JUDGMENT : A question of considerable interest has been impelled by the Southern Railway in this appeal, wherein, they challenge the order of the Court of the Additional District Judge-II, Thiruvananthapuram in O.P.(Arbitration) No.391/2013, which was filed by them impugning the award of the Arbitral Tribunal, which had granted interest to the respondents herein -who were the claimants before the Tribunal-even for the period prior to the date of the Arbitral Award. 2. It is the singular contention of the appellant that the grant of the pre-award interest is in conflict with the provisions of the Arbitration Agreement, which expressly provides that no interest shall be paid at all for such period; and therefore, that it falls foul of the provisions of Section 31(7)(a) of the Arbitration and Conciliation Act, 1996 (for short, 'the Act'). 3. The appellant submits that, as is evident from the impugned order, the relevant clauses of the Arbitration Agreement are 16(2) and 64(5) thereof, which reads as under: “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 in terms of sub-clause (1) of this clause will be repayable with interest accrued thereon”. “Where the arbitral award is for the payment of money, no interest shall be payable on whole or any part of the amount for any period till the date on which the award is made”. 4. They thus predicate that when the terms of the contract unequivocally states that no interest shall be paid on the earnest money or the security deposit or any amounts payable to the contractor under the contract; and further that where the Arbitral Award is for payment of money, no interest shall be payable on whole or any part of the same till the date on which the award is made, the Arbitral Tribunal was bound by it and resultantly, could not have granted any interest for the period until which the award had been issued. 5. The appellant thus contends that the Arbitral Award as well as the impugned order of the Additional District Court are illegal and untenable, particularly under the provisions of the aforementioned Section of the Act. 5. The appellant thus contends that the Arbitral Award as well as the impugned order of the Additional District Court are illegal and untenable, particularly under the provisions of the aforementioned Section of the Act. They, therefore, pray that the order of the Court of the Additional District Judge in O.P. (Arbitration) No.391/2013 be set aside, relying on the judgment of the Hon'ble Supreme Court in Jaiprakash Associates Ltd. v. Tehri Hydro Development Corporation India Ltd. [ AIR 2019 SC 5006 ] and a Bench judgment of this Court in Sourthern Railway v. Padmavathy Constructions [ 2019 (1) KLT 588 ]. 6. In response to the afore submissions made on behalf of the appellant by Sri.Dinesh Rao, the learned counsel appearing for the respondents Sri.Vinod Bhat, began his submissions by asserting that notwithstanding the afore clauses in the contract, neither the Arbitral Tribunal nor the District Court are in error in having granted interest for the period until the Arbitral Award had been passed. He relies on various judgments of the Hon'ble Supreme Court in substantiation of his afore assertion, including in Reliance Cellulose Products Limited v. Oil and Natural Gas Corporation Limited and another [ (2018) 9 SCC 266 ] and State of Haryana and others v. S.L.Arora and Company [ (2010) 3 SCC 690 ]. 7. Sri.Vinod Bhat submitted that, as is clear from Reliance Cellulose Products Limited (supra), while dealing with the question of interest grantable under the Arbitration Act, 1940 (hereinafter referred to as the 1940 Act'), the Hon'ble Supreme Court has concluded affirmatively that the Arbitral Tribunal/Arbitrator is entitled to grant interest for all the periods, be that the pre-reference period, the pendente lite period and the post-award period. He, however, concedes that the law as has been declared by the Hon'ble Supreme Court in Reliance Cellulose Products Limited (supra), has taken a complete departure in the Arbitration Act, 1996. He admits that when it comes to the new Act, certainly there are restrictions placed in the powers of the Arbitral Tribunal in awarding interest, which are stipulated in the provisions of Section 31 thereof. 8. He, thereafter, took my notice to paragraph 22 of Reliance Cellulose Products Limited (supra) wherein the Hon'ble Supreme Court has said as under: “22. He admits that when it comes to the new Act, certainly there are restrictions placed in the powers of the Arbitral Tribunal in awarding interest, which are stipulated in the provisions of Section 31 thereof. 8. He, thereafter, took my notice to paragraph 22 of Reliance Cellulose Products Limited (supra) wherein the Hon'ble Supreme Court has said as under: “22. The aforesaid judgment was applied by another three-Judge Bench soon thereafter in Ambica Construction v. Union of India ( (2017) 14 SCC 323 ) (“Second Ambica Construction case”). In this case, the clause concerned, which is clause 2 of the agreement, reads as follows: (SCC p.324, para5) “2. Interest on amounts.