JUDGMENT
J.B. Goel, J.
1. By this Order, a composite application, IA No.7002/93 filed by the petitioner, seeking modification of the Award dated 28.8.1992 passed by Shri Farooq Saulat as Arbitrator, under Section 15 of the Arbitration Act,1940 (for short “the Act”) and also for condensation of delay in filing this application is being disposed of.
2. Briefly, the facts are that the execution of certain works at Manari Bhati Unit, P.O. Dharasu, Distt. Uttarkashi (UP) was awarded to the petitioner by the respondent under four contracts/orders No.599/5203 dated 16.2.1983, No.2172 dated 1.4.1984, No. 11345/150 dated 12.4.1984 and No. 3691/2375 dated 23.7.1986.
3. Disputes arose between the parties. The contracts contained arbitration agreement and as provided in the contract the Chairman & Managing Director of the respondent appointed Shri Farooq Saulat as an Arbitrator on 5.10.1987. The Arbitrator entered upon the reference. Claims and counter claims were filed by the parties and after hearing the parties, the Arbitrator gave his award dated 28.8.1992 awarding to the claimant/petitioner a sum of Rs.4,94,012/- and also awarded interest @ 16.5% per annum from 28th August, 1992 till date of payment of award or decree whichever is earlier.
4. Pendente lite interest from the date of reference to date of award has not been allowed. The claimant is aggrieved from this part of the award. Only the petitioner has filed objections against the award.
5. According to him, he got knowledge of filing of the award from the office of the respondent at Dharasu in January,1993 whereas the notice of filing of award was accepted on behalf of the petitioner in Court by his Advocate on 9.3.1993 and the objections were actually filed belatedly on 5.8.1993. The petitioner has claimed condensation of delay caused in filing the objections.
6. The grounds for condensation of delay as pleaded in paras 7 and 8 of the application are that the delay has been caused due to the fact that the petitioner being situated in a remote area was unable to pursue this case vigorously and also that he was having personal difficulty due to which he was unable to file this application within the time stipulated; the delay has been caused due to no fault of the applicant and he has been pursuing the arbitration proceedings diligently; he has been financially ruined and it will rehabilitate him if this part of interest is allowed to him.
7. On merit the Award has been challenged on the ground that the Arbitrator has not awarded interest for pendente lite ignoring the Supreme Court decision in Secretary, Irrigation Deptt. Government of Orissa and Ors. Vs. G.C. Roy which was pronounced before the award was made. The respondent contested the objections and also the application for condensation of delay. It is alleged that the award is a non-speaking award and the Arbitrator has the discretion to award interest or not and the award cannot be modified. On the question of condensation, it is pleaded that the application does not disclose any ground for condensation of delay; the objections were not filed in time and the delay has not been explained and no ground is made out for condensation of delay.
8. Some more circumstances/facts for condensation of delay have been alleged in his replication by the petitioner as noticed below. And delay is imputed due to negligence and in action of his Counsel and reliance for it has been placed on the case of Rafiq & Another Vs. M/s. Munshi Lal Another, and relevant passage has been reproduced therein.
9. The objections were dismissed by P.N. Nag, J. on 7.1.1994 but without going into the question of limitation.
10. The petitioner had gone in appeal. The Division Bench in appeal set aside the judgment and decree and remanded the case on the question of interest and also for deciding the question of condensation of delay which had not been gone into in the impugned judgment.
11. I have heard learned Counsel for the parties. Coming first to the question of delay, learned Counsel for the petitioner has contended that the notice of the filing of Award was served on the petitioner through his Advocate on 9.3.1993; however the petitioner on coming to know of the filing of award in Court in January, 1993 came to Delhi, engaged an Advocate and got objections and his affidavit prepared on 17.1.1993, gave the same to the Counsel with his fee and that Advocate has not filed the objections due to his negligence or inaction or other lapse on his part, the
petitioner should not be penalised. There is no lack of diligence or bona fide nor negligence on his part. Sufficient ground for condensation of delay is made out. Reliance has been placed on Rafiq & Another Vs. Munshilal & Another (supra). He has also contended that by not awarding pendente lite interest for a period of 5 years by ignoring the law of land, great injustice has been caused to the petitioner which would also be a relevant consideration for condensation of delay, rather than dismissing the objections on technical ground of limitation.
