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2013 DIGILAW 368 (ALL)

STATE OF U. P. v. COROMANDAL ENGINEERING CO LTD.

2013-02-01

ADITYA NATH MITTAL, SUNIL AMBWANI

body2013
JUDGMENT By the Court.—The State of U.P. through Superintending Engineer, Upper Ganga Canal Modernisation Circle (World Bank) Bulandshahr, has preferred this First Appeal From Order No. 143 of 1998, from the judgment and decree dated 17.10.1997/28.10.1997 passed by the Civil Judge (Senior Division) Bulandshahr in Original Suit No. 88 of 1997 (State v. M/s Coromandal Engineering Company Limited), and other connected Original Suit No. 868 of 1996 (M/s Coromandal Engineering Company Limited v. State of U.P.), dismissing the suit to set aside the Arbitration award. 2. The connected First Appeal From Order Defective No. 1947 of 2011 has been filed by the State of U.P. from the order of the District Judge, Bulandshahr dated 4.12.2008 in Misc. Case No. 85 of 2006 and judgment and decree/award dated 3.11.2003 by the Arbitrators, with a delay of 2 years and 274 days, alongwith an application for condonation of delay. 3. We have heard Shri Vishnu Pratap, learned Standing Counsel appearing for the State of U.P. as defendant/appellant in both the appeals. Shri S. Rajay assisted by Shri Vivek Saran appears for the respondent/claimant. The Facts 4. Brief facts giving rise to these two appeals by the State of U.P., are that an agreement was entered into and was signed on 6.3.1989 between the State of U.P. through Superintending Engineer, Upper Ganga Canal Modernisation Circle-I (World Bank) Bulandshahar, with M/s Coromandel Engineering Co. Ltd, New Delhi, jointly with M/s Rani Construction Company Private Limited, New Delhi for construction of 30 km lined parallel Upper Ganga Canal from km. 197 to km 227 in District Bulandshahr in the State of U.P.. The work generally comprised of excavation, earth work, Cement Concrete lining with paver and C.C. tile lining, fixation of pressure release valves, laying graded filter and perforated A.C. pipes etc. The contract was executed after an open competitive bidding, in which the work was entrusted to M/s Coromandel Engineering Co. Ltd in a joint venture with M/s Rani Constructions Pvt. Ltd 1/34, Flat No. 204 Gangaram Hospital Marg, Rejender Nagar, New Delhi-60 (for short-the claimant). The agreement provided for the work to start from 3.4.1989, with the stipulated date of completion on 2.10.1991, (in 30 months), with the cost of the work calculated at Rs. 19,04,52,350/-, as per contract. 5. The agreement stipulated for arbitration by a panel of arbitrators. The agreement provided for the work to start from 3.4.1989, with the stipulated date of completion on 2.10.1991, (in 30 months), with the cost of the work calculated at Rs. 19,04,52,350/-, as per contract. 5. The agreement stipulated for arbitration by a panel of arbitrators. Clause 57 of the agreement providing for the arbitration is quoted as below : “57. ARBITRATION (1) All disputes or differences in respect of which the decision, if any, of the Engineer or the Employer has not become final and binding as aforesaid, shall on the initiative of either party in dispute be referred to the adjudication of three arbitrators. One arbitrator is to be nominated by the Employer, one by the Contractor and the third by the President of the International Chamber of Commerce, in the case of foreign contractors and Chairman, Central Water Commission in the case of local contractor. If either of the parties fail to appoint its arbitrator within sixty days after receipt of notice for the appointment of an arbitrator then the President of the International Chamber of Commerce, or the Chairman, Central Water Commission, as the case may be, shall appoint an arbitrator. A certified copy of the appointments made by the ‘President/’Chairman’ shall be furnished to both parties. (2) The arbitration shall be conducted in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce, Paris in the case of foreign contractors and provisions of Indian Arbitration Act, 1940 or any statutory modifications thereof in the case of local contractors and shall be held in either case at such place and time in India as the Arbitrators may determine. The decision of the majority of the Arbitrators shall be final and binding upon the parties and the expenses of the Arbitration shall be paid as may be determined by the Arbitrators. (3) The said arbitration/s shall have full power to open up, revise and review any decision, opinion, direction, certificate or valuation of the Engineer. Neither party shall be limited