JUDGMENT
D.R. Dhanuka, J.
1. By this petition filed under section 33 read with section 30 of the Arbitration Act, 1940, the petitioner has impugned Award dated 25th June, 1992 passed by Shri Y.V. Chandrachud, Retired Chief Justice of India and Shri J.G. Gadkari, Joint Arbitrator appointed by the parties. The relevant facts required to be stated for the purpose of appreciating the contentions urged at the bare as briefly summarised below:
(a) On or about 3rd of March, 1988, the petitioner awarded a contract to the respondent for carrying out certain work as specified therein. The petitioner issued its letter of intent dated 3rd March, 1988. The contract price payable for the said work was stipulated between parties at U.S. Dollars 20, 88,300/-. It was provided by the said letter of intent that all other terms and conditions shall be as per contract dated 30th September, 1985 referred to therein. Clause 41 of the agreement dated 30th September, 1985 provided that the petitioner shall be bound to pay the amount covered by each invoice to the respondent within 45 days from date of receipt of the relevant invoice. Thus, the amount specified in each invoice became payable immediately on expiry of 45 days from the receipt thereof. The respondent submitted several invoices for the work done to the petitioner. The petitioner accepted each of the said invoices. There is no dispute regarding correctness of the invoices. The petitioners took their own time to pay the amounts covered by the said invoices due to “Financial constraints and delay in receipt of permission concerning foreign exchange.”
(b) Thus, the petitioner failed to pay the amounts covered by various invoices concerning the execution of the work within the stipulated period of 45 days from the date of receipt of each the invoices.
(c) By letter dated 4th March, 1990, the respondent claimed amounts of interest on the amounts covered by each of the invoices referred to in the tabulated sheet attached thereto at the rate of 12 per cent per annum. The respondent did not agree.
(d) Disputes and differences arose between the parties in respect of the claim made by the respondent for interest payable on various amounts covered by the said invoices which were admittedly paid late. Disputes and differences arose between the parties in respect of one more claim referred to in the Award as “the second claim” made by the claimants. It is not necessary to refer to other disputes and differences between the parties. The respondents appointed Mr. J.G. Gadkari as an Arbitrator. The petitioners appointed Shri Y.V. Chandrachud, Retired Chief Justice of the Honourable Supreme Court of India as an Arbitrator. The learned Arbitrators appointed late Mr. Hidayutullah, Retried Chief Justice of India as an Umpire. The learned Arbitrators partly allowed the claim of the respondent company for interest in respect of late payments. The learned Arbitrators held that the petitioners had delayed payment of the amounts due and payable for more than 45 days from receipt of the invoices in question without any convincing reason. The respondents had claimed interest on the late payment at the rate of 12 per cent per annum. The learned Arbitrators awarded interest at the rate of 10 per cent per annum. The learned Arbitrators computed the claim of the respondents for interest at U.S. Dollars 35,053 and Rs. 33,246/-. There is no dispute about the calculation of the amount by the learned Arbitrators. As regards the second claim made by the claimants, the learned Arbitrators accepted the claim of the respondents in sum of U.S. Dollars 25,480/- with interest at the rate of 10 per cent per annum from expiry of 45 days of the date of demand i.e. from 1-9-1990 until payment or date of the Award, whichever was earlier. No payment is made so far. The learned Arbitrators also directed the petitioner to pay a sum of Rs. 2 Lacs towards the costs of the Arbitration. The challenge to the Award of costs in sum of Rs. 2 Lacs was given up by the learned Counsel appearing on behalf of the petitioner at the earlier hearing of this matter.
2. Shri Venkiteswaran, the learned counsel for the petitioner has submitted that the impugned Award discloses error of law apparent on the face of the Award in so far as the learned Arbitrators awarded interest in respect of the claim made by the respondent for the first time by their letter dated 4th May, 1990. The learned Counsel has developed this contention by inviting attention of the Court to the fact that the contract does not provide for payment of interest and by contending that the late payments were accepted by the respondents unreservedly and without any protest.
