Judgment : 1. This Original Petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award dated 10.6.2009 passed by respondents 2 to 4 (Arbitrators). 2.1. The brief facts of the case are as under: Chennai Port Trust, which was appointed by the Government of India as the Executing Agency for construction of Ennore Port, has proposed to construct two breakwaters, namely, the North and South Breakwaters, to create a tranquil basin for the ships to berth. A contract was entered into between the Chennai Port Trust and the first respondent on 6.6.1996 for Rock Quarrying and Transportation, which comprises quarrying of rocks, sorting them into various grades, loading, transporting by road, transferring to rail wagons, transportation by rail and offloading from wagons and stockpiling the rocks in various grades at the Port site. By virtue of a Memorandum of Understanding dated 30.3.2002, all the assets and liabilities, including contracts entered into by the Chennai Port Trust in respect of Ennore Port Project, stood transferred in favour of the petitioner, namely, Ennore Port Trust, which is a company in which the Government of India and Chennai Port Trust are the shareholders. 2.2. The present dispute centres around non payment of certified bills from IPC No.40 to IPC No.55 by the petitioner. It is the case of the petitioner that during scrutiny of the Interim Payment Certificates (for brevity, “the IPCs”) submitted by the first respondent and on audit of the payments made to the first respondent, the petitioner found that, on account of erroneous certification by the Engineer and misinterpretation of the contract, excess payments were received by the first respondent. Under such circumstances, the petitioner withheld the payments to the first respondent. 2.3. The first respondent referred the dispute to arbitration. During the course of the arbitration proceedings, the petitioner and the first respondent filed a joint statement reconciling the outstanding amount in IPC Nos.40 to 55 and have disputed or disagreed in respect of the following: (i) deduction of electricity charges of Rs.10,76,000/-; (ii) deduction of works contract tax of Rs.15,89,583/-; and (iii) Correction of Variation orders to an extent of Rs.13,59,000/-. 2.4. By award dated 10.6.2009, the Arbitral Tribunal held as under: “(i) There is no provision within the contract for withholding of the certified payment. 2.4. By award dated 10.6.2009, the Arbitral Tribunal held as under: “(i) There is no provision within the contract for withholding of the certified payment. The action of the Respondent in withholding the certified payments for long period is not in accordance with the contract conditions. (ii) There was no dispute on the amounts due to certified bills till the filing of counter statement 19.1.2009 and the amounts due to the claimant were withheld only based on the allegation that there were excess payments claims. (iii) The electricity charges are to be deducted from amounts due on each of the certified IPCs as proposed by the respondent. (iv) The deduction of WCT in accordance with Tamil Nadu General Sales Tax Act (TNGST) is not considered necessary and hence the claim of the respondent for deduction of WCT charges is not accepted. However, claimant will give an undertaking to indemnify the respondent in case of later disputes with TN ST department arises. (v) The deduction proposed by the Respondent in respect of variation orders with justification and supporting material is accepted only to the tune of Rs.5,56,211.73. (vi) The total amount due to the claimant towards certified bills IPC-40 to 55 (Final bill) after modification of certified bills as per the joint statement and the analysis of the Tribunal is Rs.5,33,96,328/-. (vii) In addition to the above, as decided in Dispute No.11 since it is clubbed with dispute No.10, the claimant will also be paid for balance retention money of Rs.16.12 Lacs. (viii) Considering the facts and circumstances of this case and various SC judgments applicable for above denied/withheld certified amounts is 12% per annum for the pre-award period (from date it is due for payment to date of award) and 13% for the post award period after the grace period of 90 days during which the payment of principal and interest shall be made.” Subsequently, the Arbitral Tribunal, by order dated 24.8.2009, corrected the above said award with regard to furnishing of indemnity by the first respondent to the petitioner in respect of Works Contract Tax. 2.5. Aggrieved by the award passed by the Arbitral Tribunal, the present Original Petition is filed for the relief stated supra. 3. 2.5. Aggrieved by the award passed by the Arbitral Tribunal, the present Original Petition is filed for the relief stated supra. 3. I have heard Mr.K.Manoj Menon, learned counsel for the petitioner and Mr.K.Subramanian, learned Senior Counsel appearing for the first respondent and perused the award and documents filed in support of this Original Petition. 