Date : 27/03/2012 1. As common question of facts and law arise in this group of revision applications, they are heard, decided and disposed of by this common judgement and order. 2.00. Civil Revision Application No. 39 of 1996 has been preferred by the petitioner herein – Judgement Debtor to quash and set aside the impugned order passed by the learned executing court passed below application Ex.55 in Execution Petition No.351 of 1986 and consequently to certify that the decree in question is fully satisfied and to order repayment of the amount from the respondent with interest thereon at the rate of 12% till realisation.
2.01. Civil Revision Application No.40 of 1996 has been preferred by the petitioner herein – Judgement Debtor to quash and set aside the impugned order passed by the learned executing court passed below application Ex.50 in Execution Petition No.352 of 1986 and consequently to certify that the decree in question is fully satisfied and to order repayment of the amount from the respondent with interest thereon at the rate of 12% till realisation.
2.02. Civil Revision Application No.41 of 1996 has been preferred by the petitioner herein – Judgement Debtor to quash and set aside the impugned order passed by the learned executing court passed below application Ex.50 in Execution Petition No.353 of 1986 and consequently to certify that the decree in question is fully satisfied and to order repayment of the amount from the respondent with interest thereon at the rate of 12% till realisation.
3.00. Civil Revision Application No.39 of 1996 :-
That in the arbitration proceedings, an award was declared by the learned Arbitrator which was made Rule of the Court by the learned City Civil Court and a decree was passed in favour of the respondent – Contractor for a sum of Rs.1,24,000/- with 12% interest on the above mentioned amount of Rs.1,24,000/- from 30/9/1974 to the date of decree or realisation whichever is earlier.
3.01. Civil Revision Application No.40 of 1996 :-
That in the arbitration proceedings, an award was declared by the learned Arbitrator which was made Rule of the Court by the learned City Civil Court and a decree was passed in favour of the respondent – Contractor for a sum of Rs.1,73,300/- with 12% interest on the above mentioned amount of Rs.1,73,300/- from 30/9/1974 to the date of decree or realisation whichever is earlier.
3.02. Civil Revision Application No.41 of 1996 :-
That in the arbitration proceedings, an award was declared by the learned Arbitrator which was made Rule of the Court by the learned City Civil Court and a decree was passed in favour of the respondent – Contractor for a sum of Rs.71,000/- with 12% interest on the above mentioned amount of Rs.71,000/- from 30/9/1974 to the date of decree or realisation whichever is earlier.
4.00. It appears that feeling aggrieved by the respective decrees, the petitioner herein – Gujarat Industrial Development Corporation Limited preferred First Appeal Nos. 911/1993 to 913/1996 before this Court. In the said appeals, applications for interim order/ relief were also preferred. That the aforesaid applications for interim order / relief came up for hearing before the Division Bench on 9/10/1986 and the parties arrived at consent terms on the following manner :-
“Without prejudice to the rights and contentions of parties in the First Appeals and hereby as a measure of arrangement pending final decision in the First Appeals, parties agree that this Honourable Court may be pleased to pass the following order in Civil Applications above numbered :-
Interim relief in terms of para 6(a) on the condition that the petitioner – appellant deposits on the trial Court 50 percent of the amount decreed together, with interests and costs within 8 weeks from today. On the amount being deposited as aforesaid, liability to opponent Nos.1 and 2 decree holders to withdraw the amount on furnishing bank guarantee for refund of the amount together with interest at the rate of 12 percent per annum in case petitioner – appellant succeed as in appeal. Bank Guarantee to be approved by the Trial Court after hearing both the parties. Rule is made absolute accordingly with no order as to costs.”
4.01. On the basis of the aforesaid consent terms the Division Bench disposed of the Civil Applications on 9/10/1986 and passed the following order :-
“The learned counsel for the applicant seeks permission to delete the respondent No.3. The learned counsel for the parties have filed consent terms, which may be taken on record. In view of the consent terms, the petitioner – appellant has to deposit in the Trial Court 50 percent of the decretal amount together with interest and costs within eight weeks from today and on that amount being deposited, liberty is given to respondent Nos.1 and 2 – the decree holders to withdraw the amount on furnishing bank guarantee and further agreeing that in case the appellant succeeds in appeal, the respondent Nos.1 and 2 shall refund the amount together with interest at the rate of 12 percent per annum. The bank guarantees should be approved by the Trial Court after hearing both the parties. Accordingly, Rule is made absolute with no order as to costs.”
