JUDGMENT
R.L. Anand, J.
1. This is a civil revision and has been directed against the judgment dated 8-1-1998 passed by the Additional District Judge, Kaithal, who dismissed the appeal of the petitioner, but modified the award dated 5-4-1996 and the impugned decree to the extent that the contractor will not be entitled to any interest for preference period. The Additional District Judge, Kaithal, vide its judgment held that the contractor shall be entitled to a sum of Rs. 7,72,169/- with pendente lite interest @ 15% p.a. and future interest @ 18% from the date of the award till its payment.
2. The first submission of the counsel for the petitioner is that as per the agreement, it was agreed upon between the parties that in the event of a dispute, when the mater will be referred to the Arbitrator, the Arbitrator shall not award any interest on the awarded amount and in view of this stipulation, the Arbitrator has exceeded his jurisdiction.
3. I find substance in this argument. As per Clause 25A of the agreement, it is clear that the Arbitrator shall not award any interest to the parties on any of the items of the contract agreement. For the sake of convenience, Cause 25A can be reproduced as follows :
“It shall also be term of the contract agreement that the Arbitrator shall give speaking award otherwise the award shall be null and void. It well not be binding on the parties. It shall also be a term of this contract that in any dispute/difference referred to the Arbitrator, the Arbitrator shall not award interest to this parties on any of the terms of contract agreement executed between the parties. If the Arbitrator award interest the same shall not be binding on the parties.
However, I do not subscribe to the second contention of the counsel for the petitioner when he submitted that the reference was made to the Arbitrator at the request of the Board vide letter dated 28-7-1992 followed by letter dated 18-8-1992. When a matter is referred to the Arbitrator, he is called upon the adjudicate a dispute which has arisen between the parties on account of alleged breach of the agreement. In this view of the matter, even the contractor has the right to put a counter claim before the Arbitrator. If the Arbitrator after hearing both the parties had awarded any amount in favour of the contractor by rejecting the case of the Board, it does not lie on the part of the board to say that the reference was not made at the instance of the contractor. With the acceptance of the arbitration, the Arbitrator gets jurisdiction to decide any controversy which may initially crop up or which may be referred to him by the parties to the arbitration agreement.
4. The third submission of the counsel for the petitioner is that even the Courts below have awarded interest at a higher rate than that of the provisions of Section 34, C.P.C.
5. There is merit in this contention. Rate of interest which has been awarded to the contractor is 15% p.a. by way of pendente lite interest and future interest @ 18%. As per Section 29 of the Arbitration Act, whereas insofar as award is for the payment of money the Court may in the decree order interest, from the date of the decree at such rate as the Court deems reasonable, to be paid on the principal sum as adjudged by the award and confirmed by the decree. Rate of interest @ 15% or 18% is not acceptable to the Court. Therefore, in the opinion of this Court, the contractor should get interest @ 12% only and that too from the date of the award i.e., 5-4-1996 upto the date of payment.
6. Resultantly, the present revision stands partly allowed and the impugned judgments of the Courts below are modified and it is declared that the contractor shall get a sum of Rs. 7,72,169/- along with simple interest 12@% w.e.f. 5-4-1996 will payment.
7. Revision allowed.