DELHI AIRPORT METRO EXPRESS PRIVATE LIMITED versus DELHI METRO RAIL CORPORATION

[2022] 3 S.C.R.

ADELHI AIRPORT METRO EXPRESS PRIVATE LIMITED

DELHI METRO RAIL CORPORATION

(Civil Appeal No. 3657 of 2022)

BMAY 05, 2022

[L. NAGESWARA RAO AND B. R. GAVAI, JJ.]

Arbitration and Conciliation Act, 1996: s. 31(7)(a) – Awardof sum under, if inclusive of interest pendente lite – Held: LegislativeCintent s. 31(7)(a) is clear that the discretion with regard to grant ofinterest would be available to the arbitral tribunal only when thereis no agreement to the contrary between the parties – Phrase “unlessotherwise agreed by the parties” clearly emphasizes that when theparties have agreed with regard to any of the aspects covered u/s.31(7)(a), the tribunal would cease to have any discretion withDregard to the aspects mentioned in the said provision – Only in theabsence of such an agreement, the tribunal would have discretionto exercise its powers u/s.31(7)(a) – It may grant or may not grantinterest – It may grant interest for the entire period or any partthereof – 1996 Act itself emphasizes on party autonomy – On facts,Ein view of the specific agreement between the parties, the interestprior to and after the date of award would be governed by theConcession Agreement – Arbitral tribunal rightly gave effect to thespecific agreement between the parties and granted interest at anannulaize rate – Interest.

FInterpretation of Statutes: Construction of – Held: Each andevery word and each and every phrase mentioned in the provisionwill have to be given effect to – Statutes to be construed so thatevery word has place and everything is in its place.

Judgment/Order: Interpretation of – Held: Every judgmentGmust be read as applicable to the particular facts proved, or assumedto be proved since generality of the expressions which are foundcannot be considered to be intended to be exposition of the wholelaw – They would have to be governed and qualified by theparticular facts of the case in which such expressions are found.

Dismissing the appeal, the Court

HELD: 1.1 It could be seen from clause (a) of sub-section(7) of Section 31 of the Arbitration and Conciliation Act, 1996that the part which deals with the power of the Arbitral Tribunalto award interest, would operate if it is not otherwise agreed bythe parties. If there is an agreement between the parties to thecontrary, the Arbitral Tribunal would lose its discretion to awardinterest and will have to be guided by the agreement betweenthe parties. The provision is clear that the Arbitral Tribunal isnot bound to award interest. It has discretion to award theinterest or not to award. It further has discretion to awardinterest at such rate as it deems reasonable. It further has adiscretion to award interest on the whole or any part of the money.It is also not necessary for the Arbitral Tribunal to award interestfor the entire period between the date on which the cause ofaction arose and the date on which the award is made. It cangrant interest for the entire period or any part thereof or nointerest at all. [Para 15][728-C-E]1.2 In the instant case, the words “unless otherwise agreedby the parties” would assume significance. If clause (a) of sub-section (7) of Section 31 of the 1996 Act is given plain andliteral meaning, the legislative intent would be clear that thediscretion with regard to grant of interest would be available tothe Arbitral Tribunal only when there is no agreement to thecontrary between the parties. The phrase “unless otherwiseagreed by the parties” clearly emphasizes that when the partieshave agreed with regard to any of the aspects covered underclause (a) of sub-section (7) of Section 31 of the 1996 Act, theArbitral Tribunal would cease to have any discretion with regardto the aspects mentioned in the said provision. Only in theabsence of such an agreement, the Arbitral Tribunal would havea discretion to exercise its powers under clause (a) of sub-section(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 forthe entire period or any part thereof. It may also grant intereston the whole or any part of the money. If the contention as raisedon behalf of the appellant-DAMEPL is to be accepted, the phrase“unless otherwise agreed by the parties” would be rendered

Aredundant and would become otiose. It could thus be seen thateach and every word and each and every phrase mentioned inthe provision will have to be given effect to. Statutes have to beconstrued so that every word has place and everything is in itsplace. [Para 16, 18, 19, 21][728-F; 729-E-G, G-H; 730-F-G]

B1.3 The 1996 Act itself emphasizes on party autonomy. Assuch, the legislative intent is clear that when the parties haveagreed to the contrary on any of the aspects as mentioned inclause (a) of sub-section (7) of Section 31 of the 1996 Act, theArbitral Tribunal will cease to have any discretion and would bebound by an agreement between the parties. Any interpretationCwhich would render the phrase “unless otherwise agreed by theparties” otiose or redundant will have to be avoided. If theinterpretation, as placed by the appellant-DAMEPL is to beaccepted, the phrase “unless otherwise agreed by the parties”would be reduced to “dead letter” or “useless lumber”. SuchDan interpretation would be wholly impermissible. [Para 22-24][730-G-H; 731-A, F-G]

