JUDGMENT : Rajiv Sharma, J. Since common questions of law and facts are involved in all these Appeals, the same were taken up together for hearing and are being disposed of by a common judgment. 2. Material facts necessary for the adjudication of these appeals are that agreements were entered between the appellant-corporation and respondent. Respondent raised bills; however, the amount was not paid to him. In these circumstances, the matter was referred to the Arbitrator. The learned Arbitrator in all the awards has awarded simple interest @ 12% per annum for delayed payment and future simple interest @ 18% per annum from the date of award till the date of realisation. Thereafter, objections were filed under section 34 of the Arbitration and Conciliation Act (hereinafter referred to as the Act for brevity sake) against the awards made by the Arbitrator before the learned Additional District Judge, Fast Track Court, Shimla. He dismissed the same on 1.1.2011. It is in these circumstances, the present appeals have been filed under section 37 of the Act. 3. Mr. S.R. Sharma has strenuously argued that the Arbitrator has erred in law by awarding simple interest @ 12% per annum at the pre-arbitration stage and @ 18% per annum post-award till the realisation of the amount. He also contended that the learned Arbitrator and the learned Additional District Judge, Fast Track Court have further erred in law by treating the appellant-corporation as principal employer under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. 4. Mr. J.S. Bhogal, learned Senior Advocate has supported the awards. 5. I have heard the learned counsel for the parties and have perused the pleadings carefully. 6. In the case in hand, learned Arbitrator has awarded simple interest @ 12% at the pre-arbitration stage due to delayed payment and awarded simple interest @ 18% from the date of award till the date of realisation. The agreements in the present case were entered in the year 1998. However, the amount due to the respondent was not released. 7. The Apex Court in Manalal Prabhudayal v. Oriental Insurance Company Limited, (2009) 17 SCC 296 has held that Arbitrator has the power to grant interest for all three stages, pre-reference period, pendente lite and post award period provided rate of interest is reasonable and there is no provision to the contrary in arbitration agreement. 7. The Apex Court in Manalal Prabhudayal v. Oriental Insurance Company Limited, (2009) 17 SCC 296 has held that Arbitrator has the power to grant interest for all three stages, pre-reference period, pendente lite and post award period provided rate of interest is reasonable and there is no provision to the contrary in arbitration agreement. The Apex Court has further held that normally when interest is granted, appellate, revisional or writ court would not interfere with exercise of discretion unless the discretion has been exercised arbitrarily or capriciously. The Apex Court has further held that it is equally well settled that like grant of interest, rate of interest is also in the discretion of the court and in the absence of any agreement between the parties, usually, the court would not interfere with rate of interest unless it is convinced that the discretion of the lower court was ex facie bad in law. The Apex Court has further held that Arbitrator is not a court within the meaning of section 34 of the Arbitration and Conciliation Act, 1996; however, he has power to grant interest at three stages. The Apex Court has held as under: "13. As far as arbitration proceedings are concerned, it is well established that an arbitrator, in absence of any prohibition in an arbitration agreement, has power to award interest. Though it is not a "court" within the meaning of Section 34 of the Code of Civil Procedure, 1908, an arbitrator has power to grant reasonable rate of interest at all the three stages; i.e. pre-reference period, pendente lite and post-award period. 15. It is, thus, clear that arbitrator has power to award interest at all the three stages, namely, pre-reference period, pendente lite and post-award period provided there is no provision to the contrary in an arbitration agreement and the rate of interest is not unreasonable. 17. The High Court, no doubt, referred to M/s. Channa Bros. In our opinion, however, the facts in that case were totally different. In that case, the arbitrator passed an award in favour of both the parties and granted interest in favour of one party and refused to award interest to the other party. This court in the light of facts before it, decided the matter. As we have already noted, this Court, in Bhagwati Oxygen (2005 air Ltd. has held that an arbitrator I sew 1966). This court in the light of facts before it, decided the matter. As we have already noted, this Court, in Bhagwati Oxygen (2005 air Ltd. has held that an arbitrator I sew 1966). has power to award interest at reasonable rate. In our considered opinion, the direction of the arbitrator cannot be termed as arbitrary or unreasonable and when it was affirmed by the trial court, it ought not to have been interfered with by the High Court." 