D. P. Wadhwa ( 1 ) THE contention of U. O. I, is that when the supplies were lastly made in August, 1955, the claim had already become barred by limitation when notice for referring the disputes for arbitration was given. Reference in this connection may be made to S. 37 (3) of the Act which says that for the purposes of S. 37 and of Limitation Act, an arbitration shall be deemed to be commenced when one party to the arbitration agreement serves on the other parties thereto, a notice requiring the appointment of an arbitrator. The respondent, however, contends that cause of action would arise only on 17. 1. 1968 when U. O. I, finally rejected the claim for increase in price. Mr. Gupta said his claim was outside the contract for supply of hosiery goods. If that be so, how could the disputes be subject matter of arbitration, is not clear to me. But, then this is not the objection by the UOI. Mr. Gupta strongly relied on Cannon Dunkerly Co. vs. U. O. I. AIR 1970 SC 1433 . In this case a contract was executed on 26. 11. 1948 for construction of certain works at Sindri Fertilizer Factory to be completed by 26. 2. 1950. The appellant company made certain demands by letter dt. 20. 9. 1950 which were, however, rejected by the Additional C. E. In Sept. 1954, certain disputes were referred to arbitration under the contract. The company, however, instituted a suit against the U. O. I, on 9. 8. 56 for enhanced rate in respect of work not covered by the contract but which though carried out under the instructions of the Engineer-in-charge did not arise out of the contract. It was not disputed that the claim in the suit was not covered under the arbitration clause and could not be the subject-matter of the reference. It was contended on behalf of U. O. I. that the suit was barred by limitation under Cls. 56 and 115 of the First Schedule to the Limitation Act, 1908. The Supreme Court held that the suit was covered u/art. 120 and the period of limitation was 6 years. It was contended on behalf of U. O. I. that the suit was barred by limitation under Cls. 56 and 115 of the First Schedule to the Limitation Act, 1908. The Supreme Court held that the suit was covered u/art. 120 and the period of limitation was 6 years. It was then contended that even if the claim fell within the terms of Art. 120, it was barred, for the appellant company had in the suit made a claim for the work done more than 6 years before the institution of the suit and that the period of limitation commenced to run from the date on which the defendant (U. O. I.) obtained the benefit of the work done by the appellant company. The Supreme Court negatived the contention and observed : "but under Art. 120 of the Lim. Act the period of six years for suits for which no period of limitation is provided elsewhere in the Schedule commences to run when the right to sue accrues. In our judgment, there is no right to sue until there is an accrual of the right asserted in the suit, and its infringement, or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted. . . . . . " Thus, according to the Supreme Court, the cause of action arose when the rejection was communicated to the party, and on this date the right to sue accrued. ( 7 ) MR. Rajinder Dutt, appearing for the Union of India, however, referred to another decision of the Supreme Court in Sita Ram Goel vs. Municipal Board AIR 1958 SC 1036 . It was his argument that once right to claim the excess price accrued on the supply of hosiery goods, the cause of action will arise in favour of the respondent from that date and there could be no stopping of the cause of action. Thus, according to him, last supply was made in August, 1965. The day on which reference to arbitration was made, i. e. , 22. 9. 1969 the claim towards excess price of the goods had become barred by limitation. Mr. Dutt also got support from other decision of the Supreme Court in Major (Retd.) Inder Singh Rekhi vs. D. D. A. JT 1988 (2) SC 6=1988 Rajdhani L. R. 347. The day on which reference to arbitration was made, i. e. , 22. 9. 