Ghulam Mohammad Dar v. State of Jammu & Kashmir & Ors.

Case Details & Bench

Court: High Court
Hon'ble Judges: G. P. Mathur
P. Sathasivam
Judgment Date: 2008-01-04
Court Decision / Holding: The Supreme Court upheld the High Court’s order and held that the claimant is entitled to interest at 18% per annum on the award amount from the date of the decree until realization.
Final Disposition: Appeal disposed of

Parties to the Case

Appellants / Petitioners

Ghulam Mohammad Dar

Respondents

State of Jammu & Kashmir
Ors.

Legal Representation & Advocates

Counsels for Petitioners

• M. L. Bhat
• Purnima Bhat

Counsels for Respondents

• Anis Suhrawardy
• S. Mehdi Imam

Case Synopsis & Summary

This appeal concerns the calculation of interest on an arbitration award in a dispute between Ghulam Mohammad Dar and the State of Jammu and Kashmir and others. An arbitration award was passed on 5 September 1995 and was subsequently made a rule of the Court; a decree was issued on 30 April 1998. The arbitrator directed that the claimant would be entitled to 10% simple interest per annum beyond 10 November 1995 until payment, with a further provision that, in case of default, interest at 18% per annum would accrue from 1 February 1994 until full payment. The High Court subsequently disposed of Arbitration Petition No. 171 of 1991 by directing that the award, along with the arbitrator’s interest, be paid from the date of the decree and that interest at 18% per annum run till final realization. The appellant contended that, in view of default in payment within the stipulated time, interest should be payable from the date of the award rather than from the decree. The Supreme Court examined the directions of the arbitrator and the High Court, noting that the respondents are the State Government, and affirmed the High Court’s position. It held that the claimant is entitled to interest at 18% per annum on the decretal amount from the date of the decree until realization, thereby clarifying the proper start date for interest. The Civil Appeal is disposed of with no costs.

Provisions of Law Cited

Arbitration Act

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant contends that, due to default in payment within the stipulated time, interest at 18% per annum should accrue from the date of the award, not from the date of the decree. They rely on the arbitrator’s directions, which indicate higher interest in cases of default from the award date, and argue that the decree should reflect the award as a rule of court with interest flowing from the award date.

Contentions of Respondents

The respondents maintain that the arbitrator’s directions and the High Court’s order correctly require payment of the decretal amount with 18% interest from the date of the decree, consistent with the order that the award be treated as a rule of the Court and that the interest flow from decree until realization; they contend that this interpretation aligns with the language of the award and the court’s decreeing process.

Extracted Judgment Text

Exact text extracted from official judgment records.

A ## [2008] 1 S.C.R. 13 ## GHULAM MOHAMMAD DAR II. STATE OF J & K & ORS. (C.A. No. 12 of 2008) ## JANUARY 4, 2008 B ## [G.P. MATHUR AND P. SATHASIVAM, JJ.] - - _-{ Arbitration Interest on award amount High Court hoiding that interest@ 18% p.a. for award amount from date·_ - _of decree till realization Claimant's case that interest on_ c _decretal amount to be paid from date of Award and not from_ - _date of decree On appeal,, held: Order of High Court upheld_ - - _Moreso, interest was to be paid by State Government Interest._ An arbitrator passed an award in favour of the D claimant. High Court made the award the Rule of the Court and the amount found due along with interest awarded by the Arbitrator was to be paid from the date of decree with interest at 18% till final realization of the decretal amount of the petition. Hence the present appeal. E Appellant contended that in view of default in payment of the amount within the stipulated time, the appellant was entitled to interest@ 18% p.a. from the date of the Award and not from the date of the decree. F _; Disposing of the appeal, the Court .' HELD: The direction of the Arbitrator and the order passed by the High Court both in the Arbitration Petition and Revision Petition is verified. On perusal of the same and of the fact that the respondents are none other than G the State Government, the order of the High Court passed in~rbitration Petition is concurred with and held that the claimant is entitled to interest @ 18% p.a. for the award amount from the date of the decree till realization. To this extent, the position is clarifimJ. [Para 8] [15-F, G] H H SUPREME COURT REPORTS 14 [2008) 1 S.C.R. ) A CIVIL APPELLATE JURISDICTION: Civil Appeal No. 12 . of 2008 From the final Judgment and Order dated 1.2.2006 of the High Court of Jammu & Kashmir at Srinagar in C.R. No. 47/ 200€1 B M.L. Bhat, Purnima Bhat for the Appellant. Anis Suhrawardy and S. Mehdi Imam for the Respondents. The Judgment of the Court was delivered by c **P. SATHASIVAM, J.** 1) Leave granted. 2) This appeal is directed against the order dated 01.09.2006 passed by the High Court of Jammu and Kashmir at Sri Nagar in Civil Revision No. 47 of 2006 whereby the High D[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. E F 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 05.09. 1995 which was made a Rule of the Court and accordingly decree came to be passed on 30.04.1998. ... ; 6) It is relevant to reproduce the Award of the Arbitrator in respect of the interest which reads as under: G H 'The claimant shall be entitled to 10% S.l.P.A. beyond 10.11.1995 till payment is made in full by the respondents of the full awarded amount. Respondent No.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 ,. GHULAM MOHAMMAD DAR _v._ 15 STATE OF J & K & ORS. [Sathasivam, J.] ., j t, ~ ' shall. be paid over and above from 1.2.1994 till date of A actual payment." i 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 01.02.1994 till date of actual payment. B 7) On 30.04.1998, learned single Judge of the High Court c 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 D from the date of decree with interest at 18% till final realization 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[E ] 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 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 F 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 30.04.1998 passed in Arbitration Petition No. 171 of 1991 and hold that the claimant G is entitled to interest@ 18% p.a. for the award amount from the date of the decree till realization. To this extent, we clarify the position. The Civil Appeal is disposed of on the above terms. No costs. N.J. Appeal disposed of. H