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1987 DIGILAW 802 (RAJ)

Union of India (Uoi) : Shiv Lal Talk v. Shivlal Tak And Vice Versa : Union of India

1987-10-19

M.C.JAIN

body1987
JUDGMENT 1. - The above appeals arise out of the judjement and decree dated 21-4-1986 passed by the learned District Judge, Jodhpur in the proceedings under Section 14 of the Arbitration Act whereby, the Award has been made the rule of the Court. 2. M/s Shivlal Tak submitted an application under Section 14 of the Act that the sole arbitrator passed the Award on 24-7-85 and that Award may be made the rule of the court. Objections were filed on behalf of the Union of India. Necessary issues were framed by the learned District Judge, Jodhpur and thereafter both the parties were heard and the learned District Judge made the Award the rule of the court and the decree for Rs. 2,99,902.46 p. was passed with costs. It was further decreed that the plaintiff M/s Shivlal Tak shall further be entitled to interest at rate of 60% per annum on the amount of Award from the date of the decree till the date of payment. 3. The Union of India preferred the appeal against the principal amount awarded to the plaintiff, whereas, the plaintiff-respondent Shivlal Tak preferred a cross-appeal in respect of the amount of interest which was awarded by the Arbitrator but was not allowed by the learned District Judge in the decree and the decree was not passed in terms of the Award. According to the plaintiff-respondent, the Arbitrator directed that in case, the amount of the award is paid within 90 days from the date of publication of the Award, no interest shall be payable else the defendant shall pay interest at rate of 9% per annum from the date of publication of the Award till the date of payment. The learned District Judge awarded interest only from the date of the decree and refused the amount of interest as awarded by the Arbitrator on the ground that the liability to make payment of the amount of the Award arises only when the award is made the rule of the court, therefore, the interest awarded by the Arbirtator from the date of publication of the Award till the date of payment @9% per annum was not allowed. 4. On behalf of the Union of India, Shri B.R. Mehta submitted that the Arbitrator has wrongly awarded the amount in respect of the Claims No. 1, 2, 3, 5 and plaintiff. 5. 4. On behalf of the Union of India, Shri B.R. Mehta submitted that the Arbitrator has wrongly awarded the amount in respect of the Claims No. 1, 2, 3, 5 and plaintiff. 5. The first claim related to compensation for over stay on account of non-issue of stores. The second claim related to overstay on account of escalation of prices of store and labour. Claim No. 3 related to the use of cement. Claim No. 4 was in respect of carriage of water and claim No. 5 related to non-supply of electricity. In respect of first claim, Rs. 1,40 000/-was awarded and for the second claim Rs. 1,04,00/- for the third claim Rs. 42,000/, for the fourth claim Rs. 04,000/- and for the fifth claim Rs 96,000/- in total Rs. 2,99,600/- was awarded. 6. Mr. Mehta submitted that in respect of claim for over stay the claim is not entertainable Under Clause 11(c) of the General Condition of the Contract and similarly so far as other claims are concerned the claims are not admissible under various General Conditions of Contract. The Arbitrator in disregard of the General Conditions of Contract, awarded various sums in respect of the above claims. In this connection, suffice it to say that it was for the Arbitrator to decide the justifiability of claims when disputes were raised before the Arbitrator on reference then the Arbitrator was competent to decide as to whether a particular claim has any justification and in case it is found that the contractor has suffered and has to be compensated, then it is within the comptence of the Arbitrator to award compensation in respect of various claims submitted before him. The Award no doubt is non-speaking order but on that account, it does not become bad. It was not necessary for him to have stated the reasons for the amount awarded and whether the claim is justifiable or not. It would be deemed that the claim was admissible and the amount awarded is justified and the court cannot go behind it and find out as to what persuaded, the Arbitrator in the grant of the amount of compensation in the Award. Reference in this connection be made to a decision of this Court in State of Rajasthan v. M/s Sharma and Company (1977 WLN (UC) 78) . Reference in this connection be made to a decision of this Court in State of Rajasthan v. M/s Sharma and Company (1977 WLN (UC) 