1.4 As per Article 29.8 of the Concession Agreement, theTermination Payment would become due and payable to theConcessionaire by DMRC within thirty days of demand beingEmade by the Concessionaire. It further provides that if the DMRCfails to disburse the full Termination Payment within 30 days, theamount remaining unpaid shall be disbursed along with interestat an annualized rate of SBI PLR plus two per cent for the periodof delay on such amount. It can thus clearly be seen that Article29.8 of the Concession Agreement deals with payment of interestFon Termination Payment amount. The Arbitral Tribunal rightlyconstruing the Concession Agreement has directed. Terminationpayment would be as per the provisions of the ConcessionAgreement and the interest on the Termination payment wouldaccrue from 7th August, 2013 (i.e., the date 30 days after theGdemand of Termination payment by appellant on 8th July, 2013).Though the Arbitral Tribunal has found that the rates of intereston loans taken by the appellant are lower than SBI PLR + 2%, ithas observed that it was beyond the competence of the ArbitralTribunal to change or alter or modify the provisions of theConcession Agreement. The Arbitral Tribunal, therefore, hasHgranted interest at an annualized rate of SBI PLR + 2%, thoughit had found that the rate of interest on which the loan was takenby the appellant was on the lower side. Thus, the Arbitral Tribunal,has rightly given effect to the specific agreement between theparties with regard to the rate of interest. The arbitral award hasbeen passed in consonance with the provisions as contained inclause (a) of sub-section (7) of Section 31 of the 1996 Act andspecifically, in consonance with the phrase “unless otherwiseagreed by the parties”. [Para 26-28][732-C-E; 733-C-F]

1.5 Every judgment must be read as applicable to theparticular facts proved, or assumed to be proved. The generalityof the expressions which are found in judgment cannot beconsidered to be intended to be exposition of the whole law. Theywill have to be governed and qualified by the particular facts ofthe case in which such expressions are to be found. [Para 31][734-B-C]

1.6 In view of the specific agreement between the parties,the interest prior to the date of award so also after the date ofaward will be governed by Article 29.8 of the ConcessionAgreement, as has been directed by the Arbitral Tribunal. Thefindings recorded by the Arbitral Tribunal have reached finalityin view of the judgment and order passed by this Court in CivilAppeal No.5627 of 2021. Thus, there is no error in theobservations of the Single Judge of the High Court in theimpugned judgment and order passed in Execution Petition. [Para35, 36][735-B-D]

Hyder Consulting (UK) Limited v. Governor, State ofOrissa through Chief Engineer (2015) 2 SCC 189 :[2014] 14 SCR 1029 – distinguished.

N.S. Nayak & Sons v. State of Goa (2003) 6 SCC 56 :[2003] 1 Suppl. SCR 69; Sree Kamatchi AmmanConstructions vs. Divisional Railway Manager (Works),Palghat and Others (2010) 8 SCC 767 : [2010] 10 SCR487; Reserve Bank of India v. Peerless General Financeand Investment Co. Ltd. and Others (1987) 1 SCC 424: [1987] 2 SCR 1; Hardeep Singh v. State of Punjaband Others (2014) 3 SCC 92 : [2014] 2 SCR 1; Union

720SUPREME COURT REPORTS

Aof India and Others v. Dhanwanti Devi and Others(1996) 6 SCC 44 : [1996] 5 Suppl. SCR 32; TheRegional Manager and Another v. Pawan Kumar Dubey(1976) 3 SCC 334 : [1976] 3 SCR 540 – referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3657Dof 2022.From the Judgment and Order dated 10.03.2022 of the High Courtof Delhi at New Delhi in OMP (ENF.) (COMM.) No. 145 of 2021.

Harish N. Salve, J. J. Bhatt, Sr. Advs., Mahesh Agarwal,EMs. Megha Mehta, Ms.Niyati Kohli, Nishant Rao, S. Sahil Reddy, PranjitBhattacharya, Ms. Manvi Agarwal, E. C. Agrawala, Advs. for theAppellant.

