Hari Chand Prakash Wanti Charitable Memorial Trust v. I.D.B.I Bank

Judgement Debtor Through: Mr. Hemant Budakoti, Advocate. CORAM: JUSTICE S. MURALIDHAR ORDER %

15.11.2011 E.A. No. 632 of 2010 For the reasons stated therein, the application is allowed and the Execution Petition No. 9 of 2008 stands revived. The application is disposed of. EX.P. 9/2008 & E.A. Nos. 520/2008 & 244/2011

¶1An Award made by the learned Arbitrator, Mr. Justice J.K. Mehra (Retired),on 10'^ May 2003 inthe disputebetweenthe PetitionerDecree Holder ('DH') M/s Hari Chand Prakash Wanti Charitable Memorial Trust ('HCPWCMT') and the Respondent Judgement Debtor ('JD') arising Ex.P. No. 9/2008 Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. V from the leasedeed dated 17^*^ April 1997 was modifiedby this Courtby an orderdated 6'^ July 2006 in O.M.P. No. 337 of 2003. This Courtheld that the DH would be entitledto five weeks' rent for the period during which the premises was restored to its original condition. Consequent upon the modificationwiththe Awardby this Courtby its orderdated 6'^ July2006,theDHhas filedthe presentexecutionpetition.

¶2Under the lease deed dated 17^^ April 1997 the DH received an interest-free security deposit of Rs. 51,00,000/- from the JD and it was agreedthat the said would be adjustedproportionatelytowardsthe lease rent payableby the lesseefor the last six monthsprior to the termination ofthe lease.Admittedly,rent for four months,i.e.,Februaryto May 2002, aggregatingto Rs. 42,50,000/-had to be paid by the JD to the DH upon termination of the lease. After adjusting the said amount of four months' rent against the security deposit, the DH would owe the JD a sum of Rs. 8,50,000/-. However, the JD owes the DH five weeks' rent which works out to Rs. 13,28,125/-. After adjusting the above balance security deposit of Rs. 8,50,000/-, the DH would still be owed by the JD a sum of Rs. 4,78,125/-. Further, it is pointed out that in terms of the Award dated lO'*^ May 2003 "the arrears of water and electricitycharges could be recovered by the Decree Holder out of the security deposit lying with it." Additionally, it is submitted that under Section 31(7)(3) of the Arbitration Ex. p. No.9/2008 and Conciliation Act, 1996 ('Act') as explained by the Supreme Court in State ofHaryana v. M/s S.L. Arora & Company JT 2010 (2) SC 534 the Petitioner would be entitled to 18% simple interest per annum from the date of the Award till the date of payment.

¶3The JD has filed two objections in the form of EA Nos. 520 of 2008 and of 2011. It is first submitted that the JD had instituted proceedings against the DH before the Debt Recovery Tribunal ('DRT') for recovery of the balance security deposit after adjusting the four months'. rent. In the said proceedings the DRT issued a recovery certificate ('RC') in favour of the JD and against the DH. The DH then approached the DRT for withdrawal of the said RC by filing M.A. No. 32 of2008. On 2""^ November2010 the DRT passedan orderallowingM.A. No. 32 of 2008 and recalling the RC issued against the DH. The DRT gave both the parties, i.e., the DH and the JD, to agitate their respective claims before this Court in the present execution petition filed by the DH. It may be mentioned that the appeal filed by the JD against the above order was dismissed by the Debt Recovery Appellate Tribunal ('DRAT') by an order dated 4**^ April 2011. It is submittedby the JD that for the period beyond subsistenceof the lease, it is entitledto interest on the balancesecuritydepositafteradjustingfour months' rent at the prevailing marketrate of 24% simple interestper annum. It is ftirthersubmittedthat, Ex. p. No. 9/2008 n , if the interest of the balance security deposit is so calculatedthen the claimmade by the DH inthe presentproceedingswouldnot bejustified.

¶4Mr. HemantBudakoti,learnedcounselfor the JD furtherdisputesthe claim for intereston the awarded amount. Accordingto him when this Court partly allowed O.M.P. No. 337 of 2003 filed by the DH by the orderdated 6^*^ July 2006 it only grantedthe DH five weeks' rent. Since the orderofthis Courtwas silentas regardsthe awardofinterest,no such claimcouldbe made by the DH in the presentproceedings.

