JUDGMENT : S.K. Ray, C.J. - This is an appeal u/s 39 of the Indian Arbitration Act from the order dated 12-5-1976 of the Sub-Judge, Rourkela passed in Title Suit No. 19 of 1975, setting aside an a ward. 2. The Respondent took lease of 12.30 acres of land of the Appellant within a specified boundary over which a hotel containing forty guest rooms three lounges, one dinning hall and kitchen and other rooms were standing. A lease deed was executed between the parties on 3-10-1963. A sketch map of the demised premises was attached to the lease deed. This lease deed contained the terms, inter alia, that the lessor-Appellant was to supply to the lessee at the demised premises water, electricity and conservancy service at the usual rate and that the lessor would extend the lease-hold area up to Hamirpur road in the west and up to Canteen road on the north for the purpose of enabling the lessee to enlarge his hotel. The lessor also undertook to provide maintenance to the buildings within the leasehold area, and to the approach roads. Under the terms and conditions of the lease the Defendant was to pay to the Plaintiff a sum of Rs. 6/- per head per day calculated on the total number of guests accommodated in the hotel with a minimum guarantee of Rs. 3,000/- per month. It was also stipulated that the lessee was bound to accommodate the guests of the lessor as and when so required and reservation for the lessor's guests was liable to be cancelled by giving at least twenty four hours notice. When the lessor's guests were accommodated in the hotel the lessor was to pay Rs. 14/- per head per day for its guests and in case the guests were accommodated in air-conditioned room, an additional charge of Rs. 8/- was payable to the lessee. For any accommodation required and reserved by the lessor if not utilised and not cancelled in time, a charge of Rs. 8/. per head per day was payable to the lessee by the lessor. The terms and conditions of the lease deed further laid down that the lessee was liable to render accounts to the lessor and the lessee was bound to provide facilities to the lessor or persons authorised by it to verify the number of guests staying at the hotel.
per head per day was payable to the lessee by the lessor. The terms and conditions of the lease deed further laid down that the lessee was liable to render accounts to the lessor and the lessee was bound to provide facilities to the lessor or persons authorised by it to verify the number of guests staying at the hotel. The lessee defaulted in rendering accounts and avoided to give inspection and verification of his records by the lessor or its men on various pleas. The lessee except paying only Rs. 36,096/- towards rent and Rs. 9,858.51 paise towards service charges had paid nothing more all these years since 9-2-1963, when the lease was to operate for a term of ten -years, in early 1971 the lessee came with an offer to pay Rs. 50.000/- towards the arrear dues of the lessor pending rendition of accounts as between the parties and undertook to pay rest of the dues after mutual accounts are rendered. The lessee also wanted extension of the lease period for ten years upon such payments being- made. Some sort of negotiation was commenced for renewal of the lease for another term of ten years and a draft lease deed was sent by the solicitors of the lessee to the lessor. The negotiation for a fresh lease, however, fell through and as the lessor's dues were not paid by the lessee the former filed Title Suit No; 16 of 1972 in the Court of the Sub. Judge, Panposh for a preliminary decree for rendition of accounts as between the parties and after accounts are taken to pass a final decree for recovery of the amount found due to the lessor by the lessee. 3. The aforesaid lease deed contained an arbitration clause which runs as follows: In the event of any dispute or difference arising between the Lessor and the Lessee during the period of subsistence of this lease relating to the observance of the terms and conditions of the lease and/or interpretation relating to any clause herein, the same shall be referred by both the parties to the sole Arbitration of the Chairman, Hindustan Steel Limited whose decision and/or award made in this behalf will be final, conclusive and binding between the two parties. 4.