in the proceedings before such arbitrator/s to the evidence or arguments put before the Engineer for the purpose of obtaining his said decision. (3) The said arbitration/s shall have full power to open up, revise and review any decision, opinion, direction, certificate or valuation of the Engineer. Neither party shall be limited in the proceedings before such arbitrator/s to the evidence or arguments put before the Engineer for the purpose of obtaining his said decision. No decision given by the Engineer in accordance with the foregoing provisions shall disqualify him from being called as a witness and giving evidence before the arbitrator/s on any matter whatsoever relevant to the dispute or difference referred to the arbitrator/s as aforesaid. The reference to arbitration may proceed notwithstanding that the Works shall not then be or be alleged to be complete, provided always that the obligations of the employer, the Engineer and the Contractor shall not be altered by reason of the arbitration being conducted during the progress of the Works. (4) Performance under the contract, shall, if reasonably possible, continue during the arbitration proceedings and payments due to the Contractor by the Employer shall not be withheld, unless they are the subject-matter of the arbitration proceedings. (5) All awards shall be in writing and in case of claims equivalent to Rupees one hundred thousand or more, such awards shall state reasons for the amounts awarded. (6) Neither party is entitled to bring a claim to arbitration if its Arbitrator has not been appointed within thirty days after the expiration of the Maintenance period. (7) The term ‘Local Contractor’ shall include Indian firm or group of Indian firms and Joint Venture consortia eligible for price preference as domestic tenderer.” 6. The work could not be completed within the original completion period of 30 months ending on 2.10.1991, on which the first extension of time was granted for a period of two years upto 2.10.1993; the second extension was granted for a period of one year upto 30.9.1994; the third extension was granted for a period of 21 months upto 30.6.1996 and the fourth and last extension was granted for a period of one year upto 30.6.1997. The work was finally completed vide completion certificate issued to the claimant declaring the work to be completed on 30.6.1997. 7. Certain disputes arose between the parties during the progress of work on which the contractor-claimant intended to refer the dispute for arbitration. The work was finally completed vide completion certificate issued to the claimant declaring the work to be completed on 30.6.1997. 7. Certain disputes arose between the parties during the progress of work on which the contractor-claimant intended to refer the dispute for arbitration. Under the terms of the arbitration clause the contractor nominated Justice F.S. Gill (Retd) Judge of Delhi High Court as its Arbitrator. The State-employer nominated Shri N.N. Singhal, retired Engineer-in-Chief as its Arbitrator; and the Chairman, Central Water Commission, Government of India, New Delhi nominated Shri H.S. Bhatt, retired Chief Engineer as the third Arbitrator. The Board of Arbitrators entered on the reference on 28.5.1993, and commenced proceedings. 8. Justice (Retd) F.S. Gill-the arbitrator appointed by the claimant tendered his resignation on 15.3.1994, on which the claimant nominated Shri M. Raghu Chander, Ex-Law Secretary, Government of Goa as the arbitrator, in the vacancy caused on such resignation. The reconstituted panel of the Board of Arbitrators entered on the reference on 20.6.1994, before the work was completed. 9. The award was made and signed on 5.10.1996. Para-8 of the award records that the hearings were held from 21.6.1994 to 7.4.1996, during which dates, the parties presented their respective cases, produced documents and records; presented and examined oral witnesses and made submissions on their case. Paras-9 and 10 of the award records that the three arbitrators visited the site on 9.10.1995, and held exclusive meetings on various dates between 20.9.1994 to 5.10.1996 to discuss and deliberate on various claims and the related details. The award was made on 5.10.1996 and was filed in the Court on 23.10.1996. 10. The claimant filed Case No. 868 of 1996, under Section 17 of the Arbitration and Conciliation Act, 1940 (the old Act), to make the award the rule of the Court on 18.11.1996 of which notice was directed to be issued and was received in the office of the State of U.P.-the appellant on 10.12.1996. 11. The State of U.P.