STATE OF BIHAR Vs. MIJAJ INTERNATIONAL

JUDGEMENT

(1.) This revision has been directed at the instance of the State of Bihar (now Jharkhand) the judgment-debtors petitioner against the impugned order dated 27-8-1998 passed in Execution Case No. 1 of 1991 by 2nd Subordinate Judge, Seraikella whereby and whereunder the petition filed by the decree holder for payment of compound interest on the decretal amount from the date of reference till 27-8-1998 was allowed with a direction to the Seristedar of the Court to calculate the interest, accordingly, and to submit a report in respect thereof and further a sum of Rs. 25.000/- was awarded as special cost against the judgment-debtor petitioner payable to decree holder opposite parties.

(2.) The facts giving rise to this revision are as follows : There was an agreement between the judgment-debtors petitioner and the decree- holder opposite party in the year 1984-85 for erection of dismantled hanger shed on the right bank of Subarnrekha Bandh at Chandil and in pursuance of the said agreement the decree-holder opposite party started doing the work in terms of the said agreement and during the continuance of that work a dispute arose between the judgment- debtors petitioner and the decree-holder opposite party and as per the arbitration clause contained in the said agreement the matter was referred to the sole arbitrator for adjudication as per reference dated 5-10-1985. The arbitrator made the award and sent a copy of the award each to the judgment-debtors petitioner and to the decree-holder opposite party but the arbitrator did not send the award to the competent court for making it a rule of the court. In such a situation the decree-holder opposite party filed Title Suit No. 21 of 1989 praying therein to call for the original award from the arbitrator and on hearing both the parties to make the award a rule of the court. The arbitrator awarded Rs. 2,58,222/- along with interest @ 5% in favour of the decree-holder opposite party and against the judgment-debtors petitioner. In spite of the service of notice the judgment- debtors petitioner did not appear in the said suit as a result of which the said suit was decreed ex-parte on 5-10-1985 and the award was made the rule of the court. For proper appreciation of the matter in controversy the operative portion of the judgment passed in Title Suit No. 21 of 1989 is quoted below which runs thus :

(3.) Assailing the impugned order as not only illegal but perverse it has been submitted by the learned Standing Counsel No. 1 for the judgment-debtors petitioner that the decree passed in Title Suit No. 21 of 1989 is very clear and explicit in which interest has been allowed @ 15% per annum on the principal sum of Rs. 2,58,222/- till realization and the decree does not state at all that compound interest with annual rest shall be payable on the said principal amount and in the execution petition itself, the decree-holder had claimed simple interest @ 15% per annum on the said principal amount which is evident that in column "G" a sum of Rs. 5,02,096 has been mentioned as decretal due and the decree-holder opposite party has himself not claimed interest at the compound rate and subsequently he has claimed compound interest on the said principal amount which is totally illegal. It has also been submitted that the Executing Court has no right to go behind the decree and the direction in the order dated 30-5-1994 as well as in the impugned order to calculate the due amount under the decree with interest on compound rate is illegal and is also against the decree. It has also been submitted that the judgment- debtors petitioner had paid Rs. 2,58,222/- by Bank Draft on 12-4-1996 for satisfaction of the principal amount under the decree and, thereafter, a further sum of Rs. 4,07;620/- was deposited on 7-4-1997 for the satisfaction of the interest due till date and as per the report of the Seristedar an excess amount of Rs. 2,246/- has been paid and the entire decree stands satisfied on 7- 4-1997. It has also been submitted that the calculation of the amount due as stated in the petition of the decree-holder opposite party having been calculated by a Chartered Accountant is incorrect and illegal and against the terms of the decree in view of the fact that compound interest has not been allowed to the decree-holder opposite parry. Lastly it has been contended that Section 3(3)(C) of the Interest Act, 1978 mandates that no interest upon interest shall be awarded by the court and viewed thus the learned court below has wrongly exercised its jurisdiction vested to him under the law. It has also been contended that awarding Rs. 25.000/- as special cost is equally illegal in view of the fact that the entire decree stands satisfied on 7-4-1997.