4. The Defendant-lessee in the suit filed an application on 22-6-1972 before the Subordinate Judge u/s 64 of the Arbitration Act for stay of further proceedings in the suit. After hearing both parties the learned Subordinate Judge allowed the application on 3-7-1972 and further proceeding in the suit was stayed In order that parties may go before the Arbitrator for determination of their disputes. By a registered letter dated 21-9-1972 the lessee wrote to the Arbitrator to resolve the disputes and differences between him and the lessor, which were indicated therein, by his sole arbitration. 5. The arbitrator issued a notice on 20th October, 1972 to both the lessor and the lessee informing that he entered upon the reference that very day with regard to the claims of the lessor and directed the claimant to submit its claims in duplicate within fifteen days of the notice and to deliver a copy thereof to the lessee. By notice dated 21st November, 1972 the Arbitrator entered upon the reference that very day with regard to the claims made by the lessee and called upon him to file his statement of claim. The parties were asked to file their counter to the other's claims. There were, thus, two separate arbitration cases before the Arbitrator. 6. On 3-7-1973; at the first meeting held by the Arbitrator, it was decided by consent of parties that both the arbitration matter will be heard together. Court extended time in both the arbitration cases separately tilt 4-11-1974. There- upon on 8-11-1974 the lessor applied to the Court for further extension of time which was allowed and time was extended till 7-11-1975. The lessee applied on 3-7-1975 for extension of time for making an award in his arbitration case. That time, however, was not extended tilt after the impugned award had been made in the Appellant's case. On 2.8.1975 the Arbitrator gave notice to both the parties that the next sitting of the arbitration would be on 18-8-1975 and that if any party would not attend, the matter would be heard ex parte. On 14-8-1975 the Respondent wrote to the, Arbitrator to adjourn the case, but that was refused.
On 2.8.1975 the Arbitrator gave notice to both the parties that the next sitting of the arbitration would be on 18-8-1975 and that if any party would not attend, the matter would be heard ex parte. On 14-8-1975 the Respondent wrote to the, Arbitrator to adjourn the case, but that was refused. On 18-8-1975- when the matter came up before the Arbitrator a fresh attempt was made by the Respondent for adjournment on various grounds, one of which was to adjourn it till further time was extended in the lessee's case by the Court. That application was objected by the lessor-Appellant on the ground that since time had not been extended, the Arbitrator had become functus officio so far as the lessee's arbitration case was concerned. After hearing parties, the Arbitrator refused adjournment. It may be noted that by that time all evidence had been led by both parties and as agreed to between them one set of evidence was led which would constitute evidence in each case. The only thing left was oral arguments. The lesser's counsel argued the matter when the lessee's counsel withdrew and the argument continued till next day and the case was closed and award was made on 20-8-1975. 7. The Arbitrator made a lump sum award on different items as hereunder: Whereas I, Hiten Bhaya, Chairman, Hindustan Steel Limited was appointed as Sale Arbitrator respectively by Hindustan Steel Limited of Hinoo, Ranchi in the State of Bihar and D.R. Gupta of 3, Wellesley Place. Calcutta-1 under Clause Ten of the lease deed dated 3rd October, 1963 in writing between the above two parties and the differences and disputes between the parties arising thereunder as contained in the statement of facts filed on behalf of the Claimant, Hindustan Steel Limited on 28th February, 1973 and the counter-statement of facts filed on behalf of the Respondent D.R. Gupta on 31st March, 1973 were referred to my arbitration. I have perused the statement of claim and counter claim and the Rejoinder and the documents filed and relied upon by the parties in the proceedings and oral depositions adduced before me by Respondent D.R. Gupta and I have heard the arguments of the parties' Counsel. I made and publish my award as follows: (1) I award Rs.
