ORDER The Award Debtor-appellants have preferred this appeal under Section 37 (1) (b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) against the order dated 22.12.2011 passed by the learned Additional District Judge-IV, Patna in Misc. (Arbitration) Appeal No.258 of 2006 by which the appeal has been dismissed. 2. The facts of this case, in brief, is that there was a Contract/Agreement No.DRM/W-1/19 dated 3.09.1982 between the Contractor-Respondent and Railway Administration for improvement of 27 units of Type-I quarters and 74 units of Type-II quarters, total 101 quarters at Barauni junction for the face value of Rs.2,94,693.78. The work commenced on 10.09.1982. The work was to be completed within six months from the date of agreement. The time limit was extended from time to time and finally up to 31.10.1986. The payment of work done as per agreement was made by the Railway Administration. Further case of the Contractor-Respondent is that some extra work was also done, but its payment was not made by the Railway Administration. 3. The case of the Railway-Appellants is that the agreement is admitted. The contractor was paid Rs.3,21,881.71 against the estimated amount of Rs.2,94,693.78 as mentioned in the agreement, which is more than 9% over and above the agreement value and up-to 10% upward variation is considered normal and the Divisional Authorities have power to sanction variation up-to 25% only. However, the contractor claimed Rs.6,59,783.17 more amount, which is 233% above and over the agreement value, which could not have been sanctioned by the Divisional Authority, rather, sanction from the General Manager for carrying out such extra work was required, which was not granted. 4. In connivance with a railway employee Sri Bhattacharya, a false and fabricated measurement was entered in the measurement book and said claim of payment for extra work was raised by the contractor-respondent. A departmental proceeding was initiated against the said Bhattacharya and he has been charge-sheeted. The decision on payment regarding extra work does not fall under the ambit of agreement. The Arbitrator has passed an award for Rs.20,84,353/- which includes an amount of interest of Rs.12,20,599/- without considering the facts and also the fact that the claim of the contractor was based on measurement and bills by Sri Bhattarcharya in collusion with him, which the Railways considers and proves to be fraudulent. 5. The Arbitrator has passed an award for Rs.20,84,353/- which includes an amount of interest of Rs.12,20,599/- without considering the facts and also the fact that the claim of the contractor was based on measurement and bills by Sri Bhattarcharya in collusion with him, which the Railways considers and proves to be fraudulent. 5. It has been submitted on behalf of the appellants that there is bar of payment of interest in the contract under clause 16 (2) of the General Conditions of Contract (hereinafter referred to as GCC). According to the contract, the contractor is not entitled to get interest under clause 16(2) of the GCC. For the extra work done by the contractor, there was no order by the railway/competent authority. However, even if any extra work has been done for which payment should not be made, even if the payment is made, the contractor is not entitled to claim the interest. 6. It also appears that the contractor is aware of the fact that the extra work will also be paid according to the agreement, as such, the bill has been prepared as per the agreement made between the parties. According to the agreement, the interest is bar under clause 16 (2) of the GCC and even the work done is deemed under the continuation of the agreement, as such, the Railway cannot be asked to make payment of interest on the work done for the extra work. The Arbitrator has awarded a sum of Rs.12,20,599/- in contravention of the agreement. Since the Arbitrator has gone beyond the scope of agreement, the award is fit to be set aside, but the learned Judge has dismissed the appeal holding that the case of the appellant does not fall under any of the grounds of Section 34 of the Act. The case comes under the purview of ground no.(i) of Section 34 (2) (b) of the Act as the subject matter of dispute relating to interest is clearly beyond the scope of arbitration clause and the award ought to have been set aside on this ground. 7. He has further submitted that the award is fit to be set aside. In support of his contention, he has referred the following decisions :— (i) 2008 (8) SCC 251 (M.B. Patel and Company Vs. Oil and Natural Gas Commission) (ii) 2010 (8) SCC 767 (Sree Kamatchi Amman Constructions Vs. 7. He has further submitted that the award is fit to be set aside. In support of his contention, he has referred the following decisions :— (i) 2008 (8) SCC 251 (M.B. Patel and Company Vs. Oil and Natural Gas Commission) (ii) 2010 (8) SCC 767 (Sree Kamatchi Amman Constructions Vs. Divisional Railway Manager (Works), Palghat and Ors.) (iii) 2003 (5) SCC 705 (Oil & Natural Gas corporation Ltd. Vs. Saw Pipes Ltd.) 8. The learned counsel for the respondent has submitted that the extra work done by the contractor is not within the purview of the agreement, as such, claim of interest is not bar under the GCC. The appellants have failed to make out any ground for setting aside the award under Section 34 of the Act. The arbitral award may be set aside by the Court only on the conditions enumerated in Section 34 (2) of the Act. 9. He has further submitted that the bar of interest would not be applied