Background
National Highways Authority of India (“NHAI”) challenged an Arbitral Award dated 26.02.2016 passed in favour of IRB Goa Tollway Private Ltd. (“IRB”) before the High Court of Delhi under Section 34 of the Arbitration & Conciliation Act, 1996 (“A&C Act, 1996”).
During the pendency of the Section 34 petition, the Court, by order dated 30.01.2019, recorded that 75% of the awarded amount had already been released to IRB pursuant to a NITI Aayog circular and directed NHAI to deposit the remaining 25% of the up-to-date awarded amount. The Registry was further directed to keep the deposited amount in an interest-bearing fixed deposit with a nationalised bank.
NHAI duly deposited the said amount in 2019. Although IRB had initially filed an application in 2020 seeking withdrawal of the deposited amount, it chose not to press the same and instead agreed that the Section 34 petition itself be listed for final disposal.
By judgment dated 21.02.2022, the High Court partly upheld the Award and disposed of the Section 34 petition. Thereafter, IRB filed an application seeking withdrawal of the deposited 25% along with accrued interest and also initiated enforcement proceedings under Section 36 of the Act. Eventually, the deposited amount along with the interest accrued on the fixed deposit was released to IRB.
The dispute before the Court in the present proceedings was whether IRB was entitled to claim additional interest (over and above the interest actually earned on the fixed deposit) for the period between deposit of the amount (30.01.2019) and its withdrawal (05.04.2023).
Issue and Decision
Whether an award-holder is entitled to claim further interest under the arbitral award for the period after the awarded amount has been deposited in Court and made available for withdrawal?
IRB contended that since the amount was not freely available for withdrawal, the withdrawal was objected by the NHAI until the disposal of Special Leave Petition by Supreme Court (“SLP”) and the interest earned on the fixed deposit was lower than the interest awarded by the Arbitral Tribunal, interest under the Award ought to continue running till actual withdrawal.
The Hon’ble Delhi High Court held that once the awarded amount was deposited in Court and IRB was at liberty to seek its withdrawal, it could not later claim additional interest on the ground that it voluntarily chose not to withdraw the same. A conscious decision by the award-holder not to pursue withdrawal cannot operate to its advantage and no complain of alleged loss of interest can be heard. On IRB’s contention that the NHAI objected to such withdrawal, the Court observed that any objection by NHAI cannot hide the fact that the IRB on its own volition, chose not to withdraw the awarded amount.
Interest ceases to run once the awarded amount is deposited and made available to the decree-holder. The award-holder is deemed to have had access to and benefit of the money from the date of deposit. In support of this principle, the Court relied upon the judgment of the Supreme Court in DLF Limited v. Koncar Generators and Motors Ltd. (2025) 1 SCC 343, wherein it was held that once an award debtor deposits the awarded amount and the award-holder is permitted to withdraw the same, interest ceases to accrue from the date of deposit.
The Court also referred to principles under Order XXI Rule 1 and Order XXIV CPC and to the judgement of Delhi High Court in M/s Rama Civil India Constructions Pvt. Ltd vs Union of India, wherein it was held that that a award-holder is not entitled to any further interest beyond the interest earned on the fixed deposit.
Applying the aforesaid principles, the Delhi High Court concluded that IRB was not entitled to any additional interest beyond the interest actually earned on the fixed deposit during the period the amount remained deposited in Court.
Accordingly, the application seeking further interest and the enforcement petition (to that extent) were rejected.
Case Details
Case Name: National Highways Authority of India v. IRB Goa Tollway Private Ltd.
Case No.: O.M.P. (COMM) 349/2016 & OMP (ENF.) (COMM.) 51/2022
Date of Judgment: 02.02.2026
Court: High Court of Delhi
Coram: Hon’ble Mr. Justice Harish Vaidyanathan Shankar
Citation Code: 2026: DHC: 1085