JUDGMENT - SHAH M.B., C.J.:—The Maharashtra State Electricity Board (hereinafter referred to as “the Board”), by its order dated 4th July, 1980, accepted the tender of respondent No. 1 company for supply of Squirrel ACSR Conductors and Weasel ACSR Conductors (hereinafter referred to as the “said goods”). The said goods were supplied from December 1980 to April 1983. The amount therefore was paid finally prior to April 1984 after necessary deductions. No. dispute was raised by any party. The Board woke up in 1988 and demanded Rs. 7 lacs and odd towards difference of rate of drawback on excise duty as per the terms of contract. The company agreed to pay Rs. 2.56 lacs. However, correspondence went on and, vide its Advocate's notice dated 19th May, 1992, the Board demanded from the company in all Rs. 20 lacs with interest. Thereafter the company raised claims and matter was referred to Arbitrators. The arbitrators awarded to the company Rs. 13,47,814.91 towards its claim and Rs. 25,44379.14 by way of interest. Objections filed by the Board were rejected by the learned Single Judge. Hence these Appeals. in these Appeals questions involved are : (1) whether the Award passed by the Arbitrators is, on the face of it, invalid because — (a) the claims made by the parties are apparently time-barred ? (b) Award of interest amounting to Rs. 25 lacs and odd to respondent No. 1 Company for a claim awarded to the tune of Rs. 13 lacs (approximately) is, on the face of it, illegal as permissible grounds for Award of interest did not exist? (2) Consequentially, whether in a non-speaking Award this Court can consider the claims of parties for determining whether the Award is, on the face of it, illegal or not ? 2. Facts : For appreciating the aforesaid questions, the relevant facts are as under: On or about 10th May, 1979, the appellants, Maharashtra State Electricity Board (hereinafter referred to as the Board) constituted under the provisions of the Electricity (Supply) Act, 1948, invited offers for supply of certain ACSR Conductors of the specifications set out in the schedule to the tender on the terms and conditions mentioned therein. The tender of M/s. Bharat Conductors Pvt. Ltd., respondent No. 1 (hereinafter referred to as the Company) was accepted and the Board has placed order dated 4th July, 1980 for supply of 7100 kms. of Weasel A.C.S.R. Conductors. The tender of M/s. Bharat Conductors Pvt. Ltd., respondent No. 1 (hereinafter referred to as the Company) was accepted and the Board has placed order dated 4th July, 1980 for supply of 7100 kms. of Weasel A.C.S.R. Conductors. It is the contention of the Board that the goods were supplied in two batches during the period from December 1980 to April 1983. It is also pointed out that the Board in all paid Rs. 3,39,40,692.56 through a letter of credit which represented 95% of the contract price. The balance 5% was paid by the Board by a cheque after deducting Rs. 2,40,673.31 on account of certain bank charges, wharfage charges, expenses for damages, etc. These deductions were clearly indicated in the deduction memos which were handed over to the company. The Board also paid Rs. 40,86,239.64 on account of price variation and the last payment was made in April 1984. 3. No objection or dispute was raised by the Company in respect of the deductions made by the Board. The payments were accepted unconditionally and without any protest. The Board also returned the performance guarantees which had been furnished by the Company. 4. It is submitted that in December 1988, the Board became aware that the rate of drawback duty for Aluminum had increased during the relevant period and the Company was, therefore, liable to pay to the Board the drawback received by it. The Board addressed letters to the Company to pay the said amount. Finally, after ascertaining the correct amount of drawback, the Board by its Advocate's letter dated 19th May, 1992, called upon the Company to pay to the Board the said amount of Rs. 7,49,571.04 along with interest thereon of Rs. 4,59,476.00 aggregating to Rs. 12,09,047.81. 5. It is submitted that by its letters dated 9th June, 1992 and 24th July, 1992, the Company admitted its liability to make payment of the said drawback amount. However, the Company stated that the net amount payable was Rs. 2,57,000.00 and that it would pay Rs. 57,000.00 as it was a sick unit and the balance amount could be recovered by placing an additional order on its associate company. However, the Company stated that the net amount payable was Rs. 2,57,000.00 and that it would pay Rs. 57,000.00 as it was a sick unit and the balance amount could be recovered by placing an additional order on its associate company. In the letter written by the Company on 24th July, 1992 it has been specifically stated by the Company as under :- “On verification of receivables we find that during the years 1980 and 1981, our claim was due from the Board of about Rs. 4.92 lakhs. Similarly, in subsequent years of 1982 and 1983 the Board's claim was about Rs. 7.49 lakhs. AS a result, the net (amount) payable remains to the extent of about Rs. 2.57 lakhs. This was due to D.D.B. formula of the order. ……” The proposal made by the Company was rejected by the Board. By a letter dated 26th December, 1992, the Company finally wrote to the Chief Engineer of the Board, inter alia, stating as under : “It is now over 9 years that the supplies are completed and we do not possess much of the concerned records, since most of them were mutilated/destroyed by the workers during the period of labour unrest in the union…… In spite of the fact that the Board's claim itself was time-barred, with due regard to the cordial relations we have with your Board, we replied the Counsel vide Letter No. BC/CO/92/464 dated 9-6-1992, clarifying that the Board had to pay us an amount of appr. Rs. 4.90 lakhs towards duty drawback and the Board's claim of Rs. 12,09,047.81 was not correct.” It is further stated that the Board has not released payments for all the supplies made by the company and the claim of the Board was one-sided without even referring to the dues to be paid to the Company by the Board and thereafter, it is stated as under : “We may also mention here that the Board has taken a unilateral decision invoking the bank guarantee submitted by us, vide No. 768/78 dated 9-8-1978 for Rs. 50,000.00 of State Bank of India, Kumara Park, Bangalore-560 020. This bank guarantee has in fact, no relation to the P.O. under question and is a Guarantee submitted by us towards permanent E.M.D.. The matter is now pending as N/M 2780 of 1988 in Suit No. 3256 before the Hon'ble City Civil Court, Bombay. 