-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 deposited in terms of sub-clause (1) of this clause will be repayable with interest accrued thereon.” This Court found that the aforesaid clause was no bar, after referring to para 34 of First Ambica Construction case (Union of India v. Ambica Construction ( (2016) 6 SCC 36 ) (Ambica Construction case (Ambica Construction v. Union of India ( (2017) 14 SCC 323 )) SCC p. 325, para 6).” 9. He says that, therefore, merely because there are clauses in the contract restricting the payment of interest, it would not bind the Arbitral Tribunal or the Court in granting reasonable interest and he fortified his submissions by relying on S.L.Arora and Company (supra) asserting that the Hon'ble Supreme Court has restated the afore principles in paragraph 18(3) of the said judgment which reads as under: “(18.3) If the contract provides for compounding of interest, or provides for payment of interest upon interest, or provides for interest payable on the principal upto 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.” 10. He thus prays that this appeal be dismissed and the impugned order of the Additional District Judge, in O.P. (Arbitration) No.391/2013 be affirmed. 11. He thus prays that this appeal be dismissed and the impugned order of the Additional District Judge, in O.P. (Arbitration) No.391/2013 be affirmed. 11. I have considered the afore submissions and have also examined the various precedents relied upon by the parties. 12. In my assessment of the dialectical issues involved in this case, a reading of Reliance Cellulose Products Limited (supra) would certainly be of guiding light because, their Lordships in the said judgment have analysed various precedents in the area to finally conclude that as far as the 1940 Arbitration Act is concerned, the Arbitral Tribunal has wide powers as regards the grant of interest for every period be that a pre-reference period or the pre-award period or the post-award period. However, their Lordships, thereafter, very clearly said that the position under the Arbitration Act, 1996 has been drastically altered and it is in that context that their Lordships were referring to Ambica Construction v. Union of India ( (2017) 14 SCC 323 ) and declared that under the 1940 Act, the clauses in the contract is not a bar to the grant of interest. The reference of Sri.Vinod Bhat to paragraph 22 of the said judgment, as extracted afore, certainly is justified but it must be kept in mind that the observations of the Hon'ble Supreme Court therein was with reference to the 1940 Act and not with reference to the Arbitration Act, 1996. 13. The above becomes explicit from Jaiprakash Associates Ltd. (supra), wherein their Lordships considered the context in which Ambica Construction (supra) had been delivered after extracting paragraph 16 of the judgment in Sri.Chittaranjan Maity v. Union of India [ (2017) 9 SCC 611 ], which requires a full reading and is therefore reproduced as under: “16. Relying on a decision of this Court in Ambica Construction v. Union of India [Ambica Construction v. Union of India, MANU/SC/0846/2017: (2017) 14 SCC 323 ], the learned Senior Counsel for the Appellant submits that mere bar to award interest on the amounts payable under the contract would not be sufficient to deny payment on pendente lite interest. Therefore, the arbitrator was justified in awarding the pendente lite interest. Therefore, the arbitrator was justified in awarding the pendente lite interest. However, it is a not clear from Ambica Construction [Ambica Construction v. Union of India, MANU/SC/0846/2017: (2017) 14 SCC 323 ] as to whether it was decided under the Arbitration Act, 1940 (for short “the 1940 Act”) or under the 1996 Act. It has relied on a judgment of Constitution Bench in State of Orissa v. G.C.Roy [State of Orissa v. G.C. Roy, MANU/SC/0142/1992 : (1992) 1 SCC 508 ]. This judgment was with reference to the 1940 Act. In the 1940 Act, there was no provision which prohibited the arbitrator from awarding interest for the pre-reference, pendente lite or post-award period, whereas the 1996 Act contains a specific provision which says that if the agreement prohibits award of interest for the pre-award period, the arbitrator cannot award interest for the said period. Therefore, the decision in Ambica Construction [Ambica Construction v. Union of India, MANU/SC/0846/2017: (2017) 14 SCC 323 ] cannot be made applicable to the instant case.” 14. It is ineluctable, therefore, that their Lordships found that it is not clear from Ambica Construction (supra) whether it is decided under the Arbitration Act, 1940 or under the Arbitration Act, 1996; and then went on to affirmatively declare the law that, though under the 1940 Act, an Arbitrator has power to grant pre-reference interest under the Interest Act, 1978, as also pendente lite and future interest; when it comes to the 1996 Act, the position is totally different and the grant of interest is governed strictly by Section 31(7)(a) of the Arbitration Act, 1996. 