-the appellant filed Case No. 88 of 1997 challenging the award under Sections 33 and 30 of the old Act on 29.1.1997. There was a delay of 19 days in filing Case No. 88 of 1997 on which, the State-appellant filed an application under Section 5 and Section 14 of the Limitation Act seeking condonation of delay. This petition for condonation of delay was dismissed on 28.7.1997. There was a delay of 19 days in filing Case No. 88 of 1997 on which, the State-appellant filed an application under Section 5 and Section 14 of the Limitation Act seeking condonation of delay. This petition for condonation of delay was dismissed on 28.7.1997. On 17.10.1997 by a common order the Judge, Small Cause Court/Civil Judge (Senior Division) Bulandshahr dismissed Original Case No. 88 of 1997 filed by the State of U.P.-the appellant under Section 30/33 of the old Act as barred by limitation, and allowed Original Case No. 886 of 1996 for making the award dated 5.10.1996, the rule of the Court. The Court directed interest at 18% on quarterly based on the amount awarded by the Arbitrator till the final payment. The award dated 5.10.1996 was made part of the decree. The State of U.P. has filed a First Appeal From Order No. 143 of 1998 against the order dated 17.10.1997 making the award rule of the Court, in which an interim order was granted by the Court. 12. The respondent-claimants had to submit his claim after completion of the work upto 30.6.1997 within one month with the concerned authority. The contractor did not submit his claim within the prescribed period and submitted it on 23.3.1998, which was rejected by the Superintending Engineer, being not payable under the provisions of the agreement vide order dated 9.5.1998. The claimant by his letter dated 30.5.1998 demanded the arbitrator to decide the dispute on which a panel of arbitrators was constituted under the arbitration clause No. 57/6 of the agreement, the arbitrators entered into reference and after several meetings and fixing of several dates, an award was made on 3.11.2003. 13. An application under Section 34 (3) of the Arbitration and Conciliation Act, 1986, (in short, the A.C. Act of 1996) read with Sections 5, 14 and 17 and under Section 137 of the Limitation Act as well as Section 151 CPC was filed by the State of U.P. for condonation of delay in filing the objections under Section 34 of the A.C. Act of 1996 before the District Judge, Bulandshahr. 14. 14. By an order dated 4.12.2008 the District Judge, Bulandshahr dismissed the application for condonation of delay under Section 34 (3) of the A.C. Act of 1996 and consequently dismissed the objections under Section 34 of the AC Act of 1996, giving rise to First Appeal From Order No. 1947 (defective) of 2011. The State of U.P.-the appellant has filed an application for condonating the delay of two years and 274 days in filing the First Appeal From Order under Section 37 (1) (b) of the AC Act,1996, challenging the order dated 4.12.2008 passed by the District Judge, Bulandshahr in Misc. Case No. 85 of 2006. 15. The award dated 5.10.1996 was challenged by the State of U.P.-the appellant, on the grounds that after Justice (Retd) F.S. Gill nominated as the arbitrator appointed by the defendant-company, had tendered his resignation on 15.3.1994, the claimant could not have nominated Shri M. Raghu Chander as an arbitrator to fill up the vacancy without notice to the State of U.P.. The claimant was required to give notice to the other party to the agreement, and should have applied to the Court for filling up the vacancy. The objection was taken at the first available opportunity before the arbitrators, who did not decide the issue properly. The reconstituted board of arbitrators did not have a right to hear and decide the dispute. The State of U.P. has further raised an objection that M/s Coromandal Engineering Company Limited and M/s Rani Construction (P) Limited are two different companies. They entered into a joint venture to execute the agreement for completing the work. The agreement between these two companies dated 22.11.1988 was supplied to the State of U.P. for entering into contract, whereas some other agreement dated 12.8.1989 between these two companies was produced before the Board of Arbitrators, which was against the terms of the agreement and was not binding upon the State of U.P.. The Board of Arbitrators committed gross error in law in accepting their accounts separately in support of their claims. The joint accounts of these two companies were not produced before the Board of Arbitrators. 