50,000.00 of State Bank of India, Kumara Park, Bangalore-560 020. This bank guarantee has in fact, no relation to the P.O. under question and is a Guarantee submitted by us towards permanent E.M.D.. The matter is now pending as N/M 2780 of 1988 in Suit No. 3256 before the Hon'ble City Civil Court, Bombay. Under the circumstances, we hereby take recourse to Article 32- “Arbitration Clause of the General Conditions of Contract” which reads as under : “If at any time, any question, dispute or differences whatsoever shall arise between the purchaser and the contractor, upon or in relation to, or in connection with this contract either party may forthwith give to the other, notice in writing of the existence of such question, dispute or differences and the same shall be referred to the adjudication of three arbitrators one to be nominated by the purchaser, the other by the contractor and the third by the President of International Chamber of Commerce, in the case of foreign contracts and President of Institution of Engineers, India, in the case of local contracts. If either of the parties fail to appoint its Arbitrator, within 60 days after receipt of notice of the appointment of its arbitrator, then the President of International Chamber of Commerce or as the case may be, shall have the power, at the request of either of the parties to appoint an Arbitrator. A certified copy of the “PRESIDENT” making such an appointment shall be furnished to both parties.” “Notice is hereby given that in terms of the Arbitration clause of the contract, we have appointed Shri B.K. Ramdas, Director, M/s Tumkur Hand Tools Pvt. Ltd., “RENUE SREE”, behind Aruna Nursing Homes, Tumkur-572 102 (Karnataka), to be our arbitrator on our behalf to settle the disputes and differences which have arisen between your Board and ourselves and you are hereby required to appoint within 60 days an Arbitrator to act on your behalf in the matter of the said differences and by marking a copy of this letter, we are requesting the President of the Institute of Engineers, India, to nominate one Arbitrator, as required under the clause of Arbitration.” Thereafter, the Board appointed its arbitrator. The Umpire was appointed by the Institute of Engineers, India. The Umpire was appointed by the Institute of Engineers, India. The Board thereafter filed its claim before the arbitrators wherein it is, inter alia, stated that the Board had discharges all their obligations under the contract relating to payments towards the value of the goods and the price variation bills as per the terms of the contract and last of such price variation bills payable to the company was paid in April 1984. The company accepted the said payments unconditionally from time to time, but did not render any true and faithful account in respect of duty drawback with effect from 1st March, 1982 and thereafter. In the year 1988, the Board roughly worked out the said amount which the company was bound to account for and pay to the Board aggregating Rs. 9,53,702.00. Finally, after verification of accounts, it was found that the Board was entitled to recover a sum of Rs. 7,49,571.04 towards the duty drawback plus Rs. 4,59,476.77 being the interest thereon at the rate of 18% per annum aggregating Rs. 12,09,047.81. 6. It is also stated that, the Board subsequently verified the accounts and it was found that they have paid a sum of Rs. 4,61,125.00 towards bank charges which was debited by the Bank of Maharashtra and Central Bank of India to the Board's account although under the contract, the said amount was payable by the company. The Board claimed a sum of Rs. 20,01,500.56 with future interest thereon @12% per annum from the date of the preliminary meeting dated 10th July, 1993 till payment. 7. As against this, with a letter dated 30th July, 1993, the company filed its statement of claim before the Arbitrators wherein, vide paragraph 39, it is, inter alia, contended as under : “The Company is a small scale unit, which had suffered severe labour problems during the years 1986-87 and was under constant financial stringency. Many relevant records/documents were mutilated/destroyed during the period of labour problems and the company could not prefer their claims with the Board in view of this. On the other hand, the Board being a vast, reputed and systematic organisation, should have had the minimum courtesy of clearing the dues to a small scale unit, which has not been done by the Board.” It is also stated that the Board is not entitled to claim any differential duty drawback amount from the company. On the other hand, the Board being a vast, reputed and systematic organisation, should have had the minimum courtesy of clearing the dues to a small scale unit, which has not been done by the Board.” It is also stated that the Board is not entitled to claim any differential duty drawback amount from the company. In paragraphs 47 and 48, it is, inter alia, stated as under :- “47. Since the date of completion of supplies, the Board had not demanded any amounts from the company against the order under arbitration, since there was no claim whatsoever. All of a sudden, during April 1988, the Board issued a letter for invoking the permanent guarantee, to the company's bankers. The plea taken by the Board in the said letter that, 'AS THEY HAVE FAILED TO EXECUTE THE SUPPLY OF MATERIALS OF OUR CONTRACT NO. SP/16/IDA/REC/MSEB-1/19621 DATED 10-7-1980' is absolutely wrong and misleading. The company has executed the order to the entire satisfaction of the Board and the Board had no cause to encash the guarantee given towards permanent E.M.D. In the interest of justice, the company had to file a Suit No. 3536 of 1988 in the Hon'ble Bombay City Civil Court, Bombay, praying the Hon'ble Court to refrain the Board from demanding the amount against the guarantee and the bankers from paying the amount to the Board. Since the action of the Board in invoking the guarantee against their alleged claims pertaining to the order under arbitration has no justification, the Board should return the said guarantee to the company, duly discharges. The company, during the last 5 years of the pendency of the case in the Court has made a number of visits to Bombay in connection with the case incurring heavy expenses. The company has also been meeting the legal expenses in the matter. The amount of expenses in the matter is Rs. 42,400/- which the Board is liable to pay to the company. 