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1999 DIGILAW 493 (DEL)

V. K. DEWAN AND COMPANY v. MUNICIPAL CORPORATION OF DELHI

1999-07-19

MANMOHAN SARIN

body1999
Manmohan Sarin,j. ( 1 ) BY this order, I would be disposing of IA 1115/1997 beingobjections filed by the petitioner under Sections 30 and 33 of the Arbitration Act and IA1495/1998, being an application under Order XII, Rule 6, CPC. ( 2 ) PETITIONER filed a petition under Sections 14 and 17 of the Arbitration Act, 1940,which was registered as a suit, for filing of the award dated 26. 4. 1996 made andpublished by Sh. S. M. Hasnain, respondent No. 2, the sole Arbitrator. Notice of the filingof the award was issued to the parties. Petitioner accepted the notice of the filing of theaward on 13. 1. 1997. Respondent No. 1 was served with the notice of the filing of theaward on 21. 1. 1997. ( 3 ) THE petitioner filed objections in respect of claim No. 3 and claim No. 6 of theaward. In claim No. 3, the Arbitrator had rejected the claim of the petitioner for Rs. 70,650. 00 on account of cost of stores, machinery, tools/plants and temporary structures,which were alleged to have been taken over by the Delhi Vidyut Board. The learnedarbitrator held that the contractor/petitioner had not been able to establish the claimbased on the evidence produced before him and, accordingly, he rejected the same. Counsel for the petitioner contended that the Arbitrator had ignored material documents in reaching this conclusion and had also not taken cognizance of admissions bythe respondent. Mr. Sharma has not been able to bring to my notice any such admission. The objection really amounts to seeking re-appraisal of evidence and the conclusionsreached thereon. This is not the province of this Court in the exercise of jurisdiction undersections 30 and 33 of the Arbitration Act, 1940. The objection to the award on claim No. 3 has no merit and is, accordingly, dismissed. ( 4 ) COMING to the objection in respect of award on claim No. 6, petitioner, claimedinterest on the claim amounts @ 12% p. a. from 7. 7. 1980, the date he had invokedarbitration. The learned Arbitrator, however, awarded simple interest @ 12% p. a. on thesums awarded under claim Nos. 1, 2, 4 and 5 from the date of awad till the date ofpayment or decree, whichever is earlier on the ground that the same would meet the endsof justice. Mr. 7. 1980, the date he had invokedarbitration. The learned Arbitrator, however, awarded simple interest @ 12% p. a. on thesums awarded under claim Nos. 1, 2, 4 and 5 from the date of awad till the date ofpayment or decree, whichever is earlier on the ground that the same would meet the endsof justice. Mr. Sharma contends that the Arbitrator has committed legal misconduct n notawarding the interest from the date of invocation of arbitration to the date of award. ( 5 ) FROM the perusal of the arbitral record, it is seen that the arbitration in the instantcase was invoked on 7. 7. 1980. A petition under Section 20 of the Arbitration Act bearingno. 391-A/80 was filed, which was disposed of on 19. 12. 1980 and one Mr. Rajnikanthwas appointed the sole Arbitrator. The appointment was challenged by the respondentin FAO (OS) No. 36/81. The appointment was stayed by the Division Bench. It was onlyon 26. 3. 1993 that the Division Bench decided the FAO (OS) and directions were issuedfor appointment of new Arbitrator. The Arbitrator was appointed on 7. 6. 1993. Thearbitrator entered upon reference on 19. 7. 1993 and made and published the award on26. 4. 1996. ( 6 ) MR, Sharma, after seeking instructions from Mr. Vinod Kumar Dewan, partnerof the petitioner company, submits that the petitioner does not press his claim for interestbeing awarded from the date of invocation i. e. 7. 7. 1980 or 19. 12. 1980 i. e. the date fromwhich the first Arbitrator was appointed. On the other hand, he confines his claim to thegrant of pendente lite interest from 19. 7. 1993 i. e. the date on which the present Arbitratorentered upon reference. The sole surviving question is, therefore, whether the Arbitratorcould have declined pendente lite interest by simply holding that it would meet the endsof justice, if interest was awarded from 26. 4. 1996 i. e. the date of award. ( 7 ) MR. Ajay Jha, Counsel for the respondent, justifies the award of the Arbitratorby holding that he has given sufficient indication of his thought process by holding thatthe ends of justice would be met by grant of interest from the date of award, whichimplicitly rejects claim of grant of pendente lite interest from the date of reference. ( 7 ) MR. Ajay Jha, Counsel for the respondent, justifies the award of the Arbitratorby holding that he has given sufficient indication of his thought process by holding thatthe ends of justice would be met by grant of interest from the date of award, whichimplicitly rejects claim of grant of pendente lite interest from the date of reference. Counselfor the respondent relies on AIR 1992 S. C. 732, wherein the Apex Court observed that,"this does not mean that in any case the Arbitrator should necessarily award interestpendente lite. It is a matter within the discretion to be exercised in the light of the facts andcircumstances of the case keeping the ends of justice in view. " He contends that this wasa matter entirely within the discretion of the Arbitrator, who has the authority and couldhave rejected and has rejected he claim for pendmte lite interest. ( 8 ) LET us recapitulate the relevant facts. Petitioner invoked arbitration as far backas on 7. 7. 1980 and was constrained to file a petition under Section 20 of the Arbitrationact, 1940 for the appointment of an Arbitrator. This eventually materialised on19. 12. 1980. The contract work in question had already been executed even prior to 1980. The Arbitrator has found the awarded amounts to be due and payable to the contractor. The petitioner cannot be faulted with or made to suffer due to the delay entailed in therespondent challenging the appointment of the Arbitrator and the subsequent proceedings which consumed nearly 13 years before the new Arbitrator was appointed andcould enter upon reference on 19. 7. 1993. Furthermore, the petitioner has given up theclaim for interest for the period prior to 17. 6. 1993. Nothing on record has been broughtto my attention from which any reason for non-grant of pendente lite interest can bediscerned. In these facts and circumstances, the petitioner was definitely entitled to thegrant of pendente lite interest in the exercise of judicial discretion by the Arbitrator. Nonexercise of discretion in awarding pendente lite interest and that too without any reasonor justification is failure to exercise jurisdiction amounting to legal misconduct. Accord-ingly, the award in respect of claim No. 6 is modified to the extent that the petitioner isheld entitled to interest from the date of reference i. e. 19. 6. 1993 till 26. 4. 1996 on the sumsawarded under claim Nos. Accord-ingly, the award in respect of claim No. 6 is modified to the extent that the petitioner isheld entitled to interest from the date of reference i. e. 19. 6. 1993 till 26. 4. 1996 on the sumsawarded under claim Nos. 1, 2,4 and 5 @ 12% p. a. The petitioner shall also be entitledto interest @ 12% p. a. on the sums awarded from the date of decree till realisation. ( 9 ) COUNSEL for the respondent contends that the earnest money of Rs. 19,000. 00which is the subject matter of claim No. 5 was duly refunded, vide letter dated 12. 11. 1997. The respondent would be entitled to adjustment of the same in computation of theamount payable. ( 10 ) WITH the aforesaid modifications in claim No. 6, the award is made rule of thecourt and decree in tern-is thereof be drawn. ( 11 ) THIS order would also dispose of all the pending applications. The petition stands disposed of.