1969 the claim towards excess price of the goods had become barred by limitation. Mr. Dutt also got support from other decision of the Supreme Court in Major (Retd.) Inder Singh Rekhi vs. D. D. A. JT 1988 (2) SC 6=1988 Rajdhani L. R. 347. This was, however, a case u/s. 20 of the Act. The Court held that in order to be entitled to ask for a reference u/s. 20, there must not only be an entitlement to money but there must be a difference or dispute arising out between the parties. It observed that it was true that on completion of the work a right to get payment would normally arise and that a party could not postpone the accrual of cause of action by writing letters or sending reminders. Mere failure or inaction to pay did not lead to the inference of the existence of dispute. In this case the Court had taken the view that for applicability of S. 20, there must be a claim and a denial or repudiation of the claim for the dispute to arise and that the existence of dispute was essential for appointment of an arbitrator u/s. 8 or a reference u/s. 20 of the Act. The controversy, therefore, is if the arbitrator took correct view of the law in holding that the claim was within limitation. I think, however, that answer to this controversy can be found in Food Corp. vs. Joginderpal JT 1989 (2) SC 89. The Court observed that the jurisdiction to interfere by a Court of Law of an award made by the arbitrator chosen by the parties was circumscribed and it further observed as under :- "but in proceedings of arbitration there must be adherence to justice, equity, law and fair play in actions. However, the proceedings of arbitration must adhere to the principles of natural justice and must be in consonance with such practice and procedure which will lead to a proper resolution of the dispute and create confidence of the people for whose benefit these processes are resorted to. It is, therefore, the function of courts of law to oversee that the arbitrators act within the norms of justice. It is, therefore, the function of courts of law to oversee that the arbitrators act within the norms of justice. Once they do so and the award is clear, just and fair, the courts should, as far as possible, give effect to the award of the parties and make the parties compel to adhere to and obey the decision of their chosen adjudicator. It is in this perspective that one should view the scope and limit of correction by the court of an award made by the arbitrator. We should make the law of arbitration simple, less technical and more responsible to the actual realities of the situation, but must be responsive to the cannons of justice and fair play and make the arbitrator adhere to such process and norms which will create confidence, not only by doing justice between the parties, but by creating a sense that justice appears to have been done. " ( 8 ) THEN, referring to the law on the subject discussed in Halsbury s Law of England (Vol. 2, 4th Edn.) and also to the observation of Russell on Arbitration (20th Edn.) the Court held that it was not misconduct on the part of an arbitrator to come to an erroneous decision, whether his error was one of fact or law, and whether or not his findings of fact were supported by evidence. In that case the Court was of the opinion that the arbitrator had taken a view which was a plausible view. ( 9 ) IN the present case the learned arbitrator after carefully considering the rival contentions of the parties and referring to various decisions and particularly that of the Supreme Court in Gannon Dunkerly and Co. (supra) came to the conclusion that the claim of the respondent was not barred by limitation. It was also pointed out to me during the course of arguments that Justice V. S. Deshpande, a retired Chief Jutice of this Court took a similar view as an arbitrator when disputes regarding other manufacturers of hosiery goods were referred to him ; the disputes being the same, i. e. , the claim for increase in the price of goods supplied. The arbitrator, thus, in the present case, has taken the view that the cause of action arose on 17,1. 1968 and thus the claim was within limitation. The arbitrator, thus, in the present case, has taken the view that the cause of action arose on 17,1. 1968 and thus the claim was within limitation. I do not find any fault in that reasoning of the arbitrator and there is no ground to interfere. The objections by the U. O. I, are dismissed. The award is, therefore, to be made rule of the court and a decree passed in terms thereof. ( 10 ) THEN, the question arises about the payment of interest. Under S. 29 of the Act where the award is for 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. There is authority for the proposition that this section impliedly bars the jurisdiction of the Court to award interest pendente lite, i. e. , for the period the proceeding for making award rule of the court are pending meaning thereby that S. 34, CivilProcedure Code. is inapplicable in such proceedings. I do not think that this is a correct proposition. The Interest Act, 1978 which empowers the Court (the term also includes a tribunal and an arbitrator) to allow interest in certain circumstances for the period upto the date of institution of the proceedings by virtue of S. 5 leaves the provisions of S. 34, C. P. C. unaffected. This Section 5 is as under: "section 34 of the Code of Civil Procedure, 