15. In the afore scenario, it becomes necessary for this Court to look into Section 31(7)(a) of the Arbitration and Conciliation Act, 1996, for which purpose, I draw out the said provision as under: “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.” 16. It is limpid from the afore Section that when the parties specifically agree that no interest shall be paid between the date on which the cause of action arises and the date on which the award is made, then the Arbitral Tribunal is bound by the same and it cannot be, thereafter, disturbed or modified by the Courts either. This is the emphatic declaration in Jaiprakash Associates Ltd. (supra), which has subsequently been affirmed by the Hon'ble Supreme Court in S.L.Arora and Company (supra). 17. Of course, when I say this, I am also fully cognizant of the submissions of Sri.Vinod Bhat that, on account of the amendment made to Section 28(3) of the Arbitration Act, 1996, an Arbitral Tribunal is not bound by the terms of a contract in arriving at a just and fair decision and that it can, therefore, make an award of interest even for the period prior to the award, if it is found that the denial of the same is against public policy. I am also aware that Sri.Vinod Bhat edifies this proposition on S.L.Arora and Company (supra),particularly on the afore extracted paragraph 18(3) of the said judgment. 18. However, it is to be noticed that what has been declared in S.L.Arora and Company (supra) in paragraph 18(3) thereof is that when an Arbitral Tribunal decides on the grant of interest, it is bound by the terms of the contract and, consequently, that even if an usurious rate has been shown therein, it will still be obligated to award the same. The judgment thereafter goes to say that, however, this will not bind the Court under Section 34 of the Arbitration Act and that it can thus modify the grant of interest, including the rate, if it is found to be in conflict with or violating the public policy of India. That said, one must understand that these observations have been made by the Hon'ble Supreme Court in the context of the rate of interest being specified in the contract and which is then found to be either in conflict or violation of the public policy, but not in the case where the parties specifically agree that no interest shall be payable between the period when the cause of action arises and Arbitral Award is made. In the latter case, it is indubitable that the provisions of Section 31(7) (a) of the Arbitration Act, 1996, would apply; and since the said provisions of the Statute will have to be interpreted strictly, it conceding to no ambiguity at all, the Arbitral Tribunal could not have granted interest if the parties had specifically agreed that no such was payable for the period when the cause of action arose and until the award is made. 19. Therefore, the axiomatic query before me is whether the afore extracted provisions of the contract between the parties would operate as a bar for the Arbitral Tribunal in having granted interest for the period prior to the Award, under the provisions of Section 31(7)(a). 20. Even on a bare reading of the stipulations of the contract, which have been extracted paragraph 2 above, it becomes irrefutable that no interest is payable upon the earnest money or the security deposit or amounts payable to the contractor under the contract; and further that, where the Arbitral Award is for the payment of money, no interest shall be payable in whole or any part of the said amount for any period till the date on which the Award is made. Evidently, there is an unequivocal agreement between the parties that no interest shall be payable prior to the date of the award; and in such circumstances the provisions of Sec.31(7)(a) of the Arbitration Act, 1996, comes into play in all its force. Thus, when the parties specifically agreed so, it was incumbent upon the Arbitration Tribunal as well as the Court below to have gone by the mandate of the said section and certainly, therefore, the grant of interest in the Award of the Arbitral Tribunal and its affirmation by the Court below, for the period upto the date of the Award, cannot be found to be tenable and cannot be approved by this Court. 21. In the afore circumstances, I find substantial force in the contentions of the appellant on this issue and I am inclined to allow this appeal, particularly because I am told that all the other amounts under the Award have already been paid to the respondents. 21. In the afore circumstances, I find substantial force in the contentions of the appellant on this issue and I am inclined to allow this appeal, particularly because I am told that all the other amounts under the Award have already been paid to the respondents. Resultantly, I allow this appeal and set aside the impugned order to the extent to which it has granted interest to the respondents from the date of arising of the cause of action until the date on which the Award was issued; but confirming the award in all other respects, since there is no challenge against the same. In the nature of the circumstances I have seen above, I do not deem it prudent to make any order as to costs; and therefore, direct the parties to suffer their respective costs.