I have perused the statement of claim and counter claim and the Rejoinder and the documents filed and relied upon by the parties in the proceedings and oral depositions adduced before me by Respondent D.R. Gupta and I have heard the arguments of the parties' Counsel. I made and publish my award as follows: (1) I award Rs. 9,32,662 and 37 paise only in favour of Claimant Hindustan Steel Limited as follows: A. Arrears of Hotel Rent for period 9-2-1963 to 8-10-1972 Rs. 8,58,159 00 B. Arrears of Electricity Charges for period 1-7-1965 to 3-9-1972 Rs. 51,847.13 Rs. 9,32,66237 (2) I award Rs. 1,38,289.60 P. towards interest on the above sum for the period 28-2-1973 to 19-8-1975. (3) I award Rs. 8,500/- (Rupees eight thousand five hundred only) as costs to the Claimant. (4) I direct the Respondent to pay the sums awarded within 30 days from the award in default I award interest at the rate of six per cent per annum on the sums a warded. xx xx xx 8. The validity of the award was questioned before the subordinate Judge on the following grounds: (a) The Arbitrator misconducted himself and the proceedings (i) by basing his award on conjectures, ignoring the evidence and the facts and law, and so making the award arbitrarily which was perverse, (ii) by altering the character and nature of the proceeding without notice, (iii) by violating the principles of natural justice, (iv) by acting in excess of his jurisdiction in awarding interest which had not been claimed and also interest over interest, and by awarding exorbitant costs, and (v) by failing to act impartially. (b) The award has been improperly procured and is otherwise invalid as per the provisions of Section 30(a) and (c) of the Arbitration Act. 9. The award has been set aside on the following grounds: (a) The Arbitrator misconducted himself and the proceeding by coming to settle an amount in favour of the Plaintiff without showing as to on what basis he arrived at the conclusion. (b) The Arbitrator by giving a lump sum award has erred, since the same does not show that he considered material documents existing on record. (c) The Arbitrator misconducted himself, because he has not discussed the evidence and has not given reasons for the lump sum award.
(b) The Arbitrator by giving a lump sum award has erred, since the same does not show that he considered material documents existing on record. (c) The Arbitrator misconducted himself, because he has not discussed the evidence and has not given reasons for the lump sum award. (d) The Arbitrator acted illegally by splitting up two proceedings after evidence was closed and thereby altering the character of the proceedings. (e) The Arbitrator violated the principles of natural justice by not adjourning the proceedings. (f) The Arbitrator exceeded his jurisdiction in two ways, namely, by awarding interest and by awarding interest on interest. (g) The Arbitrator showed bias by his entire conduct in awarding excessive costs. These grounds were reiterated here by the learned Counsel for the Respondent. 10. It is well settled that an Arbitrator is the sole and final Judge of all questions of law and of fact in regard to the cause or matters in difference referred to him. There are three exceptions to this rule, namely, where the award is the result of (a) corruption (b) fraud and (c) where the question of law necessarily arises on the face of the award of upon some papers accompanying and forming part of the award, and it is shown that the question of law on which the award is based is erroneous. The Court cannot analyse the mental process of the Arbitrator whether the evidence he could arrive at his conclusions see the case of Champsey Bhara Company v. Jivraj Balloo Spinning and Weaving Company AIR 1923 P.C. 36. Their Lordships of the Judicial Committee in that very case have observed: An error in law on the face of the award means, in their Lordships view, that you can find in the award or document actually incorporated thereto, as for instance a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous. It does not mean that if in-a narrative a reference is made to a contention of one party, that opens the door to seeing first that contention is, and then going to the contract on which the parties rights depend to see it that contention is sound. This view has been accepted and followed by the Supreme Court in the case of Bungo Steel Furniture Pvt. Ltd. Vs.
This view has been accepted and followed by the Supreme Court in the case of Bungo Steel Furniture Pvt. Ltd. Vs. Union of India (UOI) where their Lordships observed: It is true that the Court in dealing with an application to set aside an award has not to consider whether the view of the arbitrator on the evidence is justified. The arbitrator's adjudication is generally considered binding between the parties, for he is a tribunal selected by the parties and the power of the Court to set aside the award is restricted to cases set out in Section 30 of the Arbitration Act An award may be set aside by the Court on the ground of an error of law apparent on the face of the award but an award is not invalid merely because by a process of inference and argument it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion in determining whether the award of an arbitrator should be remitted or set aside on the ground that there is an error of law apparent on the face of it, the Court is not entitled to draw any inference as to the finding by the arbitrator of facts supporting the award, but must take it at its face value.... It is further observed in that case: It is now a well settled principle that if an arbitrator, in deciding a dispute before him, does not record his reasons and does not indicate the principles of law on which he has proceeded, the award is not on that account vitiated. It is only when the arbitrator proceeds to give his reasons or to lay down principles on which he has arrived at his decisions that the Court is competent to examine whether he has proceeded contrary to law and is entitled to interfere if such error in law is apparent on the face of the award itself. Similar view was expressed in another case of the Supreme Court namely, in the case of Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore in the following words: ...The arbitrator could give a lump sum award. He was not bound to give a separate award for each claim. His a ward on both fact and law is final. There is no appeal from his verdict.