16. The Board of Arbitrators committed gross error in law in accepting their accounts separately in support of their claims. The joint accounts of these two companies were not produced before the Board of Arbitrators. 16. The award and the order making it a rule of the Court was also challenged on the ground that the agreement between the two companies forming joint venture was not registered before the Registrar of Firms and thus the suit was barred under Section 69 of the Partnership Act. 17. The award was also challenged on the ground that the claimants have not given any basis of overhead damages at the rate of 14%, nor did then produce any evidence or accounts for the actual expenses incurred. The Board of Arbitrators wrongly accepted the claim for interest in violation of Clause 57 of the agreement. Further the award on claim 2 (b) was challenged on the ground that the land was to be made available as and when the contractor completed the work in part and parcel to continue the work. The electricity supply was given by the U.P. Electricity Board which was not in the administrative control of the department concerned; and thus the Board of Arbitrators wrongly allowed the claim for not providing the land and electricity, on account of which it was alleged that the labour was kept idle. The Board of Arbitrators travelled beyond its authority in making reassessment of the rates of the contract and awarding damages on higher rates, for which the claimant had given a no claim certificate. The award was also challenged on the ground of award of excessive rate of interest and cost of the proceedings of the suit. 18. The State of U.P.-the appellant, had taken up the plea that the counter claim filed by the department was wrongly rejected without entering into the merit of the claim. The interest on the advance upto 1992 was against the principle of natural justice. The State of U.P. thus prayed for setting aside the award on the grounds of misconduct committed by the Board of Arbitrators, on these grounds. 19. The trial Court recorded its findings on each of these objections. It held that under Section 8 (1) of the old Act, the vacancy on the resignation of an arbitrator could be filled by the Court, if the parties did not agree to fill up such vacancy. 19. The trial Court recorded its findings on each of these objections. It held that under Section 8 (1) of the old Act, the vacancy on the resignation of an arbitrator could be filled by the Court, if the parties did not agree to fill up such vacancy. Justice (Retd) F.S. Gill had resigned as an arbitrator, as he had proceeded on a visit to foreign country on which Shri M. Raghu Chander was nominated by the claimant and was appointed as an arbitrator, after which the Board of Arbitrators heard the matter for about four years, during which no one objected to his continuing in the Board of Arbitrators. In the affidavit (Paper 10-Ga) State of U.P./defendant did not give any reply to the objection of the claimant, which establishes the consent of the State of U.P. The State of U.P. is thus barred by the principle of acquiescence in raising such objections. In any case under Section 8 the Court can fill up the vacancy, if it could not be filled up by the parties in accordance with the arbitration clause in the agreement. The appointment of Shri M. Raghu Chander in the vacancy caused on the arbitrator appointed by the claimant was thus in accordance with the terms of the agreement and in accordance with law. 20. The Court further held that the accounts produced by both the companies was examined by the Board of Arbitrators on which the award is made. The State of U.P. did not make any objection nor gave its reply to the accounts produced by the companies. 21. The Court held that M/s Coromandal Engineering Co. Ltd. and M/s Rani Construction Private Ltd jointly entered into an agreement with the State of U.P.. Both the companies were maintaining accounts separately, which did not prejudice the State of U.P. in any manner. The production of the accounts by these two companies separately, on which the award was passed, would not make the award liable to be set aside on the ground of misconduct. The two companies had entered into an agreement initially on 22.11.1988 for entering into the contract. They had subsequently entered into another agreement on 12.10.1989, which was produced before the Board of Arbitrators. The two companies had entered into an agreement initially on 22.11.1988 for entering into the contract. They had subsequently entered into another agreement on 12.10.1989, which was produced before the Board of Arbitrators. The agreement dated 12.10.1989 was not contrary to the terms of their earlier agreement dated 22.11.1988 nor affected the terms of the contract with the State of U.P.. The subsequent agreement was arrived at to complete the work effectively. The non-registration of the subsequent agreement, or the absence of the registration of the joint venture company before the Registrar of Firms and acceptance of their claim would not affect the arbitration proceedings and the award. 