Engineering Construction … vs Mining And Allied Mechinery … on 2 December, 1993

Calcutta High Court
Engineering Construction … vs Mining And Allied Mechinery … on 2 December, 1993
Equivalent citations: (1994) 2 CALLT 317 HC
Author: S K Hazari
Bench: S K Hazari, A K Chakravarty


Sachi Kanta Hazari, J.

1. This is appeal is directed against the judgment and order dated 10th March, 1993 passed in Matter No. 3083 of 1992. The short point involved in this appeal is as to whether the granting of pendente lite, interest is mandatory or discretionery.

2. In 1987 Joint Arbitrators were appointed. In December, 1987 an application was filed under Section s 5, 8, 11 and 12 of the Arbitration Act for leave to revoke the authority of the arbitrators and for appointment of a new arbitrator. By an order dated 15th January, 1988 the authority of the joint arbitrators were revoked and Mr. A. M. Pal, a retired Judge of this court was appointed as sole arbitrator in place and stead of the out going joint Arbitrators. On 3rd of May 1988 the arbitrator entered into the reference and on 7th December, 1991 the learned arbitrator made and published his award wherein it was directed that the respondent would pay to the petitioner Rs. 2.25 lacs together with interest at the rate of 15% from the date of the award until payment and a further sum of Rs. 30,000/-as costs of this arbitration. No interest pendente lite was granted by the arbitrator under the said award.

3. On 28th February, 1992 an application was filed under Section 16 of the Arbitration Act for an order that a sum of Rs. 1.65 lacs be granted to the petitioner on account of interest pendente lite and for that purpose the award be remitted to the Saha Arbitrator for necessary correction.

4. By an order dated 19th June, 1992 the award was remitted back to the learned Arbitrator for reconsideration of the question of grant of interest pendente lite. On 18th August, 1992 the Arbitrator passed an award and in the award the Arbitrator did not grant any interest pendente lite. The said award has not been challenged by the respondent under Section 30 of the Arbitration Act. On 16th December, 1992 the petitioner filed an application for setting aside the award by which the learned Arbitrator refused to grant interest pendente lite. By judgment and order dated 10th March 1993 the learned Trial Judge was pleased to reject the said application. This appeal is directed against the said judgment and order of the learned Trial Judge.

5. Mr. P. K. Das appearing with Mrs. Mukherjee submits that by an order of this court the Arbitrator was directed to consider the pendente lite interest and the Arbitrator has failed and neglected to carry out the direction of this court and thereby has misdirected himself and the proceeding. It is further argued that in granting pendente lite interest the Arbitrator has no discretion. The only discretion an arbitrator has, is as to the rate of interest but, he is bound to grant some interest. Several decisions were referred to by Mr. Das, namely, ; ; ; ; ; ; . Most these decisions were also referred to before the learned trial judge. The learned Trial Judge in his judgment has referred to and discussed the said judgments and the learned Trial Judge held that the Arbitrator did not misdirect himself and it was the sole discretion of the Arbitrator to grant pendente lite interest following the principle laid down in .

6. Mr. Shibdas Banerjee learned Advocate for the respondent submits that this Court directed the Arbitrator to reconsider the award by remitting the award and Mr. Banerjee refers to the order wherefrom it is clear that the Arbitrator was. directed to consider whether any pendente lite interest is payable and if payable, to grant such interest as the learned Arbitrator will think fit and proper. Therefore, there was no direction by this Court upon the Arbitrator to grant interest and it was discretionary on the part of the Arbitrator to grant pendente lite interest. Mr. Banerjee relies upon decision and and submits that the granting of pendente lite interest is a discretionary matter and in the said judgment the Division Bench of this court have discussed the judgment and it has been held that it is the discretion of the court to grant pendente lite interest and the same principle is applicable in the case of an arbitrator.

7. We have carefully gone through the submissions made by the learned council of both sides and also the decisions cited and we are in agreement with the finding of the learned Trial Judge and the principle discussed by the learned Trial Judge. Accordingly, we hold that the arbitrator did not misdirect himself and he passed the award after remittance in terms of the direction given by his Court. So far as the pendente lite interest is concerned, we hold that is discretionary on the part of the arbitrator to grant pendente lite interest and in the instant case since the arbitrator has held that no pendente lite interest should be payable to the petitioner we do not find any reason for interfering with the same and on this point also we are in complete agreement with the learned trial Judge.

8. Accordingly the appeal fails and is hereby dismissed. The judgment and order of the learned trial court are affirmed.

There will be no order as to costs.

All parties are to act on a signed xerox copy of this judgment on the usual undertaking.

Ashok Kumar Chakravarty, J.

9. I agree.

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