48. While concluding, the company prays the learned arbitrators for the following Award : (i) The Board be directed to pay an amount of Rs. 42,137.60 (which amount is deducted by the Board from the bills of the company) towards alleged wharfage along with interest as shown in the consolidated claim statement. (ii) The Board be directed to refund the amount of Rs. 42,137.60 (which amount is deducted by the Board from the bills of the company) towards alleged wharfage along with interest as shown in the consolidated claim statement. (ii) The Board be directed to refund the amount of Rs. 1,23,499.46 to the company (which amount is deducted by the Board towards alleged Bank interest) along with interests as shown in the consolidated claim statement - Annexure C-77. (iii) The Board be directed to pay an amount of Rs. 8629/- to the company (which amount the Board has deducted towards under charges) along with interest as shown in the consolidated claim statement - Annexure C-77. (iv) The Board be directed to pay an amount of Rs. 14,078.99 to the company (which amount the Board has deducted towards alleged damages) along with interest as shown in the consolidated claim statement - Annexure C-77. (v) The Board be directed to pay an amount of Rs. 10,329.57 (which amount is deducted by the Board towards C.S.T.) to the company with interest as shown in the consolidated claim statement - Annexure C-77. (vi) The Board be directed to pay an amount of Rs. 4,92,537.21 to the company towards differential duty drawback along with interest as shown in the consolidated claim statement. The claim amount of Rs. 4,92,537.21 is worked out in Annexure C-75. The amount of interest is shown in Annexure C-77. (vii) The Board be directed to pay an amount of Rs. 23,914.60 to the company in lieu of the 'C' form along with interest as shown in the consolidated claim statement - Annexure C-77. (viii) The Board be directed to pay an amount of Rs. 6,69,055.48 the details of which is shown in Annexure C-76. The Board is also liable to pay interest on this amount as shown in consolidated claim statement - Annexure C-77. (ix) Money is not available free of interest. Had the Board released the amounts claimed above at the appropriate time, the company would not have incurred any interest on these amounts. It is therefore just that the Board be directed to pay interest to the company at 21% p.a. on all the amounts claimed by the company, as per the banking norms as per the trade and commerce practice with quarterly rests, from the date the amounts were due till the date of final payment. The amount of Rs. It is therefore just that the Board be directed to pay interest to the company at 21% p.a. on all the amounts claimed by the company, as per the banking norms as per the trade and commerce practice with quarterly rests, from the date the amounts were due till the date of final payment. The amount of Rs. 1,07,17,028.44 has been included in the consolidated claim statement - Annexure C-77, towards interest for the period 1-8-1983 till 30-7-1993. Further interest till the date of actual payment be awarded by the Hon'ble arbitrators. (x) The Board be directed to pay an amount of Rs. 42,400/- the amount being the expenses incurred by the company to visit Bombay in connection with the case pertaining to the permanent bank guarantee (E.M.D.) and the legal expenses incurred in the matter. (xi) The Board be directed to return the permanent bank guarantee submitted by the company towards E.M.D. vide B.G.No. G/7/68/78 dated 9-7-1978 for Rs. 50,000/- duly discharged.” 8. The Board filed its reply to the said statement of claim on 10th August, 1993 wherein it has been contended that the company has neither claimed refund of the said amounts at any time from the Board nor has disputed the correctness of the contents of the various deduction memos prior to the filing of the statement of claim. It was, therefore, submitted by the Board that there was no pre-existing dispute for recovery of the said amount which could be referred by the company to the arbitrators and, therefore, the Arbitrators have no jurisdiction to entertain, try or Award any amount in respect of the said claims except with regard to the duty drawback. The Board further contended that the claims for recovery of the said amounts after a period of over 9 years are clearly time barred and are liable to be rejected on that ground. The claim of interest of Rs. 1,07,17,028.44 calculated at the rate of 21% per annum from 1st August, 1983 to 30th July, 1993 on the sum of Rs. 13,84,181.91 was also not legally tenable. It was submitted that interest can be claimed only when principal amount is due and as no demand or dispute has so far been raised in respect of the said amount aggregating to Rs. 13,84,181,91, the claim for interest thereon is liable to be rejected outright. 13,84,181.91 was also not legally tenable. It was submitted that interest can be claimed only when principal amount is due and as no demand or dispute has so far been raised in respect of the said amount aggregating to Rs. 13,84,181,91, the claim for interest thereon is liable to be rejected outright. It was also contended by the Board that the claim has been made without demand or any dispute and hence the claim of interest was contrary to the provisions of the Interest Act. The Board has also pointed out various facts contending that the Company was not entitled to recover any amount from the Board. 9. The company submitted a rejoinder dated 20th August, 1993. It has been pointed out that no supplier will ever accept any unauthorised deductions and the company has always objected to such deductions by the Board. Whereas the Board has preferred their claims before the arbitrators, it is surprising that the Board is putting forth the plea that the company's claims are time barred. This is nothing but blowing hot and cold at the same time. With regard to the interest, it has been pointed out that since the company's bankers have advanced amounts to the company for their industrial activities and since the company was being charged interest by the bank as per the banking norms, there was nothing extra-ordinary in the company claiming interest as per banking norms at quarterly rests. 10. In reply to the Board's claim, the Company has filed written submissions wherein it is stated that the supplies of conductors were made commencing from 11th December, 1980 and ending on 11th April, 1983 and the Board has lifted the said material during the said period. It has been further submitted that although the supplies against the order were completed in April 1983, the Board kept quiet for long and all of a sudden, vide a letter dated 3rd December, 1988, the Board asked the company to produce documents pertaining to duty drawback and also demanded huge amount towards differential duty drawback and bank charges. The company has finally submitted that the claims of the Board should be rejected outright. 11. After considering the documentary evidence which was produced on record, the claims of parties and the written submissions made by the respective parties, the arbitrators partly allowed the claims of the Board as well as the company. The company has finally submitted that the claims of the Board should be rejected outright. 