TaxTMI 
TaxTMI 
2022 (5) TMI 977
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....) and the balance works (including the Depot civil works and the Project systems works) were to be executed by the Appellant-DAMEPL. As per Article 29 of the Concession Agreement, in the event of termination, it was the Respondent-DMRC, which was liable to make Termination Payment (as defined in the Concession Agreement). 5. During the course of operations of the project, a dispute arose between the Appellant-DAMEPL and the Respondent-DMRC. The Appellant-DAMEPL terminated the Concession Agreement by Termination Notice dated 8th October, 2012. The Respondent-DMRC referred the dispute to Arbitration Under Article 36.2 of the Concession Agreement on 23rd October, 2012. An Arbitral Award came to be passed on 11th May, 2017. On 12th May, 2017, the Appellant-DAMEPL paid a stamp duty of Rs. 4,72,20,000/- on the Award. Certain interim orders were also passed in the interlocutory proceedings by the Delhi High Court. Since the Respondent-DMRC was aggrieved by the Award, it filed a Petition Under Section 34 of the 1996 Act in Delhi High Court, being OMP (COMM.) No. 307 of 2017, challenging the Arbitral Award dated 11th May, 2017. Vide the judgment and order dated 6th March, 2018, the learned....
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....s that the issue is no more res integra. The majority judgment of this Court in the case of Hyder Consulting (UK) Limited v. Governor, State of Orissa through Chief Engineer (2015) 2 SCC 189 has clearly held that, upon a plain reading of clauses (a) and (b) of Sub-section (7) of Section 31 of the 1996 Act, it is clear that in the sum for which an Award is made, interest may be included for the pre-award period, and that for the post-award period, interest up to the rate of 18% per annum may be awarded on such sum directed to be paid by the Arbitral Tribunal. Learned Senior Counsel, therefore, submits that the amount under Clause (a) of Sub-section (7) of Section 31 of the 1996 Act would include the Termination Payment of Rs. 2782.33 crores plus the amount of interest granted by the Arbitral Tribunal from the date of cause of action till the date of the award. As such, it is the contention of the Appellant-DAMEPL that the sum, as specified in Clause (a) of Sub-section (7) of Section 31 of the 1996 Act, would be an amount of Rs. 4662.59 crores. It is further submitted that the sum, which is arrived at Rs. 4662.59 on the correct construction of Clause (a) of Sub-section (7) of Section....
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....as follows: 31.(7)(a) Unless otherwise agreed by the parties, where and insofar as an arbitral award is for the payment of money, the Arbitral Tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. (b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the award to the date of payment. (emphasis supplied) 4. Clause (a) of Sub-section (7) provides that where an award is made for the payment of money, the Arbitral Tribunal may include interest in the sum for which the award is made. In plain terms, this provision confers a power upon the Arbitral Tribunal while making an award for payment of money, to include interest in the sum for which the award is made on either the whole or any part of the money and for the whole or any part of the period for the entire pre-award period between the date on which the cause of action arose and the date on w....
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....award, whether inclusive or exclusive of interest, shall carry interest at the rate of eighteen per cent per annum for the post-award period, unless otherwise ordered. 8. Thus, Sub-section (7) of Section 31 of the Act provides, firstly, vide Clause (a) that the Arbitral Tribunal may include interest while making an award for payment of money in the sum for which the award is made and further, vide Clause (b) that the sum so directed to be made by the award shall carry interest at a certain rate for the post-award period. 9. The purpose of enacting this provision is clear, namely, to encourage early payment of the awarded sum and to discourage the usual delay, which accompanies the execution of the award in the same manner as if it were a decree of the court vide Section 36 of the Act. 10. In this view of the matter, it is clear that the interest, the sum directed to be paid by the arbitral award under Clause (b) of Sub-section (7) of Section 31 of the Act is inclusive of interest pendente lite. 11. At this juncture, it may be useful to refer to Section 34 Code of Civil Procedure, also enacted by Parliament and conferring the same power upon a court to award interest on an a....
