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2024 (1) TMI 928 - DELHI HIGH COURTMaintainability of petition - Aggregate value of claims and counter-claims in arbitration - Seeking return of the petition on ground of lack of pecuniary jurisdiction of this Court entertain this Petition - invocation of Order VII Rule 10 of the Code of Civil Procedure, 1908 - inclusion of pendente lite interest - HELD THAT:- Section 12(2) of the CCA stipulates that the ‘aggregate value’ of the claim and any counter-claim in a commercial dispute arbitration forms the basis for determining the pecuniary jurisdiction of the Court. In cases where the Statement of Claim includes a component of interest, such as in the present case, it is necessary to consider the portion of interest accrued up to the date of invocation of arbitration as part of the ‘aggregate value’, in accordance with Section 12(2) of CCA. However, this provision cannot be interpreted as requiring the computation of interest up to the commencement of proceedings under Section 34 of the Arbitration and Conciliation Act, 1996. The intent is to consider interest only until the arbitration is invoked, thereby establishing a definitive cut-off for calculating the ‘aggregate value’ for jurisdictional purposes. The calculation presented by the Petitioner conflicts with the proper interpretation of Section 12 of the CCA. It is not permissible to apply interest to the original value of both the claim and counter-claim up until the filing date of petition under Section 34 of the Act. Accepting such a method would imply that in any arbitration case, the Specified Value would continually get revised. Consequently, if the Specified Value is initially below the pecuniary jurisdiction of this Court, it would eventually fall within the jurisdiction of a High Court simply due to the accrual of interest over time. This outcome would contravene the legislative intent behind establishing a specific threshold for the pecuniary jurisdiction of the Courts. Reliance placed upon a Division Bench judgment of this Court in NATIONAL SEEDS CORPORTION LTD. & ANR. VERSUS RAM AVTAR GUPTA [2021 (12) TMI 1479 - DELHI HIGH COURT], wherein the Court took into consideration only the portion of interest claimed till the date of invocation of arbitration for the purposes of calculating the pecuniary jurisdiction of this Court under Section 12(2) of the CCA. Section 21 of the Act stipulates that the arbitral proceedings commence when the notice invoking arbitration is received by the Respondent, and therefore, the interest is calculated up to such date. The interest component in the calculation supplied by the Petitioner would reduce substantially, for the following reasons: (a) Interest on risk and cost amount is to be calculated from due date (19th January, 2019) to the date of notice invoking arbitration (04th October, 2019): 18% interest p.a. on INR 58,07,799.82 for a period of 258 days = INR 7,38,891.5. (b) Moreover, the inclusion of pendente lite (interest accruing during litigation) and future interest on the counter-claim, as well as litigation costs, is impermissible to be inlcuded in the calculation of the Specified Value, as they commence accrual after date of notice invoking arbitration. Application disposed off.
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