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Friday, October 2, 2015

Whether once the amount is deposited in Court, there is no liability to pay interest in terms of the award.=“The word 'payment' may have different meaning in different context but in the context of Section 37(1)(b); it means extinguishment of liability arising under the award. It signifies satisfaction of the award. The deposit of the award amount into the Court is nothing but a payment to the credit of the decree-holder. In this view, once the award amount was deposited by the appellants before the High Court on May 24, 2001, the liability of post-award interest from May 24, 2001 ceased. The High Court, thus, was not right in directing the appellants to pay the interest @18% p.a. beyond May 24, 2001.” In the present case, we find that the amount was to be deposited in a Fixed Deposit at the request made by the respondent and it is not seen that the respondent has made any request before the High Court for withdrawal of the amount deposited as per the directions by the High Court. However, it is submitted that the appellants have not deposited the full amount in terms of the award. In the above facts and circumstances of the case, we are of the view that the appellants shall be entitled to interest as per award from the date of award till the principal amount was deposited in the High Court on 03.03.2003. From the said date of 03.03.2003 till it was withdrawn, the respondent shall be entitled only to the interest accrued on the principal amount in terms of the Fixed Deposit made as per the direction by the High Court. However, the respondent shall be entitled to the interest in terms of the award on the balance of the award amount which the appellants failed to deposit in Court, as per the award. The impugned Judgment of the High Court is modified to the above extent. The Civil Appeals are disposed of with no order as to costs.

                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                     CIVIL APPEAL NOS.8077-8079 OF 2015
           [@ SPECIAL LEAVE PETITION (C) NO. 36013-36015 OF 2013]

      U.O.I & ANR                                 Appellant(s)

                                VERSUS

M.P TRADING & INVESTMENT RAC. CORP.
LTD              Respondent(s)

                               J U D G M E N T

      Leave granted.
      The sole dispute in these cases is  with  regard  to  the  payment  of
interest when the proceedings  under  Section  34  of  the  Arbitration  and
Conciliation Act, 1956 were pending before the  High  Court.   In  the  case
before us, we find that the  award  was  passed  on  02.03.2001.   When  the
matters were pending before the High  Court,  there  was  a  direction  vide
order dated 04.02.2003 to deposit  the  Principal  amount  before  the  High
Court.  The amount was deposited  on  03.03.2003.   Subsequently,  by  order
dated 22.05.2003, the High Court, on the request  made  by  the  respondent,
directed the Court deposit to be made as a Fixed Deposit  in  a  nationalist
bank.  Ultimately, the  objections  were  rejected  on  02.06.2006  and  the
appeal thereon was also dismissed on 27.09.2006.  Placing  reliance  on  the
decision of Himachal Pradesh Housing and  Urban  Development  Authority  and
Anr. Vs. Ranjit Singh Rana reported in (2012) 4 SCC 505, it is contended  by
the learned counsel appearing for the appellants that  once  the  amount  is
deposited in Court, there is no liberty to pay  interest  in  terms  of  the
award.
      Paragraph 15 of the Judgment reads as under :-
“The word 'payment' may have different meaning in  different  context    but
in   the context of Section 37(1)(b); it means extinguishment  of  liability
arising under the award. It   signifies   satisfaction of  the  award.   The
deposit of the award amount into the Court is nothing but a payment  to  the
credit of the decree-holder.  In this view, once     the  award  amount  was
deposited   by   the      appellants    before    the    High    Court    on
              May 24, 2001, the liability of post-award  interest  from  May
24, 2001   ceased. The High Court, thus, was  not  right  in  directing  the
appellants to pay the interest @18% p.a. beyond May 24, 2001.”
      In the present case, we find that the amount was to be deposited in  a
Fixed Deposit at the request made by the respondent and it is not seen  that
the respondent has made any request before the High Court for withdrawal  of
the amount deposited as per the directions by the High Court.   However,  it
is submitted that the appellants have  not  deposited  the  full  amount  in
terms of the award.
      In the above facts and circumstances of the case, we are of  the  view
that the appellants shall be entitled to interest  as  per  award  from  the
date of award till the principal amount was deposited in the High  Court  on
03.03.2003.  From the said date of 03.03.2003 till  it  was  withdrawn,  the
respondent shall be entitled only to the interest accrued on  the  principal
amount in terms of the Fixed Deposit made as per the direction by  the  High
Court.
      However, the respondent shall be entitled to the interest in terms  of
the award on the balance of the award amount which the appellants failed  to
deposit in Court, as per the award.
      The impugned Judgment of the High  Court  is  modified  to  the  above
extent.  The Civil Appeals are disposed of with no order as to costs.

                                                   .......................J.
                                                             [KURIAN JOSEPH]


                                                   .......................J.
                                                               [ARUN MISHRA]

      New Delhi;
      September 28, 2015.

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