BANGALORE DEVELOPMENT AUTHORITY vs M/S. ABHIRAM INFRA PROJECTS PRIVATE LIMITED,

Court
Karnataka High Court

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HC-KAR
NC: 2026:KHC:55912
WP No. 7104 of 2025


CNR: KAHC010146102025





IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 6 DAY OF OCTOBER, 2026


BEFORE

THE HON'BLE MR. JUSTICE K. V. ARAVIND

WRIT PETITION NO. 7104 OF 2025 (GM-CPC)

BETWEEN:

BANGALORE DEVELOPMENT AUTHORITY
KUMARA PARK WEST,
T.CHOWDAIAH ROAD,
BENGALURU - 560 020
REPRESENTED BY ITS COMMISSIONER.
…PETITIONER






(BY SRI. AJAY KUMAR M, ADVOCATE)

AND:

M/S. ABHIRAM INFRA PROJECTS PRIVATE LIMITED,
REGISTERED OFFICE FLAT NO.B-302,
RAMKY UTSAV, SEENAPPA LAYOUT,
NEW BEL ROAD, BENGALURU - 560 094.
…RESPONDENT




Digitally
signed by
VINUTHA B S
Location:
High Court of
Karnataka

(BY SRI. ROHAN VEERANNA TIGADI, ADVOCATE)
THIS W.P. IS FILED UNDER ARTICLE 227 OF THE
CONSTITUTION OF INDIA PRAYING TO CALL FOR RECORDS.
SET ASIDE ORDER DTD. 14.02.2025 PASSED BY THE LXXXIII
ADDL. CITY CIVIL AND SESSIONS JUDGE, COMMCERCIAL
COURT, BENGALURU IN COM. EX NO. 872/24 PASSED ON IA
NO. 4 AND 5 AT ANNX-A WHEREBY THE MEMO OF

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WP No. 7104 of 2025


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CALCULATION FILED BY THE PETITIONER HEREIN CAME TO
REJECTED AND ETC.,
THIS PETITION, COMING ON FOR ORDERS, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE K. V. ARAVIND

ORAL ORDER
The present writ petition is filed calling in question the
order dated 14.02.2025, whereby the petitioner has been
directed to pay interest, including on the award amount
deposited before the Court.
2. Learned counsel appearing for the petitioner
submits that the award amount was deposited before the
Commercial Court pursuant to the order dated 09.08.2023. It is
contended that, upon deposit of the award amount, the liability
to pay further interest ceases. It is further contended that, if
the decree-holder has failed to seek withdrawal of the amount
deposited towards satisfaction of the award, such default on
the part of the decree-holder cannot render the petitioner liable
to pay further interest.

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2.1. It is contended that the Execution Court, without
noticing the aforesaid position, has erroneously directed
payment of interest. In support of the said contention, learned
counsel places reliance on the judgments of the Hon’ble
Supreme Court in Himachal Pradesh Housing and Urban
Development Authority v. Ranjit Singh Rana , reported in
(2012) 4 SCC 505 , and Union of India and Another v. MP
Trading and Investment RAC Corporation Limited ,
reported in (2016) 16 SCC 699 .
3. Per contra, learned counsel appearing for the
respondent submits that the deposit before the Commercial
Court was made in compliance with a conditional interim order
and was not intended for the benefit of the respondent. It is
further submitted that, unless the respondent was permitted to
withdraw the amount deposited, the liability to pay interest in
terms of the award would continue.
3.1. Learned counsel further submits that the objection
raised by the petitioner to the respondent’s application dated
07.09.2024, seeking withdrawal of the amount deposited,
clearly establishes that the deposit was not unconditional.

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WP No. 7104 of 2025


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Learned counsel places reliance on the judgment of the Hon’ble
Supreme Court in DLF Limited (formerly known as DLF
Universal Limited) and Another v. Koncar Generators and
Motors Limited (2025), SCC 343 and submits that the
judgments relied upon by the petitioner, namely, Himachal
Pradesh Housing and Urban Development Authority and
Union of India and Another (supra) have no application to
the facts of the present case.
3.2. Learned counsel further places reliance on the
judgment of the Hon’ble Supreme Court in National Seeds
Corporation Limited v. National Agro Seed Corporation
(India) , reported in 2026 SCC OnLine SC 1924 , to contend
that, unless the amount deposited is made available for the
benefit of the decree-holder, the liability to pay interest in
terms of the award continues. Reliance is also placed on the
judgment of the Hon’ble Supreme Court in Ramanathan
Chettiar & Ors. v. ORPRM Ramanathan Chettiar , reported
in 1968 SCC OnLine SC 28 , in support of the same
proposition.

