BHADANI ASSOCIATES Vs. KAMLINI DHARAMRAJ ASHAR & ORS.

JUDGEMENT

(1.) This Chamber Summons is an application by the 1st Respondent seeked dismissal of the Claimants' Execution Application No. 4 of 2016. That Execution Application arises from an award dated 16th Jan. 2006. A. INTRODUCTION

(2.) The issue is narrow. The Claimants ( "Bhadani ") obtained an arbitral award in damages against the Respondents in a claim for specific performance of an agreement for sale of immovable property. The award carried interest beyond 30 days. In proceedings before the Supreme Court, the 1st Respondent ( "Kamlini ") agreed on behalf of the Respondents to furnish a bank guarantee to the satisfaction of the Prothonotary and Senior Master in the amount of the arbitral award. She did so. The Respondents challenge to the award failed. Bhadani did not invoke the bank guarantee. It had separately challenged the award, but it filed its challenge in the wrong court, one without jurisdiction. It obtained an order returning the challenge petition, and presented it to the proper court, with an accompanying application to condone the intervening delay. That application was refused. Several years went by till that order attained finality in the Supreme Court, thus ending Bhadani's challenge. Now Bhadani claims interest on the award amount for the entire intervening period, including for the time it was in the wrong court and pursuing its application for delay condonation. Mr Pooniwala for Bhadani argues that the bank guarantee does not constitute payment into court within the meaning of Order 21, Rule 1 of the Code of Civil Procedure, 1908 ( "CPC "), and that, in any case, interest did not stop for want of the necessary notice under Order 21, Rule 1 (2) read with Order 21 Rules 1(4) and 1(5) of the CPC. Mr Chitnis for the Respondents/Applicants says Mr Pooniwala's submission is incorrect on both counts: the provision of a bank guarantee is equivalent to payment into court of the entire decretal sum; and, as regards notice, there is no question that Bhadani had notice. He also points out that it was not until after Kamlini demanded invocation (against herself ) following the Supreme Court's dismissal of Bhadani's final Special Leave Petition that Bhadani first invoked the bank guarantee. In his submission, nothing in the Code of Civil Procedure lends itself to the foisting of such manifest injustice in the garb of execution. I think he is completely correct on all counts. I have held for the Respondents/Claimants. My reasons follow. B. FACTS

(3.) The dispute between Bhadani on the one hand and the Respondents related to a plot of land of about 1708.6 sq. mtrs. The plot had additional FSI available to it. The Respondents filed Special Civil Suit No. 367 of 2002 and Regular Civil Suit No. 468 of 2003 in the District Court at Thane in regard to these disputes. The Principal District Judge passed an interlocutory order. Both sides came up to the High Court against that order. This Court suggested the parties refer their disputes to arbitration. They agreed, and their disputes were referred to a three-member Arbitral Tribunal of Mr Justice AA Halbe (Retd), Mr Justice H Suresh (Retd), both former judges of this Court, and Mr Justice SD Pandit (Retd), former judge of the Delhi High Court.