2009 (7) TMI 1388 - HC - Indian Laws

Summary

Issues Involved:
1. Appropriation of the amount of Rs. 89,78,84,930/- towards interest or principal sum.
2. Entitlement of the respondent to charge interest on interest/compound interest.

Summary:

Issue 1: Appropriation of Amount

The primary issue was whether the respondent could adjust the amount of Rs. 89,78,84,930/- towards interest or was obliged to appropriate it towards the principal sum due under the award. The court referred to the Supreme Court's judgment in I.C.D.S. Ltd. v. Smt. Smithaben H. Patel and Ors. AIR 1999 Supreme Court 1036, which held that post-decretal payments must be made in terms of the decree or as agreed between the parties. The court found that the appellant had deposited the amount specifically towards the principal sum, and the respondent had accepted and withdrawn it without any protest or reservation. Therefore, there was an implied agreement that the amount was to be appropriated towards the principal sum.

Issue 2: Interest on Interest/Compound Interest

The respondent's calculation included compound interest, which was not granted by the Arbitrator. The Supreme Court's order dated 15.09.2006 clarified that compound interest was not allowed. The court concluded that the calculation made by the respondent was incorrect and the appellant could not be directed to make payment as per this calculation. The appellant's calculation, which appropriated the amount towards the principal sum and calculated simple interest as modified by the Supreme Court, was found to be correct.

Conclusion:

The court set aside the order dated 19.11.2008 passed by the Learned Single Judge. The Ld. Single Judge was directed to decide if any further amount was payable by the appellant to the respondent in light of this judgment. Any amount found payable would be paid out of the amount deposited by the appellant during the pendency of the appeal, and the remaining amount, if any, would be refunded to the appellant. If no amount was found due, the entire amount deposited would be refunded to the appellant.