4.02. It appears that pursuant to the aforesaid consent order and the order passed by the Division Bench in the aforesaid applications, petitioner - Corporation deposited 50% of the principal amount with interest at the rate of 12% per annum on 9/12/1985 and the respondent – Contractor withdrew the said amount on furnishing necessary bank guarantee.
4.03. It appears that thereafter the aforesaid First Appeals came up for final hearing in the month of February, 1993 and the Division Bench by the judgement and order dtd.17/12/1993 dismissed the aforesaid appeals and while dismissing the said appeals, the Division Bench gave the following directions in para 28 of the judgement :-
“Pursuant to the interim order passed by this Court, the GIDC has deposited 50 per cent of the amount decreed together with interest and cost and 50 per cent of the amount of award, in all the four matters, is required to be paid to the Contractor. Therefore, it is hereby clarified that the interim order passed by this Court shall, obviously, stand vacated and we direct the appellant – GIDC to pay the remaining amount of 50 per cent with costs and interest at the rate of 12 per cent per annum till the realisation. The bank guarantee for the withdrawal of 50 per cent of the amount of decree, given by the contractor, pursuant to the order passed by this Court, shall be realised forthwith.”
4.04. It appears that thereafter for recovery of the remaining amount of 50% of the decretal amount, the respondent Contractor submitted execution petitions. It appears that the petitioner Corporation deposited 50% of the principal amount with 12% interest and thereafter submitted respective applications before the learned executing court for appropriate order to certify that the entire decretal amount has been paid. The said applications were opposed by the respondent Contractor by submitting that as per the order passed by this Court, Corporation was required to pay remaining amount of 50% with interest at the rate of 12% per annum, meaning thereby according to the respondent Contractor, the Corporation was required to pay principal amount with interest at the rate of 12% per annum on the said principal amount, till passing of the judgement and award and thereafter 12% interest on the amount of principal amount + interest at the rate of 12% on the principal amount. The learned executing Court accepted the same and has directed the petitioner to pay balance amount, by impugned orders. Being aggrieved by and dissatisfied with the said impugned orders passed by the learned Executing Court below application Ex. Nos.55, 50 and 50 in respective Execution Petitions, the petitioner Corporation – judgement debtor has preferred these Civil Revision Applications under section 115 of the Code of Civil Procedure.
5.00. Mr.Y.F. Mehta, learned advocate appearing on behalf of the petitioner Corporation has vehemently submitted that the impugned orders passed by the learned executing Court are contrary to the directions issued by the Division Bench while dismissing the First Appeals, more particularly, against the directions issued in para 28 of the judgement and order passed by this Court by which the Division Bench directed the appellant GIDC to pay remaining 50% amount with costs, and interest at the rate of 12% per annum till realisation. Therefore, it is submitted that as such the Corporation was required to pay 50% of the principal amount with 12% interest all through out. It is submitted that by the impugned order, the learned executing court has directed to pay principal amount along with compound interest at the rate of 12%, which is not permissible.
5.01. Mr.Y.F. Mehta, learned advocate appearing on behalf of the petitioner Corporation has further submitted that even otherwise as the contractual rate of interest was 12%, the learned Executing Court could not have awarded interest on the interest and all through out the respondent – judgement creditor shall be entitled to principal amount with 12% interest only and is not entitled to interest on the amount of interest.
5.02. In support of his above submission, Mr.Mehta, learned advocate appearing on behalf of the petitioner has heavily relied upon the decision of the Hon'ble Supreme Court in the case of State of Haryana & Ors. Versus M/s. S.L. Arora and Company, reported in AIR 2010 S.C. 1511.
