FAO No. 3686 of 2009 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
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FAO No. 3686 of 2009 (O&M)
Date of decision: November 05 , 2009
Union of India ........ Appellant
Versus
M/s Gupta Electric Company and another .......Respondent(s)
Coram: Hon'ble Ms Justice Nirmaljit Kaur
-.-
Present: Mr. Nitin Kumar, Advocate
for the appellant
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1. Whether Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in
the Digest?
Nirmaljit Kaur, J.
This is an appeal against the order dated 18.12.2008 passed by
the Additional District Judge, Ambala, dismissing the petition filed by the
appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (in
short the 1996 Act) for setting aside the award dated 31.01.2008 qua awarding
of the interest.
While challenging the aforesaid order, the only ground raised by
the learned for the appellant is that the award of interest on final bill is totally
illegal and illogical. The Arbitrator under Claim 8(c ) has allowed interest at
FAO No. 3686 of 2009 2
the rate of 12% from 10.12.1997 and in claim No. B-7 allowed interest on
Rs.54,133/- at 12% from 27.09.1999 and claim C-3 awarded interest on
Rs.9944/- at 12% from 28.09.1999 and thereafter the Arbitrator allowed
interest at the rate of 12% on the total claim amount after three months from
the date of receipt of the award.
It is apparent as also from the ground of appeal that the appellant
has accepted the rest of the award given by the Arbitrator and the challenge in
the present appeal is only to the extent of the interest awarded.
I find no merit in the arguments raised by the learned counsel for
the appellant.
Section 31 (7) (a) and (b) of the Arbitration and Conciliation Act,
1996, read as under:-
“7(a) Unless otherwise agreed by the parties, where and in so
far 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.”
It is, therefore, apparent that it is well settled by various
judgements of the Apex Court that the award of interest is the discretion of the
Court. It is also well settled that like the grant of interest, rate of interest is
also the discretion of the Court and in the absence of any agreement between
the the parties, the court does not interfere unless the same is bad in law.
FAO No. 3686 of 2009 3
Learned counsel for the appellant has not pointed out as to how
the rate of interest is arbitrary and the same is beyond the agreement or is not
in accordance with Section 31 (7) (a) and (b), referred to above.
The Hon’ble Apex Court in the case of ‘M/s Manalal
Prabhudayal v. Oriental Insurance Co. Ltd., 2006(4) R.C.R. (Civil) 234,,
while allowing the appeal, set aside the order of the High Court reducing the
rate of interest from September 19, 1995 till the award and till the amount is
paid/deposited in the Court from 12% to 6% per anum and held that the award
passed by the Arbitrator granting interest at the rate of 12% per annum all
throughout, that is, for pre-reference period, pendente lite and post award
period, was correct.
No other ground was raised
No merit.
Dismissed.
.
(Nirmaljit Kaur)
Judge
November 05, 2009
mohan