4. The short question that arises for consideration is whether awarding simple interest at the rate of 12% per annum for the pre-award period and 13% per annum for the post-award period is justified. 5. The time of payment and interest is governed by Sub-Clause 60.8 of the contract. In this case, the Arbitral Tribunal has come to the conclusion that the rate of interest, as specified under Sub-Clause 60.8, is applicable only for the shorter period specified in the said clause and not for the period beyond that. Admittedly, in this case, payment has not been made within the period specified in the said clause, even though the first respondent furnished IPCs. Taking note of the fact that for hypothecation advances given to the first respondent, the petitioner had stipulated interest at 18% per annum, the Arbitral Tribunal thought it fit to award interest at the rate of 12% per annum for the pre-award period and at 13% per annum for the post award period. INTEREST FOR PRE-AWARD PERIOD 6. Insofar as the interest for pre-award period is concerned, the learned counsel for the petitioner relies upon Sub-Clause 60.8 of the contract, which reads as follows: “60.8. Time of payment and interest: The amount due to the Contractor under any Interim Payment Certificate issued by the Engineer pursuant to this Clause, or to any other term of the Contract, shall, subject to Clause 47, for local currency payments, be paid by the Employer to the Contractor and for foreign currency payments, be notified to the State Bank of India by the Employer for transfer to the Contractor's overseas bank, within 56 days after the Contractor's monthly statement has been submitted to the Engineer for certification, or in the case of the Final Certificate pursuant to Sub-Clause 60.13, within 84 days after the agreed Final Statement and written discharge have been submitted to the Engineer for certification. In the event of the failure of the Employer to make or notify payment within the times stated, the Employer shall pay to the Contractor interest compounded monthly at the rate(s) stated in the Appendix to Bid upon all sums unpaid or not notified from the date upon which the same should have been paid or notified, in the currencies in which the payments are due.” and states that the Arbitral Tribunal was not justified in granting higher rate of interest than specified in the contract. 7. Per contra, the learned Senior Counsel appearing for the first respondent referred to the interpretation of the said Sub-Clause 60.8 by a learned Single Judge of this Court in the order dated 14.8.2009 made in O.P.Nos.487 and 568 of 2008, which was upheld by a Division Bench of this Court by judgment dated 20.9.2013 in O.S.A.No.279 of 2010, and the further appeal filed by the petitioner herein before the Supreme Court in Special Leave to Appeal (Civil) CC No.2805 of 2014 was also dismissed by order dated 7.3.2014. 8. In the order dated 14.8.2009 made in O.P.Nos.487 and 568 of 2008, the learned Single Judge considered Sub-Clause 60.8 of the Contract and held as follows: “49. The only other point which has to be decided in respect of the impugned award is about the claim of interest. The Contractor claims interest at the rate of 18% from the due dates of the respective bills. The said claim is made on various grounds, including that the same is due to the fault of the Employer in withholding the release of certified payment which has resulted in loss and the said loss continued even during the pendency of the arbitration proceedings; that as per Section 31(7)(a) of the Act, the Arbitral Tribunal is competent to award interest; that Section 31(7)(b) of the Act also enables payment of 18% interest; that even under the Conditions of Particular Application, the Employer has stipulated the payment of interest at the rate of 18% in respect of advances against hypothecation of new equipment and machinery as per Sub-Clause 60.7 of the Conditions of Particular Application; and that the delay caused by the Employer is not a normal circumstance and therefore, the situation cannot be construed for award of nominal rate of interest. 50. 50. On the other hand, it is the case of the Employer that the interest provided under Sub-Clause 60.8 of the Conditions of Particular Application on a certified bill or any payment by the Employer is as per the rate of interest of State Bank of India on 46 day deposit and therefore, any other interest other than the same is not permissible; that even if Sub-Clause 60.8 of the Conditions of Particular Application is not applicable, the provisions of Interest Act, 1978 is to be applied which stipulates that the interest awarded cannot exceed the current highest rate of interest paid on deposits; and that in any event the Contractor is not entitled to claim interest for a period beyond three years immediately preceding the date of commencement of arbitration proceedings. 