DELHI AIRPORT METRO EXPRESS PRIVATE LIMITED VS DELHI METRO RAIL CORPORATION CASE

DELHI AIRPORT METRO EXPRESS PRIVATE LIMITED VS DELHI METRO RAIL CORPORATION CASE

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION 

CIVIL APPEAL NO .3657  OF 2022

[Arising out of Special Leave Petition (Civil) No.4901 of

2022]

DELHI AIRPORT METRO EXPRESS

PRIVATE LIMITED     ...APPELLANT(S)

VERSUS

DELHI METRO RAIL CORPORATION         ...RESPONDENT(S)

J U D G M E N T 

B.R. GAVAI, J.

1. Leave granted.

2. The short question involved in the present appeal is, as to

whether the “sum” awarded under clause (a) of sub­section (7)

of Section  31  of the  Arbitration  and  Conciliation Act,  1996

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(hereinafter referred to as the “1996 Act”) would include the

interest pendente lite or not?

3. The undisputed facts in the present case are as under:

4. On being declared as the successful bidder, a Concession

Agreement dated 25th August, 2008 (hereinafter referred to as

“the   Concession   Agreement”),   was   entered   into   between   the

appellant–Delhi   Airport   Metro   Express   Private   Limited

(hereinafter referred to as “DAMEPL”) and the respondent­Delhi

Metro Rail Corporation (hereinafter referred to as “DMRC”).  As

per the Concession Agreement, the respondent­DMRC was to

carry   out   the   civil   works   (excluding   at   the   Depot)   and   the

balance works (including the Depot civil works and the Project

systems works) were to be executed by the appellant­DAMEPL.

As per Article 29 of the Concession Agreement, in the event of

termination, it was the respondent­DMRC, which was liable to

make   Termination   Payment   (as   defined   in   the   Concession

Agreement).

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5. During the course of operations of the project, a dispute

arose   between   the   appellant­DAMEPL   and   the   respondentDMRC.     The   appellant­DAMEPL   terminated   the   Concession

Agreement by Termination Notice dated 8th October, 2012.  The

respondent­DMRC   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 appellant­DAMEPL 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   respondent­DMRC   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 Single

Judge of the Delhi High Court upheld the Arbitral Award and

rejected the respondent­DMRC’s petition under Section 34 of

the 1996 Act. The said judgment and order dated 6th  March,

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2018 came to be challenged by the respondent­DMRC before

the Division Bench of the Delhi High Court by way of appeal

being FAO(OS)(COMM) No. 58 of 2018.   The said appeal was

partly allowed by the Division Bench of the Delhi High Court

vide the judgment and order dated 15th January, 2019.  Being

aggrieved thereby, the appellant­DAMEPL preferred Civil Appeal

No.5627 of 2021 [arising out of Special Leave Petition (Civil)

No.4115 of 2019] before this Court.  The said appeal came to be

allowed   by   this   Court   by   judgment   and   order   dated   9th

September, 2021, vide which the judgment and order dated 15th

January, 2019, passed by the Division Bench of the Delhi High

Court was set aside.  

6. The   appellant­DAMEPL   thereafter   immediately   filed   an

Execution Petition being OMP (ENF.) (COMM) No. 145 of 2021

on   12th  September,   2021,   before   the   Delhi   High   Court   for

enforcement of the Arbitral Award dated 11th May, 2017 passed

by the Arbitral Tribunal.  Various orders came to be passed by

the learned Single Judge of the Delhi High Court in the said

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proceedings from time to time. Vide the impugned judgment

and order dated 10th March, 2022, the learned Single Judge of

the Delhi High Court issued certain directions with regard to

the payment to be made by the respondent­DMRC towards the

satisfaction of the Award.   Vide the impugned judgment and

order, the application(s) for impleadment filed by the Canara

Bank and the Union Bank of India came to be rejected.  In the

said   proceedings,   a   contention   was   raised   on   behalf   of   the

appellant­DAMEPL that the sum, as specified under clause (a)

of sub­section (7) of Section 31 of the 1996 Act, would include

interest for a period from the date on which the cause of action

arose to the date on which the award was made.   The said

contention  was rejected by the learned Single Judge of the

Delhi High Court by the impugned judgment and order.  Being

aggrieved thereby, the present appeal by way of special leave.   

7. We   have   heard   Shri   Harish   N.   Salve,   learned   Senior

Counsel appearing on behalf of the appellant­DAMEPL and Shri

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Parag P. Tripathi, learned Senior Counsel appearing on behalf

of the respondent­DMRC.