22. On the acceptance of 14% as damages on overhead on claim No. 1, the Court has found that the Award in that respect is not in violation of Clause 57 (5) of the agreement. The amount worked out as 14% over head was in respect of obstructions caused by the State of U.P., and the conditions in which the period of completion of contract was extended. The extra wages paid by the contractors to the labour also fell within the jurisdiction of the Board of Arbitrators. 23. On claim No. 2 (b) the Court found that the Board of Arbitrators has considered the claims on the non-availability of land and the electricity supply for which the labour was allowed to sit idle. This award was also within the jurisdiction of the Board of Arbitrators and in that they did not go beyond the terms of the contract. The rejection of the counter claim was also within the jurisdiction of the Board of Arbitrators. The trial Court thus held that the Board of Arbitrators did not commit any misconduct in giving the award dated 5.10.1996. 24. On the question of interest the trial Court found that the agreement was silent, which did not take away the jurisdiction of the Board of Arbitrators in awarding interest. The Board of Arbitrators awarded interest on the same rates on which the State of U.P. claimed interest from the claimant i.e. at 18% and to that effect the award of interest was valid. 25. On the issue of delay in filing application under Section 30/33 the trial Court held that the Board of Arbitrators gave the notice of the award on 20.10.1996 of filing it in the Court to the parties by the registered post. 25. On the issue of delay in filing application under Section 30/33 the trial Court held that the Board of Arbitrators gave the notice of the award on 20.10.1996 of filing it in the Court to the parties by the registered post. The Original Case No. 868 of 1996 was filed on 18.11.1996 in which the State of U.P. entered appearance on 27.2.1997, which was the first date of hearing of the case whereas the Original Case No. 88 of 1997 was filed by the State of U.P. on 29.1.1997. The notice dated 10.12.1996 was received by the postal clerk of the office of the Superintending Engineer on its presentation by Shri Ram Autar, a Process Server of the Court. The service of notice clearly establishes that the State of U.P. had the knowledge of the filing of the award dated 5.10.1996 in the Court on 10.12.1996, and thus the limitation would start on 10.12.1996. The period of 30 days under Section 14 (2) of the old Act expired on 9.1.1997, whereas the Original Case No. 88 of 1997 under Section 33/30 was filed on 29.1.1997. The objections under Section 30/33 were thus filed with a delay of 19 days and was rightly rejected on 28.7.1997. 26. On the ‘no claim certificate’, submitted by the claimant companies the Court observed that the respondents companies gave the certificate on the condition that the State of U.P. will extend the period of completion of contract. Since the period was not extended no claim certificate could not be relied upon by the State of U.P. to object to the claim. 27. The trial Court found that the award of Rs. 1,49,75,777/- after adjusting the mobilisation advance and the interest on such mobilisation advance was payable from the date of award on 5.10.1996 after which the claimants are entitled to interest at 18% and thus awarded interest on such rates at 18% with quarterly rests. The Contentions 28. Shri Vishu Pratap appearing for the State of U.P.