12. Learned Counsel for the respondent on the other hand has contended that the facts sought to be raised in replication were not pleaded in the petition; the petition did not disclose sufficient cause and the petitioner is guilty of negligence and in the facts and circumstances no ground for condensation of delay is made out. He has relied on Ashis Kumar Hazra Vs. Rubi Park Co-op. Housing Society Ltd. And Ors., , State of
Haryana Vs. Chander Mani, 1996 RLR 224 and S.K. Enterprises Vs. DDA, 1993 RLR (Note) 108:52 1990(3) DLT 281.
13. Notice of the filing of the Award was not served on the petitioner. The Counsel appeared in Court on 9.3.1993, filed a Power of Attorney dated 9.3.1993 signed by him and accepted the notice of the filing of the Award on behalf of the petitioner on that day. These objections were not filed by him in time and were actually filed in Court on 5.8.1993. But the explanation for delay given in para 7 of the application is “the delay has been caused due to the fact that the petitioner being situated in a remote area was unable to pursue this case vigorously and also due to the fact that the
applicant is having some personal difficulty due to which the applicant was unable to get this application filed within the time stipulated in the notice.”
14. As appears from affidavit which appears to have been drafted on 17.1.1993 but got attested on 4.8.1993 that this was in support of some application. There would have been no other application perhaps except these objections. The explanation given in para 7 of this application for condensation is somewhat not understandable. This position, however, becomes clear from the facts mentioned in rejoinder where the petitioner has pleaded some more facts. He has stated that notice of the filing of the Award was not served on him, the applicant on coming to know about it from the office of the respondent at Dharasu some time in the first week of January, 1993, came to Delhi, contacted his Counsel, got drafted the objection application and an affidavit was got signed from him on 17.1.93; he was assured that the objections will be filed by him within the statutory period and he depended on him and further stated that “it has now been
revealed that the Counsel ….. has not filed the said objections in time and there is delay in filing the objections in the matter. That the said delay is unintentional, bona fide and because of the mistake/lapse on the part of the Counsel for which the applicant cannot be penalised. ” This replication is accompanied by the copy of the petitioner’s affidavit typed on 17.1.93. The period of 30 days for filing objections against award starts from the date notice is served which in this case was accepted by the Counsel in Court on 9.3.1993. There was no occasion to explain delay before 9.3.1993.
15. The explanation for delay given in the application seems to have been given under wrong advice.
16. From the circumstances, now brought on record, it is clear that the petitioner had contacted the Advocate after getting some information about the filing of the Award in Court, came to Delhi, gave instruction, power of attorney, got the objections and supporting affidavit drafted and obviously expecting that the Counsel will file the same in Court in time. It could be explained by the Advocate engaged by the petitioner, why he has not filed these objections. These circumstances do not show negligence, indolence, want of bona fides or lack of diligence on the part of the petitioner. Apparently, it was due to negligence or inaction, if not misdemeanour on the part of the Counsel. It will not be possible for the petitioner to produce the said Counsel to explain his conduct to support his case. This application is not signed by the petitioner. It could be to wash off his negligence that the Counsel has pleaded the ground of delay in this application of his own. The facts stated in the rejoinder seem to represent the correct state of affairs and the question of condensation of delay has to be viewed in the light of these circumstances.
17. These circumstances clearly show that the petitioner wanted to challenge the Award, took appropriate steps but due to negligence, inaction or misdemeanour on the part of the Counsel, these objections were not filed in time.
18. For condoning the delay the Court has to be satisfied that “sufficient cause” has been made out. What is a “sufficient cause” will depend upon the facts of the particular case. The scope and meaning of this expression has
been gone into in great detail in State of Haryana Vs. Chander Mani & Ors.,
, where a large number of decisions have been referred to.
19. In New India Insurance Co. Ltd. Vs. Smt. Shanti Misra, , it was held that discretion given by Section 5 cannot be viewed in a rigid rule of law. The expression “sufficient cause” should receive a liberal construction.
20. In G. Ramegowda Major & Ors. Vs. Spl. Land Acquisition Officer, Bangalore, , it was held that the expression “sufficient cause” must receive a liberal construction so as to advance substantial justice
and generally delays in preferring the appeals are required to be condoned in the interest of justice where no gross negligence or deliberate inaction or lack of bona fides is imputable to the party seeking condensation of delay.
