MUNICIPAL COUNCIL THANESAR versus VIRENDER KUMAR ETC.

Citation: [2019] 5 S.C.R. 829 · Decided: 19-02-2019 · Supreme Court of India · Bench: UDAY UMESH LALIT · Disposal: Case Partly allowed
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Judgment (excerpt)

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MUNICIPAL COUNCIL THANESAR
v.
VIRENDER KUMAR ETC.
(Civil Appeal Nos. 1751-1763 of  2019)
FEBRUARY 19, 2019
[UDAY UMESH LALIT AND
DR. DHANANJAYA Y CHANDRACHUD, JJ.]
Arbitration and Conciliation Act, 1996: s.31(7)(a) and (b) –
Interest – Entitlement of Decree-holders to the statutory benefits
under ss.31(7)(a) and (b) – Held: Decree-holders-respondents are
entitled to post award interest in terms of s.31(7)(b) of the Act.
Code of Civil Procedure, 1908: Execution of award – Interest
awarded in the arbitration award – In the award, it was not
specifically stated that the interest @ 7% p.a. was to be awarded
with quarterly rests – In fact, the award did not specify anything;
whether it was quarterly rests or yearly rests – It simply awarded
interest @ 7% p.a. – Executing Court put it with yearly rests which
the High Court in revisions preferred by the appellants modified to
quarterly rests – On appeal, held: Both the Executing Court and
the High Court completely erred and awarded compound interest in
favour of the respondents when the award had stipulated it to be
7% p.a. simplicitor – The award did not even remotely suggest that
such award of interest would be with a direction that interest be
capitalized on yearly or quarterly basis – It was pure and simple
award of interest @ 7% and could not be taken to be a direction to
award compound interest – Consequently, the pre-award interest
on the amounts in question shall be calculated @ 7% p.a. simple
interest – Arbitration and Conciliation Act, 1996 – s.31(7)(a)
and (b).
Partly allowing the appeals, the Court
HELD: 1.   The first issue that whether the decree-holders
were entitled to the statutory benefits under Section 31(7)(a)
and (b) of the Act was rightly answered in favour of the
decree-holders/respondents.  The question is no longer res
   [2019] 5 S.C.R. 829
829
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SUPREME COURT REPORTS
[2019] 5 S.C.R.
integra and stands answered in clear terms in Hyder Consulting
case.  [Paras 5.2, 7][833-F; 834-B-C]
Hyder Consulting (UK) Ltd. v. Governor, State of Orissa
through Chief Engineer (2015) 2 SCC 189 – relied on
2. As regards the second issue, the Executing Court
correctly appreciated that the Award did not specifically state that
the interest @ 7% per annum was to be awarded with quarterly
rests.  The Executing Court found that it was doubtful whether
the award of interest was @ 7% with quarterly rests or yearly
rests.  The Executing Court put it with yearly rests which the
High Court in Revisions preferred by the appellants modified to
quarterly rests.  Both the Executing Court and the High Court
completely erred and awarded compound interest in favour of
the respondents when the award had stipulated it to be 7% per
annum simplicitor.  The Award did not even remotely suggest
that such award of interest would be with a direction that interest
be capitalized on yearly or quarterly basis.  It was pure and simple
award of interest @ 7% and could not be taken to be a direction
to award compound interest.  Consequently, the pre-award
interest on the amounts in question shall be calculated @ 7%
per annum simple interest.  The respondents shall be entitled to
the benefit under Section 31(7)(b) of the Act and post
award interest shall also be @ 7% per annum simple interest.
[Paras 8-12][834-C-D; 835-F-G; 835-A-B]
Case Law Reference
(2015) 2 SCC 189
relied on
Para 6
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1751-
1763 of 2019.
From the Judgment and Order dated 03.03.2017 of the High Court
of Punjab and Haryana at Chandigarh in C.R. Nos. 6765 of 2015
(O & M), C.R. No. 5198 of 2015 (O & M) to C.R. No. 5205 of 2015
(O & M), C.R. No. 5510 of 2015 (O & M) to C.R. No. 5512 of 2015
(O & M) and C.R. No. 4253 of 2015 (O & M).
With
Civil Appeal Nos. 1443-1444 of 2019.
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Ajay Majithia, Shekhar Kumar, Advs. for the Appellants.
A. Tewari, Ms. Eliza Bar, Shree Pal Singh, Riju Mani Talukdar,
Anupam Raina, Saurav Trivedi, Sunando Raha, Raktim Gogoi, Kartikeya
Singh, Sarvwsa Chhajer, Anupam Lal Das, Chritarth Palli, Shubham
Bhalla, Advs. for the Respondents.
The Judgment of the Court was delivered by
UDAY UMESH LALIT, J. 1.Leave granted.
2. These appeals challenge the final judgment and order dated
03.03.2017 passed by the High Court of Punjab and Haryana at
Chandigarh in C.R.Nos. 6765 of 2015 (O&M), 5198 of 2015(O&M),
5199 of 2015(O&M), 5200 of 2015(O&M), 5201 of 2015(O&M), 5202
of 2015(O&M), 5203 of 2015(O&M), 5204 of 2015(O&M), 520
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