TaxTMI 
TaxTMI 
2023 (10) TMI 486
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....t should be the relevant date for conversion of the awarded sum from USD to Indian rupees?" 2. Relevant facts necessary for adjudication of the issue are as follows: 2.1. An agreement was executed between the parties to carry out earth work in Iraq by the Royal Construction Company Private Limited RCCPL given by the National Projects Construction Corporation Limited NPCCL. According to the contract, Clauses 31 and 32 of the agreement along with their sub-paragraphs relate to payments and advances, the same are reproduced hereunder: "31. PAYMENTS AND ADVANCES: All amounts and schedule of prices as mentioned in the Agreement documents are in Iraqi Dinars ID and represent the* total lump sum amount payable to the Associate for various components of works. For the purpose of payment, the schedule of prices shall be used, and payment released against all monthly account bills submitted by the Associate after due verifications. 32. PAYMENT OF WORK IN PROGRESS 32.1. The NPCC may pay initial advance in the form of purchase of air tickets for workers and staff of the Associate from Delhi to Iraq. 2. The NPCC shall give advance, towards the ....
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.... advice to the Associate. 32.5 Retention money: Retention money shall be done by the Contractor at the rate of 10% of the gross value of each R.A. Bills subject to a total deduction of 5% of the contract value. 32.6 Currency: Payments against monthly account bill's shall be made to the Associate by the NPCC in Iraqi Dinars and US Dollars. i) 35 % Iraqi Dinars ii) 55 % US Dollars 32.7 Payments not to be deemed as the Acknowledgements: Payments made to the Associate shall not be deemed as the acknowledgement on the part of the contractor, of acceptance of work and any part thereof and/or of materials and workmanship etc. 32.8 Exchange Rate: For the purpose of conversion of Iraqi Dinars to US Dollars, the exchange rate of 1 Iraqi Dinars equivalent to 3.37778 US Dollars shall be applicable. 32.9 Refund of Retention Money after Maintenance Period: Necessary or desirable and for that purpose, shall have power to order the Associate to do and -the Associate shall do any or all of the following: - a) Increase or decrease the quantity of any work' included in the Agreement b)....
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....NPCCL preferred a Special Leave Petition before this Court. This Court vide order dated 24.02.2015 after granting leave, allowed the appeal, set aside both the orders of the Division Bench i.e. 19.05.2014 and 19.09.2014. This Court further held that whatever directions have been given in the award by the learned Arbitrator would govern the field. This Court had further held that the date of conversion would be as per the original agreement dated 26.09.1982, as the learned Arbitrator had already in clear terms said so. It further was of the view that the midway approach of the Division Bench by reducing the rate of interest was also not justified. It would be beneficial to reproduce the last two paragraphs of the judgment of this Court: "The issue that arises for consideration is whether the High Court should have fixed the date of conversion contrary to the agreement and contrary to the award which is in consonance with the agreement and further reduced the rate of interest. In our considered opinion, when the* learned arbitrator had already, in clear terms, stated the date of conversion would be as per the original agreement dated 29.06.1982, the same could not have been ....
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....r the original agreement dated 29.06.1982. ii) The change of rate of interest by the Division Bench by reducing it from 12 percent to 6 percent terming it as midway approach was not sustainable as it was beyond the scope of section 37 of the 1996 Act. iii) The directions given by the learned arbitrator in the award will govern the field. 6. It is very clear from the above that we have to fall back upon the terms of the agreement for the purposes of deciding the question regarding the date of conversion. 7. In the entire agreement, the relevant paragraphs dealing with the payments and advances and the payments of work in progress is laid down in paragraphs 31 and 32 and its sub-paragraphs. Paragraph 32.6 of the agreement states that payments against monthly account bills shall be made in Iraqi Dinars and US Dollars out of which 35 percent would be in Iraqi Dinars and 65 percent would be in US Dollars. Further, paragraph 32.8 defines the exchange rate for the purposes of conversion of Iraqi Dinars to US Dollars and the exchange rate being 01 Iraqi Dinar equivalent to 3.37778 US Dollars. 8. We do not find any mention of payment being made in the Indian Curre....