JUDGMENT
S. Mukerkee, J.
1. The short point which arises for
consideration in this case is whether the Judgment
Debtor/DDA has satisfied the decretal amount which fell
due under the decree.
2. The position, as has crystalised between
the parties, and as relied upon by both the learned
counsel, is contained in Annexure A to the reply filed by
Delhi Development Authority to EA No. 338/2000.
3. It is admitted by Delhi Development
Authority that the award amount Along with interest up to
the date of award, was Rs. 5,22,002/62/-, which figure is
also accepted by learned counsel for the Decree Holder.
4. Thereafter however while calculating the
interest @ 12% for the period from 22.1.92 (the day
after the date of Award), till 17.11.99 (which was the
date of deposit of amount in this Court), the Delhi
Development Authority went on to calculate the interest
only on the awarded principal amount of Rs. 4,06,214.58/-,
and not upon the total awarded amount inclusive of
interest up to the date of Award (viz. not on
Rs. 5,22,002.62).
5. Due to the above said difference in the
base figure for computation of interest, an amount of
Rs. 1,17,000.00/- is still outstanding as per the
calculations of the Decree Holder, who has taken the base
figure for calculation of pendente lite and future
interest, to be, Rs. 5,22,002.62/- viz. the total amount
up to the date of Award inclusive of interest as per
award.
6. It is submitted by learned counsel for
the Delhi Development Authority that there cannot be
interest on interest, and as such their calculation
(Delhi Development Authority’s calculation), is correct
and the entire said amount having been paid, nothing
further remains due towards the Decree Holder.
7. Section 3 of the Interest Act, 1978
stipulates that interest cannot be granted on interest.
However, learned counsel for the Decree Holder while
relying on the judgment of the Apex Court in Oil &
Natural Gas Commission v. M.C. Clelland Engineers S.A.
(1999) 4 CCC 327, has urged that interest becomes part of
the principal amount, and therefore on that awarded
interest, further interest up to the date of payment,
would accrue in terms of the above-said judgment of the
Apex Court.
8. He has further relied upon the judgment
of the Single Judge of the Punjab & Haryana High Court
reported as Union of India v. Harbans Singh Tuli & Sons
Builders (P) Ltd. AIR 2000 Punjab and Haryana 313 where
he submits that it has been categorically held that the
Union of India was liable to pay interest even on the
pendente lite interest.
9. In my view there is a fallacy in the
submission of learned counsel for the Decree Holder.
10. It is a settled position under law that
interest is awarded in the nature of damages for delayed
payment, and there can-not be an award of further damages
on damages. For this purpose, it would be necessary to
examine carefully the decision of the Apex Court in Oil &
Natural Gas Commission (supra). The arbitrators in that
case, while dealing with the claims before them, had
awarded interest as a claim, and thereafter had also
awarded interest @ 12% from the date of the award till
realisation. The submission of learned senior counsel
for Oil & Natural Gas Commission was that since the
claims themselves were having interest component,
therefore the arbitrators could not have awarded further
interest on those claims.
11. The Apex Court held that if any interest
for the delay in making, say invoice payments, is dealt
with as a claim and is awarded as part of a claim,
thereafter there can also be an award of interest on
awarded claim up to the date of the payment, since that is
the interest as compensation for the delay in the payment
of the awarded amount. Therefore interest can always be
granted in relation to the total amount awarded under the
total number of claims, including any claim which
themselves are including determination of invoice price
with interest.
12. However that does not mean that once the
cumulative amount awarded under the different heads of
claim, are added together to constitute the principal
awarded amount, thereafter it will become a continuously
increasing base figure for working out the further
interest awarded after the award, and also after the
decree.
13. Learned counsel for the Decree Holder
submits that while calculating the further interest from
the date of the decree, with interest up to date of
decree, whatever is the cumulative amount up to the date
of the decree with interest up to date of decree, should
be taken as the base figure. This is totally
unsustainable. Once the principal amount awarded is
known, in relation to compensation for the time taken for
the said payment to reach the decree holder, the only
entitlement can be to interest at the rate granted by the
Court, but always with the base figure remaining as the
cumulative amount of the award, and not the amount
inclusive of interest as on the date of the decree.