Hukumchand Mills Ltd., Indore in the following words: ...The arbitrator could give a lump sum award. He was not bound to give a separate award for each claim. His a ward on both fact and law is final. There is no appeal from his verdict. The Court cannot review his award and correct any mistake in his adjudication, unless an objection to the legality of the award is apparent on the face of it.... The Court cannot re-examine or re-appraise the evidence to hold that the conclusions are wrong, nor can it set aside an a ward unless the error is apparent on the face of the record. This view has been accepted by this Court also in the case of State of Orissa and Others Vs. U.N. Samantray. There are a galaxy of other cases of the Supreme Court and other High Courts reiterating the same principles as above. 11. In the present case, the Arbitrator has given a lump sum award on different Items of claim. He has given no reasons for the award. I do not find on the face of the award any legal proposition which is erroneous. It is not possible to say from the award whether the Arbitrator was under a misconception of any law. It appears from the Arbitrator's minutes in the third to seventh meetings, printed at pages 185 to 192 of the paper book, that documentary evidence was adduced by the Appellant. The Appellant also called for documents from the Respondent which were produced. Some oral evidence was led and the Respondent Sri D.R. Gupta was cross-examined at length by the Appellant. The Arbitrator has specifically stated that he perused the statement of claim, counter claim and the Re-joinder and the documents filed and relied upon by the parties and oral deposition adduced before him prior to making his award. This is certainly not a case of no evidence. 12. The learned Sub-Judge was completely in error in setting aside the award on the ground that the Arbitrator did not give reasons for his award. He has further gone into evidence and has tried to reappraise the same and then found fault with the award.
This is certainly not a case of no evidence. 12. The learned Sub-Judge was completely in error in setting aside the award on the ground that the Arbitrator did not give reasons for his award. He has further gone into evidence and has tried to reappraise the same and then found fault with the award. Court is not competent, in the aforesaid legal perspective, to analyse the mental process of the Arbitrator whether on evidence he could arrive at his conclusions, or set aside an award by demonstrating through a process of inference and argument or by reappraising evidence led by the parties that the Arbitrator has rendered erroneous conclusions. Since in the present case, the Arbitrator has not given reasons or laid down some erroneous legal proposition on which he has based his award, the Court is incompetent to examine- the award or re-examine the evidence, when the award is not a speaking one, and set it aside on the ground that on a review of evidence the Arbitrator's conclusions are untenable. Thus, grounds (a) to (c) are not valid grounds to set aside the award. 13. The learned Sub-Judge has relied on the decisions in the cases of Ardeshar Irani Vs. The State of M.P. and K.P. Poulose Vs. State of Kerala and Another. In the Madhya Pradesh case, the award was set aside on the I ground that the Arbitrator accepted money from one of the parties behind the back of the other, that is to say, on the ground of corruption. Besides, any observation in that case to the effect that the Arbitrator could have given reasons is not correct in law, in view of the decisions of the Privy Council and of the Supreme Court indicated above. In the second case, which is a case of the Supreme Court, the decision was based on a speaking award. Therefore, the observations in that case are not relevant. 14. I will now proceed to examine if there is any substance in ground Nos. (d) and (e) which are interconnected. As indicated earlier, there were two separate arbitration proceedings before the Arbitrator, one initiated on 20-10-1972 at the instance of the Appellant and the other initiated on 21-11-1972 at the instance of the Respondent.