21. In State of Haryana Vs. Chander Mani & Ors., 1996 (3) SC 371, it was held that the expression ‘sufficient cause’ should be considered with pragmatism in justice oriented approach rather than the technical detection of sufficient cause for explaining every day’s delay. The Court should decide the matters on merits unless the case is hopelessly without merit. In this case 109 days delay was condoned.
22. In Shakuntla Devi Jain Vs. Kuntal Kumari & Ors., , it
was held that unless want of bona fides or such inaction or negligence as would deprive a party of the protection of Section 5 is proved, the application must not be thrown out or any delay cannot be refused to be condoned.
23. In O.P. Kathpalia Vs. Lakhmir Singh (dead) & Ors., , it
was held that if the refusal to condone the delay results in grave miscarriage of justice it would be a ground to condone the delay.
24. In Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors., , it was held that Section 5 was enacted in order to
enable the Court to do substantial justice to the parties by disposing of matters on merits. The expression “sufficient cause” is adequately elastic to enable the Court to apply the law in a meaningful manner which subserves the ends of the justice that being the life purpose for the existence of the institution of Courts. It was explained that the expression everyday’s delay must be explained” does not mean that a pedantic approach should be made. The doctrine must be applied in rational common sense pragmatic manner. When substantial justice and technical considerations are pitted against each other cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non deliberate delay.
25. In Smt. Prabha Vs. Ram Parkash Kalra, (1987) Supp. SCC 338, it was held that the Court should not adopt an injustice-oriented approach in rejecting the application for condensation of delay. 26. In Ram Kishan & Anr. Vs. U.P. State Roadways Transport Corpn. & Anr., (1994) Sup. 2 SCC 507, it was held that where explanation for delay in
filing an application for compensation under the Motor Vehicles Act was not found convincing but keeping in view the facts and circumstances and cause of justice, the delay was condoned.
27. However, in Scheduled Caste Coop. Land Owning Society Ltd., Bhatinda Vs. Union of India & Ors., and Binod Bihari Singh Vs.
Union of India, it was held that where bona fides are
lacking, the Court should not encourage such person by condoning the delay.
28. In Concord of India Insurance Co. Ltd . Vs. Nirmala Devi & Ors.,
, in a case of negligence of the Counsel which misled a litigant into delayed pursuit of his remedy, the default in delay was condoned.
29. In Rafiq and Ors. Vs. Munshi Lal & Anr., , it was held that where a party has selected his Advocate, briefed him, paid his fee and has done everything in his power expected of him, should not suffer for the inaction, deliberate omission or misdemeanour of his Counsel.
30. In Inder Singh Vs. Kanshi Ram AIR 1917 PC 156, it was observed that the true guide for a Court to exercise discretion under Section 5 is whether the appellant acted with reasonable diligence in prosecuting the appeal.
31. The law thus is well established that the expression “sufficient cause” must receive a liberal construction so as to advance substantial justice and delay should be condoned in the interest of justice where no gross negligence, or deliberate omission or lack of bona fides or diligence is imputable to a party seeking condensation of delay and where substantial justice and technical considerations are pitted against each other cause of substantial justice deserves to be preferred; and a party should normally not be penalised if such party is not being guilty of negligence or want of diligence but delay is caused due to negligence or inaction or misdemeanour of his Counsel.
32. Learned Counsel for the respondent has relied on the following case law.
33. In DDA Vs. Ramesh Kumar, 1996 RLR (Note) , a
Division Bench of this Court declined to condone the delay where it was found that the delay in filing the appeal had not been satisfactorily explained and there was negligence and indolence on the part of the appellant or its officers in pursuing the matter. It obviously is based on its own facts.
34. In Shanti Devi Vs. Bhan Raj, 1989 RLR (N) 81, explanation for delay was not found satisfactory by the two Courts below. In second appeal, the learned Single Judge of this Court declined to interfere. This case also is based on its own facts.
35. In S.K. Enterprises Vs. DDA, 1993 RLR (N) 108, also the delay had not been satisfactorily explained and proved and one of the ground was wrongly stated.
36. As held in State of Kerala Vs. E.K. Kuriyipe & Ors., 1981 Supp. SCC 72, the question whether or not there is sufficient cause for condensation of delay is a question of fact dependent upon the facts and circumstances of the particular case.
37. Apart from the fact that the delay in this case cannot be imputed to the petitioner but to his Counsel, there is other consideration of denial of substantial justice if delay is not condoned in this case. As noticed below the learned Arbitrator has declined to award interest pendente lite covering a period of about 5 years under misconception and ignorance of law declared by the Supreme Court and that part of the award is patently wrong and contrary to law. The award to this extent, unless it is corrected will result in substantial injustice and loss to the petitioner. In view of the legal position as noticed above to advance substantial justice, technical ground of delay should not be allowed to stand in its way.