78) . (excerpt from which has been extracted by the learned District Judge) in which reliance has been placed on Bungo Steel Furnitures (Pvt.) Ltd. v. Union of India, AIR 1967 SC 378 ) and Jivraj Bhai Ujamshi Seth and Ors. v. Chintemarrao Bahji and Ors., ( AIR 1965 SC 214 ) . It has been held that in deciding the dispute, an arbitrator need not record his reasons and he need not indicate on what principles he has given the Award. It is not open to the Court to speculate where no reasons are given by the Arbitrator as to what impelled him to arrive at his conclusions. It is not open to the Court to attempt to probe the mental process by which the arbitrator has arrived at his conclusion, where it is not disclosed by the terms of his award. It has been laid down that it is only when the arbitrator proceeds to give his reasons or to lay down principles on which he arrived at his decision that the court is competent to examine whether he has proceeded contrary to law and the award is liable to be interfered with if such error in law is apparent on the face of the award i self. As already stated in the present case no reason whatsoever has been assigned, so the court cannot enter into the question as to whether the award for various claims was justified or not. Thus, so far as the appeal by the Union of India is concerned, in my opinion, it has no force so it deserves to be dismissed. 7. Coming to the appeal filed by M/s Shivlal Tak, I may state that the District Judge has not made the award the rule of the court in respect of the claim of interest. The Arbitrator awarded interest @9% per annum on the principal amount from the date of the publication of the Award till the date of payment. 7. Coming to the appeal filed by M/s Shivlal Tak, I may state that the District Judge has not made the award the rule of the court in respect of the claim of interest. The Arbitrator awarded interest @9% per annum on the principal amount from the date of the publication of the Award till the date of payment. When, with regard to the principal amount the award was made the rule of the court then the court should have allowed interest as was awarded by the Arbitrator i.e. 9% interest from the date of the publication of the Award should have been made payable till the date of decree i.e. till the Award was made the rule of the court. After that date, the discretion vests under Section 29 of the Arbitration Act. It is true that the 1 ability for payment of the amount awarded by the arbitration arises from the date when the Award, is made the rule of the court. That does not mean that the award of interent made by the Arbitrator can be excluded from the Award passed by the Arbitrator. The court while making the Award the rule of the court should have included the award of interest allowed by the Arbitrator. Question stands concluded by the decision of the Supreme Court in Bungo Steel Furniture Pvt. Ltd. v. Union of India (supra). It has been held in this case that the Arbitrator his an authority to grant interest from the date of the Award upto the date of the decree, when all disputes in the suit including the question of interest have been referred to the Arbitrator. The claim of interest was before the Arbitrator so while examining the claim of interest, the arbitrator thought it proper not to allow any interest if payment is made in 90 days. In case, payment is not made within 90 days, then the Arbitrator awarded interest @ 9% per annum from the date of publication of the Award till the date of payment. The court could not have ignored to make it the rule of the court. Thus, the appeal of M/s Shivlal Tak deserves to be allowed and the plaintiff-respondent would also be entitled to interest @ 9% per anuum on the amount of award from the date of publication of the award till the dated of the decree. 8. The court could not have ignored to make it the rule of the court. Thus, the appeal of M/s Shivlal Tak deserves to be allowed and the plaintiff-respondent would also be entitled to interest @ 9% per anuum on the amount of award from the date of publication of the award till the dated of the decree. 8. Accordingly the Appeal No. 161/86 Union of India v. M/s Shivlal Tak is dismissed while the Appeal No. 55 of 86 M/s Shivlal Tak v. Union of India is allowed and decree of the learned District Judge, Jodhpur is modified to this extent that M/s Shivlal Tak shall be further entitled to interest @ 9% per annum on the amount of Rs. 2,99,902.43 from the date of the publication of the Award till the date of the decree. 9. The parties shall bear their own costs of both the appeals.Appeal No. 161/86 dismissed. Appeal No. 55/86 allowed. *******