Parag P. Tripathi, Ajit Kumar Sinha, Sr. Advs., Tarun Johri, AnkurGupta, Vishwajeet Tyagi, Advs. for the Respondent.FThe Judgment of the Court was delivered:

B. R. GAVAI, J.

1. Leave granted.

2. The short question involved in the present appeal is, as to whetherGthe “sum” awarded under clause (a) of sub-section (7) of Section 31 ofthe Arbitration and Conciliation Act, 1996 (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, ConcessionAgreement dated 25[th] August, 2008 (hereinafter referred to as “theConcession Agreement”), was entered into between the appellant–DelhiAirport Metro Express Private Limited (hereinafter referred to as“DAMEPL”) and the respondent-Delhi Metro Rail Corporation(hereinafter referred to as “DMRC”). As per the Concession Agreement,the respondent-DMRC was to carry out the civil works (excluding atthe Depot) and the balance works (including the Depot civil works andthe Project systems works) were to be executed by the appellant-DAMEPL. As per Article 29 of the Concession Agreement, in the eventof termination, it was the respondent-DMRC, which was liable to makeTermination Payment (as defined in the Concession Agreement).5. During the course of operations of the project, dispute arosebetween the appellant-DAMEPL and the respondent-DMRC. Theappellant-DAMEPL terminated the Concession Agreement byTermination Notice dated 8[th] October, 2012. The respondent-DMRCreferred the dispute to Arbitration under Article 36.2 of the ConcessionAgreement on 23[rd] October, 2012. An Arbitral Award came to be passedon 11[th] May, 2017. On 12[th] May, 2017, the appellant-DAMEPL paid astamp duty of Rs.4,72,20,000/- on the Award. Certain interim orderswere also passed in the interlocutory proceedings by the Delhi HighCourt. Since the respondent-DMRC was aggrieved by the Award, itfiled Petition under Section 34 of the 1996 Act in Delhi High Court,being OMP (COMM) No.307 of 2017, challenging the Arbitral Awarddated 11[th] May, 2017. Vide the judgment and order dated 6[th] March,2018, the learned Single Judge of the Delhi High Court upheld the ArbitralAward and rejected the respondent-DMRC’s petition under Section 34of the 1996 Act. The said judgment and order dated 6[th] March, 2018came to be challenged by the respondent-DMRC before the DivisionBench of the Delhi High Court by way of appeal being FAO (OS)(COMM) No. 58 of 2018. The said appeal was partly allowed by theDivision Bench of the Delhi High Court vide the judgment and orderdated 15[th] January, 2019. Being aggrieved thereby, the appellant-DAMEPL preferred Civil Appeal No.5627 of 2021 [arising out of SpecialLeave Petition (Civil) No.4115 of 2019] before this Court. The said appealcame to be allowed by this Court by judgment and order dated 9[th]September, 2021, vide which the judgment and order dated 15[th] January,2019, passed by the Division Bench of the Delhi High Court was setaside.

A6. The appellant-DAMEPL thereafter immediately filed anExecution Petition being OMP (ENF.) (COMM) No. 145 of 2021 on12[th] September, 2021, before the Delhi High Court for enforcement ofthe Arbitral Award dated 11[th] May, 2017 passed by the Arbitral Tribunal.Various orders came to be passed by the learned Single Judge of theDelhi High Court in the said proceedings from time to time. Vide theBimpugned judgment and order dated 10[th] March, 2022, the learned SingleJudge of the Delhi High Court issued certain directions with regard tothe payment to be made by the respondent-DMRC towards thesatisfaction of the Award. Vide the impugned judgment and order, theapplication(s) for impleadment filed by the Canara Bank and the UnionCBank of India came to be rejected. In the said proceedings, contentionwas raised on behalf of the appellant-DAMEPL that the sum, as specifiedunder clause (a) of sub-section (7) of Section 31 of the 1996 Act, wouldinclude interest for period from the date on which the cause of actionarose to the date on which the award was made. The said contentionwas rejected by the learned Single Judge of the Delhi High Court by theDimpugned judgment and order. Being aggrieved thereby, the present appealby way of special leave.

7. We have heard Shri Harish N. Salve, learned Senior Counselappearing on behalf of the appellant-DAMEPL and Shri Parag P. Tripathi,learned Senior Counsel appearing on behalf of the respondent-DMRC.E

8. Shri Harish N. Salve, learned Senior Counsel, submits that theissue is no more res integra. The majority judgment of this court in thecase of Hyder Consulting (UK) Limited vs. Governor, State of Orissathrough Chief Engineer[1] has clearly held that, upon plain reading ofclauses (a) and (b) of sub-section (7) of Section 31 of the 1996 Act, it isFclear that in the sum for which an Award is made, interest may be includedfor the pre-award period, and that for the post-award period, interest upto the rate of 18% per annum may be awarded on such sum directed tobe paid by the Arbitral Tribunal. Learned Senior Counsel, therefore,submits that the amount under clause (a) of sub-section (7) of SectionG31 of the 1996 Act would include the Termination Payment of Rs.2782.33crores plus the amount of interest granted by the Arbitral Tribunal fromthe date of cause of action till the date of the award. As such, it is thecontention of the appellant-DAMEPL that the sum, as specified in clause(a) of sub-section (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 arrivedat Rs.4662.59 on the correct construction of clause (a) of sub-section(7) of Section 31 of the 1996 Act, would therefore carry the interest asawarded by the Arbitral Tribunal from the date of the award till the dateof payment. The learned Senior Counsel would submit that the aforesaidinterpretation is the only logical interpretation. He submits that the HighCourt has, therefore, erred in rejecting the claim of the appellant-DAMEPL with regard to addition of the interest pendente lite in thesum to be arrived at under clause (a) of sub-section (7) of Section 31 ofthe 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 theappellant-DAMEPL. He submits that clause (a) of sub-section (7) ofSection 31 of the 1996 Act itself begins with the phrase “unless otherwiseagreed by the parties”. He submits that there is specific agreementbetween the parties under Article 29.8 of the Concession Agreement,with regard to payment of interest. Learned Senior Counsel submits thatsince there is an agreement between the parties as to how the interestwould be awarded and that since the same has been awarded by theArbitral Tribunal in accordance with the agreement, the majority judgmentof this Court in the case of Hyder Consulting (UK) Limited (supra)would not be of any assistance to the case of the appellant-DAMEPL.He therefore submits that the present appeal deserves to be dismissed.