51. As elicited above, under Sub-Clause 60.8 of the Conditions of Particular Application, the interest payable by the Employer is as per the notification of the State Bank of India and as per the Appendix to bid. With regard to Indian currency, the interest is payable in the following terms: 'Current annual rate on 46 day deposit paid by State Bank of India on due day of payment for payments in local currency; for other currencies, refer to the table below.' 52. Again, in respect of the foreign currency, the interest payable is as under: Currency (as per Sub-Clause 60.1) Rate of Commercial Interest for Daily Borrowing in Country of Origin plus 2 percent DFL 6% + 2% (as above) USD 6% + 2% (as above) 53. At this stage, it is relevant to point out that even under Sub-Clause 60.8 of the Conditions of Particular Application even though for the delayed payment the above said interest is to be paid, the interest rate payable as per the Appendix to bid is only in respect of the non payment within 56 days from the Contractor's monthly statement submitted to the Engineer for certification or in cases of final statement, pursuant to Sub-Clause 60.13 of the Conditions of Particular Application, within 84 days after the agreed final statement and written discharge have been submitted to the Engineer for certification. The rate of interest which is payable within the above said stipulated days are covered under the Appendix to bid and in respect of further delay, the said Sub-Clause makes it very clear that the Contractor is entitled to compound rate of interest on monthly basis. 54. Under the Act, the Arbitral Tribunal is empowered to award interest at the rate it deems reasonable for the period between the arising of cause of action and the date of the award. As far as the interest on post arbitral award, Section 31(7)(b) of the Act makes it clear that unless otherwise directed it shall carry interest at the rate of 18% per annum from the date of award till the date of payment. Sections 31(7)(a) and (b) of the Act are as follows: 'Section:31.Form and contents of arbitral award.- (1) to (6) .... (7) (a) Unless otherwise agreed by the parties, where and insofar as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. (b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the award to the date of payment.' 55. It is also not in dispute, as it has been elicited above, that in Sub-Clause 60.7 of the Conditions of Particular Application in respect of advances made by the Employer against hypothecation of equipment and machinery, the Contractor is liable to pay interest at the rate of 18% which is to be deducted proportionately from the Interim Payment Certificates. 56. The question is as to whether there can be different rate of interest one in respect of the payment by the Contractor and another in respect of payment by the Employer. 56. The question is as to whether there can be different rate of interest one in respect of the payment by the Contractor and another in respect of payment by the Employer. The Arbitral Tribunal, taking note of the various judgments cited, applying the same to the facts and circumstances of the case and finding that there is no normal circumstance, has decided that interest stipulated in Sub-Clause 60.8 of the Conditions of Particular Application is applicable only in respect of a delay for a grace period of 56 days from the date of the Interim Payment Certificates. The Tribunal has also taken note of the fact that Interest Act, 1978 also does not apply and that the payment due to the Contractor is in respect of execution and completion of work and not a money transaction and concluded that the claim of interest at the rate of 18% by the Contractor is reasonable. However, the Tribunal has taken note of the fact that the case before the Tribunal was relating to one in the list of disputes between the Contractor and the Employer and granted interest at the rate of 12% per annum for the pre award period, including pendente lite, and at the rate of 15% per annum for the post award period and that decision has been arrived at by taking note of not only the legal aspect but also the documents which were made available. The relevant portion of the award of the Arbitral Tribunal in that regard is as follows: '9.9. Considering all these aspects, and keeping in mind the commercial nature of the transactions, the rate of 18% which has, as basis, the provisions of the Arbitration Act, the rate provided in the Contract for advances to the Contractor and the Respondent's own proposal to charge this rate in the draft consent terms, is thus fully justified. However, after taking cognizance of the above legal aspects and based on the arguments and documents made available and after analyzing the issue in totality, the Tribunal feels that it would be fair and reasonable and meets the ends of justice to award interest at 12% per annum for the pre-award period including pendente lite and 15% per annum for the post-award period.' 