8. Shri Harish N. Salve, learned Senior Counsel, submits

that the issue is no more res integra. The majority judgment of

this court in the case of  Hyder  Consulting  (UK) Limited vs.

Governor,   State   of   Orissa   through   Chief   Engineer1

  has

clearly held that, upon a plain reading of clauses (a) and (b) of

sub­section (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 pre­award period, and that for the post­award 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 sub­section (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

1 (2015) 2 SCC 189

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the   contention   of   the   appellant­DAMEPL   that   the   sum,   as

specified in clause (a) of sub­section (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 sub­section (7) of

Section 31 of the 1996 Act, would therefore carry the interest

as awarded by the Arbitral Tribunal from the date of the award

till the date of payment.   The learned Senior Counsel would

submit   that   the   aforesaid   interpretation   is   the   only   logical

interpretation.  He submits that the High Court has, therefore,

erred   in   rejecting   the   claim   of   the   appellant­DAMEPL   with

regard to addition of the interest pendente lite in the sum to be

arrived at under clause (a) of sub­section (7) of Section 31 of

the 1996 Act. 

9. Shri Parag P. Tripathi, learned Senior Counsel, on the

contrary,   would   submit   that   the   High   Court   has   correctly

rejected the claim of the appellant­DAMEPL.  He submits that

clause (a) of sub­section (7) of Section 31 of the 1996 Act itself

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begins with the phrase “unless otherwise agreed by the parties”.

He   submits   that   there   is   a   specific   agreement   between   the

parties under Article 29.8 of the Concession Agreement, with

regard to payment of interest.  Learned Senior Counsel submits

that since there is an agreement between the parties as to how

the interest would be awarded and that since the same has

been awarded by the Arbitral Tribunal in accordance with the

agreement, the majority judgment of this Court in the case of

Hyder  Consulting  (UK)  Limited  (supra) would not be of any

assistance to the case of the appellant­DAMEPL.  He therefore

submits that the present appeal deserves to be dismissed. 

10. As already stated hereinabove, the present appeal needs to

be decided in the narrow compass of interpretation of clause (a)

of sub­section (7) of Section 31 of the 1996 Act.  

11. Shri Harish N. Salve, learned Senior Counsel is justified in

relying on the majority judgment of this Court in the case of

Hyder Consulting (UK) Limited (supra).  S.A. Bobde, J. in his

judgment in the said case observed thus:

8

“2. It   is   not   possible   to   agree   with   the

conclusion   in S.L.   Arora   case [State   of

Haryana v. S.L.   Arora   and   Co.,   (2010)   3

SCC 690 : (2010) 1 SCC (Civ) 823] that

Section 31(7) of the Act does not require

that interest which accrues till the date of

the award be included in the “sum” from

the date of award for calculating the postaward interest. In my humble view, this

conclusion   does   not   seem   to   be   in

consonance   with   the   clear   language   of

Section 31(7) of the Act.

3. Sub­section (7) of Section 31 of the Act,

which deals with the power of the Arbitral

Tribunal   to   award   interest,   reads   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.

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(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   sub­section   (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   pre­award   period   between

the   date   on   which   the   cause   of   action

arose and the date on which the award is

made. To put it differently, sub­section (7)

(a) contemplates that an award, inclusive

of interest for the pre­award period on the

entire amount directed to be paid or part

thereof,   may   be   passed.   The   “sum”

awarded may be the principal amount and

such   interest   as   the   Arbitral   Tribunal

deems fit. If no interest is awarded, the

“sum”   comprises   only   the   principal.   The

significant words occurring in clause (a) of

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sub­section (7) of Section 31 of the Act are

“the sum for which the award is made”. On

a plain reading, this expression refers to

the total   amount or sum for   the   payment

for which the award is made. Parliament

has   not   added   a   qualification   like

“principal”   to   the   word   “sum”,   and

therefore,   the   word   “sum”   here   simply

means “a particular amount of money”. In

Section   31(7),   this   particular   amount   of

money may include interest from the date

of cause of action to the date of the award.

5. The Oxford Dictionary gives the following

meaning to the word “sum”:

Sum, ‘if noun’.—A particular amount

of money.

Sum,   ‘if   verb’.—The   total   amount

resulting   from   the   addition   of   two   or

more numbers, amounts, or items.