10. As already stated hereinabove, the present appeal needs to bedecided in the narrow compass of interpretation of clause (a) of sub-section (7) of Section 31 of the 1996 Act.

11. Shri Harish N. Salve, learned Senior Counsel is justified inrelying on the majority judgment of this Court in the case of HyderConsulting (UK) Limited (supra). S.A. Bobde, J. in his judgment in thesaid case observed thus:

“2. It is not possible to agree with the conclusion in S.L. Aroracase [State of Haryana v. S.L. Arora and Co., (2010) 3 SCC690 : (2010) 1 SCC (Civ) 823] that Section 31(7) of the Act doesnot require that interest which accrues till the date of the awardbe included in the “sum” from the date of award for calculatingthe post-award interest. In my humble view, this conclusion doesnot seem to be in consonance with the clear language of Section31(7) of the Act.

3. Sub-section (7) of Section 31 of the Act, which deals with thepower of the Arbitral Tribunal to award interest, reads as follows:

“31.(7)(a) Unless otherwise agreed by the parties, where andinsofar as an arbitral award is for the payment of money, theArbitral Tribunal may include in the sum for which the awardis made interest, at such rate as it deems reasonable, on thewhole or any part of the money, for the whole or any part ofthe period between the date on which the cause of action aroseand the date on which the award is made.

(b) sum directed to be paid by an arbitral award shall, unlessthe award otherwise directs, carry interest at the rate of eighteenper centum per annum from the date of the award to the dateof payment.”

(emphasis supplied)

4. Clause (a) of sub-section (7) provides that where an award isDmade for the payment of money, the Arbitral Tribunal may includeinterest in the sum for which the award is made. In plain terms,this provision confers power upon the Arbitral Tribunal whilemaking an award for payment of money, to include interest in thesum for which the award is made on either the whole or any partEof the money and for the whole or any part of the period for theentire pre-award period between the date on which the cause ofaction arose and the date on which the award is made. To put itdifferently, sub-section (7)(a) contemplates that an award,inclusive of interest for the pre-award period on the entire amountdirected to be paid or part thereof, may be passed. The “sum”Fawarded may be the principal amount and such interest as theArbitral Tribunal deems fit. If no interest is awarded, the “sum”comprises only the principal. The significant words occurring inclause (a) of sub-section (7) of Section 31 of the Act are “thesum for which the award is made”. On plain reading, thisGexpression refers to the total amount or sum for the payment forwhich the award is made. Parliament has not added qualificationlike “principal” to the word “sum”, and therefore, the word “sum”here simply means “a particular amount of money”. In Section31(7), this particular amount of money may include interest fromthe date of cause of action to the date of the award.

5. The Oxford Dictionary gives the following meaning to theword “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 thefollowing meaning:

“Sum.—In English law—A summary or abstract; acompendium; collection. Several of the old law treatises arecalled ‘sum’. Lord Hale applies the term to summaries of statutelaw. Burrill. The sense in which the term is most commonlyused is ‘money’; quantity of money or currency; any amountindefinitely, sum of money, small sum, or largesum. United States v. Van Auken [24 L Ed 852 : 96 US 366(1878)] and Donovan v. Jenkins [52 Mont 124 : 155 P 972 atp. 973] .”

7. Thus, when used as noun, as it seems to have been used inthis provision, the word “sum” simply means “an amount ofmoney”; whatever it may include — “principal” and “interest” orone of the two. Once the meaning of the word “sum” is clear, thesame meaning must be ascribed to the word in clause (b) of sub-section (7) of Section 31 of the Act, where it provides thata sum directed to be paid by an arbitral award “shall … carryinterest …” from the date of the award to the date of the paymenti.e. post-award. In other words, what clause (b) of sub-section(7) of Section 31 of the Act directs is that the “sum”, which isdirected to be paid by the award, whether inclusive or exclusiveof interest, shall carry interest at the rate of eighteen per cent perannum for the post-award period, unless otherwise ordered.8. Thus, sub-section (7) of Section 31 of the Act provides, firstly,vide clause (a) that the Arbitral Tribunal may include interest whilemaking an award for payment of money in the sum for which theaward is made and further, vide clause (b) that the sum so directedto be made by the award shall carry interest at certain rate forthe post-award period.

