9911796707
TMI Blog2011 (6) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... dently carry on its commercial activities. The appellant/assessee entered into contract with M/s. Alimenta SA Switzerland (for short 'Alimenta') for export of 5,000 MT HPS groundnut during the period February to April, 1980 subject to certain terms and conditions. On account of ban imposed by Government of India, the assessee was prohibited from exporting balance quantity of HPS groundnuts. Alimenta initiated arbitration proceedings, wherein the assessee was directed to make payment of US$ 46,81,000 as damages with interest at the rate of 10.5 per cent from 13-2-1981 to the date of the award i.e., 15-11-1989. The assessee preferred appeal before the Board of Appeal which confirmed the award with some modification, i.e., the assessee was directed to pay US $45,26,000 as damages with interest at the rate of 11.25 per cent from 13-2-1981 to the date of award i.e., 14-9-1990. Alimenta on 8-7-1993 initiated proceedings for enforcement of award and also claimed interest at the rate of 18 per cent per annum from the date of award till the date of payment. On 28-1-2000 the High Court made award as a rule of the Court and directed the assessee to pay interest at the rate of 18 per cent per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate authority passed the order). Admittedly, as per the award of the appellate authority interest was payable by the assessee on a sum awarded only up to the date of the award. The date of the award here would be taken to be the date of the order confirming the award by the appellate authority, i.e., 14-9-1990. On 8-7-1993, Alimenta filed an application before this Court for a decree in terms of the award wherein, it also prayed for future interest at the rate of 18 per cent per annum from the date of award till the date of payment by the assessee. It was only on 28-1-2000, that this Court passed a decree making the award as a rule of Court and directions were given to the assessee to pay interest as claimed at the rate of 18 per cent per annum from the date of award till the date of payment. Here also the date of award shall be taken to be 14-9-1990. That being so, this Court directed the assessee to pay interest at the rate of 18 per cent from 14-12-1990 till the date of payment. The question for consideration would be as to whether the liability could be said to have accrued to the assessee to pay this interest before the passing of the order by this Court on 28-1-2000. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/[1996] 88 Taxman 138 (Ker.). 6. The case of Rama Bai (supra) related to interest on enhanced compensation payable under the Land Acquisition Act on account of the property of the assessee acquired by the Government. Since the property was held transferred to the Government, compensation and solatium allotted to the assessee was held to have accrued on the date on which transfer took place. Therefore, the interest allowed by the court on enhanced compensation was held to be accrued to the assessee and, therefore, was allowed to be spread over the years. The facts of the case are distinguishable inasmuch as the principle applicable in such cases is that the interest is payable on compensation and enhanced compensation as per the provisions of Land Acquisition Act. Therefore, the income was to accrue every year irrespective, of its quantification by the party acquiring the land. It was under those circumstances that interest was conceded as having accrued to him year to year and was directed to be taxed year after year from the date of delivery of decision till the date of order awarding enhanced compensation. In the case of Fazilka Electric Supply Co. Ltd. (supra), the dispute was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that period can be determined. 10. Invoking the ratio of the aforesaid decisions, the learned counsel submitted that the interest liability on the outstanding amount of damages accrued, inasmuch as the award against the assessee had already been made and the interest was capable of estimation with reasonable certainty. Now we may like to mention about the judgments which were cited by the learned counsel for the revenue. In the case of Central India Electric Supply Co. (supra), the Supreme Court rejected the plea of the assessee that the liability had become due on its quantification after passing of the award by the Umpire. The Apex Court observed that the arbitrator was appointed through the intervention of the court and, therefore, award had to be submitted in the court by passing a decree in terms thereof. In reference to this judgment, it was submitted by the learned counsel that in the present case, award was filed in the court and the same was made rule of the court only on 28-1-2000. Based on this decision of Supreme Court, it was further submitted that when an award is passed and is filed in the court, the same as such is not enforceable and the amount awarded thereunde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending consideration in appeal before the High Court was also not a good ground to contend that the price was not due till the litigation with regard to the award was not over. In law the money payable under a decree becomes due for payment on the date of passing of the decree and nonetheless it is so even if the decree is appealed against and there is likelihood of the decree being set aside, modified or confirmed in appeal." 12. In the present case, it is true that the award was made by the Arbitrator on 15-11-1989 and the same was merged with the award of the appellate authority made on 14-9-1990. This award of the Appellate Authority not only modified the original award dated 15-11-1989 by decreasing the amount of damages and increasing the rate of interest from 10.5 per cent to 11.25 per cent, but made the same payable from 13-2-1981 to the date of award, i.e., 14-9-1990. Till such time the award was not made enforceable and an application for enforcement was filed only on 8-7-1993. It is only with passing of the decree by this Court on 28-1-2000, that the award being made rule of the court, became enforceable. By this decree of 28-1-2000, the assessee was also directed to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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