6. In Black's   Law   Dictionary,   the   word

“sum” is given the following meaning:

“Sum.—In   English   law—A   summary

or abstract; a compendium; a collection.

Several   of   the   old   law   treatises   are

called ‘sum’. Lord Hale applies the term

to   summaries   of   statute   law.   Burrill.

The sense in which the term is most

commonly used is ‘money’; a quantity of

money   or   currency;   any   amount

indefinitely, a sum of money, a small

sum,   or   a   large   sum. United

11

States v. Van Auken [24 L Ed 852 : 96

US   366   (1878)]

and Donovan v. Jenkins [52 Mont 124 :

155 P 972 at p. 973] .”

7. Thus, when used as a noun, as it seems

to have been used in this provision, the

word “sum” simply means “an amount of

money”;   whatever   it   may   include   —

“principal” and “interest” or one of the two.

Once the meaning of the word “sum” is

clear, the same meaning must be ascribed

to the word in clause (b) of sub­section (7)

of Section 31 of the Act, where it provides

that   a sum directed   to   be   paid   by   an

arbitral award “shall … carry interest …”

from the date of the award to the date of

the   payment   i.e.   post­award.   In   other

words, what clause (b) of sub­section (7) of

Section 31 of the Act directs is that the

“sum”, which is directed to be paid by the

award,   whether   inclusive   or   exclusive   of

interest, shall carry interest at the rate of

eighteen per cent per annum for the postaward period, unless otherwise ordered.

8. Thus, sub­section (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

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the award shall carry interest at a certain

rate for the post­award 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 sub­section (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 CPC, also enacted by

Parliament and conferring the same power

upon   a   court   to   award   interest   on   an

award   i.e.   post­award   interest.   While

enacting   Section   34   CPC   Parliament

conferred   power   on   a   court   to   order

interest   “on   the   principal   sum   adjudged”

and not on merely the “sum” as provided

in the Arbitration Act. The departure from

the language of Section 34 CPC in Section

31(7) of the  1996 Act is significant  and

shows the intention of Parliament.

12. It is settled law that where different

language   is   used   by   Parliament,   it   is

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intended to have a different effect. In the

Arbitration   Act,   the   word   “sum”   has

deliberately not been qualified by using the

word “principal” before it. If it had been so

used, there would have been no scope for

the contention that the word “sum” may

include “interest.” In Section 31(7) of the

Act, Parliament has deliberately used the

word “sum” to refer to the aggregate of the

amounts that may be directed to be paid

by the Arbitral Tribunal and not merely the

“principal” sum without interest.

13. Thus, it is apparent that vide clause

(a) of sub­section (7) of Section 31 of the

Act, Parliament intended that an award for

payment   of   money   may   be   inclusive   of

interest,   and   the   “sum”   of   the   principal

amount plus interest may be directed to be

paid by the Arbitral Tribunal for the preaward   period.   Thereupon,   the   Arbitral

Tribunal may direct interest to be paid on

such “sum” for the post­award period vide

clause (b) of sub­section (7) of Section 31

of   the   Act,   at   which   stage   the   amount

would   be   the   sum   arrived   at   after   the

merging of interest with the principal; the

two components having lost their separate

identities.

14. In   fact   this   is   a   case   where   the

language of sub­section (7) clauses (a) and

(b) is so plain and unambiguous that no

question   of   construction   of   a   statutory

14

provision   arises.   The   language   itself

provides   that   in   the   sum   for   which   an

award is made, interest may be included

for the pre­award period and that for the

post­award period interest up to the rate of

eighteen   per   cent   per   annum   may   be

awarded on such sum directed to be paid

by the arbitral award.”

12. Abhay Manohar Sapre, J. in his concurring judgment in

the case of  Hyder  Consulting  (UK)  Limited  (supra) has also

agreed with the view of S.A. Bobde, J.  

13. It could thus be seen that the majority view of this Court

in the case of Hyder Consulting (UK) Limited (supra) is that

the sum awarded may include the principal amount 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 sub­section (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 subsection (7) of Section 31 of the 1996 Act would include the

15

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 sub­section (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. Sub­section (7) of Section 31 of the 1996 Act is already

reproduced in the judgment of S.A. Bobde, J. in the case of

Hyder   Consulting   (UK)   Limited  (supra).     Applying   the

principle of plain interpretation of the language employed by

the legislature, the position that would emerge, on an analysis

of clause (a) of sub­section (7) of Section 31 of the 1996 Act, is

as under:

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(i) It begins with the words “Unless otherwise agreed by

the parties”;

(ii) where   and   insofar   as   an   arbitral   award   is   for   the

payment of money, the Arbitral Tribunal may include

interest component in the sum for which the award is

made;

(iii) the   interest   may   be   at   such   rate   as   the   Arbitral

Tribunal deems reasonable; 

(iv) the interest may be on the whole or any part of the

money;

(v) the interest may be 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.

