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CASE NO.: Appeal (civil)  1511 of 2008

PETITIONER: M/s. B.L.Gupta Construction Ltd

RESPONDENT: M/s. Bharat Co-op.Group HNG.STY.Ltd

DATE OF JUDGMENT: 22/02/2008

BENCH: S.B. SINHA & HARJIT SINGH BEDI

JUDGMENT: J U D G M E N T  

CIVIL APPEAL NO 1511 / 2008 (arising out of SLP (C)No. 4654/2007)

HARJIT SINGH BEDI,J.

1.      Special leave granted.

2.      The facts leading to the filing of this appeal are as under: 3.      The appellant B.L.Gupta Construction Ltd. was awarded a  contract by the respondent for construction of 308 dwelling units.   The contract also provided for resolution of disputes through an  arbitrator.  A dispute having arisen, the High Court vide order of  5.12.1991 ordered the appointment of an arbitrator.  The arbitrator  rendered his award on 18.12.1992 for a sum of Rs.25, 14,424/- in  favour of the appellant and a counter claim for Rs. 1, 18,393.32p.  in favour of the respondent.  The principal amount thus determined  to be paid to the appellant was Rs.23, 96,031/-.  The arbitrator also  granted interest in the following terms:      "I award the following interest to be paid by the          respondents to the claimants as under:-

(a)     Interest at the rate of 18(eighteen) percent  per annum on the amount awarded under  claim No.1 after expiry of 50 days from the  date of submission of Final bill dated  18.4.1990 i.e. 8.6.1990 to the date prior to  the Arbitration proceedings i.e.5.12.1991.

(b)     Pendente-lite interest at the rate of 18                        (eighteen) percent per annum from  6.12.1991 to the date of Publication of  award 18.12.1992.                                        

(c)        If the Respondents does not pay the  awarded amount within a period of 60 days  from the date of publication of the award,  the Respondents shall also pay interest at  the rate of 18 (eighteen) per cent per  annum on the gross amount of award for  all the claims from 19.12.1992 to the date  of decree or date of payment whichever is  earlier."

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       4.      The respondent society thereafter filed objections under section 30  and 33 of the Arbitration Act, 1940.  These objections were dismissed  and the award was made a rule of the court and a decree Annexure P-2  was accordingly passed on 5.2.1996.  An appeal [FAO(OS) No. 78/96]  was filed  in the High Court against the aforesaid order and on  admission on 28.9.1996 a stay of execution was granted subject to  deposit of the principal amount in Court.  Concededly this amount has  been released to the decree-holder appellant on furnishing a bank  guarantee on 27.10.1998.  The Division Bench while disposing of the  aforesaid FAO in its order dated 1.8.2001 modified the decree to the  extent that the interest prior to 18.12.1998 awarded by the Arbitrator  was declined and future interest reduced from 18% to 10% per annum  and as the respondent had deposited the amount in the High Court on  28.9.1996 it was directed that the interest would cease to be payable on  and from the said date.  The appellant thereupon filed a Special Leave  Petition in this Court in which leave was granted.   The respondent also  made a part payment of Rs.8, 39,791/- as interest on 8.12.2001 to the  appellant.  The aforesaid appeal was allowed on 5.11.2003 and it was  held that the respondent would pay pre-reference and pendente-lite  interest at 10% per annum on the amount of the award.  The respondent  thereafter made another payment of Rs. 6, 14,911/- to the appellant.   The appellant also filed an execution application (E.A.No.282/04)  submitting its calculations and claimed a further sum of Rs.19,  07,872/- as on 19.7.2004.  A copy of this application has been filed as  Annexure P-5 to the grounds in the Special Leave Petition.   The  learned Single Judge in his order dated  21.7.2005 ordered the Registry  to calculate the pre-reference interest at 10% per annum on the sum of  Rs.23,96,030-38p. for a period from 8.6.1990 to 18.12.1992 and  likewise the interest on the aforesaid amount for the period from  18.12.92 to 28.9.96 i.e. date on which the amount had been deposited  by the respondent in Court and the matter was adjourned for further  hearing to 16.8.2005.  On 16.8.2005 the learned Single Judge held that  the question of payment of interest both pendente-lite and future  interest had been settled and accordingly dropped the proceedings.  The  appellant thereupon filed an appeal before the Division Bench  challenging the orders dated 21.7.2005 and 16.8.2005 in Appeal (EFA  (OS)No.12/05).  By order dated 21.9.2006 the Division Bench  dismissed the appeal holding that the learned Single Judge had rightly  directed the future interest be calculated only on the principle amount  of Rs.23,96,031/-.  A review application filed by the appellant against  the aforesaid order was also dismissed on 18.10.2006.  Both these  matters have been impugned in the present appeal.                                5.      A reply has been filed by the respondent in response to the  notice.  It has been highlighted that 14 claims had been raised before  the Arbitrator and whereas Claim Nos. 1 to 12 were under several  heads including the payment for the work done, Claim No.13 was with  regard to interest simplicitor both pre-reference and pendente-lite.  It  has been pointed out that the Arbitrator had in his award dated  18.12.1992 awarded a total sum of Rs.25,14,424/- to the appellant  partly allowing his claim Nos. 1,2 and 5 in the following terms -  Claim  No.1 Rs.24,64,424/-, Claim No.2  Rs.10,000/- and Claim No.5  Rs.40,000/- and that the Arbitrator had awarded interest only against  Claim No.1 at 18% per annum from 8.6.1990 to 5.12.1991 (Pre- reference) and pendente-lite interest at 18% per annum from 6.12.1991  to the date of the publication of the award i.e. 18.12.1992 and that no  interest had been awarded with respect to the claim Nos.2 to 5 and that  the award had clarified that if the amount awarded was not paid within  the period of 60 days from the date of the publication of the award, the  respondent would be liable to pay future interest at 18% on the gross  amount of the award for all claims allowed from 19.12.1992 to the date  of payment.   It has further been highlighted that the respondent had  filed an appeal before the Division Bench being FAO(OS) 78/96 and a  direction had been issued to deposit the principal amount in terms of  the award  i.e. Rs.23,96,031/- which in fact had been withdrawn by the  petitioner on 28.9.1996 without any objection and that the Division