14. I will now proceed to examine if there is any substance in ground Nos. (d) and (e) which are interconnected. As indicated earlier, there were two separate arbitration proceedings before the Arbitrator, one initiated on 20-10-1972 at the instance of the Appellant and the other initiated on 21-11-1972 at the instance of the Respondent. It appears from the minutes of the proceedings of the arbitration that the counsel for the Appellant moved the Arbitrator that 'both the matter of arbitration between Hindustan Steel Limited (Appellant) and D.R. Gupta (Respondent) and D.R. Gupta (Respondent) and Hindustan Steel Limited (Appellant) should be held together', and the counsel for the Respondent (D.R. Gupta) having no objection to the same the Arbitrator ordered that 'the two matters will be heard together'. One set of evidence was led which was evidence in both the cases. The Appellant moved the Sub-Judge from time to time u/s 28 of the Arbitration Act for extension of time for submission of the a ward and the last extension was till 7-11-1979. The Respondent similarly moved the Sub-Judge for extension of time for submission of the award in his arbitration proceeding. He obtained extension of time till 4-11-1974. Then on 7-7-1975 the Respondent made an application to the Sub-Judge for extension of time u/s 28 of the Arbitration Act, for his own case. After closure of evidence, the Arbitrator posted both the cases for oral arguments to 18-8-1975. On 18-8-1975 the Respondent, through his lawyer, filed an application before the Arbitrator for time till he obtained an order for extension from the Sub-Judge in his case. This petition was objected to by the Appellant's Advocate on the ground that the Respondent had been very negligent in applying for extension of time and no adjournment should be granted hoping for a hypothetical event to occur, namely, grant of extension of time. Furthermore, the two arbitration cases were separate and the Arbitrator was bound to pass award in the Appellant's, case on or before 7-11-1979. In the absence of any guarantee that the Court would further extend time, the Arbitrator would have exposed the Appellant to the risk of making his arbitration proceeding, in the Appellant's case, infructuous, if he yielded to the request of the Respondent for adjournment.
In the absence of any guarantee that the Court would further extend time, the Arbitrator would have exposed the Appellant to the risk of making his arbitration proceeding, in the Appellant's case, infructuous, if he yielded to the request of the Respondent for adjournment. Further, since he was bound to make another award in Respondent's case, there was no reason for granting adjournment so far as the Appellant's arbitration case was concerned. It was further argued by the Appellant that this time petition was a mala fide act for the sale purpose of dragging on the arbitration cases as long as possible. The Arbitrator after hearing both parties on the petition for adjournment passed the following order: In view of the developments disclosed in the submissions of the Counsel of D.R. Gupta it is ordered that in modification of the earlier order of 3rd July 1974 made in the Minutes of the 1st Meeting, HSL's claim against D.R. Gupta will be proceeded with separately in view of the fact that in both the matters examination and cross-examination of witness Sri D.R. Gupta and arguments on behalf of the Respondent are over and the matter should not be delayed any further on the grounds advanced by the Respondent's Counsel. After rejection of the adjournment petition counsel for the Respondent D.R. Gupta left complaining of some eye trouble and shortly thereafter Respondent himself also left the meeting, but before be did so the Arbitrator asked him to make his submissions, if any, on the 19th morning, that is next day. So far as the Appellant's arbitration case was concerned, hearing before the Arbitrator continued till 19-8-1975 and concluded. Neither the Respondent nor his counsel appeared on that date. The Arbitrator passed the award in the Appellants case on 20-8-1975. The mala fide action in praying for adjournment will be clear from the subsequent conduct of the Respondent. On 28 8-1975 the Respondent filed an application before the Sub-Judge to withdraw his petition for extension of time. That shows very dearly that the Respondent's intention was to merely delay the matter for no valid reason at all and to delay delivery of the award in the Appellant's case. Though this petition for withdrawal was filed by the Respondent after the award was passed, nevertheless it shows that he did not intend to proceed in his arbitration case.
