D. K. Jain ( 1 ) ON a petition under Sections 8 and 20 of the Arbitration Act, 1940 in Suit No. 701-A/81, arising out contract dated 30th June, 1976 between the parties, containing an arbitration clause, this court vide order dated 12th April, 1985, appointed Shri T. U. Mehta, Retd. Chief Justice, as the sole arbitrator to adjudicate the claims set out in the suit, except ( 2 ) CLAIM No. 3. The Id. arbitrator made his award on 16th July, 1987, issued notices to the parties and caused the award to be filed in this court. ( 3 ) NOTICE of the filing of the award was given to the parties. Notice was accepted for the claimant on 4th December, 1987. It was served on the respondent on 19th February, 1988. The respondent filed the objections against the award on 18th March, 1988. These have been resisted of the claimant. On the pleadings of the parties following issues were framed : (1) Is the award liable to be set aside for any of the reasons set out in the objection petition ? (2) Have the objections been filed within the period of limitation ? if not, what is its effect ? (3) Relief. ( 4 ) EVIDENCE was directed to be led by way of affidavits. Affidavits in support and in resistance to the objections have been filed by the parties. I have heard ld. counsel for the parties. ( 5 ) ISSUE No. 2 It would be convenient to dispose of this issue first. It is common ground that the respondent was served with the notice of filing of the award on 19th February, 1988. The objections petition, as per endorsement of the registry, appears as received on 18th March, 1988. The objections, thus, were filed within Fairly, as such, no arguments were addressed on the issue. The issue is, accordingly, found in favour of the Objector. ( 6 ) ISSUE No. 1 There were two claims, in main, besides of interest and costs for adjudication by the Id. arbitrator, namely : (I) Claim No. I-for refund of Rs. 15,000 paid by the claimant towards their contribution of the proposed joint venture along with interest at 1. 5% per mensem for the period 30th June, 1976 till payment calculated upto 30th June, 1985 at Rs. 36,000. arbitrator, namely : (I) Claim No. I-for refund of Rs. 15,000 paid by the claimant towards their contribution of the proposed joint venture along with interest at 1. 5% per mensem for the period 30th June, 1976 till payment calculated upto 30th June, 1985 at Rs. 36,000. ( 7 ) IT has been allowed in full along with interest at 12% per annum with yearly rests instead of interest at 1. 5% per month as claimed but held unjustifiable. (ii) Claim No. 2-falling under four heads mentioned below ; allowed to the extent mentioned against each of them. ( 8 ) IN the objections filed, the grounds of attack generally taken are (1) misconduct by the arbitrator on the pleas that the award is perverse and based on no evidence and the arbitrator was biased towards the respondent and (2) that there are mistakes apparent on the face of the record . ( 9 ) ON the general and vague pleas of misconduct or award being perverse, no arguments were addressed by the Id. counsel. The alleged plea of bias was faintly touched with reference to observations in the award made while rejecting the contentions put forth on behalf of the respondent, I have gone through the award, which is detailed and well reasoned and do not find anything to show that the Id. arbitrator was biased against the respondent. Nothing substantial was pointed out in this behalf. ( 10 ) THE real challenge to award on Claim No. 1 is to the award of interest for the period prior to the reference. It was urged that there being no stipulation in the contract to pay interest, no interest could be allowed unless a notice demanding interest was issued ; and in any case the interest awarded with yearly rests is without jurisdiction. ( 11 ) AN arbitrator has to act according to law. It is well settled that pre-reference interest can be awarded by an arbitrator only (i) if there is an agreement to pay interest (ii) if there is a usage on custom having the force of law or (iii) under substantive law like Section 61 of the Sales of goods Act etc. or if a notice of demand for interest as contemplated in Section 3 (l) (b) of the Interest Act, 1978 is given in writing. or if a notice of demand for interest as contemplated in Section 3 (l) (b) of the Interest Act, 1978 is given in writing. ( 12 ) ADMITTEDLY, there is no stipulation in the agreement for payment of interest. No usage or custom in support is relied on or is indicated. The Id. arbitrator has allowed interest saying : "in view of the fact that this amount of Rs. 15,000 it withheld and utilised by the respondent-corporation right from the month of June, 1976, the reasonable rate of interest should be calculated on the footing of long term deposits. It should, in my view be calculated @ 12% per annum with yearly rests. I, therefore, held that the claimants are entitled to interest on this amount of Rs. 15,000 at the rate of 12 p. c. with yearly rests from 13th November, 1979 till the date of decree, if any, passed by the court on the basis of this award. So far as the interest from the date of decree to the date of payment is concerned, it is for the court to adjudge the same under Section 29 of the Arbitration Act. The claimants have claimed interest at the rate of 1. 5% per month which comes to 18% p. c. per year. This rate of interest is not justified. Moreover, the claimants claim of interest from 30th June, 1976 is also not justified for the reasons stated above. The claimant shall, however, be entitled to interest at the rate of 12 p. c. with yearly rests from 13. 11. 