EXECUTIVE ENGINEER, KHADKAI IRRIGATION DIVISION v. ABADHUTA JENA
1980-08-19
R.N.MISRA
body1980
DigiLaw.ai
JUDGMENT : R.N. Misra, J. - These are appeals u/s 39 of the Arbitration Act challenging the decision of the learned Subordinate Judge making two separate awards rule of the Court and passing decree incorporating the awards. As parties are common and a common question arises for examination these appeals have been heard at a time and are being disposed of by a common judgment. 2. Respondent is a contractor. He undertook execution of work under the State Government by entering into F-2 contracts. Disputes having arisen they were referred to arbitration and the appointed arbitrator passed awards. Objection was raised on the following grounds to the awards: (i) Under the arbitration clause the Chief Engineer had authority to nominate an arbitrator but the disputes had to be referred by the parties. As no reference was made of specific disputes, the arbitration proceeding was a nullity. (ii) The Arbitrator has taken certain items of work into account which were not covered by the original contract and having compensated the claimant for the same has misconducted himself and has acted in excess of jurisdiction. (iii) There was an express provision in the agreement under the special conditions and specifications forming part of the contract which has not been taken into account by the arbitrator. (iv) The Arbitrator should have given reasons and non-furnishing of reasons has prejudiced the State in contesting the award of compensation. These were ruled out and the two awards have been made rule of the Court. The learned Subordinate Judge has refused future interest. The State has carried the appeals reiterating their objections and the Contractor has filed memorandums of cross-objection in both the appeals claiming future interest. 3. Admittedly the award is without reasons. It is settled law that the arbitrator is not 'hound to give a reasoned award see N. Chellappan v. Secretary, Kerala State Electricity Board and Anr. AIR 1975 S.C. 238. The extra works undertaken by the Contractor were ancillary to the main work forming the subject-matter of the F-2 agreements. In fact, these were certain extra items done for the same work. There can be no doubt that the same arbitration clause which applied to the main work must apply to the supplementary work and no separate contract or agreement was necessary.
In fact, these were certain extra items done for the same work. There can be no doubt that the same arbitration clause which applied to the main work must apply to the supplementary work and no separate contract or agreement was necessary. The dispute having arisen, the Chief Engineer had appointed an arbitrator before whom parties have raised their disputes on the basis of which the arbitrator entered into the reference. The State participated before the arbitrator. The objection raised to lack of jurisdiction is wholly without basis. The only other objection raised is that certain items for which payment could not be made have been included. In the memorandums of appeal no specific item has been indicated. One of the objections in the trial Court was more by way of illustration than specific. The agreement is not incorporated in the award. On the principle indicated in Champsen Bhara & Company v. Jivraj Balloo Company Ltd. AIR 1923 P.C. 66 . Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd. and N. Chellappan v. Secretary, Kerala State Electricity Board and Anr. AIR 1975 S.C. 238 such an objection would not be maintainable. I also find that there is no specific objection raised and the counter filed before the learned Subordinate Judge on this score was vague. There is no merit in both the appeals and accordingly both are dismissed. 4. Section 29 of the Arbitration Act provides: Where and in so far as an award is for the payment of money the Court may in the decree order interest, from the date of the decree at such rate as the Court deems reasonable, to be paid on the principal sum as adjudged by the award and confirmed by the decree. Admittedly, award of future interest is in the discretion of the Court. While the Court is not bound to order its payment, withholding of it should be on some reasonable basis. Once the amount is found due and the Court affirms the award by making it a rule of the Court and the Defendant is in a position to satisfy the decree, there can be no justification to refuse award of future interest. Non-satisfaction of the decree after it is passed and withholding of the payment of money of the adversary, are situations which should bring in a liability of interest.
Non-satisfaction of the decree after it is passed and withholding of the payment of money of the adversary, are situations which should bring in a liability of interest. No reason has been given by the trial Court, to withhold interest following the period of decree till recovery. I am inclined in such circumstances to vacate the direction and allow the memorandums of cross-objection and award future interest from the date of the decree till its realisation at the rate of six per cent. There would be no order for costs either in the appeals or in the cross-objections. Final Result : Allowed