{"id":301891,"date":"2023-09-19T18:30:47","date_gmt":"2023-09-19T13:00:47","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=301891"},"modified":"2023-10-04T12:11:04","modified_gmt":"2023-10-04T06:41:04","slug":"delhi-hc-depositing-award-amount-with-notice-decree-holder-sufficient-discharge-judgment-debtor-onus-legal-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/09\/19\/delhi-hc-depositing-award-amount-with-notice-decree-holder-sufficient-discharge-judgment-debtor-onus-legal-news\/","title":{"rendered":"Depositing award amount for withdrawal with due notice to the decree holder is sufficient to discharge onus on the judgment debtor: Delhi High Court"},"content":{"rendered":"
\n

Delhi High Court:<\/span> In a case wherein, the execution petitions were filed under Section 36<\/a> of the Arbitration and Conciliation Act, 1996<\/a> (‘the Act’) read with Order XXI Rule 1<\/a> of the Civil Procedure Code, 1908<\/a> (‘CPC’), to seek enforcement of common award dated 29-7-2020 passed by the Arbitral Tribunal, Manoj Kumar Ohri J.*<\/span>, opined that the award amount along with the interest at the awarded rate calculated till 19-5-2021, and the interest accrued on the deposit being kept in the form of Fixed Deposit Receipt (‘FDR’) had already been withdrawn by the decree holder and accordingly disposed of the present petition.<\/p>\n

Background<\/p>\n

In the instant case, the Arbitral Tribunal had awarded cumulative amount of Rs. 5,54,09,437 including the interest rate at 9% per annum in decree holder’s favour, from 29-7-2020 till the date of payment.<\/p>\n

Thereafter, the award dated 29-7-2020, was challenged by the judgment debtor under Section 34<\/a> of the Act<\/a>, whereas the decree holder filed the present petition under Section 36 of the Act to seek enforcement of the award dated 29-7-2020. Further, pursuant to the order dated 15-3-2021 passed in the proceedings, the judgment debtor on 19-5-2021, deposited the entire award amount along with the interest till the date of deposit.<\/p>\n

The judgment debtor awaited the outcome of its challenge to the award, which he filed under Section 34<\/a> of the Act<\/a>, thus requested the Court to defer passing any orders in the proceedings. However, the challenge to the award were dismissed on 6-5-2022 and accordingly, the award became executable without any impediment.<\/p>\n

Thereafter, pursuant to the order dated 2-8-2022, the decree holder withdrew the amount deposited by the judgment debtor, thus, it resulted in the satisfaction of the award put up for the execution in these proceedings. However, the decree holder demanded interest on the award amount from 19-5-2021, the date of deposit of award till 6-5-2022, the date of dismissal of the objections under Section 34<\/a> of the Act<\/a>.<\/p>\n

The award amount deposited by the judgment debtor was kept in the form of an interest-bearing FDR, and as per the decree holder, the FDR earned interest of Rs. 25,09,194. Thus, after adjusting the aforesaid interest amount earned on the FDR, the decree holder claimed the remaining sum of Rs. 16,27,461.<\/p>\n

The issue involved before the Court was whether the judgment debtor was liable to pay interest for the period between the date of deposit till the date of withdrawal of the deposit by the decree holder.<\/p>\n

Analysis, Law, and Decision<\/p>\n

The Court noted that in the instant case, the decree holder was aware of the Court order dated 15-3-2021, whereby the court allowed the judgment debtor to deposit the award amount in the Court, simultaneously also permitted the decree holder to withdraw the amount subject to certain conditions which were mentioned in the order.<\/p>\n

The Court opined that the decree holder was never denied any access to the award amount and the deposited amount was available to the decree holder with a condition to return, if the award was set aside. The decree holder withdrew the deposited amount only after the judgement debtor’s objections under Section 34 of the Act were dismissed. The decree holder was not required to wait till then, but if it did remain under the self-imposed restriction, then it couldn’t demand interest.<\/p>\n

The Court relied on P.S.L. Ramanathan Chettiar and Ors.<\/span> v. O.R.M.P.R.M Ramanathan Chettiar<\/span>, AIR 1968 SC 1047<\/a>; Gurpreet Singh<\/span> v. Union of India<\/span> (2006) 8 SCC 457<\/a> and Mathunni Mathai<\/span> v. Hindustan Organic Chemicals Ltd.<\/span>, (1995) 4 SCC 26<\/a> and opined that, if the judgment debtor had sent the notice of the deposit to the decree and award amount was available for the withdrawal to the decree holder without any condition of furnishing security, the judgment debtor’s liability ceased on the date of deposit.<\/p>\n

The Court opined that as per Order XXI Rule 1<\/a> of the CPC<\/a> and, the judgment debtor sent the notice to the decree holder on 19-5-2021, the date of deposit and also deposited the award amount in execution proceedings. The Court further opined that as there was no stay of the impugned award in the objections filed by the judgment debtor, therefore, there were no restraints on the decree holder to withdraw the amount.<\/p>\n

Accordingly, the Court opined that the decree holder’s failure to take steps in withdrawal of the award amount would not endure to the judgment debtor’s disadvantage and the depositing the award amount along with notice to the decree holder was sufficient discharge the onus put on the judgment debtor in terms of Order XXI Rule 1<\/a> of the CPC<\/a>.<\/p>\n

Thus, the Court opined that the award amount along with the interest at the awarded rate calculated till 19-5-2021, and the interest that had accrued on the deposit being kept in the form of FDR had already been withdrawn by the decree holder and accordingly disposed of the present petition.<\/p>\n

[Cobra Instalaciones Y Servicios and Shyam Indus Power Solution v. Haryana Vidyut Prasaran, 2023 SCC OnLine Del 5439<\/a>, decided on 4-9-2023<\/span>]<\/p>\n

*Judgment authored by- Justice Manoj Kumar Ohri<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case :<\/p>\n

For the Decree Holder:<\/span> Pankaj Kumar Singh, Advocate;<\/p>\n

For the Judgment Debtor:<\/span> Varun Kalra and Krishan Kumar, Advocates<\/p>\n

Buy Arbitration and Conciliation Act, 1996   HERE<\/a><\/h3>\n

\"arbitration<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“The decree holder was not required to await the outcome of the objections filed under Section 34 of the Arbitration and Conciliation Act, 1996, however, if it did choose to remain under a self-imposed embargo, then it can’t demand interest.”<\/p>\n","protected":false},"author":67011,"featured_media":293503,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[40741,61200,39496,34851,2543,2591,14211,3659,61201],"class_list":["post-301891","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-arbitration-and-conciliation-act-1996","tag-award-amount","tag-civil-procedure-code-1908","tag-decree-holder","tag-Delhi_High_Court","tag-Interest","tag-judgment-debtor","tag-notice","tag-order-xxi-rule-1"],"yoast_head":"\nDepositing award amount with notice to the decree holder 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