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4. Considered the submissions made by learned
counsel for the parties and perused the impugned order.
5. The only issue that arises for consideration is
whether the petitioner is liable to pay interest on the award
amount even after depositing it before the Commercial Court.
6. It is not in dispute that the deposit was made
pursuant to the order dated 09.08.2023, as a precondition for
staying the operation and execution of the impugned award
passed by the Sole Arbitrator. Thereafter, notice was issued to
the respondent.
6.1. The respondent thereafter filed an application
seeking withdrawal of the amount deposited, to which the
petitioner raised objections. This circumstance clearly indicates
that the amount deposited before the Commercial Court was
not an unconditional deposit towards satisfaction of the award.
6.2. The Hon’ble Supreme Court, in National Seeds
Corporation Limited (supra ), has summarised the principles
governing the issue as follows:

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"(i) The Arbitration and Conciliation Act, 1996 is a self-
contained code. Section 36(1) contains a legal fiction by
which an arbitral award is made enforceable as if it were
a decree of the Court.

(ii) Section 36(3) of the 1996 Act provides that, while
considering an application for stay of an arbitral award
for payment of money, the Court shall have due regard
to the provisions governing the grant of stay of a money
decree under the Code of Civil Procedure.

(iii) The real effect of deposit of money in Court is to
place the money beyond the reach of the parties.

(iv) A deposit of the decretal amount in Court must be
unconditional and the amount must be made available
to the decree-holder for withdrawal in order for such
deposit to constitute payment in terms of Order XXI
Rule 1 of the Code of Civil Procedure.

(v) If the decree-holder is permitted to withdraw the
amount only upon furnishing security, such deposit
cannot be treated as payment in satisfaction of the
decree in accordance with Order XXI Rule 1 of the Code.

(vi) If the deposit is not made in terms of Order XXI
Rule 1 of the Code, interest continues to run on the
decretal amount even after the deposit.


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(vii) A decree-holder cannot claim interest on the
deposited amount if he fails to take steps seeking
withdrawal thereof. Such inaction may amount to
deemed refusal of the tender of the amount.

(viii) Where the amount deposited by the judgment-
debtor is converted into and held as a fixed deposit at
the request of the decree-holder, the decree-holder
would be entitled only to the interest accrued on such
fixed deposit.

(ix) Where only part of the outstanding amount is
deposited or tendered and is unconditionally available
for withdrawal by the award-holder/decree-holder,
accrual of interest ceases only to the extent of such
deposit, while the balance amount continues to carry
interest at the applicable rate."

6.3. The aforesaid principles, when applied to the facts
of the present case, make it clear that the liability to pay
interest on the award amount ceases upon deposit only when
the deposit is unconditional and the amount is made available
to the decree-holder for withdrawal. Further, where the amount
is unconditionally available for withdrawal, the liability to pay
interest may cease from the date of deposit if the decree-
holder fails to take steps to withdraw the same.

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6.4. In the present case, a plain reading of the order
directing deposit makes it evident that the deposit was a
condition precedent for staying the execution and operation of
the impugned award. The petitioner has not demonstrated that
the amount deposited was unconditionally available to the
decree-holder for withdrawal. On the contrary, when the
respondent filed an application seeking withdrawal of the
amount deposited, the petitioner opposed the same.
6.5. This clearly demonstrates that the amount
deposited before the Commercial Court was not an
unconditional deposit towards satisfaction of the award. It is
also relevant to note that, as observed by the Execution Court
in the impugned order, no notice of the deposit was issued to
the decree-holder in accordance with the applicable provisions
of the Code of Civil Procedure. The petitioner, therefore, cannot
contend that the decree-holder failed to withdraw an amount
that had been unconditionally made available to it.
7. In view of the aforesaid circumstances and the
principles laid down by the Hon’ble Supreme Court, this Court
finds no error or infirmity in the order passed by the Execution

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Court warranting interference in the exercise of its writ
jurisdiction.
8. Accordingly, the writ petition stands dismissed.



Sd/-
(K. V. ARAVIND)
JUDGE


VN
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