-the appellant has pressed three points for consideration of the Court. He submits that the vacancy on the resignation of Justice (Retd) F.S. Gill, who had resigned on 15.3.1994, by nomination of Shri M. Raghu Chander could not be filled except by drawing proceedings under Section 8 (1) of the old Act by the Court. He submits that the vacancy on the resignation of Justice (Retd) F.S. Gill, who had resigned on 15.3.1994, by nomination of Shri M. Raghu Chander could not be filled except by drawing proceedings under Section 8 (1) of the old Act by the Court. Since the proceedings were initiated under the old Act, the provisions of the new Act will not apply. He further submits that the claimants had raised claims before the Board of Arbitrators on five main heads. Claim No. 1 for extra overhead was awarded in favour of the claimant. The claim No. 2 was not allowed by the Board of Arbitrators. The claim No. 3 was found beyond the scope of reference. The Board of Arbitrators has, however, awarded interest even on claim No. 2 (A) which could not be allowed. He submits that the Board of Arbitrators also committed misconduct in allowing losses to the contractors on the ground that the land was not made available without considering the fact that the land was to be made available in parts as and when the work was complete. The agreement did not provide for making the entire land available before starting the work. He has also objected to the award of interest at 18% beyond the terms of the agreement. 29. Learned counsel appearing for the respondent-claimants submits that on the facts of the case, Section 8 of the old Act is not attracted. Under the arbitration clause both the parties were required to appoint one arbitrator each and the third by the Chairman, Central Water Commission, Government of India. The consent of the other party was not required in nominating the arbitrators by either of the parties and thus on analogy no consent was required for filling up the vacancy of the arbitrator to be nominated by the respective parties. Section 8 (1) is applicable where the arbitrators have to be appointed by consent. When no consent was required for appointment of arbitrators each by either party, there was no question of invoking Section 8 for filling up the vacancy of the arbitrator of the concerned party on his resignation. He further submits that other questions relate to the merits of the award on which the Court cannot interfere, unless it is shown that any of the claims was beyond the scope of the agreement. He further submits that other questions relate to the merits of the award on which the Court cannot interfere, unless it is shown that any of the claims was beyond the scope of the agreement. There is no such plea taken by the State of U.P. in the trial Court that any of the claims was beyond the scope of the agreement. He submits that so far as interest is concerned, it has been awarded on the advances and that Board of Arbitrators have given the same interest on claims as it was claimed by the State of U.P. in its counter claims. 30. Learned counsel appearing for the respondents would further submits that the notice of the award was admittedly received on 10.12.1996, from which 30 days for filing objections expired on 10.1.1996. The objection filed by the State of U.P. on 29.1.1997 was beyond the statutory period and thus the trial Court rightly rejected the objections, as barred by limitation. The Reasoning and conclusion 31. In the present case the arbitration clause in the agreement does not provide for appointment of arbitrators with the consent or consultation with the parties to the dispute. It contemplates one Arbitrator to be appointed on nomination by the employer, one by the contractor and the third by the President of the International Chamber of Commerce. The agreement does not require the concurrence of every party in nominating the Arbitrator. Section 8 (1) of the Arbitration Act, 1940 would apply only, when the arbitration agreement provides for reference of the dispute to one or more Arbitrators, to be appointed with the consent of parties and that the other or all the parties do not concur in their appointment. Section 8 (1) is thus not attracted in the present case. The arbitration agreement does not show that vacancy should not be supplied. In the award the Arbitrators, as well as the Court below has considered this objection and has come to conclusion that there was nothing irregular or illegal in the appointment of Shri M. Raghu Chander as Arbitrator in the vacancy caused on the resignation of Justice (Retd.) F.S. Gill, the Arbitrator appointed by the respondent company. The appellant participated in the proceedings for almost four years without raising any objection. The appellant participated in the proceedings for almost four years without raising any objection. In ACC Ltd. v. Global Cements Ltd., (2012) 7 SCC 71 , the Supreme Court considered the question in the context in which one of the Arbitrators had died. The question raised was whether the time factor mentioned therein is the time within which the question or dispute or difference between the parties is resolved as per the agreement and whether the arbitration clause would