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1984 DIGILAW 897 (ALL)

State of U. P. v. Hari Mittar

1984-10-29

S.C.MATHUR, U.C.SRIVASTAVA

body1984
JUDGMENT S.C. Mathur, J. 1. The State of U. P. has directed this appeal against the judgment arid order dated 27th September, 1983 passed by the learned Civil Judge, Lucknow whereby he rejected the objections of the State of U.P., against the Award dated 221981 published by Sri J.S. Trivedi, the sole Arbitrator, in a dispute between the parties. The dispute between the parties arose out of a contract to supply material. The said material was to be supplied by the respondent to the State of U.P., in the Irrigation Department. The dispute was referred to the arbitration of Sri Trivedi by a Bench of this Court to which one of as was a member, by an order dated 4th April, 1979, From a perusal of the award which is available on the record on Regular Suit No. 130 of 1981 of the Court below it appears that apart from other items there was dispute between the parties regarding two items. One of the items was a sum of Rs. 51,470/. The respondent had claimed this amount as price of Shingles supplied by him to the Irrigation Department. The other item was for a sum of Rs. 37,66652p. According to the respondent he was required to pay this amount to the Sales Tax Department, while the liability for payment of this amount was on the Irrigation Department. The Arbitrator by his aforesaid award upheld the respondent's claim in regard to both the items. On the first item, namely, on the sum of Rs. 470/ he awarded interest to the respondent at the rate of 10% per annum from 1274 till the date of payment of decree whichever was earlier. On the other item, namely a sum of Rs. 3766653 the learned Arbitrator awarded interest at the rate of 2%, per annum from 1675 till the date of payment. The Department of Irrigation did not pay the salestax directly to that Department. In the present appeal the appellant has assailed the judgment of the Court below only in regard to the interest awarded by the Arbitrator and confirmed by the court below. According to the learned counsel for the State the Arbitrator had no jurisdiction to award the interest which he did and this was an error apparent on the face of the record which could have been corrected by the court below. According to the learned counsel for the State the Arbitrator had no jurisdiction to award the interest which he did and this was an error apparent on the face of the record which could have been corrected by the court below. Learned counsel for the appellant submitted that there was no agreement between the parties for payment of interest at the rate of 10% per annum on the price of the goods and, therefore, interest could not be awarded. Interest on the price of goods may be awarded under agreement and if there is no agreement between the parties it can be awarded under Section 61 of the Sale of Goods Act. The Arbitrator has not published a reasoned award and it is not possible to ascertain whether he awarded interest on the basis of the agreement or on the basis of Section 61(2) of Sale of Goods Act, 1930. Under subsection (2) of Section 61 it is competent to award interest from the date of the tender of the goods at such rate as the court thinks fit. Learned counsel for the appellant submitted that this power could be exercised only by the court and not by the Arbitrator. We are unable to accept the submission. While dealing with the claim in arbitration proceedings the Arbitrator could apply all the laws which could be applied by a court while dealing with a suit pending before it. In view of the fact that of the award of interest is referable to a statutory provision it cannot be said that the award of interest by the Arbitrator is without jurisdiction. 2. In support of his plea that the interest awarded by the Arbitrator could not be legally awarded, learned counsel for the appellant placed reliance upon AIR 1963 SC 1635 Union of India v. A.I. Rallia Ram and AIR 1966 SC 275 . Union of India v. Watkins Mayor and Co. In the first mentioned case interest had been awarded by way of damages and this according to their Lordships was unwarranted. Their Lordships in this very case observed In the absence of any usage or contract express or implied, or of any provision of law as to justify the award of interest, interest cannot be allowed by way of damages caused to the respondent for wrongful detention of their money. Their Lordships in this very case observed In the absence of any usage or contract express or implied, or of any provision of law as to justify the award of interest, interest cannot be allowed by way of damages caused to the respondent for wrongful detention of their money. From this observation it would appear that their lordships were of the opinion that the interest could be awarded under a statutory provision. In the present case interest has not been awarded by way of damage and the award of interest is referable to a statutory provision. This authority is, therefore, of no assistance to the learned counsel. 3. In the second case, interest was claimed on the amount claimed towards Godown Rent, Chaukidar's Salary, Terminal Tax, Cartage, Unloading charges and Cooliage. In respect of all these items their Lordships held that interest could not be awarded either under Section 1 of the Interest Act or under Section 34 of the Code of Civil Procedure. Of course the items on which interest was claimed in this case were not covered by the Sale of Goods Act. This authority is also of no assistance to the learned counsel. 4. So far as interest on the amount of salestax is concerned this has been allowed to the respondent because there is statutory provision under which the respondent has to pay to the Sales Tax Department a penalty of 2%. This penalty the respondent has incurred on account of the failure of the Irrigation Department to pay SalesTax to the respondent which he could have in turn paid to the Sales Tax Department. The award of this interest also, therefore, has statutory basis and cannot be interfered with. 5. No other point has been urged by the learned counsel for the appellant. 6. The appeal is without merit and is hereby dismissed with Costs to the respondent. Interim order, if any, shall stand discharged. (Appeal dismissed.)