8. Their Lordships of the Honble Supreme Court in State of Haryana and others v. S.L. Arora and Company, (2010) 3 SCC 690 has reiterated the purpose of post-award interest @ 18% per annum. Their Lordships have held that high rate of post-award interest is provided not because it is normal rate of interest to be awarded in arbitration's, but to act as deterrent to award-debtors from avoiding payment or using delaying tactics. Their Lordships have further held that section 31 (7) authorises Arbitral Tribunal to award interest in accordance with the contract and in the absence of any prohibition in the contract and in the absence of specific provision relating to interest in the contract, to award simple interest at such rates as it deems fit from the date on which cause of action arose till the date of payment. It also provides that if the award is silent about interest from the date of award till the date of payment, the person in whose favour the award is made will be entitled to interest @ 18% per annum on the principal amount awarded, from the date of award till the date of payment. Their Lordships have held as under: "18. Section 31 (7) makes no reference to payment of compound interest or payment of interest upon interest. Nor does it require the interest which accrues till the date of the award, to be treated as part of the principal from the date of award for calculating the post-award interest. The use of the words "where and insofar as an arbitral award is for the payment of money" and use of the words "the Arbitral Tribunal may include in the sum for which the award is made, interest ... on the whole or any part of the money" in clause (a) and use of the words "a sum directed to be paid by an arbitral award shall .. on the whole or any part of the money" in clause (a) and use of the words "a sum directed to be paid by an arbitral award shall .. carry interest" in clause (b) of subsection (7) of Section 31 clearly indicate that the section contemplates award of only simple interest and not compound interest or interest upon interest. "A sum directed to be paid by an arbitral award" refers to the award of sums on the substantive claims and does not refer to interest awarded on the "sum directed to be paid by the award'. In the absence of any provision for interest upon interest in the contract, the Arbitral Tribunals do not have the power to award interest upon interest, or compound interest, either for the pre-award period or for the post-award period. 23. The difference between clauses (a) and (b) of Section 31 (7) of the Act may conveniently be noted at this stage. They are: (i) Clause (a) relates to pre-award period and clause (b) relates to post-award period. The contract binds and prevails in regard to interest during the pre-award period. The contract has no application in regard to interest during the post-award period. (ii) Clause (a) gives discretion to the Arbitral Tribunal in regard to the rate, the period, the quantum (principal which is to be subjected to interest) when awarding interest. But such discretion is always subject to the contract between the parties. Clause (b) also gives discretion to the Arbitral Tribunal to award interest for the post-award period but that discretion is not subject to any contract; and if that discretion is not exercised by the Arbitral Tribunal, then the statute steps in and mandates payment of interest, at the specified rate of 18% per annum for the post award period. (iii) While clause (a) gives the parties an option to contract out of interest, no such option is available in regard to the post-award period. In a nutshell, in regard to pre-award period, interest has to be awarded as specified in the contract and in the absence of contract, as per discretion of the Arbitral Tribunal. On the other hand, in regard to the post-award period, interest is payable as per the discretion of the Arbitral Tribunal and in the absence of exercise of such discretion, at a mandatory statutory rate of 18% per annum. On the other hand, in regard to the post-award period, interest is payable as per the discretion of the Arbitral Tribunal and in the absence of exercise of such discretion, at a mandatory statutory rate of 18% per annum. 24.1 The provision for interest in the Act is contained in Section 31 dealing with the form and contents of arbitral award. It employs two significant expressions "where the arbitral award is for payment of money" and "the Arbitral Tribunal may include in the sum for which the award is made, interest... on the whole or any part of the money", (emphasis supplied) The legislature has thus made it clear that award of interest under sub-section (7) of Section 31 [and award of costs under sub-section (8) of Section 31 of the Act] are ancillary matters to be provided for by the award, when the Arbitral Tribunal decides the substantive disputes between the parties. The words "sum for which the award is made" and "a sum directed to be paid by an arbitral award' contextually refer to award on the substantive claims and not ancillary or consequential directions relating to interest and costs. 