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2009 DIGILAW 1159 (PNJ)

Gupta And Company v. Union Of India

2009-07-15

VINOD K.SHARMA

body2009
Judgment Vinod K.Sharma, J. 1. C.M. No. 12720-CII of 2007 Allowed as prayed for. C.R.No. 3377 of 2007. This revision petition is directed against the judgment dated 8.3.2008 passed by the learned District Judge, Hisar allowing an appeal filed by the respondent-Union of India. 2 A dispute arose between M/s Gupta & Company and Union of India relating to the agreement No. CWE (P) H-8/90-91. The arbitrator gave his award on 30.12.1998. An application was moved by the Union of India for making the award rule of the Court. The learned trial Court did not accept the contention raised by the petitioner that the arbitrator had misconducted himself but held that the interest awarded was on higher side, and reduced the interest awarded. 3. The Union of India preferred an appeal and the learned lower appellate Court was pleased to allow the appeal by recording as under :- "9. The Interest Act 1978 came into force in August 1981 and interest can be awarded for the pre reference period. Reference may here be made to AIR 1989 SC 973. The Arbitrator had awarded interest for the pendente lite and future under the provisions of the Interest Act. The contractor in this case had filed objections that the Arbitrator had misconducted the proceedings. They had also referred to authorities under Section 34 of the Civil Procedure Code. The question is whether the Arbitrator has jurisdiction to award interest. It is not in dispute that the claim for interest was made before the Arbitrator and Arbitrator was called upon to adjudicate the claim in respect of the interest. The Honble Apex Court in case of Secretary Irrigation Department v. G.C. Roy, AIR 1992 SC 732, has set at reset the controversy regarding the jurisdiction of the Arbitrator to award interest and it is settled that the Arbitrator can award interest. The Arbitrator in this case had found that Union of India has raised the claim in 1996 and the contractor had failed to deposit the government dues. The Union of India had claimed interest at the rate of 24%. The arbitrator awarded the interest in three different slabs. It was for the Arbitrator to see if interest could be allowed keeping the facts into view. The Court could not interfere in the award. The Union of India had claimed interest at the rate of 24%. The arbitrator awarded the interest in three different slabs. It was for the Arbitrator to see if interest could be allowed keeping the facts into view. The Court could not interfere in the award. The Apex Court has held in M/s Steeman Ltd. v. The State of Himachal Pradesh and others, 1997(2) Indian Civil Cases 428 that the jurisdiction of the Court to interfere with award is confined to matters enumerated in Section 30 of the Arbitrator Act and t he issue regarding the interest does not fall within the ambit of Section 30 of the Act. In view of this, I find that the Court had no jurisdiction to modify the award and reduce the interest. It is held that the Arbitrator had rightly and justly awarded the interest. The order vide which interest was reduced is thus bad and is set aside. It is clarified that Union of India would be entitled to the interest which had been awarded by the Arbitrator. The appeal is accepted. Parties are left to bear their own cost. Memo of cost be prepared and the file be consigned to records. Lower Court filed be returned with a copy of judgment." 4. The learned counsel for the petitioner contends that the impugned order is liable to be set aside, as the petitioner is willing to pay the awarded amount with 6% interest. 5. The mere offer of the petitioner to make payment on his terms cannot be a ground to set aside a decree passed by the Court in appeal, which is in accordance with law. 6. The learned counsel for the petitioner has placed reliance on the judgment of the Honble Supreme Court in the case of Rajasthan State Road Transport Corpn. v. Indag Rubber Ltd., 2007(1) RCR(Civil) 47 : 2007(1) RAJ 331 : (2006)7 Supreme Court Cases 700, wherein it has been held that Court cannot sit as a Court of appeal and disturb the finding of fact recorded by the arbitrator after considering all the materials and factual controversy. However, in the peculiar facts and circumstances of the said case the Honble Supreme Court was pleased to reduce the interest to 6% p.a. from 12%. 7. However, in the peculiar facts and circumstances of the said case the Honble Supreme Court was pleased to reduce the interest to 6% p.a. from 12%. 7. The learned counsel for the petitioner also placed reliance on the judgment of the Honble Supreme Court in the case of State of Rajasthan and another v. M/s Nav Bharat Construction Co. AIR 2002 Supreme Court 258, wherein the Honble Supreme Court has been pleased to hold, that the award of interest by the arbitrator, cannot be said to be an error apparent on the face of record or amount to misconduct. Again in the peculiar circumstances of said case the Honble Supreme Court reduced the interest from 15% to 6%. 8. Finally, the reliance was placed on the judgment of the Honble Supreme Court in the case of Rajendra Construction Co. v. Maharashtra Housing & Area Development Authority and others, (2005)6 Supreme Court Cases 678. In the said case again award of interest by the arbitrator was upheld but the Honble Supreme Court in the facts and circumstances of the case was pleased to reduce the interest from 18% p.a. to 10%. p.a. In all these judgments the Honble Supreme Court has not laid that interest @ 6% only is to be granted 9. It may further be seen, that in none of the judgments relied upon by the learned counsel for the petitioner it has been laid down that award can be interfered with if the interest awarded is on higher side, rather the Honble Supreme Court has authoritatively laid down that the arbitrator can grant interest. No special facts and circumstances have been disclosed or argued which may call for interference by this Court to reduce the interest. Merely on an offer that the petitioner is willing to pay the awarded amount with 6% p.a. interest can not be a ground to interfere with the judgment. No merit. Dismissed.