In Brief
A municipal council in Thanesar conducted an auction for shops but disputes arose over non-delivery of possession and incomplete construction. An arbitrator awarded interest on advance rent and non-refundable security at 7% per annum to the successful bidders. The key issue was whether this interest should be calculated as compound interest (with quarterly rests) or simple interest. The Supreme Court held that decree-holders are entitled to post-award statutory interest under Section 31(7)(b) of the Arbitration Act, and that interest awarded at 7% per annum without explicit specification for compounding must be interpreted as simple interest, not compound interest.
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