live so long as any question or dispute survives, if the Arbitrator dies and in such case a substitute Arbitrator could be appointed. The Supreme Court explained the legislative policy of the Act to facilitate the parties to resolve the dispute by way of arbitration, and observed in paragraphs 21 and 29 as follows : “21. The legislative policy embodied in Sections 14 and 15 of the Act is to facilitate the parties to resolve the dispute by way of arbitration. The arbitration clause if clearly spells out any prohibition or debarment, the Court has to keep its hands off and there is no question of persuading or pressurising the parties to resolve the dispute by a substitute arbitrator. Generally, this stands out as an exception and that should be discernible from the language of the arbitration clause and the intention of the parties. In the absence of such debarment or prohibition of appointment of a substitute arbitrator, the Court’s duty is to give effect to the policy of law that is to promote efficacy of arbitration. 29. The question may also arise in a given case that the named arbitrators may refuse to arbitrate disputes, in such a situation also, it is possible for the parties to appoint a substitute arbitrator unless the clause provides to the contrary. Objection can be raised by the parties only if there is a clear prohibition or debarment in resolving the question or dispute or difference between the parties in case of death of the named arbitrator or their non-availability, by a substitute arbitrator.” 32. We do not find that the Court below committed any error in holding that the vacancy on the resignation of Justice (Retd.) F.S. Gill could be supplied by nomination of Shri M. Raghu Chander without drawing proceedings under Section 8 (1) of the old Act by the Court. We do not find that the Court below committed any error in holding that the vacancy on the resignation of Justice (Retd.) F.S. Gill could be supplied by nomination of Shri M. Raghu Chander without drawing proceedings under Section 8 (1) of the old Act by the Court. The arbitration clause does not provide for any such event nor there was any objection to the appointment of Shri M. Raghu Chander, by the contractor. If it could appoint Justice (Retd) F.S. Gill, as its arbitrator without the consent of the State-employer, it could also appoint Shri M. Raghu Chander in the vacancy caused on resignation of its nominee. No objection was raised by the State employer to such nomination on his competency or qualifications to be nominated as arbitrator. 33. The second point raised by Shri Vishnu Pratap touches the merits of the award. The Claim No. 2 was not allowed by the Board of Arbitrators. The Claim No. 3 was found beyond the scope of reference. The interest was not awarded by the Board of Arbitrators on Claim No. 2 (A). The interest was awarded on the Mobilization Advance (Principal). All other questions, which were raised before the trial Court related to the merits of the award, which cannot be assailed in appeal as the Court does not sit in appeal over the award of an Arbitral Tribunal, by reassessing or re-appreciating the evidence. An award can be challenged only under the grounds of misconduct mentioned in Section 30 (2) of the Act, vide Municipal Corporation of Delhi v. Jana Nath Ashok Kumar and another, AIR 1987 SC 2316 . The principle of law that the Court cannot sit in appeal over the award has been reiterated in P.R. Shah Stock Brokers Pvt. Ltd. v. B.H.H. Securities Pvt. Ltd., (2012) 1 SCC 594 (para 21). 34. So far as third and last contention regarding awarding of interest at 18% beyond the terms of agreement is concerned, the Board of Arbitrators as well as trial Court have discussed the law on the subject and have come to conclusion that such a power exists to grant interest for all the three stages i.e. pre-reference, pendente-lite and future interest. So far as third and last contention regarding awarding of interest at 18% beyond the terms of agreement is concerned, the Board of Arbitrators as well as trial Court have discussed the law on the subject and have come to conclusion that such a power exists to grant interest for all the three stages i.e. pre-reference, pendente-lite and future interest. In Bhagwati Oxygen Ltd. v. Hindustan Copper Ltd., 2005 (1) ALR 608 (SC), the award of interest at 18% was upheld on the ground that the same was the rate at which the employer was charging the contractor for recovery of their advance. 