11. After considering the documentary evidence which was produced on record, the claims of parties and the written submissions made by the respective parties, the arbitrators partly allowed the claims of the Board as well as the company. The Arbitrators Awarded to the company towards the deductions which were made and large amount of interest to the tune of Rs. 25,44,379.14 for the period from 1-8-1983 to 30-7-1993. 12. The issues raised and the findings given by the arbitrators are as under :- Issue No. Claim in dispute Awarded 1. Whether the company proves that the Comp- any's claim or any part thereof are arbitrable and the arbitrators have jurisdiction to enter- tain, try or Award them ? YES 2. Whether the claims or any part thereof is not barred by the law of limitation? NOT PROVED 3. Whether the learned Arbitrators have jurisdi- ction to Award any claim for cost in respect of Suit No. 3536/88 pending in the City Civil Court at Bombay? NO 4. Whether the company proves that delay or substantial part thereof in completion of Co- ntract was committed by the Board? If so, YES whether the company sustained any loss as (Towards differential Duty Drawback) a result thereof ? Rs. 4,78,878.20 5. Whether the Board caused long delays in YES making proper financial arrangements by way of L/C and by not lifting the materials in time during December 1980 and also during April to September, 1981? 6. Whether the Board contravened the terms YES of the P.O. by not establishing L/C for paym- ent of 5% bills of the company? 7. Whether the Company is eligible to get an amount of Rs. 42,137.60 reimbursed by the Board towards wharfage charges deducted by YES the Board? Rs.42,137.60 8. Whether the company is eligible to get an amount of Rs. 1,23,499.46 reimbursed by the Board towards Bank interest deducted by the YES Board? Rs. 1,23,499.46 9. Whether the company is eligible to get an NO amount of Rs. 8629/- reimbursed by the Board towards Under Charges deducted by the Board? 10. Whether the company is eligible to get an NO amount of Rs. 14,078.99 reimbursed by the Board towards damages deducted by the Board? 11. Whether the company is eligible to get an amount of Rs. Whether the company is eligible to get an NO amount of Rs. 8629/- reimbursed by the Board towards Under Charges deducted by the Board? 10. Whether the company is eligible to get an NO amount of Rs. 14,078.99 reimbursed by the Board towards damages deducted by the Board? 11. Whether the company is eligible to get an amount of Rs. 10,329.57 towards reimbursem- ent made by the Board towards C.S.T. not paid YES by the Board? Rs. 10,320.57 12. Whether the company is eligible to get an YES amount of Rs. 4,92,537.21 reimbursed by (adjusted in the the Board towards differential duty drawback Awards against which was remained unpaid? Issue No. 21 13. Whether the company is eligible to get an YES amount of Rs. 23,914.60 reimbursed by the Rs. 23,914.60 Board towards C.S.T. in lieu of C form not issued by the Board? 14. Whether the company is eligible to get an YES amount of Rs. 6,69,055.48 reimbursed by the Rs. 6,69,055.48 Board towards price variation on B.T.G. Steel Gore Wire? 15. Whether the Company is eligible to get Admitted at 18% p.a an amount of Rs. 1,07,17,022.44 towards int- on the amount of erest at 21% p.a. as per Banking norms as Rs. 13,47,814.91 per trade and commerce practice at quarterly from 1-2-1983 to rests on all the amounts shown in Col. 7 to 14 25-1-1984 above for the period 1-8-1988 till 30-7-1993 Rs. 25,44,379.14 and for further interest at the same rate and same norms till the date of final payment by the Board. 16. Whether the company is eligible to get an amount of Rs. 42,000/- by the Board towards legal and other expenses incurred by the company in respect of Suit No. 3533 of 1988 filed in the Bombay City Civil Court for invok- ing of permanent E.M.D. Bank Guarantee No. G/768/78 dated 9-7-1978 for Rs. 50,000 by the Board and whether the Board is liable to return the said guarantee duly discharged to the Company? NO 17. Whether the company is liable to get an amount of Rs. 2.00 to Rs. 50,000 by the Board and whether the Board is liable to return the said guarantee duly discharged to the Company? NO 17. Whether the company is liable to get an amount of Rs. 2.00 to Rs. 3.00 lakhs or the actual amount, if ascertained during the arb- itration proceedings that has remained unpaid by the Board towards 5% bills of the company along with interest at 21% p.a. as per banking norms as per trade and commerce practice at quarterly rests for the period from 1-8-1995 till the date of final payment by the Board? NO 18. Whether the company is eligible to get the entire costs of arbitration at actual reimbur- sed by the Board? NO 25. Whether the Board is entitled to recover from NO the company the costs of arbitration at actuals? 19. Whether the company is eligible for any other relief/s and cost/s in the subject-matter? NO ------------------------- GRAND TOTAL PAYABLE TO COMPANY : Rs. 38,92,194.05 ---------------------- 20. Whether the Board is entitled to call upon the company to render account in respect of amounts received on account of duty draw- back from the Jt. Chief Controller of Imports and Exports? NO 21. Whether the Board can recover from the YES company the differential duty drawback for After adjusting the Rs. 7,49,571.04 found due and payable to the Award amount on Board? Issue No. 12, the balance amount payable to the Board is Rs. 2,57,033.83 22. Whether the Board is entitled to recover from the company the interest for the sum of Rs. 4,61,125/- as per Exhibit 'F' of the Board's Statement of Claim? NO 23. Whether the Board is entitled to recover from the company the wharfage, demurrages charges for the sum of Rs. 42,137.60? NO 24. Whether the Board is entitled to recover from Interest is the company interest on the amount due to admitted on the Board at 18% p.a. from the date due or amounts from any other date? the date due to the Board. As awarded in para 21 above. Interest ad- mitted @ 18% p.a. on the amount of Rs. 2,57,033.83 till 10-7-1993 and 12% p.a. from 11-7-1993 to 25-1-1994 (as claimed by the Board) (a) (Derived proportionately from Ex. 'F' of (Board) till 30-4-1992 @ 18% Rs. 1,57,561.74 (b) 1-5-1992 to 10-7-1993 @ 18% Rs. 55,265.80 (c) 11-7-1993 to 25-1-1994 @ 12% Rs. 16,816.35 Total Rs. Interest ad- mitted @ 18% p.a. on the amount of Rs. 2,57,033.83 till 10-7-1993 and 12% p.a. from 11-7-1993 to 25-1-1994 (as claimed by the Board) (a) (Derived proportionately from Ex. 'F' of (Board) till 30-4-1992 @ 18% Rs. 1,57,561.74 (b) 1-5-1992 to 10-7-1993 @ 18% Rs. 55,265.80 (c) 11-7-1993 to 25-1-1994 @ 12% Rs. 16,816.35 Total Rs. 2,29,643.89 21-A. Whether the Board is entitled to recover from the company Rs. 1,23,499.46 towards the Bank service charges? NO 21-B. Whether the Board is entitled to recover NO from the company Rs. 8629-towards under-charges? 