¶5Replyingof the last submission,it is submittedby Mr. S.K. Rungta, learnedSeniorcounselappearingfor the DH, that underSection31(7)(b) of the Act any amount found payable under an arbitral Award would automaticallycarry @ 18% simple interestper annum from the date of the Award till the date of the payment. He further pointed out that the security deposit was expressly stated to be an interest-free one in the lease deed. The subjectmatterof the arbitralproceedingsinteralia concerned the liabilityofthe JD to pay rent for the periodduringwhichthe premises were restoredto its originalposition.Since some portionof that amount had to be adjusted against the security deposit as well, interest did not becomepayable on the securitydeposittill the entire amount in terms of the Award v/as realized. Ex, P. No, 9/2008 Page4of7

¶6The above submissionshave been considered.After the order dated 2"^^ November2010 ofthe DRT, the questionofthe DH havingto pay any amountto the JD as a resultofthe RC earlierissuedby the DRT did not arise. The DRT gave liberty to both parties to agitate their respective claims in these proceedings.Thereafter,the JD has filed EA No. 244 of 2011 claimingthatthe DH owes it moneyand not vice-versa.Admittedly, the JD owes the DH four months' rent aggregatingto Rs. 42,50,000/-. Underthe lease deed the securitydepositofRs. 51,00,000/-held by the DH was an interest-freedeposit. After adjusting rent of four months againstthe said interest-freesecuritydeposit, the DH would have owed the JD a sum ofRs. 8,50,000/-.In terms ofthe judgmentdated 6"" July 2006 of this Court in O.M.P. NO. 337 of 2003, the JD further owes the DH rent for five weekswhichworks out to Rs. 13,28,125/-(calculatedon the basis that in terms of the lease deed the rent for four weeks is Rs. 10,62,500/-).The said amount of Rs. 13,28,125/-would get reducedby Rs. 8,50,000/-, which is refundable by the DH to the JD as the balance security deposit. The sum owed by the JD to DH, de hors the claim for water and electricity charges, works out to Rs. 4,78,125/-.

¶7There is merit in the contention of the DH that till such time the five weeks rent was not fully paid by the JD, the question of the DH paying any interest on the security deposit for the period beyond subsistence of Ex.P. No. 9/2008 the leasedid notarise.Further,the issuewhetherthe JD was liableto pay the DH rent for the period during which the premises were restored to its original position was the subject matter of arbitration. The modified Arbitral Award granting the said sum to the DH had to be enforced and the amount realised after adjusting the security deposit amount. Consequently, this Court negatives the claim of the JD for interest on the security deposit for the period beyond the subsistence of the lease deed.

¶8As regardsthe claimof the DHfor intereston the balancesum payable in terms of the arbitralAward by the JD to the DH, Section31(7)(b)of the Act makes it clear that "a sum directed to be paid by an arbitral award shall, unless the award otherwisedirects, carry interest at the rate of eighteen per cent per annum from the date of the av/ard to the date of payment." There is nothing in either the original Award or the Award as modifiedby this Courtby its orderdated 6^^ July 2006 in O.M.P.No. 337 of.2003 which indicates that interest would not be payable. Therefore, in terms of Section 31(7)(b) of the Act, the DH would be entitled to 18% simple interest per annum on the aforementioned sum of Rs. 4,78,125/- from the date ofthe Award, i.e., lO'*" May 2003 till the date ofpayment by the JD which shouldnot be laterthan fourweeks from today.

¶9In terms of the Award the DH is entitled to recover from the JD arrears Ex. P. No. 9/2008 of water and electricity charges. However, the DH has to produce to the JD, the original bills in respect thereof. Accordingly, it is directed that the DH would be entitled to recover from the JD the arrears of water and electricitycharges for the period upto 3D' May 2002, providedthe DH produces the original bills and payment proof before the JD within a period of four weeks from today. In such event, the payment by the JD of such sum to the DH shall be made within a further period of four weeks thereafter.

¶10EA Nos. 520/2008 and 244/2011 are dismissed and Ex. P. No. 9 of 2008 is disposed of in the above terms. S. MURALIDHAR, J NOVEMBER 15, 2011 Bx. P.No. 9/2008 Page7of 7

* IN THE HIGH COURT OF DELHI AT NEW DELHI #3 . + EX.P. 9/2008 HARI CHAND PRAKASH WANTI CHARITABLE MEMORIAL TRUST Decree Holder Through: Mr. S.K. Rungta, Senior Advocate with Mr. Prashant Singh, Advocate. versus I.D.B.I BANK