NHPC LTD Vs M/S JAI PRAKASH ASSOCIATES LTD.
Bench: J. CHELAMESWAR,ABHAY MANOHAR SAPRE
Case number: C.A. No.-005891-005891 / 2016
Diary number: 20451 / 2014
Advocates: AJIT PUDUSSERY Vs
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NON-REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 5891 OF 2016 (ARISING OUT OF SLP (C) No. 20397/2014)
NHPC Ltd. …….Appellant(s)
VERSUS
M/s Jai Prakash Associates Ltd. & Ors. ……Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. Leave granted.
2. This appeal is filed against the final judgment
and order dated 06.02.2014 passed by the High
Court of Punjab and Haryana at Chandigarh in
F.A.O. No. 3607 of 2011 wherein the Single Judge of
the High Court dismissed the FAO filed by the
appellant herein, in consequence, affirmed the order
dated 24.12.2010 passed by the Additional District
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Judge, Faridabad in Arbitration Petition No.52 of
2010.
3. On 11.08.2014, this Court issued notice of the
appeal to respondent No. 1 confining it to examine
only the question regarding the rate of interest
awarded by the High Court on the awarded sum to
the respondent.
4. Therefore, the short question involved in the
appeal is whether the rate of interest awarded by
the High Court on the awarded sum is proper or
not.
5. Having regard to the short controversy
involved in the case, it is not necessary to burden
the order by mentioning the facts in detail except to
the extent necessary for the disposal of the appeal.
6. The appellant-Government of India Company
awarded a contract dated 21.03.2001 to respondent
No.1 for doing some specific civil construction work
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in the project-Teesta V Hydroelectric Project at
Sikkim known as Lot TT-4 civil works.
7. In execution of the aforesaid work, disputes
regarding non-payment of dues for the work done
by respondent No.1 and several ancillary disputes
in connection thereto arose between the parties.
Since the parties could not amicably settle the
disputes and hence they were referred to the
Arbitral Tribunal in terms of the arbitration clause
contained in the contract. The Arbitral Tribunal
consisted of three arbitrators.
8. Respondent No. 1 filed their claim for recovery
of Rs.537.88 lacs against the appellant before the
Arbitral Tribunal towards their outstanding dues of
various natures. The appellant contested the claim
of the respondent.
9. By award dated 10.05.2008, the Arbitral
Tribunal partly allowed the claim of respondent
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No.1 and accordingly awarded them a total sum of
Rs.356.78 lacs. The Arbitral Tribunal also awarded
10% p.a. simple interest payable on the awarded
sum (Rs.356.78 lacs) from the date of accrual of
cause of action till the date of award and further
awarded future interest at the rate of 12% p.a. on
the awarded sum, i.e., Rs.451.49 lacs (Rs.356.78
lacs principal sum + Rs.94.71 lacs interest =
Rs.451.49 lacs) payable from the date of award till
recovery.
10. The appellant, felt aggrieved, challenged the
legality of the aforesaid award under Section 34 of
the Arbitration and Conciliation Act, 1996 before
the Additional District Judge, Faridabad, who by
order dated 24.12.2010 partly allowed the
application and modified the award accordingly.
11. The appellant, felt aggrieved, challenged the
order of the Additional District Judge and filed
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appeal before the High Court. By impugned order,
the High Court dismissed the appeal and upheld the
order passed by the Additional District Judge.
12. Felt aggrieved, the appellant has filed this
appeal by way of special leave before this Court.
13. Heard Mr. Gaurab Banerji, learned senior
counsel for the appellant and Mr. Sarvjit Pratap
Singh, learned counsel for respondent No.1.
14. Submission of the learned counsel for the
appellant was only one. According to him, the High
Court while dismissing the appeal and in principle
upholding of the award of the Arbitral Tribunal
wrongly awarded interest at the rate of 12% p.a. and
18% p.a. in place of 10% and 12% p.a. which was
awarded by the Arbitral Tribunal. It was, therefore,
his submission that this error appears to be more in
the nature of typographical error rather than on
merits and hence needs to be corrected by this
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Court by restoring the same rate of interest which
was awarded by the Arbitral Tribunal in the award
dated 10.05.2008 and upheld by Additional District
Judge vide his order dated 24.12.2010, i.e., 10%
and 12% respectively as detailed above in para 9.
15. Learned counsel for respondent No.1 candidly
admitted the error committed by the High Court in
the order while awarding the interest. Respondent
No.1 also in their counter at page 204 admitted the
error, which was pointed out by the appellant while
awarding the rate of interest.
16. In our opinion, the submission urged by the
appellant appears to be correct and hence it
deserves to be accepted. As mentioned above, even
the respondent could not oppose the prayer made
by the appellant which appear to be more in the
nature of typographical error.
17. In the light of foregoing discussion, which is
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sufficient, the appeal succeeds and is allowed in
part. Impugned order is modified to the extent that
the awarded amount shall carry the interest at the
same rates which were awarded by the Arbitral
Tribunal in the award dated 10.5.2008. In other
words, the awarded sum shall carry interest at the
rate 10% p.a. payable from the date of accrual of
cause of action till the date of award and shall
further carry interest at the rate of 12% p.a. from
the date of award till recovery on the awarded sum
as detailed in para 9 above.
18. No costs.
………...................................J.
[J. CHELAMESWAR]
…...……..................................J.
[ABHAY MANOHAR SAPRE] New Delhi; July 04, 2016
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