3. It is true that the contract does not provide for payment of interest. The contract, however, does provide that the amount payable in respect of the invoices must be paid within 45 days from the date of receipt of the invoice. Section 3(1) of the Interest Act, 1978 in terms empowers the Court as well as the Arbitrator to award interest at current rate of interest if the proceeding relates to a debt payable by virtue of a written instrument “at a certain time”. In such an eventuality, the Court or the Arbitrator may award interest from the date when the debt is payable under the written contract to the date of institution of the proceeding. The expression “Court” includes “a tribunal and an arbitrator” by virtue of definition of the expression “Court” contained in section 2(a) of the Interest Act, 1978. Section 3(1) of the Interest Act, 1978 reads as under:
“3. Power of Court to allow interest:
(1) In any proceedings for the recovery of any debt or damages or in any proceedings in which a claim for interest in respect of any debt or damages already paid is made, the Court may, if it thinks fit, allow interest to the person entitled to the debt or damages or to the person making such claim, as the case may be, at a rate not exceeding the current rate of interest, for the whole or part of the following period that is to say,-
(a) if the proceedings relate to a debt payable by virtue of a written instrument at a certain time, then, from the date when the debt is payable to the date of institution of the proceedings;
(b) if the proceedings do not relate to any such debt, then from the date mentioned in this regard in a written notice given by the person entitled or the person making the claim to the person liable that interest will be claimed, to the date of institution of the proceedings;
Provided that where the amount of the debt or damages has been repaid before the institution of the proceedings, interest shall not be allowed under this section for the period after such repayment.”
The written contract clearly provided that the amount was payable by the petitioner to the respondent on expiry of 46 days from the date of receipt of each invoice. Section 3(a) of the Interest Act, 1978 is clearly attracted to this case. The learned Counsel for the petitioner invited attention of the Court to the judgment of the House of Lords in the case of President of India v. La Pintada Cia Navegacion SA, reported in (1984)2 England Law Reports 773. In this case it was held by the House of Lords that the Arbitrator had no power to award interest if the amount due and payable was paid by the debtor before the commencement of arbitration proceedings. The House of Lords clearly stated in the said judgment that it was compelled to take this view in absence of a legislative provision on the subject. In the abovereferred case, the House of Lords clearly observed that denial of interest for the period prior to commencement of arbitration proceedings was unjust but the Court was helpless in the matter in absence of a legislation. This House of Lords clearly observed in the abovereferred case that the awarding of interest for the period prior to commencement of arbitration proceedings would amount to usurpation of legislative function. The House of Lords traced the history of English Legislation on the subject and arrived at its conclusion in light of English Provisions. Fortunately, for the respondent in this case, the Interest Act, 1978 makes specific and clear provisions on the subject. The ratio of this judgment, with respect, has no applicability to our case.
4. The case of the respondent on this aspect of the matter is supported also by the ratio of judgment of High Court of Andhra Pradesh in the case of Superintending Engineer, Somasila Project, Nellore District v. Ramana Reddy, reported in A.I.R. 1990 Andhra Pradesh 183. In the case of State of Orissa v. Uchhalia Pradhan, , the Honourable Mr. Justice Lalit Mohan Sharma (As His Lordship then was) observed as under:
“But as the Award is not a speaking one, we cannot presume that the arbitrator included the claim of interest in his award illegally or on consideration which are not relevant for his decision.”
In my opinion, these observations are helpful to the respondent. I am bound to presume that the Award is valid unless the ground of challenge to the Award is established by the petitioner within the framework of Arbitration Act, 1940. To my mind, the award does not suffer from any error of law apparent on the face of Award. Even if there is some scope for taking different view on the subject the Court cannot interfere and set aside an award.
5. The learned Counsel for the petitioner has submitted that the learned Arbitrators have not specifically dealt with the contention that the respondent was not entitled to claim interest on the ground that late payment was accepted by the respondent unreservedly and without any protest. The dispute as to accord and satisfaction was liable to be decided by the learned Arbitrators. It is implicit in the impugned award that this plea of the petitioner is negatived by the learned Arbitrators. It was not a stipulation of the submission that the learned Arbitrators must record reasons for the conclusions arrived at or in respect of each of the submissions or otherwise. I must, therefore, presume that the plea of “accord and satisfaction” raised on behalf of the petitioner was rejected or deemed to have been rejected by the learned Arbitrators. This Court cannot re-examine the merit of the controversy once again. The jurisdiction of this Court to set aside an award is narrow and circumscribed by the provisions contained in Arbitration Act, 1940.
6. In the result, the petition fails. The petition is not admitted. The petition is dismissed. No order as to costs.
7. Since I have dismissed the petition, I pass a decree in terms of the Award dated 25th June, 1992. The said Award provides inter alia for payment of the amount in U.S. Dollars as well as Indian currency. Since the Award is partly in foreign currency, if necessary, the amount of the award in U.S. Dollars would be converted into Indian currency at the exchange rate prevailing on the date of the decree i.e. of today. I also pass a decree by awarding further interest on sum of U.S. Dollars 25,480/-, being the amount of the second claim at the rate of 12 per cent per annum from the date of the Award till payment. I have passed this order in exercise of power of the Court under section 3(1) of the Interest Act, 1978 in so far as the award of interest upto the date of decree is concerned and in exercise of power of the Court under section 29 of the Arbitration Act, 1940 in so far as the Award of interest from the date of decree is concerned. No order as to costs in respect of proceedings before this Court.