9. The purpose of enacting this provision is clear, namely, toencourage early payment of the awarded sum and to discouragethe usual delay, which accompanies the execution of the award inthe same manner as if it were decree of the court vide Section36 of the Act.

10. In this view of the matter, it is clear that the interest, the sumdirected to be paid by the arbitral award under clause (b) of sub-section (7) of Section 31 of the Act is inclusive of interest pendentelite.

11. At this juncture, it may be useful to refer to Section 34 CPC,also enacted by Parliament and conferring the same power upona court to award interest on an award i.e. post-award interest.While enacting Section 34 CPC Parliament conferred power on acourt to order interest “on the principal sum adjudged” and noton merely the “sum” as provided in the Arbitration Act. Thedeparture 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 byParliament, it is intended to have different effect. In theArbitration Act, the word “sum” has deliberately not been qualifiedby 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 theaggregate of the amounts that may be directed to be paid by theArbitral Tribunal and not merely the “principal” sum withoutinterest.

13. Thus, it is apparent that vide clause (a) of sub-section (7) ofSection 31 of the Act, Parliament intended that an award forpayment of money may be inclusive of interest, and the “sum” ofthe principal amount plus interest may be directed to be paid bythe Arbitral Tribunal for the pre-award period. Thereupon, theArbitral Tribunal may direct interest to be paid on such “sum” forthe post-award period vide clause (b) of sub-section (7) of Section31 of the Act, at which stage the amount would be the sum arrivedat after the merging of interest with the principal; the twocomponents having lost their separate identities.

14. In fact this is case where the language of sub-section (7)clauses (a) and (b) is so plain and unambiguous that no questionof construction of statutory provision arises. The language itselfprovides that in the sum for which an award is made, interest maybe included for the pre-award period and that for the post-awardperiod interest up to the rate of eighteen per cent per annum maybe awarded on such sum directed to be paid by the arbitral award.”

12. Abhay Manohar Sapre, J. in his concurring judgment in thecase of Hyder Consulting (UK) Limited (supra) has also agreed withthe view of S.A. Bobde, J.

13. It could thus be seen that the majority view of this Court inthe case of Hyder Consulting (UK) Limited (supra) is that the sumawarded may include the principal amount and such interest as the ArbitralTribunal deems fit. It is further held that, if no interest is awarded, the“sum” comprises only the principal amount. The majority judgment heldthat clause (a) of sub-section (7) of Section 31 of the 1996 Act refers tothe total amount or sum for the payment for which the award is made.As such, the amount awarded under clause (a) of sub-section (7) ofSection 31 of the 1996 Act would include the principal amount plus theinterest amount pendente lite. It was held that the interest to be calculatedas per clause (b) of sub-section (7) of Section 31 of the 1996 Act wouldbe on the total sum arrived as aforesaid under clause (a) of sub-section(7) of Section 31 of the 1996 Act. S.A. Bobde, J. in his judgment, hasreferred to various authorities of this Court as well as Maxwell on theInterpretation of Statutes. He emphasized that the Court must giveeffect to the plain, clear and unambiguous words of the legislature and itis not for the Courts to add or subtract the words, even though theconstruction may lead to strange or surprising, unreasonable or unjust oroppressive results.

14. Sub-section (7) of Section 31 of the 1996 Act is alreadyreproduced in the judgment of S.A. Bobde, J. in the case of HyderConsulting (UK) Limited (supra). Applying the principle of plaininterpretation of the language employed by the legislature, the positionthat would emerge, on an analysis of clause (a) of sub-section (7) ofSection 31 of the 1996 Act, is as under:

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

A(ii) where and insofar as an arbitral award is for the payment ofmoney, the Arbitral Tribunal may include interest componentin the sum for which the award is made;

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

(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 periodbetween the date on which the cause of action arose and thedate on which the award is made.

C15. It could thus be seen that the part which deals with the powerof the Arbitral Tribunal to award interest, would operate if it is nototherwise agreed by the parties. If there is an agreement between theparties to the contrary, the Arbitral Tribunal would lose its discretion toaward interest and will have to be guided by the agreement between theparties. The provision is clear that the Arbitral Tribunal is not bound toDaward interest. It has discretion to award the interest or not to award.It further has discretion to award interest at such rate as it deemsreasonable. It further has discretion to award interest on the whole orany part of the money. It is also not necessary for the Arbitral Tribunalto award interest for the entire period between the date on which thecause of action arose and the date on which the award is made. It canEgrant interest for the entire period or any part thereof or no interest atall.

