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Tuesday, July 12, 2016

whether the rate of interest awarded by the High Court on the awarded sum is proper or not. = it is like typographical error but not judgement- the High Court while dismissing the appeal and in principle upholding of the award of the Arbitral Tribunal wrongly awarded interest at the rate of 12% p.a. and 18% p.a. in place of 10% and 12% p.a. which was awarded by the Arbitral Tribunal. It was, therefore, his submission that this error appears to be more in the nature of typographical error rather than on merits and hence needs to be corrected by this Court by restoring the same rate of interest which was awarded by the Arbitral Tribunal in the award dated 10.05.2008 and upheld by Additional District Judge vide his order dated 24.12.2010, i.e., 10% and 12% respectively as detailed above in para 9. As mentioned above, even the respondent could not oppose the prayer made by the appellant which appear to be more in the nature of typographical error.- Impugned order is modified to the extent that the awarded amount shall carry the interest at the same rates which were awarded by the Arbitral Tribunal in the award dated 10.5.2008. In other words, the awarded sum shall carry interest at the rate 10% p.a. payable from the date of accrual of cause of action till the date of award and shall further carry interest at the rate of 12% p.a. from the date of award till recovery on the awarded sum as detailed in para 9 above.

                                                              NON-REPORTABLE
                            IN THE SUPREME COURT OF INDIA
                             CIVIL APPELLATE JURISDICTION

                             CIVIL APPEAL No. 5891 OF 2016
                      (ARISING OUT OF SLP (C) No. 20397/2014)

NHPC Ltd.                               …….Appellant(s)

                             VERSUS

M/s Jai Prakash Associates Ltd.
& Ors.                                  ……Respondent(s)


                               J U D G M E N T
Abhay Manohar Sapre, J.
1.    Leave granted.
2.    This appeal is filed  against  the  final  judgment  and  order  dated
06.02.2014 passed by the High Court of Punjab and Haryana at  Chandigarh  in
F.A.O. No. 3607  of  2011  wherein  the  Single  Judge  of  the  High  Court
dismissed the FAO filed by the appellant herein,  in  consequence,  affirmed
the  order  dated  24.12.2010  passed  by  the  Additional  District  Judge,
Faridabad in Arbitration Petition No.52 of 2010.
3.    On 11.08.2014, this Court issued notice of the  appeal  to  respondent
No. 1 confining it to examine  only  the  question  regarding  the  rate  of
interest awarded by the High Court on the awarded sum to the respondent.
4.    Therefore, the short question involved in the appeal  is  whether  the
rate of interest awarded by the High Court on the awarded sum is  proper  or
not.
5.    Having regard to the short controversy involved in  the  case,  it  is
not necessary to burden the order by mentioning the facts in  detail  except
to the extent necessary for the disposal of the appeal.
6.    The appellant-Government of India Company  awarded  a  contract  dated
21.03.2001 to respondent No.1 for doing  some  specific  civil  construction
work in the project-Teesta V Hydroelectric Project at Sikkim  known  as  Lot
TT-4 civil works.
7.    In execution of the aforesaid work, disputes regarding non-payment  of
dues for the work done by respondent No.1 and several ancillary disputes  in
connection thereto arose between the parties. Since the  parties  could  not
amicably settle the disputes and hence they were referred  to  the  Arbitral
Tribunal in terms of the arbitration clause contained in the contract.   The
Arbitral Tribunal consisted of three arbitrators.
8.    Respondent No. 1 filed their claim  for  recovery  of  Rs.537.88  lacs
against  the  appellant  before  the   Arbitral   Tribunal   towards   their
outstanding dues of various natures.  The appellant contested the  claim  of
the respondent.
9.    By award dated 10.05.2008, the Arbitral Tribunal  partly  allowed  the
claim of respondent No.1  and  accordingly  awarded  them  a  total  sum  of
Rs.356.78 lacs. The Arbitral Tribunal also awarded 10% p.a. simple  interest
payable on the awarded sum (Rs.356.78 lacs) from  the  date  of  accrual  of
cause of action till the date of award and further awarded  future  interest
at the rate of 12% p.a. on the awarded sum, i.e., Rs.451.49 lacs  (Rs.356.78
lacs principal sum + Rs.94.71 lacs interest = Rs.451.49 lacs)  payable  from
the date of award till recovery.
10.    The  appellant,  felt  aggrieved,  challenged  the  legality  of  the
aforesaid award under Section 34 of the Arbitration  and  Conciliation  Act,
1996 before the Additional District Judge, Faridabad,  who  by  order  dated
24.12.2010  partly  allowed  the  application   and   modified   the   award
accordingly.
11.   The appellant, felt aggrieved, challenged the order of the  Additional
District Judge and filed appeal before the High Court.  By  impugned  order,
the High Court dismissed the appeal and  upheld  the  order  passed  by  the
Additional District Judge.
12.    Felt aggrieved, the  appellant  has  filed  this  appeal  by  way  of
special leave before this Court.
13.   Heard Mr. Gaurab Banerji, learned senior  counsel  for  the  appellant
and Mr. Sarvjit Pratap Singh, learned counsel for respondent No.1.
14.   Submission of the learned counsel for  the  appellant  was  only  one.
According to him,  the  High  Court  while  dismissing  the  appeal  and  in
principle upholding of the award of the Arbitral  Tribunal  wrongly  awarded
interest at the rate of 12% p.a. and 18% p.a. in place of 10% and  12%  p.a.
which  was  awarded  by  the  Arbitral  Tribunal.  It  was,  therefore,  his
submission  that  this  error  appears  to  be  more  in   the   nature   of
typographical error rather than on merits and hence needs  to  be  corrected
by this Court by restoring the same rate of interest which  was  awarded  by
the  Arbitral  Tribunal  in  the  award  dated  10.05.2008  and  upheld   by
Additional District Judge vide his order dated  24.12.2010,  i.e.,  10%  and
12% respectively as detailed above in para 9.
15.   Learned counsel  for  respondent  No.1  candidly  admitted  the  error
committed by the High Court  in  the  order  while  awarding  the  interest.
Respondent No.1 also in their counter at page 204 admitted the error,  which
was pointed out by the appellant while awarding the rate of interest.
16.   In our opinion, the submission urged by the appellant  appears  to  be
correct and hence it deserves to be accepted. As mentioned above,  even  the
respondent could not oppose the prayer made by the  appellant  which  appear
to be more in the nature of typographical error.
17.   In the light of foregoing discussion, which is sufficient, the  appeal
succeeds and is allowed in part. Impugned order is modified  to  the  extent
that the awarded amount shall carry the interest at  the  same  rates  which
were awarded by the Arbitral Tribunal  in  the  award  dated  10.5.2008.  In
other words, the awarded sum shall carry  interest  at  the  rate  10%  p.a.
payable from the date of accrual of cause of action till the date  of  award
and shall further carry interest at the rate of 12% p.a. from  the  date  of
award till recovery on the awarded sum as detailed in para 9 above.
18.   No costs.

                     ………...................................J.
                                  [J. CHELAMESWAR]


                  …...……..................................J.
                               [ABHAY MANOHAR SAPRE]     New Delhi;
July 04, 2016
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