By making above submissions and relying upon above decisions, it is requested to allow these Civil Revision Applications.
6.00. All these revision applications are opposed by Mr.Mrugen Purohit, learned advocate appearing on behalf of the respondents. It is submitted that as such the impugned orders passed by the learned executing court are absolutely in consonance with the orders passed by this Court in respective First Appeals and therefore, the same are not required to be interfered with by this Court. It is further submitted by Mr.Mrugen Purohit, learned advocate appearing on behalf of the respondents that as such the petitioner corporation is required to pay the principal amount with interest at the rate of 12% per annum on the said principal amount till passing of the Judgement and Award and thereafter 12% interest on the principal amount plus interest at the rate of 12% on the principal amount. Therefore, it is submitted that the contention on behalf of the petitioner Corporation that the petitioner Corporation is liable to pay interest at the rate of 12% per annum on the principal amount only all through out, cannot be accepted. It is further submitted that as such the decision of the Hon'ble Supreme Court in the case of M/s. S.L. Arora and Company (supra) relied upon by the learned advocate appearing on behalf of the petitioners shall not be applicable in the facts and circumstances of the case. Therefore, it is requested to dismiss these Civil Revision Applications.
6.01. Heard the learned advocates appearing on behalf of the respective parties at length and considered the impugned order passed by the learned executing court. The only controversy raised in the present Civil Revision Application is that whether the petitioner Corporation is liable to pay principal amount with interest at the rate of 12% per annum all through out and/or is liable to pay principal amount + 12% interest till Judgement and Award passed by the learned arbitrator and thereafter principal amount + interest and 12% interest thereon for the subsequent period. It is required to be noted that as such the respondent Corporation was entitled to principal amount for which the Judgement and Award was passed and the learned arbitrator directed to pay principal amount + 12% interest i.e. till judgement and award and further directed the petitioner corporation to pay the amount awarded i.e. principal amount + 12% interest on the principal amount with 12% interest till realisation. Therefore, as such interest is required to be bifurcated in two parts, one till Judgement and Award is passed by the learned arbitrator and another for the subsequent period. The learned arbitrator awarded interest at the rate of 12% on the principal amount on the ground that principal amount was withheld by the corporation and therefore, as on the date of the Judgement and Award passed by the learned arbitrator, contractor was entitled to principal amount +12% interest. Therefore, as on the date of the Judgement and Award passed by the learned arbitrator, the Contractor was entitled to principal amount with 12% interest. As the said awarded amount i.e. principal amount with 12% interest was not paid in view of the interim order passed by this Court in the respective First Appeals, naturally the contractor would be entitled to amount due and payable under the Judgement and Award with 12% interest, more particularly, the respondent contractor would be entitled to 12% interest on the principal amount + 12% interest till Judgement and Award. Under the circumstances, no illegality has been committed by the learned executing court in passing the impugned orders.
6.02. Now, so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case of M/s. S.L. Arora and Company (supra) is concerned, on facts the same shall not be applicable. It is required to be noted that in the case before the Hon'ble Supreme Court the dispute was with respect to compound interest even from the date of entitlement till Judgement and Award i.e. under section 34 of the Code of Civil Procedure read with section 3 of the Interest Act and to that the Hon'ble Supreme Court observed that only if there is specific contract or authority under the statute, compound interest cannot be levied. That is not the case here. Here, the executing court has not awarded compound interest for the period during the proceedings. Under the circumstances, the aforesaid decision shall not be applicable.
7.00. In view of the above and for the reasons stated above, all these Civil Revision Applications fail and the same deserve to be dismissed and are accordingly dismissed. Rule discharged. In the facts and circumstances of the case, there shall be no order as to costs.
At this stage Mr.Y.F. Mehta, learned advocate appearing on behalf of the petitioner Corporation has requested to grant some time to the petitioner Corporation to deposit the amount as per the order passed by the learned executing court.
In the facts and circumstances of the case, petitioner corporation is granted time upto 30/6/2012 to deposit as per the order passed by the learned executing court.
[M.R. SHAH, J.] rafik