16. We find that in the present case, the words “unless otherwiseagreed by the parties” would assume significance. The said words fellFfor consideration before this Court in the case of N.S. Nayak & Sonsvs. State of Goa[2]. This Court in the said case had an occasion to considerthe scope of the phrase “unless otherwise agreed by the parties” invarious provisions of the 1996 Act. This Court observed thus:

“14. … The phrase ‘unless otherwise agreed by the parties’ usedin various Sections, namely, 17, 21, 23(3), 24(1), 25, 26, 29, 31,G85(2)(a), etc. indicates that it is open to the parties to agreeotherwise. During the arbitral proceedings, right is given to theparties to decide their own procedure. So if there is an agreementbetween the parties with regard to the procedure to be followedby the arbitrator, the arbitrator is required to follow the saidH2 (2003) 6 SCC 56

procedure. Reason being, the arbitrator is appointed on the basisof the contract between the parties and is required to act as perthe contract. However, this would not mean that in appeal partiescan contend that the appellate procedure should be as per theiragreement.”

17. This Court in the case of Sree Kamatchi AmmanConstructions vs. Divisional Railway Manager (Works), Palghat andothers[3] had an occasion to directly consider the aforesaid phrase asemployed by the legislature in sub-section (7) of Section 31 of the 1996Act. R.V. Raveendran, J. in the said case observed thus:

“19. Section 31(7) of the new Act by using the words ‘unlessotherwise agreed by the parties’ categorically clarifies that thearbitrator is bound by the terms of the contract insofar as theaward of interest from the date of cause of action to the dateof award. Therefore, where the parties had agreed that no interestshall be payable, the Arbitral Tribunal cannot award interestbetween the date when the cause of action arose to the date ofaward.”

18. If clause (a) of sub-section (7) of Section 31 of the 1996 Actis given plain and literal meaning, the legislative intent would be clearthat the discretion with regard to grant of interest would be available tothe Arbitral Tribunal only when there is no agreement to the contrarybetween the parties. The phrase “unless otherwise agreed by the parties”clearly emphasizes that when the parties have agreed with regard toany of the aspects covered under clause (a) of sub-section (7) of Section31 of the 1996 Act, the Arbitral Tribunal would cease to have anydiscretion with regard to the aspects mentioned in the said provision.Only in the absence of such an agreement, the Arbitral Tribunal wouldhave discretion to exercise its powers under clause (a) of sub-section(7) of Section 31 of the 1996 Act. The discretion is wide enough. It maygrant or may not grant interest. It may grant interest for the entire periodor any part thereof. It may also grant interest on the whole or any part ofthe money.

19. If the contention as raised on behalf of the appellant-DAMEPLis to be accepted, the phrase “unless otherwise agreed by the parties”would be rendered redundant and would become otiose.

A20. It will be apposite to refer to the following observation of thisCourt in the case of Reserve Bank of India vs. Peerless GeneralFinance and Investment Co. Ltd. and others[4]:

“33. Interpretation must depend on the text and the context. Theyare the bases of interpretation. One may well say if the text is theBtexture, context is what gives the colour. Neither can be ignored.Both are important. That interpretation is best which makes thetextual interpretation match the contextual. statute is bestinterpreted when we know why it was enacted. With thisknowledge, the statute must be read, first as whole and thensection by section, clause by clause, phrase by phrase and wordCby word. If statute is looked at, in the context of its enactment,with the glasses of the statute-maker, provided by such context,its scheme, the sections, clauses, phrases and words may takecolour and appear different than when the statute is looked atwithout the glasses provided by the context. With these glassesDwe must look at the Act as whole and discover what eachsection, each clause, each phrase and each word is meant anddesigned to say as to fit into the scheme of the entire Act. No partof statute and no word of statute can be construed in isolation.Statutes have to be construed so that every word has place andeverything is in its place. It is by looking at the definition as aEwhole in the setting of the entire Act and by reference to whatpreceded the enactment and the reasons for it that the Courtconstrued the expression “Prize Chit” in Srinivasa [(1980) 4 SCC507 : (1981) 1 SCR 801 : 51 Com Cas 464] and we find no reasonto depart from the Court’s construction.”F21. It could thus be seen that each and every word and each andevery phrase mentioned in the provision will have to be given effect to.Statutes have to be construed so that every word has place andeverything is in its place.