1979 till the date on which the court passes the decree. Issue No. 14 is accordingly disposed of. " ( 13 ) OBVIOUSLY having found that a sum of Rs. 15,000 was refundable by the respondent to the claimant, the Id. arbitrator on the basis of letter dated 13th November, 1979 has allowed interest under Section 3 of the Interest Act, 1978. ( 14 ) THE relevant portion of Section 3 of the Interest Act, 1978 is extracted below : "3. Power of court to allow interest. 15,000 was refundable by the respondent to the claimant, the Id. arbitrator on the basis of letter dated 13th November, 1979 has allowed interest under Section 3 of the Interest Act, 1978. ( 14 ) THE relevant portion of Section 3 of the Interest Act, 1978 is extracted below : "3. Power of court to allow interest. (1) In any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say : (a) if the proceedings relate to a debt payable by virtue of a written instrument at a certain time, then, from the date when the debt is payable to the date of institution of the proceedings ; (b) if the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings : Provided that where the amount of the debt or damages has been repaid before the institution of the proceedings, interest shall not be allowed under this section for the period after such repayment. (2 ). . . . . . . . . . . . (3) Nothing in this section ; (a ). . . . . . (b ). . . . . . (c) shall empower the court to award interest upon interest". ( 15 ) THUS, Section 3 (l) (b) of the Interest Act, 1978 enables the court, if it so thinks fit, to award interest to the person entitled to the debt or damages from the date mentioned in this regard in a notice given by the person making the claim for interest to the person liable to pay upto the date of institution of the proceedings for recovery. By including "an arbitrator" in the definition of "court" in Section 2 (a) of the said Act, the same power has been conferred on the arbitrator. ( 16 ) AS noted above, while awarding interest, the Id. arbitrator has treated claimant s letter dated 13th November, 1979 as one of demand of interest. It was argued that in the said letter there is no mention of any demand of interest but of "damages" and, as such interest could not have been awarded. The relevant portion of the said letter is extracted below : "our amount of Rs. 15,000 is still lying with you in trust for joint venture. All other expenses incurred by us are additional. Kindly note that we have supplied you expensive technology obtained by us from Pl-Squared in collaboration with Cladan of U. S. A. who are world leaders in the field. I have already sent you in original references on Pl-Squared from CTI corporation dated September 23, 1977 their Bank report of 28th December, 1977 their letter of 30th December, 1977 along with references from Indian Investment Centre -Mr. Bajaj. You will be fully responsible for paying all costs and damages if you fail to proceed with the Joint Venture" ( 17 ) A plain reading of the portion side lined above, taken as notice for demand of interest by the Id. Arbitrator would show that it is not so. What is sought to be conveyed in plain words is a warning to the respondent/ objector to proceed with the joint venture, failing which they were threatened to be made responsible to pay "all costs and damages". The damages sought for were in relation to the respondent not proceeding with the joint venture. The "damages" for not proceeding with the joint venture, resulting in a breach of contract, could be multifarious. It is difficult to read a demand of interest or confine or construe the word "damages" as used to mean demand for interest within the meaning of Section 3 (l) (b) of the Interest Act, as done by the Id. Arbitrator. Nothing be contrary was pointed out. ( 18 ) THIS, in my view, is a mistake apparent on the fact of the award, The award of interest by the Id. Arbitrator is, therefore, liable to be set aside. The award to that extent is severable and is accordingly set aside. Arbitrator. Nothing be contrary was pointed out. ( 18 ) THIS, in my view, is a mistake apparent on the fact of the award, The award of interest by the Id. Arbitrator is, therefore, liable to be set aside. The award to that extent is severable and is accordingly set aside. ( 19 ) IN view of the fact that award of interest on Rs. 15,000 has been held to be unjustified, there is no necessity of dealing with the alternative contention of the Id. counsel for the objector about the grant of interest vide yearly rests, even though, prima facie, in the light of Section 3 (3) (c) of the Interest Act, the contention appears to be well founded. ( 20 ) NOW coming to the claim No. 2. as noted above, the Id, arbitrator has awarded a sum of Rs. 1,08,151. 50 out of the total claims of Rs. 1,30,231. 50. ( 21 ) IN so far as the award of these amounts is concerned the finding in that behalf has been arrived at on the merits of the case by the Id. arbitrator, after considering the entire material placed before him in the form of affidavit and documents and as such cannot be disturbed. ( 22 ) MR. P. K. Aggarwal. Id. counsel for the objectors, however, contends that there is an error apparent on the face of the award in that the Id. arbitrator has relied on the auditor s report, according to which the sum of Rs. 20,325 was incurred on travelling between Delhi to Shimla for the period July, 1976 to December, 1979, whereas in the affidavit on behalf of the claimant it had been stated that trips to Shimla had been made upto March, 1979. He maintains that the amount debited under the said head for the period of March, 1979 is not payable but has been wrongly awarded by Id. arbitrator. ( 23 ) I have glanced