full satisfaction of the award as ordered by the learned Court below. The impugned order is hereby set aside. Execution Case No. 1 of 2019 pending before the learned Additional District Judge, North & Middle Andaman, Mayabunder stands disposed of on full satisfaction.
Accordingly, C.O. 1 of 2022 is allowed.
Interim award, if any, stands discharged.
There will be no order as to costs.
All parties are directed to act on a server copy of this order duly downloaded from the official website of this Court.
Urgent Photostat certified copies of this order, if applied for, be given to the parties upon compliance of all requisite formalities.
(Kesang Doma Bhutia, J.)