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Cobra Instalaciones Y Servicios, S.A. and Shyam Indus Power Solution Pvt. Ltd. Vs. Haryana Vidyut Prasaran Nigam Ltd. - (High Court of Delhi) (04 Sep 2023)

If the Judgment debtor has intimated the decree holder and award amount is available for withdrawal unconditionally, the liability of judgment debtor would cease on the date of deposit



By way of present Execution Petitions filed under Section 36 of the Arbitration and Conciliation Act, 1996 ('the A&C Act') read with Order XXI Rule 1 CPC, the Decree Holder seeks enforcement of common Award. By way of the Award, AT has awarded cumulative amount of Rs. 5,54,09,437, including interest at the rate of 9% per annum from 29.07.2020 till the date of payment ('the Award amount'), in favour of the Award Holder/Decree Holder ('the DH').

The short issue involved is as to whether JD is liable to pay interest for the period between the date of deposit till the date of withdrawal of the deposit by the DH or dismissal of the objections, as in the present case.

Under Order XXI Rule 1(1)(a), payment of Award amount by JD by way of court deposit is permissible. Under Order XXI Rule 1(2), a court notice is required to be given to DH in case the Award amount is deposited in court under Sub-Rule (1)(a). Proviso to Rule 1 stipulates that in case DH refuses to accept the Award amount tendered to him, interest shall cease to run from the date of tender.

If the JD has intimated the DH with a notice of deposit and the Award amount is available for withdrawal to the DH unconditionally i.e., without any condition of furnishing security or otherwise, the liability of JD would cease on the date of deposit.

In the present cases, the JD had deposited the Award amount in the execution proceedings with the requisite notice in terms of the Order XXI Rule 1 CPC. The notice was served on the date of deposit i.e., 19.05.2021 on the DH. There were no fetters upon the DH to withdraw the said amount, as admittedly there was no stay of the impugned award in the objections filed by the JD under Section 34 of the A&C Act. The failure of the DH to take steps in preferring an application for withdrawal of the Award amount would not ensure to the disadvantage of the JD. The deposit alongwith its due notice to the DH was sufficient discharge of the onus put on the JD in terms of Rule 1 Order XXI CPC. The award having already been satisfied, the present petitions are disposed of.


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