Steel Authority of India Ltd. v. Uttam Singh Duggal and Co.
1984-11-14
R.B.MISRA, R.S.PATHAK, V.D.TULZAPURKAR
body1984
DigiLaw.ai
ORDER : 1. By these Civil Misc. Petitions the petitioners are seeking to set aside the two Awards, both dated 30th of May 1984 made by learned arbitrator Shri A.C. Gupta on several grounds. 2. It appears that two work contracts-Contract No. CE/96/62 and Contract No. CE/97/62 were given by the petitioners to the respondent and disputes and differences arose between the parties under these two contracts which were referred to his arbitration by this Court's Order dated 30th of April, 1982. By his Award made in respect of the claims under Contract No. CE/96/62 the learned Arbitrator has directed the petitioners to pay a total sum of Rs. 42, 12, 656. 33 to the respondent and has further directed that said sum shall carry interest at the rate of 12 per cent per annum from April 30, 1982 to the date of the Award. By his Award made in respect of the claims under contract No. CE/97/62 he has directed the petitioners to pay a total sum of Rs. 59, 60, 824. 15 to the respondent and has further directed that the said sum shall carry interest at 12 percent per annum from April 30, 1982 to the date of the Award. 3. Though several grounds have been taken in the Civil Misc. Petitions at the hearing only two grounds were urged before us by counsel for the petitioners by way of challenging the Awards : (1) that in law the Arbitrator could not have allowed any claim in respect of wage escalation and as such the Awards suffer from an illegality and (2) no interest could have been allowed by the Arbitrator on the amounts of the final bills submitted by the respondent in respect of the two contracts since the work contracts contained no provision for payment of interest. We find no substance in either of these two grounds and the Civil Misc. Petitions are liable to be dismissed and the Awards should be made a rule of the Court. 4. As regards the first ground the Awards are admittedly non-speaking Awards and it is difficult to come to a conclusion that anything has been awarded relatable to the claim in respect of wage escalation. In this connection it may he stated that a total claim made by the respondent against the petitioners before the Arbitrator under the first contract was to the tune of Rs.
In this connection it may he stated that a total claim made by the respondent against the petitioners before the Arbitrator under the first contract was to the tune of Rs. 1,02,42,236.00 which comprised two items (a) Rs. 59,38.135.00 being the claim in respect of wage escalation and (b) Rs. 43,04,101.00 being the amount of final bill and unsettled claims, excluding wage escalation. The actual amount awarded by the learned Arbitrator being less than either of the two figures representing the two items it is difficult to say whether anything was awarded towards the claim in respect of wage escalation. Similar is the position with regard to the Award made under the second contract namely that the actual amount awarded (Rs. 59, 60, 824, 15) is less than the claim in respect of wage escalation (Rs. 76, 70, 504. CO) as also the amount of the final bill and unsettled claims, excluding wage escalation (Rs. 84, 74, 994, 00). It is thus clear that the awards being non-speaking Awards it is not possible to sustain this ground of challenge. 5. As regards the point of interest it must he observed that only pendente lite interest at the rate of 12 percent per annum has been awarded by the learned Arbitrator i.e., for the period during which the reference was pending before him. It is true that the two contracts, being work contracts did not contain any provision for payment of interest on the hills that may become due and payable to the respondent. However, it seems clear that interest has been awarded by the learned Arbitrator under the Interest Act. It seems, out of greater caution, since the work was complected in 1967 the respondent had, even before the submission of the final hills by its letter dated August 18, 1971 informed the petitioners that the respondent will be claiming interest at 12 percent per annum from 1st January, 1968 till all payments were released. Since the earlier part of this letter dealt with the aspect of claims based on wage escalation counsel for the petitioners suggested that the demand for interest made in the last para of the letter should be confined to interest being claimed only on such claim based on wage escalation. On a fair reading of the letter it is impossible to accept such contention.
On a fair reading of the letter it is impossible to accept such contention. After dealing with the topic of claim based on wage escalation an independent topic of interest is touched in the last para of the letter wherein the respondent stated "the work was completed in 1967 and is now over 4 years that our large payment are outstanding against the department; please note that we shall charge you 12% interest per annum from 1st January, 1968 till all the payments are released." It is clear that a demand of interest was not confined to the claim based on wage escalation. It is thus clear that there was a demand made by the respondent for interest under the Interest Act. Apart from this in an application which was made by the respondent on 6th March, 1984 before the Arbitrator seeking interim award during the pendency of making the final award the respondent had made it clear that it would be claiming interest at 12 per cent per annum on all the amounts due to it under the Interest Act. Moreover, the learned Arbitrator was entitled to award interest pendentelite under the Interest Act as amended in 1978. The second objection to the Awards also fails. 6. The Civil Misc. Petitions are, therefore, dismissed and we proceed to make the Awards a rule of the Court. 7. There will be decrees in terms of Awards-one in each-in favour of the respondent and against the petitioners. The respondent would also be entitled to future interest at the rate of 12 per cent per annum till actual payment. We, however, direct that if half of the decretal amount in each is paid within a period of one month from today and the balance within a period of two months thereafter no future interest will be payable but if default is made in payment of any one of the instalments, interest will be payable at the rate of 12 per cent per annum from this date till payment.