That shows very dearly that the Respondent's intention was to merely delay the matter for no valid reason at all and to delay delivery of the award in the Appellant's case. Though this petition for withdrawal was filed by the Respondent after the award was passed, nevertheless it shows that he did not intend to proceed in his arbitration case. As the law is that after time for delivery of award expires the Arbitrator becomes functus officio so between 18-8-75,20-8-75 when the a ward was passed. Arbitrator was functus officio with regard to Respondent's case. In these circumstances, for end of justice he separated the Respondent's arbitration case which was a dead one at the time in which no award could be Passed unless it was revived by grant of extension of time by the Court. It is not possible to censure the Arbitrator who refused to adjourn the proceeding basing upon a contingent event, that is, grant of extension of time which mayor may not happen. He had earlier ordered hearing of the two arbitration cases together by consent of parties,; as the subject-matter in controversy in both the arbitration cases were alike arising out of the same lease transaction. Therefore, after collection of all evidence from both the parties when the Arbitrator saw that it was no longer possible to continue the two arbitration cases together on account of the conduct of the Respondent in not applying for extension of time in his case, showing lack of bona fides which impression is confirmed by his subsequent act of withdrawing his petition for extension, the Arbitrator acted very fairly in detaching the Respondent's case and proceeding with Appellant's case. This act of the Arbitrator was very right in the then circumstances and he acted bona fide. This splitting up of cases has caused no prejudice to the Respondent, because when he gets an extension of time, as he has got now, the Arbitrator would proceed to delivery his award 'in the Respondent's arbitration case. It is futile to call this splitting up of the two proceedings as illegal or altering the character of the proceedings or violating any principle of natural justice. On the contrary, this act of the Arbitrator was done for the ends of justice.
It is futile to call this splitting up of the two proceedings as illegal or altering the character of the proceedings or violating any principle of natural justice. On the contrary, this act of the Arbitrator was done for the ends of justice. In connection with this ground it is urged by the learned Counsel for the Respondent that refusal to grant adjournment amounted to with holding opportunity of hearing to the Respondent. It appears from the order-sheet of the Arbitrator that he gave notice of hearing of arguments on 30-1-1974 fixing the cases to 8th and 9th February, 1974. At the Respondent's request the date for hearing arguments was shifted to 15th and 16th March, 1974. The parties were told very clearly that if any of them failed to appear on the dates fixed, the matter would be heard ex parte. On 15-3-1975 neither the Respondent nor his counsel appeared. After getting the order of the Court extending the time till 7-11-1975, the Arbitrator fixed 18th August, 1975 for hearing of arguments of both parties. They were also intimated by the very notice that the matter would proceed ex parte if any of the parties would be unable to appear in the meeting for hearing. The Respondent applied by his letter dated 14th August, 1975 for grant of time which was rejected. On 18-8-1975 both the Respondent and his lawyer appeared but they asked for further time on the ground as already discussed above. That having been rejected, both the Respondent and his counsel retired from the proceeding before the Arbitrator. In rejecting the adjournment the Arbitrator made it very clear to the Respondent that the latter's arbitration case will be separately proceeded with after extension of time was obtained. On 19-8-1975 the Respondent did not appear at all to make his oral submission. In these circumstances, it will be height of absurdity to call this action of the Arbitrator as mala fide or to infer therefrom that there has been a violation of principle of natural justice. An Arbitrator has authority to regulated his proceedings. He is not bound by the technicality of rules of procedure and he has authority to regulate his own. If the procedure had been irregular, but bona fide, award cannot be set aside as invalid. The Arbitrator can adopt any procedure which is convenient to all parties concerned.
