Judgment S.B.Sinha, J. 1. The Miscellaneous appeal arises out of order dated 9-8-1991 passed bv Shri S.P. Sinha, Subordinate Judge, Saraikella in Misc. Judicial Case No. 4 of 1985 making fan award dated 2-11-1983, the rule of Court. 2. The fact of the matter lies in a very narrow compass. 3. A works contract was awarded by the appellant to the respondent in the year 1990 for construction of a building for the purpose of hostel workshops, class-rooms and administrative building. 4. In the year 1961, the construction works commenced and it was completed in the year 1963. Thereafter, a fresh contract job was given to the respondent by the appellant which was also completed by it by the middle of 1965. 5. According to the appellant, the value of contract work was to be extent of Rs. 40,00,000 only whereas the respondent had been paid a sum of Rs. 52,00,000. 6. According to the appellant, as the money for executing the said contract job was provided for by the Central Government, it directed the PWD authorities of the State of Bihar to take measurements of the work done by the respondent; pursuant whereof, the works done by the respondent were checked up by the PWD department of the State of Bihar and valuation of the buildings erected by the respondent was mad; and it was reported that the same was Rs. 50,00,000. 7. After a prolonged deliberations, in December, 1970, it was decided to appoint an Arbitrator to settle the disputes and pursuant to the said arbitration agreement, Sri D.N. Jha, retired Chief Engineer PHED, Government of Bihar was appointed the sole Arbitrator. The terms of reference to the Arbitrator were:- - 1. To pass orders on the genuineness of the consolidated agreement signed by the principal Secretary of the R.I.T. and the representative of the firm. 2. To fix up the recovery rate of mild steel which has not been included in the agreement. 3. To get the final bills of each group of buildings prepared after verifying and getting the detail measurements entered in M. Books. 4. To fix up the rates for items of works done which are not included in the agreements and such items of claims that have already been entered and recommended in the claim book by the then executive Engineer and the Assistant Engineer Incharge of the work. 5. 4. To fix up the rates for items of works done which are not included in the agreements and such items of claims that have already been entered and recommended in the claim book by the then executive Engineer and the Assistant Engineer Incharge of the work. 5. To pass orders and fix up rates for claim items not entered or mentioned in the claim book but given in writing by the contractor. 6. To pass orders on counter claims to be put up by the R.I.T. 7. To pass order on the hand receipts in which the contractor has mentioned that forgery regarding issue of materials has been made. 8. To pass orders on any items of claims submitted after by the con tractor or by the R. I. T. 9. To decide any type of issue concerning the work 10. To give awards. 8. The aforementioned Arbitrator submitted its award. By reason of the award, inter alia, interest payable by the appellant to the respondent on various amounts awarded were directed to be paid, which are as follows:- - 1. Interest is payable on Rs. 1,32,848.00 from 1-1-1965 to the date of payment at the rate of 6.1/4% per annum. 2. Interest is payable on Rs. 1,65,838.00 from 1-1.1965 to the date of payment at the rate of 6.1/4 % per annum. 3. Interest is payable on Rs. 1,26,288.00 from 1-1-1965 to the date of payment at the rate of 6.1/4% per annum. 4. Interest is payable on Rs. 28,746.00 from 1-1-1965 to the date of the payment at the rate of 6-1/4% per annum (kept back amount). 5. Interest is payable on 1,14,990/ 22,218) Rs. 1,37,208.00 from 1-1-1965 to the date of payment at the rate of 6-1/4% per annum, (interim award of group BCF). 6. Interest is payable on the balance security deposit of Rs. 88,296/ from 1-7-64 to the date of payment at the date of refund at the rate of 6.1/4% per annum. In view of the inordinate delay which has been occurred in payment for no fault of the contractor payment of final award must be made within ninety days from this date (2-11-1983) failing which-the rate of interest will be 8% right from the beginning upon the actual date of payment. 9. In view of the inordinate delay which has been occurred in payment for no fault of the contractor payment of final award must be made within ninety days from this date (2-11-1983) failing which-the rate of interest will be 8% right from the beginning upon the actual date of payment. 9. It appears from the award that the Arbitrator had also awarded various sums against the claim of the respondent by way of three interim awards i.e. dated 11-8-1980, 13-11-1980 and 1-3-1981. 10. The respondent, thereafter, filed an application for making the award a rule of Court in the aforementioned case. 11. The petitioner filed an objection to the said award on 9-6-1989. 12. By reason of the impugned judgment dated 19-8-1989, the said objection filed by the appellant was rejected and the award has been made the rule of Court. 13. The learned Advocate-General, in support of this appeal, has raised two contentions. According to the learned Counsel, as the dispute arose prior to 19-8-1981 i.e. before the Interest Act, 1978 came into force, no past or pendente lite or future interest could be awarded by the arbitrator. 14. It was further submitted that the interest prior to the date of entering into reference was not payable inasmuch as there did not exist any agreement for payment of such interest nor the same was otherwise payable. The learned Advocate-General, in this connection, has relied upon in Thawardas Pherumal V/s. Union of India , in Executive Engineer (Irrigation) V/s. Abhaduta Jena , in State of Orissa v. J.P. Lath reported in -- and in Hind Builders V/s. Union of India . 