STATE OF RAJASTHAN v. SINGH ASSOCIATES ENGINEERS, CONTRACTOR
2003-08-05
N.P.GUPTA
body2003
DigiLaw.ai
Judgment N. P. GUPTA, J. ( 1 ) HEARD learned counsel for the parties. This appeal has been filed by the appellant, against the order of the learned District judge, Banswara, dated 6. 12. 96, passed in civil Misc. Case No. 27/96. ( 2 ) BY the impugned order, an incomplete copy whereof has been produced by the appellant alongwith the memo of appeal, the learned trial Court, with consent of the parties, made the award Rule of the Court. While making the award, Rule of the Court, the learned trial Court directed that, the respondent will be entitled to interest on the principal amount awarded, being Rs,2,55,464/-, from 1. 9. 93 till realisation, @ 9% per annum. It is contended by the learned counsel for the appellant, that in view of the langauge of Section 29 of the Arbitration Act, the Court has no power to grant interest, when it has not been awarded by the Arbitrator. ( 3 ) SUFFICE it to say, that perusal of the award shows that thereby also, the Arbitrator had awarded interest on the four items, for different periods, for which the legitimate amount of the respondent was wrongly with held by the appellants. In that view of the matter, it cannot be said that the Arbitrator did not award the interest. The question is, as to whether, the Court has power to award interest from the date of award till realisation, or not? ( 4 ) LEARNED trial Court in this regard has placed reliance on the judgment of this Court in "union of India vs. M/s. Shivlal Tak" and "gujarat Water Supply and Sewerage Board vs. Unique Erectors Ltd and Anr. ". ( 5 ) TRUE it is, that on the face of the language of Section 29 of the Arbitration Act, the Court has power to award interest from the date of decree. But then, a look at the judgment of Honble the Supreme Court in "gujarat Water Supplys case, which has been relied upon by the learned trial Court, shows, that in para 14 and 16, Honble Supreme court has held as under:"14.
But then, a look at the judgment of Honble the Supreme Court in "gujarat Water Supplys case, which has been relied upon by the learned trial Court, shows, that in para 14 and 16, Honble Supreme court has held as under:"14. Having regard to the position in law emerging from the decision of this court in Executive Engineer (Irrigation) Balimela (supra) and S. 29 of the arbitration Act, 1940 and S. 34 of the code of Civil Procedure, we would modify the grant of interest in this case. The arbitrator has directed interest to be paid at 17% per annum from 6-8-1981 upto the date of decree viz. , 17-6-1986. Since in this case the reference to arbitration was made after the commencement of the Interest Act, 1978, the arbitrator under S. 3 (l) (a) of the said act was entitled to award interest from 6-8-1981 till 21-8-1984 in view of this courts decision in Abhudata Jenas case ( AIR 1988 SC 1520 ) (supra ). In the light of the same decision, he could not have awarded interest for the period from 22-8-1984 till the date of the publication of the award viz. 19-7-1985. So far as interest for the period from the date of the award (19-7-1985) till the date of the decree is concerned, the question was not specifically considered in Abhudata Jenas case (supra) but special leave had been refused against the order in so far as it allowed interest for this period. We think interest should be allowed for this period, on the principle that this Court can, once proceedings under Ss. 15 to 17 are initiated, grant interest pending the litigation before it, i. e. , from the date of the award to the date of the decree. It may be doubtful whether this can be done in cases arising before the Interest Act, 1978 in view of the restricted scope of S. 29 of the arbitration Act. But there can be no doubt about the courts power to grant this interest in cases governed by the interest Act, 1978 as S. 3 (l) (a) which was applied by Abhudata Jena to arbitrators will equally apply to enable this Court to do this in these proceedings. " 16.
But there can be no doubt about the courts power to grant this interest in cases governed by the interest Act, 1978 as S. 3 (l) (a) which was applied by Abhudata Jena to arbitrators will equally apply to enable this Court to do this in these proceedings. " 16. We would, however, delete the interest awarded by the arbitrator for the period from 22-8-1984 till the date of the award and confine the interest on the principal sum of Rs. 57,65,273/-to interest at 9 per cent from 6-8-1981 till 21-8-1984 (which has been worked out at Rs. 29,82,443/- ). However, in exercise of our powers under S. 3 of the interest Act, 1978 and S. 29 of the Arbitration Act, 1940, we direct that the above principal sum or the unpaid part thereof should carry interest at the same rate from the date of the award (19-7-1985) till the date of actual payment. " ( 6 ) THUS, significantly, in para 16, Honble the Supreme Court has expressly exercised powers under Section 29 read with Section 3 of the Interest Act, in view. of the fact that the matter in that case related to the period after commencement of the Interest Act, as is the present case, and therefore, on the basis of the aforesaid judgment of Honble the Supreme court, it cannot be said that the learned trial court was in error, in passing the impugned order, awarding interest from the date of award till realization. ( 7 ) THE Appeal thus has, no force, and is hereby dismissed. Parties shall bear their own costs. Appeal dismissed.