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Ghulam Mohammad Dar v. State Of J&K And Others
Factual and Procedural Background
The dispute arises out of an arbitral award dated 5-9-1995 that was made a rule of the court by a decree dated 30-4-1998. The award concerned payment owed by the respondents (the State Government) to the claimant. The arbitrator prescribed differing rates of interest depending on the timing and default of payment. When execution proceedings commenced, the executing court refused to grant interest for the period between the award and the decree. The appellant challenged this interpretation through Civil Revision No. 47 of 2006, which the High Court of Jammu and Kashmir dismissed on 1-9-2006. The present appeal before the Supreme Court is confined solely to the question of the correct period for which post-award interest is payable.
Legal Issues Presented
- Whether the claimant is entitled to interest at 18% per annum from the date of the arbitral award (5-9-1995) or only from the date of the decree (30-4-1998) until realisation of the awarded amount.
Arguments of the Parties
Appellant's Arguments
- The executing court mis-read both the arbitral award and the High Court’s decree.
- Because the respondents failed to pay within the time stipulated, the appellant should receive interest at 18% per annum from the date of the award, not merely from the date of the decree.
Respondents' Arguments
The opinion does not contain a detailed account of the respondents' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Supreme Court limited its inquiry to the computation of interest. It examined:
- The arbitrator’s direction, which granted 10% simple interest from 10-11-1995 until payment, escalating to 18% per annum from 1-2-1994 in the event of default.
- The High Court’s decree dated 30-4-1998, which made the award a rule of the court and explicitly fixed 18% interest from the date of the decree until realisation.
Observing that the respondents are a State entity and that the decree expressly governed post-decretal interest, the Court endorsed the High Court’s construction. It concluded that the claimant’s entitlement is confined to interest at 18% per annum from the date of the decree, not the award.
Holding and Implications
DISPOSED OF – The civil appeal is dismissed to the extent it sought interest from the date of the award; the claimant is entitled to 18% interest per annum only from the date of the decree (30-4-1998) until realisation. No costs were awarded.
Implications: The decision clarifies the operative period for post-award interest in this particular matter but sets no new precedent beyond confirming the terms of the existing decree.
P. Sathasivam, J.— Leave granted.
2. This appeal is directed against the order dated 1-9-2006 passed by the High Court of Jammu and Kashmir at Srinagar in Civil Revision No. 47 of 2006 whereby the High Court dismissed the civil revision filed by the appellant herein.
3. In view of the limited issue i.e interest payable by the respondents, there is no need to traverse the entire factual matrix except relating to the issue in question.
4. According to the appellant, the executing court has wrongly interpreted the judgment passed by the High Court as well as the provisions of the Arbitration Act and erroneously refused to release the interest on the award/decretal amount from the date of award till passing of the decree.
5. It is not in dispute that an award came to be passed on 5-9-1995 which was made a rule of the court and accordingly decree came to be passed on 30-4-1998.
6. It is relevant to reproduce the award of the arbitrator in respect of the interest which reads as under:
“The claimant shall be entitled to 10% SIPA beyond 10-11-1995 till payment is made in full by the respondents of the full awarded amount. Respondent 3 shall be liable to discharge and pay the final bill pending since 27-12-1993 with him failing which 18% p.a simple interest shall be paid over and above from 1-2-1994 till date of actual payment.”
Though there is little confusion in the direction of the arbitrator, it is presumed that the arbitrator has granted interest @ 10% (simple interest p.a) from 10-11-1995 till payment is made in full by the respondents. The latter part of the said direction shows that in case of default, the award amount carries interest @ 18% simple interest per annum from 1-2-1994 till date of actual payment.
7. On 30-4-1998, the learned Single Judge of the High Court disposed of Arbitration Petition No. 171 of 1991 by passing the following order:
“In the totality of the circumstances, I order that let award be made rule of the court and the amounts found due along with interest awarded by the arbitrator be paid from the date of decree with interest at 18% till final realisation of the decretal amount of the petition. Let decree be prepared accordingly.”
8. Learned Senior Counsel appearing for the appellant, by drawing our attention to the direction of the arbitrator as well as the ultimate order passed by the High Court, submitted that in view of default in payment of the amount within the stipulated time, the appellant is entitled to interest @ 18% p.a from the date of the award and not from the date of the decree. In the light of the controversy, we verified the direction of the arbitrator and the order passed by the High Court both in the arbitration and revision petition. On perusal of the same and of the fact that the respondents are none other than the State Government, we agree with the order of the High Court dated 30-4-1998 passed in Arbitration Petition No. 171 of 1991 and hold that the claimant is entitled to interest @ 18% p.a for the award amount from the date of the decree till realisation. To this extent, we clarify the position. The civil appeal is disposed of on the above terms. No costs.
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