Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Interest: Interest on delayed payment |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Interest: Interest on delayed payment – Dispute between parties as regards entitlement of the contractor to receive interest on delayed payment in relation to local currency component – Award by the Arbitral tribunal that the interest be paid on delayed payment in relation to local currency component payable under the agreement since the contract did not prohibit award of interest – However, the said order set aside by the Arbitration court as also the High Court – On appeal, held: In the agreement between the parties, there was no specific exclusion of payment of interest on delayed payment in relation to the local currency component – Specific term of the agreement provided for payment of interest on delayed payment as terms of the contract – Rate at which such interest would be paid was not specifically agreed upon – Blank space in the “appendix to the bid” cannot be construed as cancellation of the clause providing for payment of interest of delayed release of funds – The principle guiding award of interest is that interest payment is essentially compensatory in nature – On facts, interest on delayed payment formed part of the contract itself – Furthermore, it cannot be inferred that omission to fill in the blank space gave the contractor some kind of competitive edge in the bid process – Reasoning of the Arbitral Tribunal is correct and the contrary view by the Arbitration Court and the High Court breaches the permissible boundaries for encroaching upon an award – Thus, the view taken by the Tribunal is sustained, however the rate at which interest is to be paid would be simple interest at the rate of 8% pa. |
Judge | Hon'ble Mr. Justice Aniruddha Bose |
Neutral Citation | 2021 INSC 269 |
Petitioner | M/s. Oriental Structural Engineers Pvt. Ltd. |
Respondent | State Of Kerala |
SCR | [2021] 4 S.C.R. 137 |
Judgement Date | 2021-04-22 |
Case Number | 3454 |
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