Paragraph numbers below are the court’s original numbering, recovered from the source text.
5. The appellants being aggrieved, filed aforementioned Civil Revisions in the High Court which were disposed of on 03.03.2017. The questions that arose for consideration were formulated by the High Court as: “Twin questions that fall for consideration of this Court are; (i) whether the decree-holders are entitled to the statutory benefits under Section 31(7)(a) and (b) of the Act; and (ii) whether the decree-holders-petitioners are also entitled to calculate the amount of interest on advance rent and nonrefundable security, at the rate of interest offered by nationalized bank, i.e. 7% per annum, with quarterly rests.” Relying on the majority view in Hyder Consulting (UK) Ltd. vs. Governor, State of Orissa through Chief Engineer1, the High Court answered the first issue in favour of the respondents and concluded that they were entitled to post award interest in terms of Section 31(7)(b) of the Act. As regards second issue, it was held that the respondents were 1(2015) 2 SCC 189 MUNICIPAL COUNCIL THANESAR v. VIRENDER KUMAR ETC. [UDAY UMESH LALIT, J.] also entitled to interest @ 7% per annum with quarterly rests. The view so taken by the High Court is presently under challenge.
6. We have heard Mr. Ajay Majithia, learned counsel for the appellants and Mr. A. Tewari, Mr. Anupam Raina, Mr. Raktim Gogoi and Mr. Chritarth Palli, learned advocates for the respondents.
7. The first issue was rightly answered in favour of the respondents. The question is no longer res integra and stands answered in clear terms in Para 10 of the Judgment of Bobde, J. and paras 27-28 of the Judgment of Sapre, J. in Hyder Consulting (supra). The view taken by the High Court on this issue is absolutely correct.
8. As regards the second issue, the Executing Court correctly appreciated that the Award did not specifically state that the interest @ 7% per annum was to be awarded with quarterly rests. In fact, the Award did not specify anything; whether it be quarterly rests or yearly rests. It simply awarded interest @ 7% per annum. Since the Award was completely silent on that aspect, at the stage of execution, no addition or alteration could be made in the operative directions issued in the Award. The Award had seen the challenges at three levels and at none of those stages, there was any modification in the operative directions of the Award.
9. The Executing Court found that it was doubtful whether the award of interest was @ 7% with quarterly rests or yearly rests. In fact, the situation was more fundamental, whether there was award of any compound interest at all. The Executing Court put it with yearly rests which the High Court in Revisions preferred by the appellants modified to quarterly rests. In our view, both the Executing Court and the High Court completely erred and awarded compound interest in favour of the respondents when the award had stipulated it to be 7% per annum simplicitor. The Award did not even remotely suggest that such award of interest would be with a direction that interest be capitalized on yearly or quarterly basis. It was pure and simple award of interest @ 7% and could not be taken to be a direction to award compound interest.
10. We, therefore, accept the submission made by the learned counsel for the appellants as regards second issue and direct that the direction issued in the para 21 of the Award shall be construed as simple interest @ 7% per annum.
11. Consequently, the pre-award interest on the amounts in question shall be calculated @ 7% per annum simple interest. The respondents shall be entitled to the benefit under Section 31(7)(b) of the Act and post award interest shall also be @ 7% per annum – simple interest.
12. With the aforesaid modification the appeals are partly allowed. No order as to costs. Devika Gujral Appeals partly allowed. MUNICIPAL COUNCIL THANESAR v. VIRENDER KUMAR ETC. [UDAY UMESH LALIT, J.]