An Arbitrator has authority to regulated his proceedings. He is not bound by the technicality of rules of procedure and he has authority to regulate his own. If the procedure had been irregular, but bona fide, award cannot be set aside as invalid. The Arbitrator can adopt any procedure which is convenient to all parties concerned. In my opinion, irregularity in procedure, if any, in the instant case, does not amount to no proper hearing of the matters in dispute. The Respondent has failed to establish the same. The Arbitrator cannot be held guilty of want of fairplay. It is well-known that the award being the decision of a domestic tribunal chosen by the parties, whether right or wrong, is binding, if it has been reached fairly and after giving equal opportunities to the parities to place their grievances in the manner provided in the arbitration agreement. As already stated, the procedure of the Arbitrator adopted by consent of parties shows that the Arbitrator rendered his award fairly after giving, adequate opportunity to the patties to place their respective claims and evidence in their support before him. It is not always inevitably necessary that the Arbitrator must give a chance for making oral arguments after affording adequate opportunity to both the parties to place their evidence before him. Nevertheless, fun opportunity of making oral submissions had been afforded to both parties in this case. Furthermore, the Respondent and his counsel deliberately non-cooperated when the matter was being orally heard, and having done that he cannot turn round and say that there has been breach of principle of natural justice on the part of the Arbitrator and on that account the award is vitiated. In my opinion, grounds (d) and (e) have no substance. 15. This leaves last two grounds i.e. grounds (f) and (g) which prevailed with the Sub-Judge in setting aside the award, for consideration The Arbitrator has awarded pendente lite, interest to the tune of Rs. 1,38,289 60 paise m item No. 2 of the award. In item No. 4 thereof he has awarded interest at the rate of 6 per cent per annum on the aggregate amount awarded under items 1 to 3. Thus, in effect, grant of interest in item No. 4 amounts to grant of interest on interest. Mr.
1,38,289 60 paise m item No. 2 of the award. In item No. 4 thereof he has awarded interest at the rate of 6 per cent per annum on the aggregate amount awarded under items 1 to 3. Thus, in effect, grant of interest in item No. 4 amounts to grant of interest on interest. Mr. Das for the Appellant gives up the claim under Item No. 2 of the award and as that item is separable portion of the award, it is, accordingly, struck out, maintaining the remainder of the award. When that is done, the criticism that the Arbitrator acted illegally in a warding interest on interest under item No. 4 no longer survives. This point needs no further consideration. 16. Item No. 4 of the award deals with grant of future interest from the date of award at the rate of six per cent per annum. How long this interest will run is not clear, but presumably it was intended that interest will run till realisation. It is now settled that unless there is a specific provision in the agreement prohibiting award of interest, the Arbitrator has jurisdiction to award interest from the due date of payment till the date of the award. See the case of State of Orissa and Anr. v. Govinda Choudhury 37 (1971) C.L.T. 937, relying upon a series of Supreme Court decisions.) Section 29 of the Arbitration Act which provides for future interest lays down that 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. The claim sheet filed before the Arbitrator by the Appellant does not include a specific reference to award of interest. In the circumstances, the Arbitrator lacked jurisdiction to award future interest. Accordingly, item No. 4 of the award being also separable, is struck out from the award. 17. It is argued by the Respondent's counsel that costs awarded are exorbitant. The arbitration proceeding extended over three years. Two lawyers - one from Cuttack and another from Rourkela - along with two high officers of the Hindustan Steel Ltd., were attending the proceedings at Calcutta and there were thirteen sittings for recording evidence adduced by both parties. The Arbitrator has awarded costs of Rs. 8,500/- only.
The arbitration proceeding extended over three years. Two lawyers - one from Cuttack and another from Rourkela - along with two high officers of the Hindustan Steel Ltd., were attending the proceedings at Calcutta and there were thirteen sittings for recording evidence adduced by both parties. The Arbitrator has awarded costs of Rs. 8,500/- only. By comparison it win be seen that the trial Court, where hearing took place only for two days at Rourkela, has awarded costs of Rs. 11,000/- and odd which has been calculated under the rules framed by the High Court for computation of costs. It cannot, therefore, be said that the costs awarded by the Arbitrator are exorbitant, specially in view of the costs awarded in the trial Court. 18. In result, items 2 and 4 of the award being clearly separable are struck out, though for different reasons, and the remainder of the award which is good is maintained. The appeal is accordingly, allowed in part. Let a decree be passed for a sum, of Rs. 9,32,662.37 paise as adjudged in item No. 1 of the award and for a sum of Rs. 8,500/- as costs as a warded in item No. 3 of the award. The aggregate amount so decreed shall bear interest at the rate of six per cent per annum from the date of the decree till the date of payment. The appeal is allowed in part with proportionate costs. Final Result : Allowed