21-C. Whether the Board is entitled to recover NO from the company Rs. 14,078.99 towards damages? 21-D. Whether the Board is entitled to recover from the company Rs. 10,329.57 onwards CST? NO -------------------- Rs. 4,86,677.72 -------------------- SUMMARY (i) Payable to the company by the Board : Rs. 38,92,194.05 (ii) Payable to the Board by the company: Rs. 4,86,677.72 Final amount payable by the Board to the --------------------- company : Rs. 34,05,516.33 --------------------- 13. That Award was challenged by the Board before the learned Single Judge of this Court. By judgment and order dated 8th September, 1994, the learned Single Judge rejected the arbitration petition for setting aside the Award. Hence these appeals. 14. From the facts narrated above, it is apparent that quotations were invited in the month of May 1979 for supply of conductors to the Board. On the basis of the contract, admittedly, the goods were supplied prior to April 1983. Payment in respect of the said supplies were made by the Board to the company prior to April 1984. Some officers of the Board woke up from their slumber in 1988 and demanded that according to the terms of the contract, the company was bound to refund the excess drawback of excise duty. Correspondence went on between the Board and the company. The company by its letters dated 9th June, 1992 and 24th July, 1992 (Exhibits B-10 and B-11 to the Petition) agreed to refund some amount. As per letter dated 24th July, 1992, the company agreed to pay Rs. 2.57 lacs. In that letter, it is specifically mentioned that on verification of receivables during the years 1980 and 1981, the company's claims due from the Board was about Rs. 4.92 and similarly in subsequent years of 1982 and 1983 the Board's claim was about Rs. 7.49 lacs. 2.57 lacs. In that letter, it is specifically mentioned that on verification of receivables during the years 1980 and 1981, the company's claims due from the Board was about Rs. 4.92 and similarly in subsequent years of 1982 and 1983 the Board's claim was about Rs. 7.49 lacs. As a result, the net amount payable remains to the extent of about Rs. 2.57 lacs. Thereafter, the Deputy Chief Engineer of the Board wrote a letter on 30th September, 1992 stating that the company was bound to return Rs. 7,49,571.04 with interest thereon at the rate of 18% per annum from the date of receipt of additional duty drawback which works out to Rs. 4,59,476.77 aggregating to Rs. 12,09,047.81 within 10 days from the date of receipt of the said letter. In response to that letter, the company by its letter dated 26th, 28th December, 1992 contended that the Board has kept silence on the issue of payments to the Board and has now embarked upon claiming amounts from the Company which is not actually due and that too after a period of over 9 years and that the claim of the Board was one-sided. Therefore, the Company by the said letter invoked the arbitration clause and nominated its arbitrator and requested the Board to appoint its arbitrator. The arbitrators passed the Award as stated above and arrived at the conclusion that the claims filed by the Board and the company were within time. No reasons are assigned by the Arbitrators while deciding the issues framed by them. It is held that the claims made by the company and the Board were within time. It is true that the Court would not normally interfere with an Award passed by the Arbitrators. But, in the present case, it is to be borne in mind that the Board is a statutory public body; the Company has not claimed any amount from the Board until the year 1992 i.e. for a period of 8 to 9 years from the date of completion of the contract and when it received notice for recovering some amount, the counter-claim was raised and the Award is passed in its favour for a large amount. For a claim of Rs. 13 lacs, which was not claimed at the relevant time and for a period of 9 years and more, disproportionately a high amount of interest amounting to Rs. For a claim of Rs. 13 lacs, which was not claimed at the relevant time and for a period of 9 years and more, disproportionately a high amount of interest amounting to Rs. 25 lacs is Awarded. This Award is per se unjustified as the claim made by the Company is beyond time and the Award of interest is disproportionately high so as to hurt the conscience of the Court and that too in a case where the company was prepared to pay Rs. 2.57 lacs to the Board in July 1992 towards the claim of the Board. 15. The learned Counsel for the company vehemently submitted that the Court had no jurisdiction to consider the facts and circumstances of the case on the basis of the claims and the counter-claims as also the documentary evidence which are produced on record by the parties because, in a non-speaking Award, the Court's jurisdiction is limited. 16. In our view, this question is concluded by various decisions of the Supreme Court. In the case of (Dandasi Sahu v. State of Orissa)1, A.I.R. 1990 S.C. 1128, after referring to its earlier decision, the Supreme Court has held that in a case where the arbitrator has not given any reason and that even if he commits a mistake either in law or in fact in determining the matter referred to him, where such mistake does not appear on the face of the Award the same could be interfered with only in limited circumstances as provided under sections 16 and 30 of the Arbitration Act. The Court further held as under : “In this situation we have to test the Award with circumspection. Even with all this limitation on the powers of Court and probably because of these limitations, we have to hold that if the amount Awarded was disproportionately high having regard to the original claim made and the totality of the circumstances it would certainly be a case where the arbitrator could be said to have not applied his mind amounting to legal misconduct.” After holding this, the Court considered the facts of the case on the basis of the claim and the interest awarded thereon and held that for a total claim of Rs. 12,15,653/-, the arbitrators' Award of Rs. 25,00,156/- suffers from the vice of awarding disproportionately high amount. 17. 12,15,653/-, the arbitrators' Award of Rs. 25,00,156/- suffers from the vice of awarding disproportionately high amount. 17. In the present case also, for the claim of unliquidated damages the amount awarded is Rs. 13,47,814.91 and the interest amount awarded thereon is Rs. 25,44,379.14. 