15. It could thus be seen that the part which deals with the

power of the Arbitral Tribunal to award interest, would operate

if it is not otherwise agreed by the parties.   If there is an

agreement  between  the parties to  the  contrary,  the Arbitral

17

Tribunal would lose its discretion to award interest and will

have to be guided by the agreement between the parties. The

provision is clear that the Arbitral Tribunal is not bound to

award interest.  It has a discretion to award the interest or not

to award.  It further has a discretion to award interest at such

rate as it deems reasonable. It further has a discretion to award

interest on the whole or any part of the money. It is also not

necessary for the Arbitral Tribunal to award interest for the

entire period between the date on which the cause of action

arose and the date on which the award is made.  It can grant

interest for the entire period or any part thereof or no interest

at all.   

16. We   find   that   in   the   present   case,   the   words   “unless

otherwise agreed by the parties” would assume significance.

The said words fell for consideration before this Court in the

case of N.S. Nayak & Sons vs. State of Goa2

.  This Court in

the said case had an occasion to consider the scope of the

2 (2003) 6 SCC 56

18

phrase   “unless   otherwise   agreed   by   the   parties”   in   various

provisions of the 1996 Act.  This Court observed thus:

“14.   …   The   phrase   ‘unless   otherwise

agreed   by   the   parties’   used   in   various

Sections, namely, 17, 21, 23(3), 24(1), 25,

26, 29, 31, 85(2)(a), etc. indicates 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   vs.   Divisional   Railway   Manager   (Works),

Palghat and others3

 had an occasion to directly consider the

aforesaid phrase as employed by the legislature in sub­section

(7) of Section 31 of the 1996 Act.  R.V. Raveendran, J. in the

said case observed thus:

3 (2010) 8 SCC 767

19

“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

the parties had agreed that no interest

shall  be payable, the  Arbitral Tribunal

cannot award interest between the date

when the cause of action arose to the

date of award.”

18. If clause (a) of sub­section (7) of Section 31 of the 1996

Act is given a plain and literal meaning, the legislative intent

would   be   clear   that   the   discretion   with   regard   to   grant   of

interest would be available to the Arbitral Tribunal only when

there is no agreement to the contrary between the parties.  The

phrase   “unless   otherwise   agreed   by   the   parties”   clearly

emphasizes that when the parties have agreed with regard to

any of the aspects covered under clause (a) of sub­section (7) of

Section 31 of the 1996 Act, the Arbitral Tribunal would cease to

have any discretion with regard to the aspects mentioned in the

said provision.  Only in the absence of such an agreement, the

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Arbitral Tribunal would have a discretion to exercise its powers

under clause (a) of sub­section (7) of Section 31 of the 1996

Act.  The discretion is wide enough.  It may grant or may not

grant interest.  It may grant interest for the entire period or any

part thereof.  It may also grant interest on the whole or any part

of the money.

19. If the contention as raised on behalf of the appellantDAMEPL is to be accepted, the phrase “unless otherwise agreed

by   the   parties”   would   be   rendered   redundant   and   would

become otiose.  

20. It will be apposite to refer to the following observation of

this Court in the case of Reserve Bank of India vs. Peerless

General Finance and Investment Co. Ltd. and others4

:

“33. Interpretation must depend on the

text and the context. They are the bases

of interpretation. One may well say if the

text is the texture, context is what gives

the colour. Neither can be ignored. Both

are important. That interpretation is best

which makes the textual interpretation

4 (1987) 1 SCC 424

21

match the contextual. A statute is best

interpreted when we know why it was

enacted.   With   this   knowledge,   the

statute must be read, first as a whole

and then section by section, clause by

clause, phrase by phrase and word by

word. If a statute is looked at, in the

context of its enactment, with the glasses

of the statute­maker, provided by such

context,   its   scheme,   the   sections,

clauses,   phrases   and   words   may   take

colour and appear different than when

the   statute   is   looked   at   without   the

glasses   provided   by   the   context.   With

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

22

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

mentioned in clause (a) of sub­section (7) of Section 31 of the

1996 Act, the Arbitral Tribunal will cease to have any discretion

and would be bound by an agreement between the parties.  