38. In the circumstances, delay caused in filing the objection against the award is condoned.
39. Coming to merit of the objections whether the award suffers from any error?
40. The short question is whether the learned Arbitrator has committed error of law in not awarding interest pendente lite and such error is apparent on the face of the award. In the award, the Arbitrator has given the following reasons:
“5. No interest (pendente lite interest) from date of reference to date of award has been allowed as per the orders of the Supreme Court.”
41. In Executive Engineer (Irrigation) Vs. Abha Duta Jena, , a judgment of three Judges, two questions arose for consideration of the Court, (1) the power of the Arbitrator to award interest for the period prior to his entering upon reference; and (2) the power of the Arbitrator to award interest for the period the dispute remained pending before him.
42. The disputes in the present case is about the second question, that is, with regard to pendente lite interest. In that case, it was held that as the Arbitrator was not a Court within the meaning of Section 34 of the Code, therefore, he could not award pendente lite interest. This has been followed by a two Judges Bench in State of Orissa & Ors. Vs. Construction India, and also in Gujarat W.S. & S.B. Vs. Unique Erectors (Gujarat) Pvt. Ltd., AIR 1981 SC 973, where following Jena’s case it was
held that pendente lite interest could not be awarded. Obviously the learned Arbitrator has relied on these cases.
43. This question was referred to and has been considered by a Constitution Bench of the Supreme Court in Secretary, Irrigation Department, Government of India & Ors. Vs. G.C. Roy, and the aforesaid view taken in Jena’s case and which was followed in the other two cases has been overruled. The Constitution Bench has considered the question regarding the power of the Arbitrator to award interest pendente lite where the agreement does not provide for grant of such interest nor does it prohibits such grants, i.e., when the agreement is silent as to award of the interest. After considering various decisions, it was held that the Arbitrator has the power to award pendente lite interest, though it does not mean that the Arbitrator should necessarily award interest pendente lite in every case. It is a matter within his discretion to be exercised in the light of all the facts and circumstances of the case keeping the ends of justice in view. More recently, in Ramnath International Construction Pvt. Ltd. Vs. State of U.P AIR 1998 SC 367 also, it was held that even if no interest is payable for pre-reference period, the Arbitrator is not debarred from
granting pendente lite interest. Power can be exercised analogous to Section 34 of the Code. Grant of interest is a question of discretion of the Arbitrator and can be granted to do complete justice between the parties. The Contractor was held entitled to interest from the date of reference to date of award but not to interest for pre-reference period. (In this case, Clause 1.18 of the Contract specifically provided that no interest is payable for any dues due from the Government).
44. An Arbitrator is an alternative Forum for resolution of disputes arising between the parties. The Arbitrator must act and make his award in accordance with the general law of the land. It is now well settled that in the matter of award of interest for all the periods, the Arbitrator has the same powers as a Court has.
45. Under Section 34 of the Code “where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged…….”. And proviso to sub section (1) of Section 34 of the Code provides that:
“Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six percent per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions.”
p>46. In view of the Constitution Bench decision in G.C. Roy’s case, the Arbitrator was competent to award pendente lite interest and such interest could be awarded even if there is no specific contract between the parties for payment of interest for pre-award period and as held in Ramnath International Construction Pvt. Ltd. (supra), the Arbitrator is not debarred from granting interest even if no interest is payable for pre-reference period.
47. G.C. Roy’s case was pronounced on 12.12.1991 whereas the award in the present case was made later on on 28.8.1992. Apparently, the learned Arbitrator based his decision on the legal position as existed earlier on the view taken in Jena’s case and two other cases referred to above. That view had been overruled by the Constitution Bench decision in G.C. Roy’s case and that later law was the law of the land. The law declared by the Supreme Court is binding on all in view of Article 141 of the Constitution of India. The Arbitrator was bound by this law and by ignoring the same he has acted contrary to law in disallowing interest. For that he has given reasons in para 5 of the award as noticed earlier. He has committed error of law and this is error apparent on the face of the award. The award to that extent is contrary to law of the land and is not sustainable. This part of the award is independent and separate from the remaining award and is liable to be corrected or set aside or modified.