57. The submission of the learned Senior Counsel for the Contractor that the Arbitral Tribunal having found the claim of the Contractor for award of interest at the rate of 18% is justifiable, ought not to have reduced the rate of interest and the same has no legal sanctity, is not acceptable to this Court. 58. It is no doubt true that under the Interest Act, 1978, the term "current rate of interest" is defined under Section 2(b) as under: '2. Definitions.- In this Act, unless the context otherwise requires, - (a) ….. (b) "Current rate of interest" means the highest of the maximum rates at which interest may be paid on different classes of deposits (other than those maintained in savings account or those maintained by charitable or religious institutions) by different classes of scheduled banks in accordance with the directions given or issued to banking companies generally by the Reserve Bank of India under the Banking Regulation Act, 1949 (10 of 1949).Explanation.-In this clause, "scheduled bank" means a bank, not being a co-operative bank, transacting any business authorised by the Banking Regulation Act, 1949 (10 of 1949)' 59. Section 3 of the Interest Act, 1978, while empowering the Court to allow interest, allows interest at a rate not exceeding the current rate of interest. However, there is an exemption from the said provision in respect of debt or damages for which interest is payable as a matter of right, by virtue of an agreement. The said Section is as follows: 'Section 3. However, there is an exemption from the said provision in respect of debt or damages for which interest is payable as a matter of right, by virtue of an agreement. The said Section is as follows: 'Section 3. Power of court to allow interest.- (1) In any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period, that is to say, - (a) if the proceedings relate to a debt payable by virtue of written instrument at a certain time, then, from the date when the debt is payable to the date of institution of the proceedings; (b) if the proceedings do not relate to any such debt, then, from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings: Provided that where the amount of the debt or damages has bean repaid before the institution of the proceedings interest shall not be allowed under this section for the period after such repayment. (2) Where, in any such proceedings as are mentioned in subsection (1), - (a) judgment, order or award is given for a sum which, apart from interest on damages, exceeds four thousand rupees, and (b) the sum represents or includes damages in respect of personal injuries to the plaintiff or any other person, or in respect of a person's death, then, the power conferred by that sub-section shall be exercised so as to include in that sum interest on those damages or on such part of them as the court considers appropriate for the whole or part of the period from the date mentioned in the notice to the date of institution of the proceedings, unless the court is satisfied that there are special reasons why no interest should be given in respect of those damages. (3) Nothing in this section, - (a) shall apply in relation to- (i) any debt or damages upon which interest is payable as of right, by virtue of any agreement; or (ii) any debt or damages upon which payment of interest is barred, by virtue of all express agreement; (b) shall affect- (i) the compensation recoverable for the dishonour of a bill of exchange, promissory note or cheque, as defined in the Negotiable Instruments Act, 1881 (26 of 1881); or (ii) the provisions of rule 2 of Order II of the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908); (c) shall empower the court to award interest upon interest.' 60. The Arbitral Tribunal, in my view, correctly has held that the Interest Act, 1978, which is an Act enacted before the Arbitration and Conciliation Act, 1996, is not a bar for the Arbitrators to decide the interest in the interest of justice and based on the facts and circumstances of the case. I do not propose to interfere with the rate of interest granted by the Tribunal for the reason that it would amount to re-appreciation of the material facts, which is not within the purview of this Court while exercising the jurisdiction under Section 34 of the Act. 61. In Municipal Corporation of Delhi v. M/s.Jagan Nath Ashok Kumar and another, AIR 1987 SC 2316 , the Supreme Court, of course decided under Article 136 of the Constitution of India, while holding that the reasonableness of reasons given by an Arbitrator in making his award cannot be the subject matter before the Court, reiterated the legal position in the following words: '3. ..... In our opinion, where reasons germane and relevant for the arbitrator to hold in the manner he did have been indicated, it cannot be said that it was unreasonable ........ 