Civil Revision No. 831 of 2007 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CM No. 3196-CII of 2007 and Civil Revision No. 831 of 2007 Date of decision: 10.09.2009 Union Territory, Chandigarh and others ....Petitioners Versus M/s Spun Pipe and Construction Company (Baroda) Pvt. Ltd., Vraj Vihar, Near Arunodoya Society, Badodara ....Respondent CORAM: HON'BLE MR. JUSTICE VINOD K. SHARMA Present: - Mr. Sidharth Sanwaria, Advocate, for the petitioners. Mr. K.K. Garg, Advocate, for the respondent. ***** VINOD K. SHARMA, J (ORAL) This revision petition is directed against the order dated 1.11.2006 passed by the learned Civil Judge (Junior Division), Chandigarh, vide which the petitioners herein have been directed to pay a sum of Rs.1,50,281.41 to the respondent-decree-holder. The dispute between the parties was referred for arbitration to the Arbitrator, who accepted part of the claim of the decree-holder and passed an award for Rs.84,482/- It was also provided therein that the decree-holder will be entitled to interest @ 12% per annum on the awarded amount w.e.f. 31.7.1991. The petitioners-Union Territory of Chandigarh, filed objections against the award, which were dismissed and the award was Civil Revision No. 831 of 2007 (O&M) -2- made rule of the Court. It is not in dispute, that a sum of Rs.89,129/- (Rupees eighty nine thousand one hundred twenty nine only) was paid to the decree- holder on 8.5.1992. The decree-holder moved execution application claiming therein damages for use of butterfly valves, for the reason, that in terms of the award, the petitioners were to return butterfly valves to the decree-holder, but they failed to do so. A claim @ Rs.300/- per day was raised for the use of these valves. The learned Executing Court dismissed the claim of the decree-holder, and permitted them to take appropriate proceedings for recovery of amount, if so advised, as Executing Court could not go behind the decree. The learned Executing Court held, that interest on the awarded amount came to 1,54,928/- (Rupees one lac fifty four thousand nine hundred twenty eight only) as on 1.11.2000, and after adjusting the amount received by the decree-holder, petitioners were still liable to pay a sum of Rs.1,50,281.41 (Rupees one lac fifty thousand two hundred eighty one and paise forty one only). The reason for reaching this calculation was that the amount deposited, was first to be adjusted towards interest and thereafter towards principal. The order of the learned Executing Court suffers from patent illegality. Though the principle applied cannot be faulted with, that the amount deposited by the judgment-debtor was to be first applied towards interest, but amount in excess thereof was required to be adjusted towards principal. In case, this rule was applied, then sum of Rs.89,129/- (Rupees eighty nine thousand one hundred twenty nine only) paid on 8.5.1992 was to be adjusted towards interest and remaining Civil Revision No. 831 of 2007 (O&M) -3- amount towards principal. If this principle was followed, the remaining principal amount on 8.5.1992 was only Rs.2,987/- (Rupees two thousand nine hundred eighty seven only). The decree-holder, therefore, was entitled to interest on this amount @ 12% till the date of payment. The revision is, therefore, allowed, the impugned order is set aside and the case is remanded back to the learned Executing Court, to determine the amount payable by adjusting the amount first towards interest then towards principal on the date of payment of amount, and balance remaining is to be treated as principal amount, but whole of the amount awarded could not carry interest as held by the learned Executing Court. The learned Executing Court should determine the amount payable by taking the principal outstanding to be Rs.2,987/- (Rupees two thousand nine hundred eighty seven only) as on 8.5.1992 and add interest thereon @ 12% per annum. The parties through their counsel are directed to appear before the learned Executing Court on 12.10.2009. (Vinod K. Sharma) Judge September 10, 2009 R.S.