48. Learned Counsel for the petitioner has contended that the error can be corrected by this Court under Section 15 of the Act. According to him, interest from the date of the award till the date of payment of award or decree has been awarded @ 16.5% per annum. There seems to be no reason that the Arbitrator would not have awarded pendente lite interest at this rate in view of Section 34 of the Code but for the error of law committed by
him. In the facts and circumstances, remitting of this award to the Arbitrator will be an unnecessary exercise entailing waste of time, avoidable expenses and inconvenience to the parties. This is an obvious error and be corrected and the award modified suitably by this Court under Section 15 of
the Act. He has placed reliance on Upper Ganges Valley Electricity Supply Company Ltd. Vs. The U.P. Electricity Board, Gujarat Water Supply and Sewage Board Vs. Unique Erectors (Gujarat) Pvt. Ltd. & Another,
and Executive Engineer Ganjam Vs. Sankar Maharana .
49. Whereas learned Counsel for the respondent has contended that both the award of interest and rate of interest are within the discretion of the Arbitrator. This Court cannot assume the role of an Arbitrator as this Court is not an appellate Court and is not competent to substitute its own view in place of the Arbitrator’s view as if it was dealing with an appeal in exercise of power as Sections 16 and 30 of the Act do not give such powers to this Court. This Court is thus not competent nor it is just and proper for it to correct or amend the award under Section 15 of the Act nor this provision is attracted in this case.
50. In the Upper Ganges Valley Electricity Supply Company Ltd. (supra), a part of the claim was disallowed by the Arbitrator while awarding the compensation. The Supreme Court held that where the error in the award relates to a matter which is distinct and separate from the rest of the award and the part of which is invalid being severable from that which is valid, the entire award need not be set aside.
51. The further question that arose was whether the award was to be remitted back to the Arbitrator for re-consideration about the amount which was disallowed by the Arbitrator earlier. The respondent contended that the Court could not modify the award to award this amount and that the award should be remitted back. The Supreme Court held that there was no cogent reason as to why that Court should not adopt a course which far from causing prejudice to the parties was clearly in the interest of justice and the Court awarded the amount which was disallowed by the Arbitrator. Again in Gujarat Water Supply & Sewage Board (supra), the Arbitrator has not awarded interest for the period from the date of the award till the date of the decree. The Supreme Court held that interest should have been allowed for this period on the principle, that the Court before which proceedings under Sections 15 to 17 are initiated, can grant interest in the litigation pending before it and instead of remitting the case, the Court awarded interest for this period. Though a Court could award interest only from the date of the decree till realisation as provided under Section 29 of the Act, however the interest was awarded for pendente lite period without remitting the case back in the interest of justice as no prejudice would have been caused to the other party.
52. Recently, I have considered the power of the Court to award interest pendente lite in the case of Corporation Bank Vs. M/s. Rama Industries & Others, (Suit No. 1536/86, decided on 12.5.1998). After referring to the relevant case law, I have held that in commercial transactions, for the period after the institution of the suit till realisation, contractual rate ought to be the rule.
53. The learned Arbitrator has awarded interest @ 16.5% per annum from the date of his award till payment or till decree. That part of the award was not challenged by the respondent in this Court and it appears that the award made by the Arbitrator has since been satisfied. There would be no reason for the Arbitrator to award for pendente lite interest at a rate less than 16.5% per annum. In the circumstances, no prejudice would be caused to the respondent if pendente lite interest is awarded at this rate.
54. In the result, the objections are allowed, the error committed by the Arbitrator in not awarding interest pendente lite is corrected and the award is modified to the extent that the petitioner would also get pendente lite interest i.e., with effect from 2nd June, 1987 when the Arbitrator appointed first accepted the reference and called upon the parties to submit their claims and counter claims till 28.8.1992 when the Arbitrator made his award @ 16.5% per annum on the amount of Rs. 4,94,012/- awarded by the learned Arbitrator.
55. In the result, I.A. 7002/93 is allowed delay is condoned, objections are allowed and the award dated 28.8.1992 is corrected and modified to the extent that the petitioner will get pendente lite interest for the period 2.6.1987 to 28.8.1992 also @ 16.5% per annum on the amount of Rs.4,94,012/-. The award as so modified and corrected is hereby made a rule of the Court. In the circumstances, parties are left to bear their own costs.
IA No. 7002/93 and Suit No. 3720/92 are disposed of accordingly.