24.2 The authority of the Arbitral Tribunals to award interest under Section 31 (7)(a) is subject to the contract between the parties and the contract will prevail over the provisions of Section 31 (7)(a) of the Act. Where the contract between the parties contains a provision relating to, or regulating or prohibiting interest, the entitlement of a party to the contract to interest for the period between the date on which the cause of action arose and the date on which the award is made, will be governed by the provisions of the contract, and the Arbitral Tribunal will have to grant or refuse interest, strictly in accordance with the contract. The Arbitral Tribunals cannot ignore the contract between the parties, while dealing with or awarding pre-award interest. Where the contract does not prohibit award of interest, and where the arbitral award is for payment of money, the Arbitral Tribunal can award interest in accordance with Section 31 (7)(a) of the Act, subject to any term regarding interest in the contract. The Arbitral Tribunals cannot ignore the contract between the parties, while dealing with or awarding pre-award interest. Where the contract does not prohibit award of interest, and where the arbitral award is for payment of money, the Arbitral Tribunal can award interest in accordance with Section 31 (7)(a) of the Act, subject to any term regarding interest in the contract. 24.3 If the contract provides for compounding of interest, or provides for payment of interest upon interest, or provides for interest payable on the principal up to any specified stage(s) being treated as part of principal for the purpose of charging of interest during any subsequent period, the Arbitral Tribunal will have to give effect to it. But when the award is challenged under Section 34 of the Act, if the court finds that the interest awarded is in conflict with, or violating the public policy of India, it may set aside that part of the award. 24.4 Where an Arbitral Tribunal awards interest under Section 31 (7)(a) of the Act, it is given discretion in three areas to do justice between the parties. First is in regard to rate of interest. The Tribunal can award interest at such rate as it deems reasonable. The second is with reference to the amount on which the interest is to be awarded. Interest may be awarded on the whole or any part of the amount awarded. The third is with reference to the period for which the interest is to be awarded. Interest may be awarded for the whole or any part of the period between the date on which cause of action arose and the date on which the award is made. 24.5 The Act does away with the distinction and differentiation among the four interest-bearing periods, that is, pre-reference period, pendente lite period, post-award period and post-decree period. Though a dividing line has been maintained between pre-award and post-award periods, the interest-bearing period can now be a single continuous period the outer limits being the date on which the cause of action arose and the date of payment, subject to however to the discretion of the Arbitral Tribunal to restrict the interest to such period as it deems fit." 9. Mr. S.R. Sharma has not pointed out any clause in the contract prohibiting payment of interest at the three stages, i.e. pre-reference period, pendente lite and post award period. Mr. S.R. Sharma has not pointed out any clause in the contract prohibiting payment of interest at the three stages, i.e. pre-reference period, pendente lite and post award period. The Court is of the considered view that the simple interest awarded @ 12% per annum at the pre-arbitration stage is reasonable. The future simple interest @ 18% per annum simple interest paid to the respondent from the date of award till the date of realisation is statutory. 10. The second contention raised by Mr. S.R. Sharma has already been considered and decided by this Court in Arbitration Appeal No. 2 of 2008, titled H.P. Tourism Development Corporation Limited v. Roop Dass dated 21.11.2008 between the same parties. The copy of the judgment has been placed on record by Mr. J.S. Bhogal, learned Senior Advocate. The Division Bench has held as under: "It appears that the Provident Fund Commissioner, Shimla, issued notices to the HPTDC and treated the employees of the Contractor to be employee of the HPTDC by applying the principle that the HPTDC was the Principal Employer. The order was passed against the HPTDC and not against the contractor. The Arbitrator came to the conclusion that the amount was wrongly withheld by the HPTDC and therefore, directed the HPTDC to pay this amount along-with interest. Objections were filed by the HPTDC before the learned District Judge, Shimla, who has rejected the same on the ground that the award cannot be said to be against the public policy. The law is well settled that the scope of interference by the Court under Section 34 of the Arbitration and Conciliation Act, 1996 is very limited." 11. The Division Bench has relied upon Oil and Natural Gas Corporation Limited v. Saw Pipes Limited, (2003) 5 SCC 705 by holding that the illegality on the basis of which interference can be made, should be of a serious nature and should go to the root of the matter. In this case, Division Bench has held that the contractor had employed less than 20 employees; therefore, the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 did not apply. In this case, Division Bench has held that the contractor had employed less than 20 employees; therefore, the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 did not apply. The Division Bench has further held that in case the H.P.T.D.C. was aggrieved by the decision of the Provident Fund Commissioner, Shimla on the ground that the employees of the contractor could not be treated as its employees, the remedy lay in challenging the order of the Provident Fund Commissioner. 12. Accordingly, in view of the observations and discussions made herein above, there is no merit in all these appeals and the same are dismissed. Pending application(s), if any, also stands disposed of. No costs.