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Bench had finally disposed of the appeal  observing as under: "Consequently, the appeal is partly allowed to  the extent aforementioned, the judgment of  the learned Single Judge as also the award is  set aside to that extent. Consequently, decree  shall stand modified to the extent that the  Claims of the respondent (the Petitioner  herein) to interest prior to 18.12.92 stands  rejected.  The respondent shall be entitled to  future interest @ 10% per annum on the  amount of award under Claim No.1 from 18th  December 1992 till the date of decree and  from the date of decree till date of payment  on the amount payable by the Society  (respondent herein) to the respondent  (petitioner herein) in terms of Award.

Since the appellant had deposited the amount  in the Court on 28th September 1996, interest  will cease to be payable on and from that date  on the deposited amount."

6.      The appellant aggrieved by the aforesaid order of the  Division Bench, filed SLP in this Court against the judgment dated  1.8.2001 and this Court vide order dated 5.11.2003 finally  disposed of the matter by partly allowing the appeal directing the  respondent to pay pre-reference and pendente-lite interest at 10%  per annum on Claim No.1 and affirmed the other parts of the  judgment of the Division Bench which included the cessation of  interest on the principal amount deposited as well as the future  interest on Claim Nos. 2 to 5.  It has accordingly been pleaded that  as the respondent had already paid the entire amount in terms of  the judgment of the Division Bench in FAO (OS) 78/96 on  28.9.1996 only pendente-lite interest for the period from 8.6.1990  to 18.12.1992 at 10% per annum on the principal amount under  Claim No.1 i.e. a sum of Rs. 6, 14,911/- was payable and that the  aforesaid amount had already been paid.  The appellant thereafter  filed yet another execution application in the High Court claiming  that the entire amount in terms of the orders of the Court had not  been paid on which the respondent in terms of the order dated  3.2.2005 deposited a further sum of Rs.63,658/- on 9.2.2005.   It is  this execution application which has now been disposed of by the  impugned orders. 7.      We have heard the learned counsel for the parties and have  gone through the record.  Several issues have been sought to be  raised by the learned counsel for the appellant as to the method to  be adopted for the calculation of and as to how the payments made  from time to time had to be adjusted.  We are, however, of the  opinion that no such argument is open to the appellant as of now  for the reason that interest had been awarded only against some  claims and that the calculations have been made both at the stage  of the Arbitrator and at the stage of the execution in the High Court  and directions have been issued by this Court to make payment on  interest on specific sums from particular dates.  It is also to be  noticed that the appellant has dragged on the proceedings for years  together despite the orders clarifying all issues from time to time.   We have given full details of the proceedings from the start of the  arbitration till their culmination in the Supreme Court advisedly to  bring home the point that the legal process has been misused by the  appellant.  We have therefore no hesitation in dismissing the  appeal and while doing so impose Rs.50, 000/- as costs on the  appellant.