35. In MSK Projects (India) (JV) Ltd. v. State of Rajasthan and another, (2011) 10 SCC 573 , the Supreme Court has held that the Court can award interest at the rate prevalent in the banking transactions. Section 3 of the Interest Act, 1978 provides for interest at the rate not exceeding the current rate of interest. In HUDA v. Raj Singh Rana, (2009) 17 SCC 199 , the Court considered its various earlier judgments and concluded that the rate of interest is to be fixed in the circumstances of each case, and it will be imposed at uniform rate without looking into the circumstances leading to a situation, where compensation was required to be paid. In the same judgment it was reiterated in para 24 that it is settled legal proposition that the Arbitrator is competent to award interest for the period commencing with the date of award, to the date of decree or date of realisation, whichever is earlier. It was held that it is quite logical for, while award of interest for the period prior to an arbitrator entering upon the reference is matter of substantive law, the grant of interest for the post award period is a matter of procedure. In Bhagwati Cotton Ltd. v. Hindustan Copper Ltd. (Supra) it was held that the Arbitrator has power to award interest provided there is no prohibition in the arbitration agreement and rate of interest awarded is reasonable. In Secy., Irrigation Department, Government of Orissa v. G.C. Rai, the Supreme Court laid down the principle that the Arbitrator is creature of an agreement, which is alternative form for resolution of disputes arising between the parties. He must have powers to decide all the disputes in references. In Secy., Irrigation Department, Government of Orissa v. G.C. Rai, the Supreme Court laid down the principle that the Arbitrator is creature of an agreement, which is alternative form for resolution of disputes arising between the parties. He must have powers to decide all the disputes in references. If the Arbitrator has no power to award interest, the parties will have to approach the Court for the purpose leading to multiplicity of proceedings. It is open to the parties to confer upon him such powers and prescribe such procedure to follow as they deem fit. If the agreement is in conformity with law, the Arbitrator must act and make his award in accordance with the general law of the land and the agreement. Where the agreement does not prohibit and a party to the reference makes a claim for interest, the Arbitrator must have the power to award interest pendentelite. For the post award interest the point was found to be covered by the decision of the Supreme Court in Hindustan Construction Co. Ltd. v. State of J & K, (1992) 4 SCC 217 . 36. For the aforesaid reasons, we do not find any merit in the contentions raised by the counsel for the appellant. We may also observe that the question as to whether prohibition contained in Section 69 of the Partnership Act was not correctly appreciated, question is covered by the judgment of the Supreme Court in Kamal Pur Enterprise v. D.R. Construction Co., 2000 (3) ALR 1 (SC). 37. The First Appeal From Order No. 143 of 1998 is dismissed. 38. The connected First Appeal From Order (Def.) No. 1947 of 2011 has been filed with delay of 2 years and 274 days, which has not been sufficiently explained. The notice dated 10.12.1996 of the award was received by the Postal Clerk in the office of the Superintending Engineer, Irrigation, on its presentation by Shri Ram Avatar, the process server of the Court. The State of U.P.-the appellant had the knowledge of the filing of the award dated 5.10.1996 in the Court on 10.12.1996. The limitation would thus start on 10.12.1996. The period of 30 days under Section 14 (2) of the Act expired on 9.1.1997, whereas Original Case No. 88 of 1997 under Section 33/30 was filed on 29.1.1997. The objections were found to be beyond the period of limitation and were rightly rejected. The limitation would thus start on 10.12.1996. The period of 30 days under Section 14 (2) of the Act expired on 9.1.1997, whereas Original Case No. 88 of 1997 under Section 33/30 was filed on 29.1.1997. The objections were found to be beyond the period of limitation and were rightly rejected. The District Judge did not commit any error in law in rejecting the Misc. Case No. 85 of 2006 filed by the State of U.P. The State had knowledge of the order dated 4.12.2008. It waited for 2 years and 274 days in filing the appeal for which neither good nor sufficient explanation has not been given in the affidavit accompanying the application for condonation of delay. The application is rejected. The first appeal from order (D) No. 1947 of 2011 is consequently dismissed. ——————