4. In this case, there was no violation of any principles of natural justice. It is not a case where the arbitrator has refused cogent and material factors to be taken into consideration. The award cannot be said to be vitiated by non-reception of material or non-consideration of the relevant aspects of the matter. Appraisement of evidence by the arbitrator is ordinarily never a matter which the Court questions and considers. The parties have selected their own forum and the deciding forum must be conceded the power of appraisement of the evidence. The award cannot be said to be vitiated by non-reception of material or non-consideration of the relevant aspects of the matter. Appraisement of evidence by the arbitrator is ordinarily never a matter which the Court questions and considers. The parties have selected their own forum and the deciding forum must be conceded the power of appraisement of the evidence. In the instant case, there was no evidence of violation of any principle of natural justice. The Arbitrator in our opinion is the sole judge of the quality as well as quantity of evidence and it will not be for this Court to take upon itself the task of being a judge of the evidence before the arbitrator. It may be possible that on the same evidence the Court might have arrived at a different conclusion than the one arrived at by the arbitrator but that by itself is no ground in our view for setting aside the award of an arbitrator.' 62. The different rate of interest that has been awarded by the Arbitral Tribunal cannot be said to be either a misconduct, mala fide action, or excess of jurisdiction on the part of the Arbitral Tribunal to set aside the award. Further, the award of interest by the Arbitral Tribunal cannot be said to be in disregard of the terms of the contract. As stated above, under Sub-Clause 60.8 of the Conditions of Particular Application, the rate of interest stipulated is only for a short period and in view of the express provision that for more than that period the Contractor is entitled to compound interest, the award of interest by the Arbitral Tribunal, on the facts and circumstances of the case, cannot be also said to be against the provisions of the contract to hold that the Arbitrator has exceeded his jurisdiction beyond the terms of contract. There is absolutely no error apparent on the face of the award. It is also relevant to note, at this stage, that there is no bar under the contract itself prohibiting the payment of interest at any rate and in such view of the matter, the award of interest by the Arbitral Tribunal cannot be said to be a jurisdictional error. It is also relevant to note, at this stage, that there is no bar under the contract itself prohibiting the payment of interest at any rate and in such view of the matter, the award of interest by the Arbitral Tribunal cannot be said to be a jurisdictional error. In the absence of any manifest misapplication of law which is unreasonable, it is not possible to conclude as if the Arbitral award in respect of grant of interest is either a mala fide or unconscionable act.” 9. In the above said decision, the learned Single Judge, accepting the view of the Arbitral Tribunal, held that the rate of interest specified in Sub-Clause 60.8 is only for a short period. As stated earlier, the said view was confirmed by the Division Bench of this Court by judgment dated 20.9.2013 in O.S.A.No.279 of 2010 and the petitioner's appeal to the Supreme Court in Special Leave to Appeal (Civil) CC No.2805 of 2014 was dismissed by order dated 7.3.2014. 10. In view of the above, this Court is not inclined to take a different view on the interpretation of Sub-Clause 60.8 and accordingly, the award of simple interest at the rate of 12% per annum for the pre-award period stands confirmed. INTEREST FOR POST-AWARD PERIOD 11. Insofar as interest for post-award period is concerned, the learned Senior Counsel appearing for the first respondent placed reliance on the judgment dated 20.9.2013 of the Division Bench of this Court in O.S.A.No.279 of 2010, where the interest awarded for the period from the date of the award to that of actual payment was reduced to 10% instead of 15% awarded by the Arbitral Tribunal. Based on the said principle, the learned Senior Counsel for the first respondent is agreeable for modification of the interest for post-award period and the learned counsel for the petitioner has no qualms about that. 12. Accordingly, the interest for the post-award period is reduced to 10% per annum, as against 13% per annum awarded by the Arbitral Tribunal. In the result, this Original Petition is ordered in the above terms. In all other respects, the award passed by the Arbitral Tribunal holds good. No costs.