BHARAT HEAVY ELECTRICALS LTD. versus R.S. AVTAR SINGH & CO.

BHARAT HEAVY ELECTRICALS LTD. versus R.S. AVTAR SINGH & CO.

Respondent-decree holder is entitled to appropriate payments first to the interest due and payable on each date of payment, and whatever balance remains is adjusted towards principal; interest ceases to run on the portion of principal already paid. Both the arbitral award and court decree distinguished between award amount and interest; interest is not payable upon interest unless directed by decree. The Division Bench and Single Judge applied the proper rule of appropriation as per Supreme Court precedent.

Parties
Appellant: Bharat Heavy Electricals Ltd.; Respondent: R.S. Avtar Singh & Co.
Jurisdiction
India
Judgment Date
05 October 2012
Procedural Posture
Civil Appeal / Appeal Decided by Supreme Court
Outcome
Appeal dismissed
Legal Topics
Execution of Decree, Award of Interest, Rule of Appropriation, Payment of Decretal Amount
Civil Procedure Arbitration Execution of Decree Award of Interest Rule of Appropriation Payment of Decretal Amount

Case Brief

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Parties

Bharat Heavy Electricals Ltd.

Appellant

R.S. Avtar Singh & Co.

Respondent

Procedural Posture

Civil Appeal / Appeal Decided by Supreme Court

Legal Issues

  1. 1 How should part payments by a judgment debtor under a decree be appropriated, specifically regarding award amount and interest?
  2. 2 Whether future interest is payable and how interest should be calculated under a decree based on arbitral award?
  3. 3 Application of Section 34 CPC and Section 3(3)(c) of the Interest Act regarding interest upon interest

Ratio Decidendi

Respondent-decree holder is entitled to appropriate payments first to the interest due and payable on each date of payment, and whatever balance remains is adjusted towards principal; interest ceases to run on the portion of principal already paid. Both the arbitral award and court decree distinguished between award amount and interest; interest is not payable upon interest unless directed by decree. The Division Bench and Single Judge applied the proper rule of appropriation as per Supreme Court precedent.

Court Disposition

Appeal dismissed

Orders

  • Objection application dismissed
  • Division Bench and Single Judge’s orders affirmed