18. While dealing with a similar contention, the Supreme Court in the case of (State of Rajasthan v. Puri Construction Co. Ltd. and another)2, 1994(6) S.C.C. 485 , held that in recent times, error in law and fact in basing an Award has not been given the wide immunity as enjoyed earlier, by expanding the import and implication of “legal misconduct” of an arbitrator so that Award by the arbitrator does not perpetrate gross miscarriage of justice and the same is not reduced to mockery of a fair decision of the lis between the parties to arbitration. The Court further observed that in the ultimate analysis, it is a question of delicate balancing between the permissible limit of error of law and fact and patently erroneous finding easily demonstrable from the materials on record and application of principle of law forming the basis of the Award which is patently erroneous. 19. Further, the Supreme Court, in the case of (Executive Engineer, Irrigation, Galimala and others v. Abnaduta Jena)3, A.I.R. 1988 S.C. 1520, has observed that the arbitrator is bound to make his Award in accordance with law. If the arbitrator could not possibly have awarded interest on any permissible ground because such ground did not exist, it would be open to the Court to set aside the Award relating to the Award of interest on the ground of an error apparent on the record. It was further held that if there was the slightest possibility of the entitlement of the claimant to interest on one or other of the legally permissible grounds, it may not be open to the Court to go behind the Award and decide whether the Award of interest was justifiable. The Court further observed that at the same time, it should be borne in mind that in a non-speaking Award, the Court cannot weigh the mental process of the arbitrators and hence speculate that no reasons are given by the arbitrators as to what compelled them to arrive at their finding. 20. The Court further observed that at the same time, it should be borne in mind that in a non-speaking Award, the Court cannot weigh the mental process of the arbitrators and hence speculate that no reasons are given by the arbitrators as to what compelled them to arrive at their finding. 20. However, the learned Counsel for the respondent-Company heavily relied upon the following observations in the case of (Jajodia (Overseas) Pvt. Ltd. v. Industrial Development Corporation of Orissa Ltd.)4, 1993(2) S.C.C. 106 :— “8. It is, we think, necessary first, to clear some cobwebs. A speaking or reasoned Award is one which discusses or sets out the reasons which led the arbitrator to make the Award. Setting out the conclusions upon the questions or issues that arise in the arbitration proceedings without discussing the reasons for coming to these conclusions does not make an Award a reasoned or speaking Award. The arbitrator has in the Award before us only answered the issues that were framed. He has not discussed or set out the reasons for the answers. The Award is, therefore, not a speaking or reasoned Award. 9. That the arbitrator merely referred to the pleadings filed before him does not mean that the pleadings are incorporated in the Award. … 16. It will be seen that the Award says that the agreement provided for J.O.P.L. sending the original foreign sale contracts to the respondent 'at a certain stage'. It also says that 'J.O.P.L. fulfilled their obligations under the agreement in question' and that 'J.O.P.L. performed their part of the work as was necessary under the agreement at relevant stage.' On the other hand, it says that 'J.O.P.L. did not send the original foreign sale contracts to I.D.C.'. The Award then finds that 'I.D.C. was not justified in canceling the agreement' (emphasis supplied). Reading these issues and answers together and harmoniously, it is apparent that the agreement provided that J.O.P.L. should send to I.D.C.O. the original foreign sale contracts at a certain point of time and that it is found that J.O.P.L. had not sent the original foreign sale contracts to I.D.C.O.. It is also apparent that it is found that at the point of time at which I.D.C.O. purported to cancel the agreement, J.O.P.L. had performed all its obligations under the agreement. It is also apparent that it is found that at the point of time at which I.D.C.O. purported to cancel the agreement, J.O.P.L. had performed all its obligations under the agreement. The conclusion is, therefore, that up to that point of time J.O.P.L. had not obliged to send the foreign sale contracts to I.D.C.O. So read, in our view, there are no inconsistencies upon the face of the Award as can be characterised as errors that vitiate the Award. An Award has to be read as a whole and harmoniously. The grounds upon which an Award can be set aside are limited. The Court should be very circumspect about setting aside an Award reached by an arbitrator for parties have agreed that the disputes that may arise or have arisen between them should be resolved not by a Court of law but by arbitration. 17. Mr. Patnaik pointed out that the Orissa High Court had recognised that 'the malady of the racket of arbitration' affected its State (State of Orissa v. Gangaram Chhapolia)5, 1983(5) O.L.J. 214. and that this had been taken note of by this Court in (State of Orissa v. Dandasi Sahu)6, 1988(4) S.C.C. 12 . The Court said : 'In our opinion, the evidence of such state of affairs should make this Court scrutinise the Award carefully in each particular case but that does not make the Court declare that all high amounts of Awards would be bad per se.' We are in respectful agreement. We do not, having bestowed due care upon the Award and the arguments advanced to assail it, find the Award to be bad in law.” 21. Considering the aforesaid observations of the Supreme Court, it cannot be said that it has taken any view contrary to the view taken by it in its earlier decisions, as stated above. The Court has specifically observed that the Award is required to be read as a whole and harmoniously and for setting aside the said Award the grounds are limited. The aforesaid observations of the Supreme Court are with regard to a non-speaking Award and the Court has held that merely because in the Award the arbitrators have stated that they have referred to the pleadings filed before them, that does not mean that the pleadings are incorporated in the Award. The aforesaid observations of the Supreme Court are with regard to a non-speaking Award and the Court has held that merely because in the Award the arbitrators have stated that they have referred to the pleadings filed before them, that does not mean that the pleadings are incorporated in the Award. The Court, therefore, negatived the submission that the entire agreement became incorporated in the Award. It was, therefore, open to the Court to look into the entirety of the dispute in the arbitration proceedings and determine whether the Award could be set aside on limited grounds permissible under the law. 22. In the present case there is no question of re-appreciation of evidence or referring to the pleadings. The facts are required to be taken into consideration for determining whether the Award is per se illegal. De hors the facts being taken into consideration, it would not be possible to hold that the claim made by the company is time-barred or whether the interest awarded is unjustified, as permissible grounds for awarding such interest were not existing. If the contention of the learned Counsel for the respondent is accepted, then a non-speaking Award could never be set aside. In our view, there is no such law. A non-speaking Award could be set aside on a limited ground as held by the Supreme Court in Dandasi Sahu v. State of Orissa, A.I.R. 1990 S.C. 1120, State of Rajasthan v. Puri Construction Co. Ltd., 1994(6) S.C.C. 485 , and Executive Engineer, Irrigation, Galimala v. Abnaduta Jena, A.I.R. 1988 S.C. 1520. Re : Issue of time-barred claims. 