15. It was further submitted that as the original agreement was modified by the subsequent agreement, the learned arbitrator mis conducted himself in so far as he failed to take into consideration that as the agreement in question was signed by the respondent, he is bound by the terms thereof irrespective of the fact as to whether the principal appellant had put his signature thereupon or not. 16. Mr. K.K. Prasad, the learned Counsel appearing on behalf of the respondent, on the other hand, submitted that in this case the award being a non-speaking one, the Court cannot look into the question as to whether the award of the arbitrator is correct or not. 17. 16. Mr. K.K. Prasad, the learned Counsel appearing on behalf of the respondent, on the other hand, submitted that in this case the award being a non-speaking one, the Court cannot look into the question as to whether the award of the arbitrator is correct or not. 17. The learned Counsel further submitted that in terms of the reference, any claim of the parties was made arbitrable and as the respondent made a claim for payment of interest, the Arbitrator had jurisdiction to award interest. The learned Counsel, in this connection, has relied upon decisions of the Supreme Court in Union of India V/s. Bungo Steel Furniture reported in -- , in Gujarat W.S. and S.B. V/s. Unique Erector P.) Ltd., reported in -- and in State of U.P. V/s. R.V. Kayanim reported in 1990 (I) SCC 433. 18. The learned Counsel further pressed the cross-objection on the ground that the arbitrator should have awarded interested @ 24% per annum and not @ 6/4 per cent per annum. 19. Before proceeding to consider the rival contentions of the parties, it may be noticed that the cross-objection filed by the respondent is not maintainable inasmuch as it had not filed any objection to the award being made a rule of court. 20. In fact, the respondent, as noticed hereinbefore, filed an application that the award is made a rule, of Court and by person of the impugned order, the said prayer of the respondent has been allowed. 21. Re: Contention-1: In this case it is not disputed that there was no agreement between the parties to pay interest on the sums allegedly due to the respondent from the appellant. 22. It is also not in dispute that the terms of reference do not specifically include the matter of payment of interest. According to the respondent, however, the Arbitrator had the jurisdiction to pass an award on interest in view of the fact that he had been authrised to pass orders on the terms of claims submitted by cither of the parties to the arbitration agreement. 23. In Thawardas Pherwnal V/s. Union of India , it has held by the Supreme Court that Interest Act, 1839 does not apply of an arbitration. 23. In Thawardas Pherwnal V/s. Union of India , it has held by the Supreme Court that Interest Act, 1839 does not apply of an arbitration. It was further held that as interest was not payable other wise payable by law in this kind of case, but even if it be assumed that an arbitrator is a Court within the meaning of that Act, the following among other conditions must be fulfilled before interest can be awarded by the Arbitrator in terms of the said Act: (1) there must be a debt or a sum certain; (2) it must be payable at a certain time or otherwise; (3) these debts or sums must be payable by virtue of some written contract at a certain time; (4) there must have been a demand in writing stating the interest will be demanded from the date of the demand. It was further held that as a Arbitrator is not a Court within the meaning of the provisions of Code of Civil Procedure, Sec. 34 thereof would also not be attracted. 24 In Executive Engineer (Irrigation) V/s. Abhiduta Jena reported in -- , the Supreme Court upon consideration of the provisions of Interest Act, 1839 and Interest Act, 1978 came to the conclusion that under the new Act, an Arbitrator is also a Court. It was further held that Sec. 34 of the Code of Civil Procedure applies to arbitration in suit only. It was further held: Again, we must look elsewhere to discover the right of the arbitrator to award interest before the institution of the proceedings, in cases where the proceedings had concluded before the commencement of the Interest Act of 1978. While under the Interest Act of 1978 the expression court was defined to include an arbitrator, under the Interest Act of 1839 it was not so defined. The result is that while in cases arising after the commencement of Interest Act of of 1978 an arbitrator has the same power as the court to award interest up to the date of institution of the proceedings, in cases which arose prior to the commencement of the 1978 Act the arbitrator has no such power under the Interest Act of 1839. It is, therefore necessary, as we said, to look elsewhere for the power of the arbitrator to award interest up to the date of institution of the proceedings. It is, therefore necessary, as we said, to look elsewhere for the power of the arbitrator to award interest up to the date of institution of the proceedings. Since the arbitrator is required to conduct himself and make the award in accordance with law we must look to the substantive law for the power of the arbitrator to award interest before the commencement of the proceedings. If the agreement between the parties entitles the arbitrator to award interest no further question arises and the arbitrator may award interest. Similarly if there is a usage of trade having the force of law the arbitrator may award interest. Again if there are any other provisions of the substantive law enabling the award of interest the arbitrator may award interest. By way of an illustration, we may mention Sec. 80 of the Negotiable Instruments Act as a provision of the substantive law under which the court may award interest even in a case where no rate of interest is specified in the promissory note or bill of exchange. We may also refer Sec. 61(2) of the Sale of Goods Act which provides for the award of interest to the seller or the buyer as the case may be under certain circumstances in suits filed by them. We may further cite the instance of the non-performance of a contract of which equity could give specific performance and to award interest. We may also cite a case where one of the parties is forced to pay interest to a third party, say on an overdraft, consequent on the failure of the other party to the contract not fulfilling the obligation of paying the amount due to them. In such a case also equity may compel the payment of interest, Loss of interest in the place of the right to remain in possession may be rightfully claimed in equity by the owner of a property who has been dispossessed from it. 25. In Gujarat W.S. & S.B. V/s. Unique Erectors (Gujarat) (P.) Ltd. reported in -- , it was held that interest for the period prior to the initiation of arbitration proceedings can be granted in cases in which references to arbitration were made after commencement of the Interest Act, 1978. 