1908 to apply-Nothing in this Act shall affect the provisions of Section 34 of the Code of Civil Procedure, 1908. "this, therefore, fortifies the argument that the power of the Court u/s 34, Civil Procedure Code. to grant interest pendent lite remains untouched and S. 29 of the Act is no bar. To my mind S. 34, C. P. C. shall apply by virtue of S. 41 (1) of the Act which makes the provisions of Civil Procedure Code. applicable to all proceedings before the Court under the Act. Rather I would say that by virtue of definition of "court" under the Interest Act, 1978 which now includes an arbitrator as well, provisions of S. 34, Civil Procedure Code. would also apply to proceedings before an arbitrator by virtue of S. 5 of the Interest Act, 1978. Law as it stands today is quite intricate regarding award of interest pendente lite and future by the arbitrator. would also apply to proceedings before an arbitrator by virtue of S. 5 of the Interest Act, 1978. Law as it stands today is quite intricate regarding award of interest pendente lite and future by the arbitrator. It is not that arbitration proceedings are concluded within four months as one would have wished with reference to the 1st Schedule to the Act. Rather, it takes years and more years to make award rule of the Court. Injustice will be caused to the claimant if he is not allowed interest, particularly when Supreme Court has held in recent judgments that arbitrator has no power to grant interest pendente lite or future interest even after coming into force of Interest Act, 1978 in the arbitration proceedings before him. In M/s. H. M. Kamaluddin vs. U. O. I. A. I. R , 1984 S. C. 29, the Supreme Court has said that section 41 (a) of the Act made only the procedural rules of the Code applicable to proceedings in court under the Act. This view has been reasserted in J. and K. State Forest Corp. vs. Abdul Karim, AIR 1989 S. C. 1498. But 1 may add that in both these cases the Supreme Court was considering the scope of section 41 (b) of the Act. ( 11 ) IN Gujarat Water Supply and Sewage Board vs. Unique Erectors. AIR 1989 S. C. 973, the Supreme Court considered the question of grant of interest pendents lite by the arbitrator. The interest awarded in that case covered three periods- (i) prior to the commencement of the arbitration proceedings; (ii) pendente lite; and (iii) date of award to the date of decree. The Court held that having regard to the position of law emerging from the decision of the Court in Executive Engineer vs. Abhaduta Jena ( AIR 1988 SC 1520 ) and S. 29 of the Act and S. 34, Civil Procedure Code. the Court could modify the grant of interest in the case. The Court, therefore, deleted the interest pendente lite awarded by the arbitrator and upheld the award of interest for the period prior to the commencement of the arbitration proceedings and then in the exercise of powers u/s 3 of the Interest Act, 1978 and 29 of the Act, directed that interest be paid from the date of she award till the date of actual payment. ( 12 ) THUS, the position that now emerges is that, though the arbitrator can award interest for the period prior to the commencement of the arbitration proceedings, he cannot award interest in the award. The interest for the future period from the date of the award till payment can be granted by the Court. ( 13 ) THE original award is dt. 21. 6. 1977 and was filed in Court on 7. 11. 1977 for making it rule of the Court. Thereafter, as noted above, the award was remitted u/s 16 of the Act for re-consideration limited to the question of limitation. The arbitrator submitted his decision on 25. 5. 1984. This was within the time as fixed earlier at the time of remitting the award and as extended by subsequent orders of the Court. When the award was first filed U. O. I, did not file any objections to claim which had been unheld by the arbitrator. Interest from the date of the award would, therefore, be calculated from 21. 6. 1977 and not the date when the arbitrator submitted his decision after reconsideration u/s 16 of the Act as, to my mind, when the award is remitted for re-consideration on any point, the arbitrator has to give his decision within the time fixed by the Court otherwise the award which is remitted becomes void. In a case like this Court remains seized of the matter till the award is re-submitted by the arbitrator after re-consideration. ( 14 ) ACCORDINGLY, the award dt. 21. 6. 1977 as modified after re-consideration by award dt. 25. 5. 1984 is made rule of the Court. The respondent will be entitled to interest at the rate of 6% p. a. on the amount of Rs. 32,744. 00 from 21. 6. 1977 till payment. Respondent will also be entitled to costs. Counsel s fee Rs. 500/.