23. It is an admitted position that no dispute was raised with regard to the payment made by the Board from the year 1984 until 1992. The company has never demanded that the Board was required to pay certain amount as claimed by them before the arbitrators. When some officer of the Board dug out from the file that as per the contract the company was required to pay the excess excise duty drawback recovered by it and when the said officer insisted that the said amount be paid with interest @ 18% per annum, for the first time in December 1992 the company claimed that they were entitled to recover certain amounts which were illegally deducted at the time of making payment by the Board during the period 1981 to 1984. Prior to this, the company has admitted that with regard to excess excise duty drawback, the company would refund Rs. 2,57,000/- as confirmed by the company by their letter dated 24th July, 1992. In such a situation, can it be said that the issue decided by the arbitrators that the claim of the company was within time is by any standard justified. In our view, apparently, the claim made by the Company can be said to be barred by period of limitation. 24. The relevant part of the arbitration clause, which is referred to earlier, is as under :— “If at any time, any question, dispute or differences whatsoever shall arise between the purchaser and the contractor, upon or in relation to, or in connection with this contract either party may forthwith give to the other, notice in writing of the existence of such question, dispute or differences and the same shall be referred to the adjudication of three arbitrators, one to be nominated by the purchaser, the other by the contractor and the third by the President of the International Chamber of Commerce, in the case of foreign contracts and President of Institution of Engineers, India, in the case of local contracts.” It specifically provides that if at any time any question, disputes or differences whatsoever shall arise between the purchaser and the contractor, upon or in relation to, or in connection with the contract, either party may forthwith give to the other, notice in writing of the existence of such question, dispute or differences and the same shall be referred to adjudication of three arbitrators. If the company thought that the amount as awarded by the arbitrators as per Issues Nos. 7, 8, 11 and 13 was wrongly or erroneously deducted prior to 1984 or was not paid to the Company, the company ought to have raised a dispute immediately in the year 1983 or 1984 and the matter would have been settled at the relevant time. The arbitration clause further provides for issuance of notice in writing. No such notice in writing was given by the company when the amount was deducted or was not paid to the company at the relevant time. The arbitration clause further provides for issuance of notice in writing. No such notice in writing was given by the company when the amount was deducted or was not paid to the company at the relevant time. Even with regard to the so-called damages awarded under Issue No. 4 and price variation awarded under Issue No. 14, no such demand was made in writing by the company either in the year 1983 or 1984. The company was required to give notice in writing for the said payment at the relevant time and not to wait till the Board raised some demand in 1992. In this view of the matter the award passed by the arbitrators with regard to the respondents' claim is, on the face of it, time-barred because no claim was raised at the relevant time nor notice in writing was given at any point of time for a period of more than 9 years. 25. From the facts narrated above, it is also apparent that there is no justification for holding that the claim made by the company was within the period of limitation. In the notice given by the company for referring the matter to the arbitrator it has been specifically stated (as referred earlier) that the supplies were completed before 9 years; that it was not in possession of the concerned record; that the Board's claim itself was time-barred; yet with regard to the cordial relations the Company replied the Counsel's letter vide its letter dated 9th June, 1992, that the Board has to pay an amount of approximately Rs. 4.90 lacs towards duty drawback and, therefore, the Board's claim for Rs. 12 lacs and odd was not correct. In the written claim filed before the Arbitrators it has been specifically stated that since the date of completion of supplies the Board has not demanded any amount from the company against the order under arbitration since there was no claim whatsoever and all of a sudden during April 1988 the Board issued a letter for invoking the permanent guarantee. Same is the reply filed in rejoinder that the Board's claim is time-barred. Similarly, as narrated above, the Board has also contended that the company's claims was time-barred. There is nothing to indicate how the claims made by both the parties were within time before the arbitrators. Same is the reply filed in rejoinder that the Board's claim is time-barred. Similarly, as narrated above, the Board has also contended that the company's claims was time-barred. There is nothing to indicate how the claims made by both the parties were within time before the arbitrators. The learned Counsel appearing for the respondents was not in a position to point out anything to suggest that the claims were within time. However, he contended that this Court cannot consider the said question as it is based upon evidence which might have been led by the parties and that the said evidence cannot be re-appreciated by this Court. To this contention, the learned Counsel for the appellants replied that parties have not led any evidence before the arbitrators and it was solely based upon the claim and the counter-claim which were before the arbitrators. In our view, from the record as it stands, there is nothing to indicate that the claims made by the parties are within time. On the face of it, the claim made by the company in December 1992 for the deductions made in the years 1981 to 1984 is time-barred. Re : Grant of interest. 