Interest on settled payment follows default from the due date, while the agreed rate remains unchanged.

A settled payment was required to be made in one go, and the respondent's attempt to pay in instalments did not cure default when the amount was not cleared by the proposed outer date. The earlier restriction of interest to a shorter period was found to lack cogent reasoning, while the rate of interest itself was left undisturbed. The default was treated as having arisen from 16.04.2010, so interest became payable from that date until the principal was deposited, with any interest already paid to be adjusted.

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Issues: Whether the appellant was entitled to interest on the settled sum of Rs. 2.85 crore from the date of settlement and, if so, from what date and at what rate.

Analysis: The settlement recorded that the amount was to be paid in one go, though the respondent later sought to pay in instalments and did not clear the amount by the proposed outer date of 15.04.2010. The earlier limited award of interest for 07.01.2022 to 28.02.2023 was found to be unsupported by cogent reasoning. The rate of interest fixed by the Tribunal was not disturbed, but the period for which interest was allowed was held to be erroneous. The respondent was treated as being in default at least from 16.04.2010, and the appellant was found entitled to interest from that date until the principal amount stood deposited, with any interest already paid to be adjusted.

Conclusion: The appellant succeeded in part. Interest was held payable at 6% per annum from 16.04.2010 until deposit of the settled amount, instead of being confined to the shorter period earlier awarded.

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