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....nt and such interest as the Arbitral Tribunal deems fit. It is further held that, if no interest is awarded, the "sum" comprises only the principal amount. The majority judgment held that Clause (a) of Sub-section (7) of Section 31 of the 1996 Act refers to the total amount or sum for the payment for which the award is made. As such, the amount awarded under Clause (a) of Sub-section (7) of Section 31 of the 1996 Act would include the principal amount plus the interest amount pendente lite. It was held that the interest to be calculated as per Clause (b) of subsection (7) of Section 31 of the 1996 Act would be on the total sum arrived as aforesaid under Clause (a) of Sub-section (7) of Section 31 of the 1996 Act. S.A. Bobde, J. in his judgment, has referred to various authorities of this Court as well as Maxwell on the Interpretation of Statutes. He emphasized that the Court must give effect to the plain, clear and unambiguous words of the legislature and it is not for the Courts to add or subtract the words, even though the construction may lead to strange or surprising, unreasonable or unjust or oppressive results. 14. Sub-section (7) of Section 31 of the 1996 Act is already rep....
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....s that it is open to the parties to agree otherwise. During the arbitral proceedings, right is given to the parties to decide their own procedure. So if there is an agreement between the parties with regard to the procedure to be followed by the arbitrator, the arbitrator is required to follow the said procedure. Reason being, the arbitrator is appointed on the basis of the contract between the parties and is required to act as per the contract. However, this would not mean that in appeal parties can contend that the appellate procedure should be as per their agreement." 17. This Court in the case of Sree Kamatchi Amman Constructions v. Divisional Railway Manager (Works), Palghat and Ors. - (2010) 8 SCC 767 had an occasion to directly consider the aforesaid phrase as employed by the legislature in Sub-section (7) of Section 31 of the 1996 Act. R.V. Raveendran, J. in the said case observed thus: "19. Section 31(7) of the new Act by using the words 'unless otherwise agreed by the parties' categorically clarifies that the arbitrator is bound by the terms of the contract insofar as the award of interest from the date of cause of action to the date of award. Therefore, where ....
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....h these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place. It is by looking at the definition as a whole in the setting of the entire Act and by reference to what preceded the enactment and the reasons for it that the Court construed the expression "Prize Chit" in Srinivasa [[(1980) 4 SCC 507 :(1981) 1 SCR 801 : 51 Com Cas 464] and we find no reason to depart from the Court's construction". 21. It could thus be seen that each and every word and each and every phrase mentioned in the provision will have to be given effect to. Statutes have to be construed so that every word has a place and everything is in its place. 22. An important aspect that has to be taken into consideration is that the 1996 Act itself emphasizes on party autonomy. As such, the legislative intent is clear that when the parties have agreed to the contrary on any of the aspects as ment....
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.... the parties with regard to payment of interest. Such is not the case here. It will be relevant to refer to Article 29.8 of the Concession Agreement, which reads thus: "29.8 Termination Payments: The Termination Payment pursuant to this Agreement shall become due and payable to the Concessionaire by DMRC within thirty days of a demand being made by the Concessionaire with the necessary particulars duly certified by the Statutory Auditors. If DMRC fails to disburse the full Termination Payment within 30 (thirty) days, the amount remaining unpaid shall be disbursed along with interest at an annualised rate of SBI PLR plus two per cent for the period of delay on such amount." 26. It could thus clearly be seen that as per Article 29.8 of the Concession Agreement, the Termination Payment would become due and payable to the Concessionaire by DMRC within thirty days of a demand being made by the Concessionaire. It further provides that if the DMRC fails to disburse the full Termination Payment within 30 days, the amount remaining unpaid shall be disbursed along with interest at an annualized rate of SBI PLR plus two per cent for the period of delay on such amount. It can thus clearly b....
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.... with regard to the rate of interest. We find that the arbitral award has been passed in consonance with the provisions as contained in Clause (a) of Sub-section (7) of Section 31 of the 1996 Act and specifically, in consonance with the phrase "unless otherwise agreed by the parties". 29. As already discussed herein above, from the majority judgment of S.A. Bobde and Abhay Manohar Sapre, JJ. in the case of Hyder Consulting (UK) Limited (supra), it would appear that the situation, where there was an agreement between the parties on the point of payment of interest, did not fall for consideration in the said case. 30. We may gainfully refer to the three-judge Bench judgment of this Court in the case of Union of India and Ors. v. Dhanwanti Devi and Ors. - (1996) 6 SCC 44, wherein this Court has observed thus: "9. .....Every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there is not intended to be exposition of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found..." 31. It can thus clearly be seen that every j....