Municipal Council Thanesar v. Virender Kumar

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), 5205 of 2015(O&M), 5510 of 2015(O&M), 5511 of 2015(O&M), 5512 of 2015(O&M) and 4253 of 2015(O&M).

3. Pursuant to public notice for auction of shops/showrooms, the auction was conducted by the appellant on 18.10.2016 in which the respondents participated and were declared successful bidders. Thereafter, disputes arose between the parties whether the auctioned premises were ready to be delivered on the relevant dates; whether the construction was incomplete; and whether the civic amenities were made available or not? The matters reached the High Court in various Writ Petitions namely CWP Nos.13548 of 2008, 1015, 1016, 1017, 1018, 1020, 1062, 14793 and 1922[8] of 2009 and by a common order dated 14.07.2010 the disputes were referred to a sole Arbitrator. After considering the matters, the Arbitrator passed a common Award on 14.10.2010. Para 21 of the Award was as under:-

4. The appellants preferred objections under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) which were dismissed by the Additional District Judge on 15.09.2012. The appellants, being aggrieved, preferred First Appeals which were dismissed by the High Court of Punjab and Haryana on 17.01.2014. The order of the High Court was also affirmed by this Court by dismissing Special Leave Petition

(Civil) No.15550 of 2014 on 04.08.2014. The directions issued in the Award thus became final.

5. In Execution Proceedings taken out by the respondents, the Executing Court in its order dated 23.03.2015 dealt with the matter as under:-

6. Even as per the Reserve Bank of India guidelines liberty has been given to the nationalized banks to pay interest on domestic savings deposit accounts either at quarterly intervals or by giving longer rests. Admittedly different nationalized banks have their own rate of interest and are free to determine the manner of calculation by giving shorter or longer period of rests. In the absence of any specific direction given by the learned arbitrator in the award dated 14.10.2010, no further interpretation in the award is feasible and the rate of interest has to be read as 7% per annum which has to be calculated with yearly rests. As per award dated 14.10.2010, the interest has to be calculated only till the delivery of possession. The possession of the respective shops has already been handed over to the decree holders.”

5. The appellants being aggrieved, filed aforementioned Civil Revisions in the High Court which were disposed of on 03.03.2017. The questions that arose for consideration were formulated by the High Court as: “Twin questions that fall for consideration of this Court are; (i) whether the decree-holders are entitled to the statutory benefits under Section 31(7)(a) and (b) of the Act; and (ii) whether the decree-holders-petitioners are also entitled to calculate the amount of interest on advance rent and nonrefundable security, at the rate of interest offered by nationalized bank, i.e. 7% per annum, with quarterly rests.” Relying on the majority view in Hyder Consulting (UK) Ltd. vs. Governor, State of Orissa through Chief Engineer[1], the High Court answered the first issue in favour of the respondents and concluded that they were entitled to post award interest in terms of Section 31(7)(b) of the Act. As regards second issue, it was held that the respondents were also entitled to interest @ 7% per annum with quarterly rests. The view so taken by the High Court is presently under challenge.

6. We have heard Mr. Ajay Majithia, learned counsel for the appellants and Mr. A. Tewari, Mr. Anupam Raina, Mr. Raktim Gogoi and Mr. Chritarth Palli, learned advocates for the respondents.

7. The first issue was rightly answered in favour of the respondents. The question is no longer res integra and stands answered in clear terms in Para

10 of the Judgment of Bobde, J. and paras 27-28 of the Judgment of Sapre, J. in Hyder Consulting (supra). The view taken by the High Court on this issue is absolutely correct.