JUDGMENT
S.N. Aggarwal, J.
1. The petitioner being Union of India has filed the objections against the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996. The arbitral award against which objections have been filed was given by a panel of three arbitrators namely Sh. Parmatma Sharn, Chief Engineer, Northern Railways, Sh. R.K. Kardam, Adviser/Judicial Commission, Northern Railways and Mr. Shanker Banerjee, FA&CAO, Northern Railways. Sh. Parmatma Sharm was the Presiding Arbitrtor in the panel of arbitrators. The arbitral award was announced on 11.02.2002 and the objections filed against the said award are within limitation.
2. The panel of arbitrators have made award in respect of four claims of the respondent and they are as follow:
S. No. Claims Amount claimed Amount awarded 1 Claim No. 1- Work in Rs. in Rs. done nut not paid 15,50,000/- 8,75,000/- 2 Claim No. 2- Refund 2,33,571/- 2,33571/- of Security 3 Claim No. 6- Claim on 6,20,000/- 2,50,000/- account of loss of costs of trees 4 Claim on account of Interest claimed Interest awarded @ 12% interest @ 24% p.a. p.a. on the entire award amount minus Rs. 50,000/- (STDR)
3. The learned arbitrators have rejected the claim of the petitioner for Rs. 4 lacs claimed on account of liquidated damages. The learned Counsel appearing on behalf of the petitioner has argued that the learned arbitrators were wrong in holding that the petitioner was not justified in terminating the contract in question despite holding that the respondent was also contributory to the delay in execution of the contract. This Court does not sit in appeal over the judgment of the Arbitral Tribunal and cannot substitute its own view in place of the arbitrators unless the objections fall within the parameters of Section 34 of the Arbitration and Conciliation Act, 1996.
4. The award on claim No. 1 is challenged by the petitioner on the ground that the learned arbitrators have overlooked Clauses 45 & 63 of the General Conditions of the Contract according to which the measurements taken by the Railways with regard to the work done by the respondent were to be treated as final and binding. I have gone through the arbitral award and the documents available on record. The learned arbitrators have awarded an amount of Rs. 8,75,000/- to the respondent in respect of its claim No. 1 on the basis of the joint measurements of the work recorded by the Court Commissioner pursuant to order passed by this Court on 29.05.1998 in OMP No. 127/1998. The joint measurements were taken by the Court Commissioner after notice to the petitioner in terms of the Court Order dated 29.05.1998. The measurements are stated to have been taken by the Court Commissioner for a period of about one month in presence of representatives of both the parties. The representatives of the petitioner did not record any objection in the measurements of work done taken by the Court Commissioner and therefore those measurements became final and binding between the parties. The petitioner cannot be now allowed to turn around and urge that the learned arbitrators should have taken the measurements which were taken by the Railways on 19.03.1998 instead of relying on the measurements taken by the Court Commissioner in presence of representatives of both the parties. All the three arbitrators who constituted the panel of arbitrators were technical persons and belong to the Department of the petitioner itself. They knew the nitty-gritty of the contract awarded to the petitioner and in the opinion of this Court they rightly relied upon the measurements taken by the Court Commissioner in presence of representatives of both the parties for deciding the claim of the respondent in respect of work done and not paid claimed against claim No. 1. The objection of the petitioner in regard to the award on claim No. 1 is therefore disallowed.
5. Mr. Pathak, the learned Counsel appearing on behalf of the petitioner has then argued that the learned arbitrators went wrong in directing refund of security while deciding claim No. 2 of the respondent because according to him the security deposited by the respondent was liable to be forfeited on account of delay on its part in completing the contract work within the stipulated time period. This argument is of no consequence because the learned arbitrators have returned a finding in the arbitral award under consideration that the delay was not wholly attributable to the respondent. The learned arbitrators have further returned a finding that the termination of the contract of the respondent by the petitioner was not wholly justified. It is for these reasons that the learned arbitrators have directed refund of the security of the respondent while deciding claim No. 2. This Court does not find any error in this part of the award which may call for an interference while deciding the objections under Section 34 of the Act. The objection of the petitioner with regard to claim No. 2 is also disallowed.
6. Mr. Pathak has then argued that the learned arbitrators have not given any reason while awarding an amount of Rs. 2,50,000/- in favor of the respondent against claim No. 6 on account of loss of costs of the trees. This argument is not supported from the record of the arbitrators. A perusal of the arbitral award would show that the learned arbitrators have given cogent reasons for awarding the amount of Rs. 2,50,000/- in favor of the respondent on account of loss of costs of 39 trees out of 72 trees cut by the respondent at site. The learned arbitrators noted in the arbitral award that the petitioner could prove that it had returned only 33 out of 72 trees to the respondent and this makes the petitioner liable to pay the costs of remaining 39 trees. Hence I do not find any merit in the contention of the petitioner’s learned Counsel that the learned arbitrators have not given any reason for making the award under this head. The objection of the petitioner with regard to this claim is also disallowed.
7. The learned Counsel appearing on behalf of the petitioner has lastly argued on the point of interest awarded by the learned arbitrators in favor of the respondent. Mr. Pathak the learned Counsel appearing on behalf of the petitioner has relied upon Clause 16(2) of the General Conditions of Contract and also the provisions of Section 31(7) of the Arbitration and Conciliation Act, 1996 in support of his contention that since there was a prohibitory clause in the contract between the parties against award of interest, the learned arbitrators went wrong in awarding interest contrary to the terms of the contract between the parties. In this regard, it would be relevant to refer to Clause 16(2) of the General Conditions of Contract and the same is reproduced here-in-below:
INTEREST OF AMOUNTS
No interest will be payable upon the earnest money or the security deposit or amounts payable to the contractor under the contract, but Government securities deposited to term of Sub-clause (1) of this Clause will be repayable with interest accrued thereon
8. The above referred prohibitory clause came for consideration before this Court in a number of judgments and in all those judgments, this Court took a view that the arbitrator was justified in awarding interest on the amount withheld by the Department. Reference is made to a Division Bench judgment of this Court in FAO (OS) No. 187/2006 titled Union of India v. Pradeep Vinod Construction Company decided on 03.04.2006. At this stage, Mr. Pathak, the learned Counsel appearing on behalf of the petitioner has pointed out that the Railways have taken the above referred judgment of Division Bench of this Court in Special Leave Petition before the Hon’ble Supreme Court and according to him the Special Leave Petition has been admitted for hearing and in that Special Leave Petition, the Hon’ble Supreme Court has stayed the payment of interest. Having regard to the facts that the Hon’ble Supreme Court has stayed the payment of interest in Pradeep Vinod Construction’s Case, the award of interest by the learned arbitrators in the present case is upheld subject to the condition that the interest shall be paid to the respondent depending on the final out come of the abovementioned case pending in the Supreme Court.
9. For the foregoing reasons, I do not find any merit in the present objections petition. The same is, therefore, dismissed leaving the parties to bear their own costs.