23. As   already   discussed   hereinabove,   any   interpretation

which would render the phrase “unless otherwise agreed by the

parties” otiose or redundant will have to be avoided.  It will be

apposite   to   refer   to   the   following   observations   of   the

Constitution Bench of this Court in the case of Hardeep Singh

vs. State of Punjab and others5

:

“44. No   word   in   a   statute   has   to   be

construed as surplusage. No word can be

rendered   ineffective   or   purposeless.

5 (2014) 3 SCC 92

23

Courts   are   required   to   carry   out   the

legislative   intent   fully   and   completely.

While construing a provision, full effect

is   to   be   given   to   the   language   used

therein, giving reference to the context

and other provisions of the statute. By

construction, a provision should not be

reduced   to   a   “dead   letter”   or   “useless

lumber”. An interpretation which renders

a   provision   otiose   should   be   avoided

otherwise it would mean that in enacting

such   a   provision,   the   legislature   was

involved in “an exercise in futility” and

the   product   came   as   a   “purposeless

piece”   of   legislation   and   that   the

provision had been enacted without any

purpose and the entire exercise to enact

such a provision was “most unwarranted

besides being uncharitable”. (Vide Patel

Chunibhai   Dajibha v. Narayanrao

Khanderao   Jambekar [AIR   1965   SC

1457]   , Martin   Burn   Ltd. v. Corpn.   of

Calcutta [AIR   1966   SC   529]   , M.V.

Elisabeth v. Harwan   Investment   and

Trading (P) Ltd. [1993 Supp (2) SCC 433 :

AIR   1993   SC   1014]   , Sultana

Begum v. Prem Chand Jain [(1997) 1 SCC

373]   , State   of   Bihar v. Bihar   Distillery

Ltd. [(1997) 2 SCC 453 : AIR 1997 SC

1511]   , Institute   of   Chartered

Accountants   of   India v. Price

Waterhouse [(1997)   6   SCC   312]

and South   Central   Railway   Employees

Coop.   Credit   Society   Employees'

Union v. Registrar   of   Coop.

24

Societies [(1998) 2 SCC 580 : 1998 SCC

(L&S) 703 : AIR 1998 SC 703] .)”

24. If the interpretation, as placed by the appellant­DAMEPL

is to be accepted, the phrase “unless otherwise agreed by the

parties” would be reduced to a “dead letter” or “useless lumber”.

In our considered view, such an interpretation would be wholly

impermissible.   

25. It appears from the facts in the case of Hyder Consulting

(UK) Limited (supra) that there was no agreement between 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

25

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 be seen that Article 29.8 of

the Concession Agreement deals with payment of interest on

Termination Payment amount. 

27. The Arbitral Tribunal rightly construing the Concession

Agreement has directed thus:

26

“129.  Therefore,   the   Termination

Payment  to  DAMEPL  works  out  to

Rs.   983.02   +Rs.   1260.73   +Rs.

538.58 crores =Rs. 2782.33 crores.

As   regards   rate   of   interest   on   the

Termination payment, the stipulation

of   Article   29.8   of   CA   is   at   an

annualized rate of SBI PLR +2%.  We

have   noted   from   the   financial

documents   of   DAMEPL   (Pg   299   of

CD11­Supplementary reply of DMRC

dated   22.2.2014   to   the   Counter

Claim   of   the   Respondent)   that   the

secured   loan   taken   by   DAMEPL

carries the rate of interest of 12.75%

on Rupee Term Loan and is in the

range of 4.83% to 5.6% for Foreign

Currency Loan. Although the rates of

interest on loans taken by DAMEPL

are lower than SBI PLR +2%, we are

of the opinion that it is beyond the

competence of the Tribunal to change

or alter or modify the provisions of

CA.  As   such,   we   decide   that   the

Termination payment will be as per

the provisions of Article 29.8 of CA

and   the   interest   on   the

Termination   payment   will   accrue

from   7.8.2013   (i.e.   the   date   30

days   after   the   demand   of

Termination   payment   by   DAMEPL

on 08.07.2013). In terms of Article

29.9   of   CA,   this   amount   shall   be

paid by  DMRC  by way  of credit to

27

the   Escrow   Account,   details   of

which   are   available   in   Annexure

CC­4   of   the   Counter   Claim.   We

award accordingly.

