H.P.HOUSING & URBAN DEVT.AUTH.& ANRversusRANJIT SINGH RANA

                    [2012] 2 S.C.R. 427


       H.P.HOUSING & URBAN DEVT.AUTH.& ANR                          A
                               v.
                     RANJIT SINGH RANA
               (Civil Appeal No. 2751 of2012).

                      MARCH 12, 2012.
                                                                    B
         [R.M. LODHA AND H.L. GOKHALE, JJ.]

    ARBITRATION AND CONCILIATION ACT, 1996:

     s.31(7)(b) - Liability to pay interest for the post-award      c
period - Held: The deposit of the award amount into the court
is nothing but a payment to the credit of the decree-holder -
Once the award amount was deposited into the court on a
particular date, the liability of post-award interest would cease
from that date.                                                     o
     During the pendency of the objections uls 34(3) of
the Arbitration and Conciliation Act, 1996, against the
award dated 14.2.2001, the appellants on 24.5.2001,
deposited before the Hig~ Court the entire amount due
under the award. The objections were rejected and the               E
appellant filed an intra-court appeal. While the appeal was
still pending, the respondent, on 12.8.2008, filed an
execution petition. The High Court held that the
respondent was entitled to post award interest @18% p.a.
from the date of the award till the date of the actual              F
payment.

    In the instant appeal, the question for consideration
before the Court was: whether the deposit of the entire
award amount by the appellants on 24.5.2001 into the                G
High Court amounted to payment to the respondent and
the appellants' liability to pay interest@ 18% p.a. from the
date of the award ceased from that date.

     Partly allowing the appeal, the Court
                          427                                       H
    428       SUPREME COURT REPORTS             [2012] 2 S.C.R.


A      HELD: 1. The parties are ad idem that the arbitrator
  has not exercised any discretion in the matter pertaining
  to the interest for the post-award period. Obviously, in
  absence thereof, by virtue of s. 31(7)(b) of the Arbitration
  and Conciliation Act, 1996 the award would carry interest
B @ 18% p.a. from the date of the award till the date of
  payment. [para 9] [431-C-F]

          State of Haryana and others vs. S.L. Arora and Company
    2010 (2) SCR 297 = (2010) 3 sec 690 - relied on.

C       2.1 The word 'payment' is not defined in the Act. It
  may have different meaning in different context but in the
  context of s. 31(7)(b) of the Act, it means extinguishment
  of liability arising under the award. It signifies satisfaction
  of the award. The deposit of the award amount into the
D court is nothing but a payment to the credit of the decree-
  h o Ider. In this view, once the award amount was
  deposited by the appellants before the High Court on
  24.5.2001, the liability of post-award interest from
  24.5.2001 ceased. The High Court, thus, was not right in
E directing the appellants to pay interest @ 18% p.a.
  beyond 24.5. 2001. [para 10-11] [431-G-H; 432-B-C]

       The Concise Oxford English Dictionary (Tenth Edition-
  revised); Webster Comprehensive Dictionary (International
  Edition) Volume two; The Law Laxicon, 2nd Edition reprint by
F P. Ramanatha Aiyar, inter alia - referred to.
                         Case Law Reference:
          2010 (2) SCR 297       relied on            para 8
G        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    2"151 of 2012.

       From the Judgment & Order dated 05.03.2009 of the High
  Court of Himachal Pradesh at Shimla in CMP No. 678 of 2008
H in Execution Petition No. 6 of 2008.
     H.P.HOUSING & URBAN DEVT.AUTH.& ANR v.                429
               RANJIT SINGH RANA
 1
     Y. Prabhakara Rao for the Appellants.                         A

     Binu Tamta, Dhrur Tamta for the Respondent.

     The Judgment of the Court was delivered by

     R.M. LODHA, J. 1. Leave granted.                              B

     2. Pursuant to the agreement between the parties being
agreement No. 11 of 1989-90 concerning construction of
residential complex at Shimla, certain disputes arose. As per
the terms of the contract, the Arbitrator was appointed to C
adjudicate the claims of the respondent and counter-claims of
the appellants. On August 12, 1998, the Arbitrator passed the
award. Aggrieved thereby, the appellants filed objections under
Section 34(3) of the Arbitrator and Conciliation Act, 1996 (for
short "the Act"). The objections were accepted by the High
                                                                0
Court to the extent that the reasons were not given by the
Arbitrator and, accordingly, the matter was sent back to the
Arbitrator for giving reasons in support of the award.

     3. After remand, tile Arbitrator considered the matter and
passed the award on February 14, 2001. The appellants filed        E
objections against the award dated February 14, 2001. They
also deposited the entire amount due under the award before
the High Court on May 24, 2001. The objections filed by the
appellants were ultimately rejected by the single Judge of the
High Court on February 26, 2008. Against this order, intra-court   F
appeal is said to be pending. The respondent, however, started
execution of the Award dated February 14, 2001 by filing
Execution Petition on August 12, 2008. The appellants filed
objections to the Execution Petition.

     4. The question before the High Court was whether the         G
respondent was entitled to interest @ 18% p.a. from the date
of the award dated February 14, 2001 till the date of actual
payment to the respondent.