22. An important aspect that has to be taken into consideration isGthat the 1996 Act itself emphasizes on party autonomy. As such, thelegislative intent is clear that when the parties have agreed to the contraryon any of the aspects as mentioned in clause (a) of sub-section (7) ofSection 31 of the 1996 Act, the Arbitral Tribunal will cease to have anydiscretion and would be bound by an agreement between the parties.H4 (1987) 1 SCC 424

23. As already discussed hereinabove, any interpretation whichwould render the phrase “unless otherwise agreed by the parties” otioseor redundant will have to be avoided. It will be apposite to refer to thefollowing observations of the Constitution Bench of this Court in thecase of Hardeep Singh vs. State of Punjab and others[5]:

“44. No word in statute has to be construed as surplusage. Noword can be rendered ineffective or purposeless. Courts arerequired to carry out the legislative intent fully and completely.While construing provision, full effect is to be given to thelanguage used therein, giving reference to the context and otherprovisions of the statute. By construction, provision should notbe reduced to “dead letter” or “useless lumber”. An interpretationwhich renders provision otiose should be avoided otherwise itwould mean that in enacting such provision, the legislature wasinvolved in “an exercise in futility” and the product came as a“purposeless piece” of legislation and that the provision had beenenacted without any purpose and the entire exercise to enact such provision was “most unwarranted besides being uncharitable”.(Vide Patel Chunibhai Dajibha v. Narayanrao KhanderaoJambekar [AIR 1965 SC 1457], Martin Burn Ltd. v. Corpn. ofCalcutta [AIR 1966 SC 529], M.V. Elisabeth v. HarwanInvestment and Trading (P) Ltd. [1993 Supp (2) SCC 433 : AIR1993 SC 1014], Sultana Begum v. Prem Chand Jain [(1997) 1SCC 373], State of Bihar v. Bihar Distillery Ltd. [(1997) 2 SCC453 : AIR 1997 SC 1511], Institute of Chartered Accountantsof India v. Price Waterhouse [(1997) 6 SCC 312] and SouthCentral Railway Employees Coop. Credit Society Employees’Union v. Registrar of Coop. Societies [(1998) 2 SCC 580 : 1998SCC (L&S) 703 : AIR 1998 SC 703].)”

24. If the interpretation, as placed by the appellant-DAMEPL isto be accepted, the phrase “unless otherwise agreed by the parties”would be reduced to “dead letter” or “useless lumber”. In our consideredview, 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 partieswith regard to payment of interest. Such is not the case here. It will be

5 (2014) 3 SCC 92

DEFG

Arelevant to refer to Article 29.8 of the Concession Agreement, whichreads thus:

“29.8 Termination Payments: The Termination Paymentpursuant to this Agreement shall become due and payableto the Concessionaire by DMRC within thirty days of aBdemand being made by ·the Concessionaire with thenecessary particulars duly certified by the StatutoryAuditors. If DMRC fails to disburse the full TerminationPayment within 30 (thirty) days, the amount remainingunpaid shall be disbursed along with interest at anannualised rate of SBI PLR plus two per cent for the periodCof delay on such amount.”

26. It could thus clearly be seen that as per Article 29.8 of theConcession Agreement, the Termination Payment would become dueand payable to the Concessionaire by DMRC within thirty days of ademand being made by the Concessionaire. It further provides that ifDthe DMRC fails to disburse the full Termination Payment within 30 days,the amount remaining unpaid shall be disbursed along with interest at anannualized rate of SBI PLR plus two per cent for the period of delay onsuch amount. It can thus clearly be seen that Article 29.8 of theConcession Agreement deals with payment of interest on TerminationEPayment amount.

27. The Arbitral Tribunal rightly construing the ConcessionAgreement has directed thus:

“129. Therefore, the Termination Payment to DAMEPLworks out to Rs. 983.02 +Rs. 1260.73 +Rs. 538.58 croresF=Rs. 2782.33 crores.

As regards rate of interest on the Termination payment, thestipulation of Article 29.8 of CA is at an annualized rate of SBIPLR +2%. We have noted from the financial documents ofDAMEPL (Pg 299 of CD11-Supplementary reply of DMRC datedG22.2.2014 to the Counter Claim of the Respondent) that the securedloan taken by DAMEPL carries the rate of interest of 12.75% onRupee Term Loan and is in the range of 4.83% to 5.6% for ForeignCurrency Loan. Although the rates of interest on loans taken byDAMEPL are lower than SBI PLR +2%, we are of the opinionthat it is beyond the competence of the Tribunal to change or alter

or modify the provisions of CA. As such, we decide that theTermination payment will be as per the provisions of Article29.8 of CA and the interest on the Termination paymentwill accrue from 7.8.2013 (i.e. the date 30 days after thedemand of Termination payment by DAMEPL on08.07.2013). In terms of Article 29.9 of CA, this amountshall be paid by DMRC by way of credit to the EscrowAccount, details of which are available in Annexure CC-4of the Counter Claim. We award accordingly.