relating to the period after termination of agreement. In support of his contention, he has referred the following decisions :– (i) 2010 SCW 2540 (Union of India Vs. Saraswat Trading Agency) (ii) AIR 2007 SC 817 (Krishna Bhagya Jala Nigam Ltd. Vs. G.Harischandra Reddy) (iii) 2009 AIR SCW 6217 (K.V. Mohd. Zakir Vs. Regional Sports Centre) (iv) AIR 2008 Jharkhand 4 (Vardaan Builders Vs. Veer Krishna Sahay) (v) AIR 2009 SC (Supp) 2398 (Fiza Developers & Inter-Trade P. Ltd. Vs. AMCI (I) Ltd. & Anr.) (vi) 1997 (2) PLJR 531 (State of Bihar and another Vs. M/S G.S. Atwal & Company (Engineering Private Limited) 10. After hearing the learned counsel for both the parties and on perusal of record, it appears that both the parties entered into an agreement dated 3.09.1982 for improvement of 27 units of Type-I quarters and 74 units of Type-II quarters, total 101 quarters at Barauni junction for the face value of Rs.2,94,693.78. The work commenced on 10.09.1982. The work was to be completed within six months from the date of agreement. The time limit was extended from time to time and finally up to 31.10.1986. The agreement is subject to the GCC and specification of the north-eastern railway under Clause 16 (2) of the GCC. 11. Three questions arise for consideration (i) Whether the contract between the parties contains an express bar regarding award of interest? The time limit was extended from time to time and finally up to 31.10.1986. The agreement is subject to the GCC and specification of the north-eastern railway under Clause 16 (2) of the GCC. 11. Three questions arise for consideration (i) Whether the contract between the parties contains an express bar regarding award of interest? (ii) If so whether the Arbitral Tribunal was justified in refusing interest for the period between the date of cause of action to the date of award? and (iii) Whether the extra work done by the contractor will be governed by the terms and conditions entered into between both the parties so far payment is concerned? 12. Regarding point no. (i)- Clause 16 (2) of the General Conditions of Contract governing the contract between the parties bars payment of interest and the same is extracted below : “16 (2) No interest will be payable upon the earnest money or the security deposit or amounts payable to the contractor under the contract, but government securities deposit in terms of sub-clause (I) of this clause will be repayable (with) interest accrued thereon”. 13. Since no payment was made for the extra work by the contractor, the contractor made application to the Railway authorities invoking the provisions of 63 of the General Conditions of Contract 1978 by filing a petition under Section 21 read with clause 63 of the GCC 1978 before the General Manager, East Central Railway, Hajipur, successor in office of General Manager, North Eastern Railway, Gorakhpur to take steps for constitution of Arbitral Tribunal to settle the dispute. Since no Arbitral Tribunal was constituted by the General Manager, East Central Railway, the contractor filed an application in this Court vide Request Case No.59/2004 under Section 11 (6) of the Act. After hearing the parties, Sri Balram Sharma was appointed as Arbitrator to go into the dispute between the parties vide order dated 4.08.2005 passed by this Court. In pursuance thereto, both the parties appeared before the Arbitral Tribunal. There were five claims of the Contractor before the Tribunal. After hearing the parties, Sri Balram Sharma was appointed as Arbitrator to go into the dispute between the parties vide order dated 4.08.2005 passed by this Court. In pursuance thereto, both the parties appeared before the Arbitral Tribunal. There were five claims of the Contractor before the Tribunal. Claim No.1 is for the balance amount of Rs.6.50 lacs, Claim No.2 is refund of security deposit of Rs.25,000/-, Claim No.3 is for compensatory interest @ 18% on the balance amount, Claim No.4 is for interest pendente lite @ 18% on the amount of award for the period proceeding continued before the Arbitrator till the passing of the order of award and Claim No.5 is for cost of Arbitration and Litigation. 14. The pleas of rival parties have been considered by the Arbitral Tribunal. The Arbitral Tribunal has held that in view of Section 70 of the Contract Act to the effect that the contractee is bound to pay for the work done by the contractor because the contractee have accepted the same and have enjoyed its benefit and on this analogy, claim no.1 has been allowed to pay Rs.6,59,783/-. Claim No.2- the security deposit of Rs.25,000/- is to be refunded to the claimant/contractor. Claim No.3- 10% interest has been awarded on the amount of Rs.6, 59, 783/- for the period from 1.11.1986 to 23.04.2005 as Rs.12,20, 599/-. Claim No.4- Interest pendent elite @ 10% as Rs.87,971/- has been allowed. Claim No.5- It has been allowed directing the appellants to pay Rs.91,000/-. 15. It appears that there was no agreement/order/sanction for the extra work claimed to have been done by the contractor. In any view of the matter, it may be treated as continuation of the agreement and the contractor has also claimed the same rate of work as the amount contracted between both the parties vide the agreement of contract. 16. Since the General Conditions of Contract is applicable and as per Clause 16 (2) of the GCC, no interest will be payable upon the earnest money or the security deposit or amount payable to the contractor under the contract. The interest on the claim amount payable to the contractor also comes under this purview. 