                                                                   H
          '   '




    430           SUPREME COURT REPORTS               [2012] 2 S.C.R


A      5. The High Court considered the diverse provisions of the
  Act including Section 31(7)(a) and (b) of the Act and few
  decisions of this Court and ultimately held that the respondent
  was entitled to post-award interest@ 18% p.a. from the date
  of the award till the date of the actual payment. It is this order
B which is in appeal before us.

       6. There is no dispute that the entire amount due under the
  Award dated February 14, 2001 was deposited by the
  appellants before the High Court on May 24, 2001. The
C question that arises for determination before us is, whether
  deposit of the entire award amount by the appellants on May
  24, 2001 into the High Court amounts to payment to the
  respondent and the appellants liability to pay interest @ 18%
  p.a. from the date of the award ceased from that date.

D         7. Section 31 (7)(a) and (b) of the Act reads as under:

          "31 (7) (a) Unless otherwise agreed by the parties, where
          and in so far as an ·arbitral award is for the payment of
          money, the arbitral tribunal may include in the sum for which
          the award is made interest, at such rate as it deems
E
          reasonable, on the whole or any part of the money, for the
          whole or any part of the period between the date on which
          the cause of action arose and the date on which the award
          is made.

F         (b) A sum directed to be paid by an arbitral award shall,
          unless the award otherwise directs, carry interest at the
          rate of eighteen per centum per annum from the date of
          the award to the date of payment."

G        8. The above provision has been recently considered by
    this Court in State of Haryana and others vs. S.L. Arora and
    Company (2010)3 SCC 690. This Court held as under:

          "........ In a nutshell, in regard to pre-award period, interest
          has to be awarded as specified in the contract and in the
H
    H.P.HOUSING & URBAN DEVT.AUTH.& ANR v.                     431
        RANJIT SINGH RANA [R.M. LODHA, J.]

    absence of contract, as per discretion of the Arbitral            A
    Tribunal. On the other hand, in retard to the post-award
    period, interest is payable as per the discretion of the
    Arbitral Tribunal and in the absence of exercise of sucti
    discretion, at a mandatory statutory rate of 18% per
   ·annum."                                                           B

This Court further observed in para 24.6 as under:

    "......... but if the award is silent in regard to the interest from
    the date of award, or does not specify th.e rate of interest
    from the date of award, then the party in whose favour an C
    award for money has been made, will be entitled to interest
    at 18% per annum from the date of award. He may claim
    the said amount in execution even though there is no
    reference to any post-award interest in the award. Even if
    the pre-award interest is at much lower rate, if the award D
    is silent in regard to post-award interest, the claimant will
    be entitled to post-award interest at the higher rate of 18%.
    per annum.

     9. Learned counsel for the parties are ad idem that the          E
Arbitrator has not exercised any discretion in the matter
pertaining to the interest for the post-award period. Obviously,
in absence thereof, by virtue of Section 31 (7)(b) of the Act, the
award would carry interest@ 18% p.a. from the date of the
award till the date of payment. Whether May 24, 2001 when the
                                                                      F
entire award amount was deposited by the appellants into the
High Court is the date of payment?

     10. Payment is not defined in the Act. The Concise Oxford
English Dictionary (Tenth Edition-revised) defines 'payment' '1.
the action of paying or the process of being paid. 2. an amount       G
paid or payable'. Webster Comprehensive Dictionary
(International Edition) Volume two defines 'payment' '1. the act
of paying. 2 Pay; requital; recompense.' The Law Laxicon, 2nd
Edition reprint by P. Ramanatha Aiyar, inter alia, states
'payment is defined to be the act of paying, or that which is         H
    432      . SUPREME COURT REPORTS               (2012] 2 S.C.R.


A paid; discharge of a debt, obligation or duty; satisfaction of
  claim; recompense; the fulfillment of a promise or the
  performance of an agreement; the discharge in money of a sum
  due.'

        11. The word 'payment' may have different meaning in
8
  different context but in the context of Section 37(1 )(b); it means
  extinguishment of liability arising under the award. It signifies
  satisfaction of the award. The deposit of the award amount into
  the Court is nothing but a payment to the credit of the decree-
C holder. In this view, once the award amount was deposited by
  the appellants before the High Court on May 24, 2001, the
  liability of post-award interest from May 24, 2001 ceased. The
  High Court, thus, was not right in directing the appellants to pay
  the interest @ 18% p.a. beyond May 24, 2001.

D       12. The appeal is, accordingly, allowed in part. The
  impugned order of the High Court is modified and it is directed
  that the appellants shall be liable to pay interest @ 18% p.a.
  for the post-award period from the date of award until May 24,
  2001. After May 24, 2001, the appellants are not liable to pay
E any interest on the award amount under Section 37(1 )(b) of the
  Act.

      13. We are informed by Mr. Y. Prabhakara Rao, learned
  counsel for the appellants that the amount as per the impugned
  order dated March 5, 2009 was deposited by the ·appellants
F which has been withdrawn by the respondent. In light of this,
  we observe that the High Court shall now re-determine the
  amount due and payable to the respondent under the award
  and the post-award interest as indicated above. The excess
  amount, if withdrawn by the respondent shall be refunded to the
G appellants within two months of re-determination by the High
  Court.

          14. No costs.

H R.P:                                      Appeal partly allowed.