Bangladesh Oil, Gas and Mineral Cooperation Vs. Nuruzzaman Khan Brothers

Bangladesh Oil, Gas and Mineral Cooperation (Petro Bangla) (Petitioner)


Nuruzzaman Khan Brothers (Respondent)

Supreme Court

Appellate Division



ATM Afzal CJ

Latifur Rahman J 

Md. Abdur Rouf J

Bimalendu Bikash Roy Choudhury J  

Judgment dated :  February 12, 1998.

The Arbitration Act, 1940 (X of 1940) Section 39

Awarding of interest on the decretal amount of award on appeal whereas no such interest had been determined by the arbitrators and even no such claim of interest was made by the respondent before the court, granting of such interest on the award on appeal is not permissible. ………………..(6 & 7)

Lawyers Involved:

Md. Nawab Ali, Advocate-on-Record— For the Petitioner.

Shafique Ahmed, Senior Advocate, instructed by Shamsul Haque Siddique, Advocate-on-Record— For the Respondent.

Civil Petition for Leave to Appeal No. 555 of 1996.

(From the judgment and order dated May 22, 1996 passed by the High Court Division, Dhaka in FMA No. 196 of 1994).


      ATM Afzal CJ.- This petition by the second party-lessee arises out of an arbitration proceeding and is directed against judgment and order dated 22nd May, 1996 passed by a Division Bench of the High Court Division dismissing FMA No. 196 of 1994 filed by the petitioner under section 39 of the Arbitration Act, 1940 against judgment and decree dated 10-5-94 passed by the Subordinate Judge, First Court, Dhaka in Title Suit No. 28 of 1991 making the award dated 23-6-90 filed by the Arbitrators in Court as rule of the Court and part of the decree. The High Court Division while dismissing the appeal, however, directed the second party-lessee-petitioner to pay interest at the rate of 8% per annum on the decreed amount from the date of the decree till realisation of the same.

2. Mr. Md. Nowab Ali, learned Advocate-on Record appearing for the petitioner, submits that the petitioner can hardly raise any objection now against the award in view of the findings made by the learned Subordinate Judge and thereafter by the High Court Division in the appeal. He, however, submits that the only objection is as to imposition of interest which was neither a part of the award nor given by the learned Subordinate Judge while making the award a rule of the Court. He submits that the impugned order insofar as it relates to payment of interest is clearly illegal and unwarranted.

3. In view of the submission of the learned Advocate-on-Record for the petitioner raising objection only to granting of interest, it is not necessary to narrate all the facts of the case and it will be sufficient to notice that the petitioner was a lessee under the first party-lessor-respondent in respect of several floors of a multi-storied commercial building comprising of 12 floors situated at 107, Motijheel Commercial Area, Dhaka since 1982 and dispute arose between the parties over payment of rent, service charges, etc. which led to a reference to the arbitration in terms of the lease agreement, that the arbitrators entered into the reference on 17-4-89 and finally made an award for Taka 44,14,716.28 in favour of the first party-lessor on 23-6-90. The lessee-petitioner having failed to honour the award, the Arbitrators filed the award in Court at the instance of the lessor-respondent and as already noticed, the award was made a rule of the Court after hearing the objection of the lessee- petitioner. The appeal filed by the petitioner has also been dismissed by the impugned judgment and order.

4. As to the objection of the petitioner with regard to interest as granted by the High Court Division in the impugned order, Mr. Shafique Ahmed, learned Advocate entering caveat for the lessor-respondent, has found it difficult to oppose the same.

5. The objection is so obvious, there having been no interest awarded by the Arbitrators nor there having been any claim made for interest by the lessor-respondent either before the Arbitrators or the Subordinate Judge, that we were about to grant leave to examine the question of interest and to correct that part of the impugned judgment and order relating to interest. Mr. Shafique Ahmed has been very fair enough to suggest that instead of going through the process of an appeal, which will be time-consuming, it will be in the interest of justice and a favour done to the lessor-respondent, who is being deprived of the award money for a long time since 1990, if that part of the impugned order which relates to interest is deleted here and now without granting any leave to appeal.

6. It is found that the High Court Division directed payment of interest having been moved by the long deprivation of the lessor-respondent but failed to consider that the Arbitrators did not grant any interest nor any objection was taken to the award on that ground. Mr. Shafique Ahmed has frankly submitted that he cannot legally support the granting of interest even though the order has been in favour of the respondent.

7. In view of what has been stated above that part of the impugned order by which the second party-petitioner has been directed to pay interest at the rate of 8% per annum on the decreed amount from the date of decree till realisation of the same is hereby deleted. In other words, the first party- respondent will be entitled only to the amount as awarded by the Arbitrators and made a rule of the Court by the Subordinate, Judge.

The petition is disposed of in the above terms.


Source : 51 DLR (AD) (1999) 52