through the affidavit, the auditor s report and Ex. 20, a summary of expenses ; including of trips between Delhi to Shimla, prepared by the counsel for the claimant under direction of the Id. arbitrator. The auditor s report is a consolidated one giving details of expenses incurred on account of travelling, conveyance and trunk calls made to U. S. A. on account of Ceremic Capacitors project, period July, 1976 to December, 1979. arbitrator. The auditor s report is a consolidated one giving details of expenses incurred on account of travelling, conveyance and trunk calls made to U. S. A. on account of Ceremic Capacitors project, period July, 1976 to December, 1979. " The monthly expenses incurred, included all those heads of expenses. The Id. arbitrator had got prepared break-up of the said expenses under the three separate heads, namely expenses incurred for travel between Delhi to Shimla ; expenses for air tickets between India and U. S. A. ; and the expenses in India for meetings in Electronics Deptt. and trunk calls made to U. S. A. and on correspondence. According to this tabulated statement, for the bills submitted during July 1976 to October, 1979 (there being no expenses under the first head for the month of November and December) the total expenses comes to Rs. 20,325. 10. It is not indicated that the amounts debited in any particular month was actually incurred in that month. May be that the expenses incurred in any month were debited on submission of bills subsequently. A perusal of the said statement and the auditor s report shows that after March 1979 travelling expenses between Shimla and Delhi are debited only in May, 1979 (Rs. 1582) and June, 1979 (Rs. 1707 ). ( 24 ) THERE is no indication that expenses debited in these two months were actually incurred then or in the earlier months. Auditor s report having come on record and taken as the basis for tabulation, it was for the Objector, if they disputed the total expenses under the head, to have cross examined the claimant on the point to have it clarified, as is now alleged, that the expenses under the head debited in a particular month related to that very month. As such, averment made in para 15 (c) of the affidavit of Mr. Ishtpal Singh, on behalf of the claimant, to the effect that he made 15 trips in pursuance of the contract andalso incurred expenses for stay in Shimla during the period of three years between March, 1976 and the end of March, 1979 cannot be construed to mean that the expenses debited in the subsequent months were in fact not incurred and are fictiously entered. It cannot, therefore, be said that there is an error apparent on the face of the record to justify its being set aside or modified. ( 25 ) THE award of Rs. 30,000 for the expenses incurred by the claimants for obtaining technical notes from the foreign collaborators is faintly assailed firstly, on the ground that no technical notes were submitted and, therefore, there was no justification for awarding the said amount and secondly, the claimant was entitled to only one set of fee of Rs. 30,000 for submitting the feasibility report and that amount was admittedly paid. ( 26 ) I have perused paras 22. 3 to 22. 10 and find that the Id. arbitrator has relied on various documents and given detailed reasons to arrive at the conclusion that the payment of Rs. 30,000 for the first report of 1976 does not cover the costs of subsequent reports. The Id. arbitrator has also made a reference to a letter Ex. 16 whereby the claimant had submitted additional report on technology which, admittedly, was based on the technical information obtained by the claimant from Pl-Squared and GTI Associates, the foreign collaborators, as desired by the respondent. In this view of the matter I do not find any merit in the contention of the Id. counsel and hereby reject the same. ( 27 ) REGARDING award of Rs. 37,920 out of the total claim of Rs. 60,000 for the expenses incurred by the claimant on trips to United States and a further sum of Rs. 20,000 for the expenses incurred on long distance calls by the claimant, respondent/objector s luke warm objection is that the award is not based on any evidence. In my view the contention of the objector is stated to be rejected. The Id. arbitrator while awarding the aforesaid amounts has relied on the auditor s report, which report, as noted above, has gone unrebutted. In my opinion no fault can be found in the award of the aforesaid amounts. ( 28 ) FURTHER more the arbitrator is a sole Judge on facts and law. His findings on merits cannot be reviewed, and this court, not sitting in appeal, cannot reappraise the evidence or go into the process of reasoning of the arbitrator nor can it look into the sufficiency or otherwise of the reasons given. ( 28 ) FURTHER more the arbitrator is a sole Judge on facts and law. His findings on merits cannot be reviewed, and this court, not sitting in appeal, cannot reappraise the evidence or go into the process of reasoning of the arbitrator nor can it look into the sufficiency or otherwise of the reasons given. It cannot be said that in the present case findings of fact of the Id. arbitrator on the merits of the case are perverse. I have, therefore, no hesitation in dismissing the objections on the award on claim No. 2. ( 29 ) IN the result, the award, except that of interest on claim No. 1 which has been set aside, is made rule of the court. The claimant will also be entitled to interest at the rate of 12% per annum, on the awarded amount, from the date of award till payment. A decree in terms thereof is passed. Parties will bear their own costs. A decree sheet shall be drawn up accordingly.