16. Since the General Conditions of Contract is applicable and as per Clause 16 (2) of the GCC, no interest will be payable upon the earnest money or the security deposit or amount payable to the contractor under the contract. The interest on the claim amount payable to the contractor also comes under this purview. The contention of the learned counsel for the respondent contractor is that since the extra work was not under the purview of the contract, Clause 16 (2) of GCC will not be applicable and the order has rightly been passed with regard to the interest on the sum of accrued amount for payment in view of decision in the case of Union of India Vs. Saraswat Trading Agency reported in 2010 SCW 2540. 17. In that case, the railway authority accepted the termination of the contract w.e.f.31.12.1992, but in order to avoid any dislocation requested the respondent to carry on the work on the same terms and conditions promising that this claim would receive due consideration. On the appellant’s request, the respondent continued with the work under the contract though under protest till August, 1994. In case of Sree Kamatchi Amman Constructions Vs. Railways reported in (2010) 8 SCC 767 , a number of decisions have been considered by the Hon’ble Supreme Court including the decision in the case of Union of India Vs. Saraswat Trading Agency reported in 2010 AIR SCW 2540 in para 14 as follows :– “14. We may also refer to the decision of this Court in Union of India Vs. Saraswat Trading Agency. This Court reiterated that if there is a bar against payment of interest in the contract, the arbitrator cannot award any interest for the pre-reference period or pendente lite. In view of the specific bar under Clause 16(2), we are of the view that the Arbitral Tribunal was justified in refusing interest from the date of cause of action to the date of award”. 18. In this view of the matter, the decision reported in 2010 AIR SCW 2540 is not helpful to the respondent contractor. 19. The general conditions of contract are binding upon both the parties which prohibit interest payable on the earnest money or security deposit or amount payable to the contractor. As such, no interest is payable to the respondent contractor on the amount payable to him. 20. 19. The general conditions of contract are binding upon both the parties which prohibit interest payable on the earnest money or security deposit or amount payable to the contractor. As such, no interest is payable to the respondent contractor on the amount payable to him. 20. The Arbitrator had jurisdiction and authority to award interest under the Arbitration Act, 1940 and under the New Act as has been considered by the Hon’ble Supreme Court in case of Sayeed Ahmed and Co. Vs. State of UP reported in (2009) 12 SCC 26 and in the case of State of Rajasthan Vs. Ferro Concrete Construction (P) Ltd. reported in (2009) 12 SCC 1 and held that arbitrator had jurisdiction and authority to award interest for three distinct periods, namely, the pre-reference period (which referred to the period between the date of cause of action to the date of reference), pendente lite (which referred to the period between the date of reference to the date of award), and future period (which referred to the period between the date of award to the date of payment) if there was no express bar in the contract regarding award of interest. 21. Considering the decisions cited by both the parties, it is apparent that the Arbitral Tribunal cannot go beyond the terms of agreement as considered earlier. There is specific bar regarding the interest under Clause 16 (2) of the GCC. 22. Form and contents of arbitral award has been provided under Section 31 of the Act. Section 31 (7) (a) by using the words “unless otherwise agreed by the parties” categorically clarifies that the arbitrator is bound by the terms of the contract insofar as the award of interest from the date of cause of action to the date of award. Therefore, where the parties had agreed that no interest shall be payable, the Arbitral Tribunal cannot award interest between the date when the cause of action arise to the date of award. 23. In this view of the matter, the grant of interest by the Tribunal on the amount payable to the contractor is not in accordance with law, as such, it was beyond the jurisdiction of the Tribunal to grant interest of Rs.12,20,599/- on the amount payable to the respondent contractor. 24. So far interest during pendente lite, claim nos. 4 and 5 do not require any interference. 25. 24. So far interest during pendente lite, claim nos. 4 and 5 do not require any interference. 25. It appears that the court below has not considered this aspect of the matter that there is specific provisions that no interest will be payable to the contractor on the amount payable to the contractor. This matter comes under the purview of Section 34 (2) of the Act. 26. Considering the facts and circumstance stated above, in my opinion, the contractor respondent is not entitled to get interest on the amount payable to him as granted under Claim No.3 of the Arbitral Award. The impugned order passed in Misc. (Arbitration) Appeal No.258/2006 is not fit to be sustained. Accordingly, it is set aside. The Arbitral Award is modified to the extent that no interest will be payable to the contractor respondent under claim no. 3 i.e. interest of Rs.12,20,599/- on the amount payable to the contractor respondent. 27. In the result, this appeal is allowed to the aforesaid extent. 28. The parties will bear their own costs. ?