28. It is thus clear that the Arbitral Tribunal has directed that theTermination payment would be as per the provisions of the ConcessionAgreement and the interest on the Termination payment would accruefrom 7[th] August, 2013 (i.e., the date 30 days after the demand ofTermination payment by DAMEPL on 8[th] July, 2013). It is pertinent tonote that though the Arbitral Tribunal has found that the rates of intereston loans taken by the appellant- DAMEPL are lower than SBI PLR +2%, it has observed that it was beyond the competence of the ArbitralTribunal to change or alter or modify the provisions of the ConcessionAgreement. The Arbitral Tribunal, therefore, has granted interest at anannualized rate of SBI PLR + 2%, though it had found that the rate ofinterest on which the loan was taken by the appellant-DAMEPL was onthe lower side. The Arbitral Tribunal, therefore, has rightly given effectto the specific agreement between the parties with regard to the rate ofinterest. We find that the arbitral award has been passed in consonancewith the provisions as contained in clause (a) of sub-section (7) of Section31 of the 1996 Act and specifically, in consonance with the phrase “unlessotherwise agreed by the parties”.

29. As already discussed herein above, from the majority judgmentof S.A. Bobde and Abhay Manohar Sapre, JJ. in the case of HyderConsulting (UK) Limited (supra), it would appear that the situation,where there was an agreement between the parties on the point ofpayment of interest, did not fall for consideration in the said case.

30. We may gainfully refer to the three-judge Bench judgment ofthis Court in the case of Union of India and others vs. DhanwantiDevi and others[6], wherein this Court has observed thus:

6 (1996) 6 SCC 44

A“9. …..Every judgment must be read as applicable to the particularfacts proved, or assumed to be proved, since the generality of theexpressions which may be found there is not intended to beexposition of the whole law, but governed and qualified by theparticular facts of the case in which such expressions are to befound…”B

31. It can thus clearly be seen that every judgment must be readas applicable to the particular facts proved, or assumed to be proved.The generality of the expressions which are found in judgment cannotbe considered to be intended to be exposition of the whole law. They willhave to be governed and qualified by the particular facts of the case inCwhich such expressions are to be found.

32. It will also be apposite to refer to the following observation ofanother three-Judge Bench of this Court in the case of The RegionalManager and another vs. Pawan Kumar Dubey[7]:

D“7. ……Even where there appears to be some conflict, it would,we think, vanish when the ratio decidendi of each case is correctlyunderstood. It is the rule deducible from the application of law tothe facts and circumstances of case which constitutes its ratiodecidendi and not some conclusion based upon facts which mayappear to be similar. One additional or different fact can make aEworld of difference between conclusions in two cases even whenthe same principles are applied in each case to similar facts.”33. This Court has held that the ratio decidendi is the rule deduciblefrom the application of law to the facts and circumstances of casewhich constitutes its ratio decidendi and not some conclusion based uponFfacts which may appear to be similar. It has been held that one additionalor different fact can make world of difference between conclusions intwo cases even when the same principles are applied in each case tosimilar facts.

34. As discussed hereinabove, in the case of Hyder ConsultingG(UK) Limited (supra), there was no agreement between the partieswith regard to the payment of interest and as such, the phrase “unlessotherwise agreed by the parties” did not fall for consideration in the saidcase. As caution, we have also gone through the judgment of the HighCourt from which the appeal arose to this Court in the case of HyderH7 (1976) 3 SCC 334

Consulting (UK) Limited (supra). perusal of the said judgment wouldalso reveal that there was no agreement between the parties with regardto payment of interest. As such, in the case of Hyder Consulting (UK)Limited (supra), this Court did not have an occasion to consider theimport of the phrase “unless otherwise agreed by the parties”.

35. We are therefore of the considered view that in view of thespecific agreement between the parties, the interest prior to the date ofaward so also after the date of award will be governed by Article 29.8of the Concession Agreement, as has been directed by the ArbitralTribunal. The findings recorded by the Arbitral Tribunal have reachedfinality in view of the judgment and order dated 9[th] September, 2021,passed by this Court in Civil Appeal No.5627 of 2021 [arising out ofSpecial Leave Petition (Civil) No.4115 of 2019].

36. We therefore, see no error in the observations of the learnedSingle Judge of the Delhi High Court in paragraph 30 of the impugnedjudgment and order dated 10[th] March, 2022, passed in Execution Petitionbeing OMP (ENF.) (COMM) No. 145 of 2021.

37. In the result, we find no merit in the present appeal. Theappeal is accordingly dismissed.

38. Pending application(s), if any, shall stand disposed of. Thereshall be no order as to costs.

Nidhi Jain(Assisted by : Shashwat Jain, LCRA)

Appeal dismissed.