JUDGMENT
Shiv Narayan Dhingra, J.
1. This petition was filed by the petitioner under Section 14 and 17 of the Arbitration Act for making an award dated 26.10.1996 as Rule of Court. The Arbitrator awarded a total sum of Rs. 1,31,693.48 to the claimant/petitioner and interest @ 18 % per annum on this amount from 1.1.1989.
2. The respondent filed objections against the award Under Section 30 and 33 of the Act alleging that the Arbitrator passed the award mechanically and some of the facts stated by the Arbitrator regarding Arbitration proceedings were incorrect. No counter claim was filed by the respondent whereas the Arbitrator recorded that a counter claim was filed by the respondent. There was no Arbitration Agreement dated 23.11.1989. No rejoinder was filed by the petitioner but there is a mention of filing of rejoinder. The Arbitrator had asked the respondent on 31.8.1996 to submit a consolidated final bill by 15th September, 1996. The respondent submitted final bill on 14th September, 1996 showing that there was a negative balance, towards the petitioner, of Rs. 23,272/- and this fact was altogether ignored by Arbitrator. The Arbitrator, therefore, misconducted himself.
3. On merits, it is stated that the claim of petitioner was for sum of Rs. 1,94,453/- and Arbitrator awarded an amount of Rs. 1,31,693.48 ignoring the admissions of the petitioner that there was a recovery of Rs. 46,150/- on account of cement supplied by the respondents, i.e., 35.5 ton at the rate of Rs. 1300/- per ton and there was a recovery of Rs. 11,626/-. The Arbitrator also ignored that a sum of Rs. 18,299.30 was received by the petitioner from the respondent on 31.10.1988 by a cheque after the submission of final bill dated 26.6.1988 and this amount has not been accounted for.
4. The Arbitrator along with award attached annexures showing various items of claim and the awarded amount against each item. It is stated that in respect of item execution of P/L CC 1:2:4 in footings and boxes in ‘Annexure A’, the Arbitrator awarded an amount of Rs. 17,600/- whereas petitioner had already received a sum of Rs. 11,003.98 treating this item as one of the extra items. Similarly, it is stated that in respect of third running bill, a sum of Rs. 562.50/- was already released for work of 15 MM cement mix plaster. The Arbitrator wrongly showed Rs. 315/- released by the respondent and thereby giving undue benefit of Rs. 247.50 to the petitioner. In case of 4 MM ply, amount of Rs. 2,691.18 was already paid in the third running bill and this has been again allowed by the Arbitrator. In another item regarding earth, it is stated that respondent had paid Rs. 579.91 but the Arbitrator did not count this money and acted contrary to record. In Centering and Shuttering Cols., there was calculation error of Rs. 182.40. In item P/F wind ties, there was calculation error of Rs. 641.66 and in P/F wood work in frames, a sum of Rs. 1,947.21 was paid by the respondent in third running bill but the same was not taken into account by the Arbitrator. The respondent in this manner has pointed out to few more amounts. It is also submitted that the Arbitrator granted interest @ 18% for the period beyond the relief claimed by the petitioner. The petitioner only claimed pendente lite interest and future interest, whereas the Arbitrator allowed pre suit interest and directed the respondent to pay interest from 1.1.1989. The rate of interest was also exorbitant, looking into the present day circumstances.
5. In response to the objections, the petitioner had denied the allegations made by the respondent and stated that the Arbitrator had taken into consideration all the amounts paid and has prepared an item-wise chart as to what was the amount paid and what was the balance amount due. Every amount paid to the petitioner has been accounted for and the award of the Arbitrator was liable to be upheld. A few arithmetical mistakes or clerical mistakes cannot fail the award. It is denied that no adjustment of amount of Rs. 46,150/- was given on account of cement supplied by the respondent or regarding Income Tax Return. Reply was given in respect of each item about which respondent stated that there was extra payment.
6. I have considered the submissions made by the parties and perused the award. There is typographical error in the date of arbitration agreement. That cannot be a ground for rejection of award. Similarly non mentioning of some of the details of proceeding cannot be a ground for setting aside the award.
7. The contention of respondent that the Arbitrator awarded Rs. 17,600/- against P/L CC 1:2:4 footing and boxes, whereas amount of Rs. 11,003.98 was already been paid is baseless. A perusal of ‘Annexure-A’ to the award would show that the Arbitrator has not awarded Rs. 17,600/-. In fact, in ‘Annexure ‘A’ against 9 items, the total amount awarded is Rs. 3,671.82. The Arbitrator awarded only short measurement amounts for different items. If the total sum awarded is Rs. 3,671.82, it cannot be said that against one item Rs. 17,600/- has been awarded.
8. A perusal of award would show that the Arbitrator has gone into each item, the quantity executed by the claimant, the rate, the total amount and the amount already paid and what was the difference which was required to be paid. These details are given in Annexure ‘A’ and ‘B’ to the award. However, in respect item in Annexure-B, viz. 150 MM thick CC 1:4:8, the Arbitrator has himself modified the rate and the quantity and awarded Rs. 22,457/- without giving any reason. I consider that except this amount of Rs. 22,457/-, the award given by the Arbitrator is valid in respect of all other items.
9. A perusal of record would show that when reference was made to the Arbitrator, it was made in respect of a demand of interest by petitioner from 1.1.1989 but when claimant filed claim, the claimant did not claim interest from 1.1.1989 but claimed only pendente lite and future interest. The Arbitrator ignored the claim of the claimant and awarded interest from 1.1.1989 at 18 %. The respondent has relied on the judgment of the Supreme Court in Tulsi Constructions v. ONGC wherein the Hon’ble Supreme Court held that the award of interest by the Arbitrator where the same was not claimed in the counter claim by the respondent was not justified. The Supreme Court relied upon its earlier judgment in Paradip Port Trust v. Unique Builders (2001) 2 SCC 680 wherein Supreme Court had held that power of an Arbitrator to award interest pendente lite as well as pre reference must precede with a claim for grant of interest pendente lite or pre reference in the claim/counter claim. I, therefore, consider that the award of the interest by the Arbitrator in the present case from 1.1.1989 was beyond the jurisdiction of Arbitrator. The Arbitrator could have awarded only pendente lite interest and the interest for the subsequent period. The Arbitrator in this case was appointed vide letter dated 13.2.1995 and has entered reference on 20.2.1995. I consider that the petitioner could be awarded interest only with effect from 20.2.1995.
10. The rate of interest as awarded by the Arbitrator would not have seemed that exorbitant when it was awarded. However, after year 1999-2000, there was a drastic change in the economic scene in India and the lending interests fell very sharply and drastically. I, therefore, consider that after 1.1.2000 awarding of 18% interest would not be justified and the interest is required to be modified reasonably. I, therefore, consider that after 1.1.2000, the petitioner would be entitled to interest @ 10% and prior to that @ 18%. The award is therefore modified to the following extent:
The petitioner would be entitled to Rs. 1,31,963.48 Rs. 22,457.60 = Rs. 1,09,505.88 and simple interest thereon from 20.2.1995 till 31.12.1999 @ 18 % per annum and thereafter from 1.1.2000 till realization @ 10% per annum.
11. With this modification, the objections are allowed to the above extent. The award is modified to the above extent. The respondent is directed to make the payment within a period of 30 days.