Surat Mahanagar Palika v. Govindbhai Dhanjibhai Mistry
1995-02-22
R.A.MEHTA, S.K.KESHOTE
body1995
DigiLaw.ai
R. A. MEHTA, J. ( 1 ) THE respondent-plaintiff had filed a suit for recovery of a sum of Rs. 4,00,593. 75 with interest at the rate of 18% from the date of the suit till realisation. The dispute in the suit came to be referred to the arbitrator by an order of the High Court. The arbitrator made his award and the Trial Court also passed a decree in terms of the award. ( 2 ) THE only question that arises in this matter is regarding the award of interest from the date of the suit till realisation. This was one of the prayers in the suit and it is also referred to the arbitrator. However, the arbitrator awarded interest from the date of the reference till the date of the award i. e. from 23. 12. 1985 to 14. 7. 1987. The learned trial judge has awarded interest from the date of filing of the suit till realisation on the decretal amount. The period for which the arbitrator has awarded interest is covered by the first para of the operative order which is in terms of the award of the arbitrator and, therefore, it is excluded in the 2nd para of the operative order. ( 3 ) THE learned Counsel for the appellant submits that the arbitrator had the jurisdiction to deal with this question and the arbitrator has chosen to award interest only from the date of the reference till the date of the award even though the interest was claimed from the date of filing of the suit till realisation and when the arbitrator has chosen not to award interest for the other period, the Court could not have gone beyond the award and passed a decree for the interest which is not awarded by the arbitrator. ( 4 ) IN the case of Firm Madanlal Roshanlal Mahajan vs. Hukumchand Mills Ltd. , air 1967 SC 1030 , the Supreme Court held that the arbitrator can award pendente lite interest even though Sec. 34 of CPC does not in terms apply to arbitration. The Supreme court held that it was an implied term of reference in the suit that the arbitrator would decide the dispute according to law and would give such relief with regard to pendente lite interest as the Court could give if it decided the dispute.
The Supreme court held that it was an implied term of reference in the suit that the arbitrator would decide the dispute according to law and would give such relief with regard to pendente lite interest as the Court could give if it decided the dispute. This was followed by another bench of the Supreme Court in the case of Union of India vs. Bungo Steel Furniture Pvt. Ltd. , AIR 1967 SC 1032 . There also, all the disputes in the suit including the question of interest were referred to the arbitrator and it was held that the arbitrator had the authority to grant interest even after the date of the award. ( 5 ) THUS, it is clear that the question of interest from the date of the suit till realisation was the subject matter of the suit and was referred to the arbitrator and the arbitrator having chosen to award interest for a limited period, has clearly not awarded for the earlier and the future period. In these circumstances, when the Court was called upon to pass a decree in terms of the award, there was no occasion for the Court to go beyond the terms of the award and to award the interest for the period upto the date of the decree. ( 6 ) UNDER Sec. 29 of the Arbitration Act, the Court has the power to award interest from the date of the decree and, therefore, the Court could have awarded interest from the date of the decree till realisation. ( 7 ) IN the result, the appeal is partly allowed and the decree of the Trial Court to the extent that it allows interest from the date of the suit till the date of the reference and from the date of the award till the date of the decree, is quashed and set aside and the decree for interest from the date of the decree till realisation is confirmed. No order as to costs. .