26. We would now consider whether the Award of interest is, on the face of it, illegal because there was no certain sum payable at a certain time by virtue of a written agreement. 27. Further, with regard to the finding given by the arbitrators with regard to Issue No. 15 viz. whether the company is eligible for an amount of Rs. 1,07,17,028.44 towards interest at 21% per annum as per banking norms as per trade and commerce practice at quarterly rests on all the amounts shown in Columns 7 to 14 for the period 1-8-1983 till 30-7-1993 and for further interest at the same rate and same norms till the date of final payment by the Board, it is apparent that there is total non-application of mind by the arbitrators in awarding interest amount of Rs. 25,44,379.14 towards the awarded claim of Rs. 13,47,814.91. Admittedly, prior to 1992, the company had never demanded the said amount from the Board. No notice of demand was issued by the Company demanding the said amount. By Issue No. 4, an amount of Rs. 25,44,379.14 towards the awarded claim of Rs. 13,47,814.91. Admittedly, prior to 1992, the company had never demanded the said amount from the Board. No notice of demand was issued by the Company demanding the said amount. By Issue No. 4, an amount of Rs. 4,78,878.20 is Awarded to the Company as a result of loss sustained by it because of the delay in completion of the contract by the Board. In our view, with regard to the said unascertained damages, the award of interest @ 18% per annum is, on the face of it, unjustified. It is true that we cannot go into the question whether the amount of damages awarded is rightly awarded or not, but at the same time, with regard to the interest on unascertained damages, the law is settled. As far as Issue No. 15 is concerned, which is with regard to the sum of Rs. 25,44,379.14 towards interest awarded by the arbitrators, it is the outcome of their answer to Issues Nos. 7, 8, 11, 13 and 14. Issue No. 7 provides whether the Company is eligible to get an amount of Rs. 42,137.60 reimbursed by the Board towards Bank interest deducted by the Board. Issue No. 8 provides for reimbursement of Rs. 1,23,499.46 towards Bank interest deducted by the Board. Issue No. 11 provides for reimbursement of Rs. 10,329.57 towards C.S.T. (Central Sales Tax) not paid by the Board. Issue No. 12 provides for reimbursement of Rs. 4,92,537.21 by the Board towards differential duty drawback which has remained unpaid. Issue No. 13 provides for reimbursement of Rs. 23,914.60 by the Board towards C.S.T. in lieu of 'C' Form not issued by the Board. Issue No. 14 provides for reimbursement of Rs. 6,69,055.48 towards price variation on H.T.G. Steel Core Wire. This claim also is in the nature of damages which was required to be ascertained at the time of trial. At no point of time, it was an ascertained sum upon which interest could be awarded. 28. Under section 3 of the Interest Act, 1978, Court's jurisdiction for grant of interest is limited. This claim also is in the nature of damages which was required to be ascertained at the time of trial. At no point of time, it was an ascertained sum upon which interest could be awarded. 28. Under section 3 of the Interest Act, 1978, Court's jurisdiction for grant of interest is limited. Sub-section (1) of section 3, which is relevant for our purpose, reads as under :— “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.” Admittedly proceedings before arbitrators were not relating to debt payable by virtue of written instrument. Hence Clause (a) of section 3(1) of the Interest Act would not be applicable. The alleged claims by the Company were relating to damages or deductions allegedly wrongly made by the Board. But for those claims the company has not raised any demand till December 1992. The written notice was issued by the company only in December 1992 when the Board was claiming large amount towards excise drawback. So the amount of interest from 1st February, 1983 to December 1992 is, on the face of it, unjustified. But for those claims the company has not raised any demand till December 1992. The written notice was issued by the company only in December 1992 when the Board was claiming large amount towards excise drawback. So the amount of interest from 1st February, 1983 to December 1992 is, on the face of it, unjustified. In any case, section 3(1)(b) of the Interest Act, 1978 only provides for grant of interest from the date of written notice given by a person making the claim to the person liable to pay that interest. As stated, until end of year 1992 i.e. till a reply was given by the company in December 1992, the Company had never raised any claim nor had demanded any amount for loss sustained by it because of the delay or loss sustained because of the price variation on H.T.G. Steel Core Wire. Further, the contract between the parties nowhere provides for payment of any interest on the damages because of delay in performing the contract. Hence, Award of large amount of Rs. 25,44,379/- towards interest is, on the face of it, illegal and unjustified. 29. With regard to the Award of Rs. 42,137.60, Rs. 1,23,499.46, Rs. 10,329.57 and Rs. 23,914.60 in respect of Issues Nos. 7, 8, 11 and 13, we are not discussing the said issues as it would require probing into the matter or appreciating the contentions raised by the parties. 30. In this view of the matter, in our view, the Award passed by the arbitrators is, on the face of it, unjustifiable, unreasonable and disproportionately high having regard to the totality of the circumstances of the case. 31. As the Award is, on the face of it, illegal and unjustifiable, in our view, it would not be reasonable to sustain the non-speaking Award in some part either in favour of the Board or in favour of the Company. 32. In the result, both these Appeals are allowed. Award No. 87 of 1994 dated 25th January, 1994 passed by the learned arbitrators is quashed and set aside. The judgments and orders passed by the learned Single Judge in Arbitration Petition No. 69 of 1994 and Arbitration Petition No. 2 of 1995 in Award No. 87 of 1994 are set aside. In the result, both these Appeals are allowed. Award No. 87 of 1994 dated 25th January, 1994 passed by the learned arbitrators is quashed and set aside. The judgments and orders passed by the learned Single Judge in Arbitration Petition No. 69 of 1994 and Arbitration Petition No. 2 of 1995 in Award No. 87 of 1994 are set aside. No order for costs is passed because this is a case wherein Government instrumentality has allowed its large financial interests to suffer because of its own acts. Appeals allowed. -----