New Delhi, Sept. 21 -- The Supreme Court has held that depositing an arbitral award amount in court does not by itself extinguish the award-debtor's liability to pay interest.

Interest stops accruing only when the deposit complies with Order XXI Rule 1 of the Code of Civil Procedure (CPC) and is unconditionally available for withdrawal by the award-holder.

The Court said that where an award-debtor deposits the amount as a condition for challenging the award and the award-holder can withdraw it only after meeting certain conditions, the deposit cannot be treated as payment under Order XXI Rule 1 CPC.

Deposit Must Be Unconditional

The Court observed that a deposit in court effectively places the money beyond the parties' reach. Therefor...