28. It is thus clear that the Arbitral Tribunal has directed that

the Termination payment would be as per the provisions of the

Concession   Agreement   and   the   interest   on   the   Termination

payment would accrue from 7th August, 2013 (i.e., the date 30

days after the demand of Termination payment by DAMEPL on

8

th July, 2013).  It is pertinent to note that though the Arbitral

Tribunal has found that the rates of interest on loans taken by

the appellant­  DAMEPL are lower than SBI PLR + 2%, it has

observed that it was beyond the competence of the Arbitral

Tribunal to change or alter or modify the provisions of the

Concession Agreement.   The  Arbitral Tribunal, therefore, has

granted interest at an annualized rate of SBI PLR + 2%, though

it had found that the rate of  interest on which the loan was

taken by the appellant­DAMEPL was on the lower side.   The

Arbitral   Tribunal,   therefore,   has   rightly   given   effect   to   the

28

specific agreement between the parties 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

sub­section (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 three­judge Bench judgment

of this Court in the case of  Union  of   India  and  others   vs.

Dhanwanti   Devi   and   others6

,   wherein   this   Court   has

observed thus:

6 (1996) 6 SCC 44

29

“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 judgment must be

read as applicable to the particular facts proved, or assumed to

be proved.  The generality of the expressions which are found in

a   judgment   cannot   be   considered   to   be   intended   to   be

exposition of the whole law.  They will have to be governed and

qualified  by  the   particular  facts   of  the   case  in   which   such

expressions are to be found.  

32. It will also be apposite to refer to the following observation

of another three­Judge Bench of this Court in the case of The

Regional Manager and another vs. Pawan Kumar Dubey7

:

“7. ……Even   where   there   appears   to   be

some conflict, it would, we think, vanish

when the ratio decidendi of each case is

7 (1976) 3 SCC 334

30

correctly   understood.   It   is   the   rule

deducible from the application of law to

the   facts   and   circumstances   of   a   case

which constitutes its ratio decidendi and

not   some   conclusion   based   upon   facts

which   may   appear   to   be   similar.   One

additional   or   different   fact   can   make   a

world of difference between conclusions in

two cases even when the same principles

are applied in each case to similar facts.”

33. This Court has held that the  ratio decidendi is the rule

deducible   from   the   application   of   law   to   the   facts   and

circumstances of a case which constitutes its ratio decidendi

and not some conclusion based upon facts which may appear

to be similar. It has been held that one additional or different

fact can make a world of difference between conclusions in two

cases even when the same principles are applied in each case to

similar facts.

34. As   discussed   hereinabove,   in   the   case   of  Hyder

Consulting   (UK)   Limited  (supra),   there   was   no   agreement

between the parties with regard to the payment of interest and

as such, the phrase “unless otherwise agreed by the parties”

31

did not fall for consideration in the said case.  As a caution, we

have also gone through the judgment of the High Court from

which the appeal arose to this Court in the case of  Hyder

Consulting   (UK)   Limited  (supra).     A   perusal   of   the   said

judgment   would   also   reveal   that   there   was   no   agreement

between the parties with regard to payment of interest.   As

such, in the case of  Hyder  Consulting (UK) Limited  (supra),

this Court did not have an occasion to consider the import of

the phrase “unless otherwise agreed by the parties”.  

35. We are therefore of the considered view that in view of the

specific agreement between the parties, the interest prior to the

date of award so also after the date of award will be governed by

Article 29.8 of the Concession Agreement, as has been directed

by the Arbitral Tribunal.  The findings recorded by the Arbitral

Tribunal have reached finality in view of the judgment and

order dated 9th September, 2021, passed by this Court in Civil

Appeal No.5627 of 2021 [arising out of Special Leave Petition

(Civil) No.4115 of 2019].

32

36. We   therefore,   see   no   error   in   the   observations   of   the

learned Single Judge of the Delhi High Court in paragraph 30 of

the impugned judgment and order dated 10th  March, 2022,

passed in Execution Petition being OMP (ENF.) (COMM) No. 145

of 2021. 

37. In the result, we find no merit in the present appeal.  The

appeal is accordingly dismissed. 

38. Pending   application(s),   if   any,   shall   stand   disposed   of.

There shall be no order as to costs. 

…..….......................J.

[L. NAGESWARA RAO]

…….........................J.       

[B.R. GAVAI]

NEW DELHI;

MAY 05, 2022.

33