25. In Gujarat W.S. & S.B. V/s. Unique Erectors (Gujarat) (P.) Ltd. reported in -- , it was held that interest for the period prior to the initiation of arbitration proceedings can be granted in cases in which references to arbitration were made after commencement of the Interest Act, 1978. It was also held: (i) pendente lite interest cannot be granted by the arbitrator, and (ii) interest from the date of award from the date of decree can be granted by court in view of Sec. 3(1)(a) of the Interest Act and Sec. 29 of the Arbitration Act. 26. In State of Orissa V/s. J.P. Lath , a Division Bench followed the decision of Abhaduta Jenas case and in that case also the Supreme Court refused to grant interest as the reference was made prior to coming into force of the Interest Act. 27. In Hind Builders V/s. Union of India , the Supreme Court held as follows:- - An Arbitrator appointed by the Court does not have all the powers of the Court. Generally speaking, it would only seem reasonable that the power to grant interest pendente lite should be treated as ancillary to the award of damages or compensation which, but for the delay in the litigation (whether in Court or by way of arbitration), the claimant should have received much earlier. However, though pendente lite interest has been made available in Court proceedings, its extension to arbitration law has acquired some technical limitation resulting in denial of pendente lite interest in most cases of arbitration. Even if it is accepted that an arbitrator appointed by the court has all the powers of the Court, the pendente lite interest could not still be awarded by an arbitrator appointed by the parties under a private agreement for which there may be no justification in equity. These anomalies have arisen because formerly an arbitrator could not be treated as a Court to which the Code of Civil Procedure applied and because now the Interest Act, 1978, while including arbitration proceedings within its ambit, has, apart from a reference to Sec. 34, omitted to provide specifically for pendente lite interest. 28. In this case, the records of the arbitration proceedings are not available. 28. In this case, the records of the arbitration proceedings are not available. There is nothing on records to show as to whether prior to reference of the dispute to the Arbitrator, any demand was made by the respondent to the appellant for payment of interest. 29. No case has also been made out by the respondent that apart from the provisions of Interest Act, 1839, interest was payable by the appellant to respondent in terms of any agreement or under any substantive law or on equity. In the view of the matter, in my opinion, the Arbitrator has no jurisdiction either to grant interest up to the date of reference or any pendents lite interest. 30. In State of Andhra Pradesh V/s. R.V. Rayanim reported in (1990) 1 SCC 433, it was held that the court cannot speculate the mental process of the arbitrator. There is no dispute so far as the aforementioned proposition of law is concerned. 31. In that case, however, it has been held that the court can look into arbitration agreement if it is contended that the arbitrator has exceeded his jurisdiction. 32. The other decisions relied upon by the learned Counsel for the respondent, namely, Union of India V/s. Bungo Steel Furniture reported in -- has been considered by the Supreme Court in Abhaduta Jenas case (supra). 33. However, the Court in exercise of its power conferred upon it under Section 29 of the Arbitration Act, can grant further interest i. e. from the date of decree to the date of actual payment. 34. The learned Court below has not applied his mind to this aspect of the matter. In my opinion, interest @ 12% per annum should be awarded on the sums payable by the appellant to the respondent from the date of decree till actual payment on the amount awarded by the Arbitrator. 35. It may be, however, noticed here that according to the appellant, the entire awarded sum except the amount of interest has already been paid. 36. Re: Contention 2: The award passed by the Arbitrator is a non-speaking one. It appears that the Arbitrator has taken into consideration each-and every claim of the petitioner inter alia on the basis of the bills submitted by the respondent to the appellant. 37. 36. Re: Contention 2: The award passed by the Arbitrator is a non-speaking one. It appears that the Arbitrator has taken into consideration each-and every claim of the petitioner inter alia on the basis of the bills submitted by the respondent to the appellant. 37. It is, therefore, clear that the Arbitrator has jurisdiction to take into consideration the conduct of the parties in the matter of alleged novation of contract. Further, it has not been shown by the learned Advocate General as to what differences would have occurred in the matter of making award by the Arbitrator, even if the so-called subsequent agreement has been taken into consideration. It has not been suggested that by reason of any terms of the said agreement, the Arbitrator was demanded of its power to make an award in favour of the respondent on the disputes referred to him. 38. It is, therefore, not possible to accept, the second contention raised by the learned Counsel. 39. In the result, this appeal is allowed in part and the award of the Arbitrator is set aside to the extent mentioned hereinbefore. 40. However, in the facts and circumstances of the case, the parties shall pay and bear their own costs.