{"id":145067,"date":"2009-03-03T00:00:00","date_gmt":"2009-03-02T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-chaudhary-construction-vs-state-anr-on-3-march-2009"},"modified":"2015-02-19T07:50:45","modified_gmt":"2015-02-19T02:20:45","slug":"ms-chaudhary-construction-vs-state-anr-on-3-march-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-chaudhary-construction-vs-state-anr-on-3-march-2009","title":{"rendered":"M\/S Chaudhary Construction … vs State & Anr on 3 March, 2009"},"content":{"rendered":"
Rajasthan High Court – Jodhpur<\/div>\n
M\/S Chaudhary Construction … vs State & Anr on 3 March, 2009<\/div>\n
CR 127\/03 - M\/s Chaudhary Construction Co., Jaipur Vs. State & Anr.   Judgment dt.3.3.09\n\n\n\n                                             1\/5\n\n\n IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN\n                  AT JODHPUR.\n\n                                     JUDGMENT\n<\/pre>\n
            M\/s Chaudhary Construction Company, Jaipur
\n                              VERSUS
\n                   The State of Rajasthan & Anr.<\/p>\n
\n\n           S.B. CIVIL REVISION PETITION NO.127\/2003\n\n\nDate of judgment                         :                3rd March, 2009\n\n                                        PRESENT\n\n             HON'BLE DR. JUSTICE VINEET KOTHARI\n\nMs. Rekha Borana) for the petitioner.\nMr. M.S. Panwar )\n\nMr. Mukul Singhvi for the respondents.\n\n                                         ---------\n\n1.              Heard learned counsels.\n\n\n\n<\/pre>\n
2.              This revision petition is directed against the order dated<\/p>\n
01st June, 2002 passed by the learned District Judge, Udaipur who<\/p>\n
while allowing the application under Section 17 of the Arbitration<\/p>\n
Act, 1940 made the arbitration award dated 26.3.1999 a rule of Court,<\/p>\n
however, reduced the rate of interest from 18% per annum as awarded<\/p>\n
by the Arbitrator to 9% per annum pendente lite from 25.3.1996 to<\/p>\n
the date of payment in the impugned order.\n<\/p>\n<\/p>\n
3.              The learned counsel for the petitioner contractor urged
\n CR 127\/03 – M\/s Chaudhary Construction Co., Jaipur Vs. State & Anr.   Judgment dt.3.3.09<\/p>\n
                                             2\/5<\/span><\/p>\n
that the Court had no power to reduce the rate of interest from 18% to<\/p>\n
9% per annum without assigning any reason in the impugned order.<\/p>\n
Unless the arbitration award itself is found to be wrong so as to not to<\/p>\n
make a rule of Court, the learned District Judge could not reduce the<\/p>\n
rate of interest while not disturbing the amount of arbitration award<\/p>\n
itself. She relied upon the judgment of the Hon’ble Supreme Court in<\/p>\n
the case of B.L. Gupta Construction (P) Ltd. Vs. Bharat<\/p>\n
Cooperative Group Housing Society Ltd. – 2003(3) Arb. LR 570<\/p>\n
(SC) and judgment of the Hon’ble Supreme Court in the case of<\/p>\n
Paradip Port Trust and others Vs. Unique Builders – 2001(1) Arb.<\/p>\n
LR 505 (SC) and the judgment of coordinate Bench of this Court in<\/p>\n
Alim & Co. Vs. State of Rajasthan – 1998 (Suppl.) Arb. LR 67.<\/p>\n
4.              As against this, Mr. Mukul Singhvi, learned counsel<\/p>\n
appearing for the respondents relying upon the decision of the<\/p>\n
Hon’ble Supreme Court in case of Krishna Bhagya Jala Nigam Ltd.<\/p>\n
V. G. Harischandra Reddy and Anr.<\/a> – AIR 2007 SC 817 referring to<\/p>\n
para 11 of the said judgment submitted that the Hon’ble Supreme<\/p>\n
Court in that case had reduced the rate of interest from 18% to 9% at<\/p>\n
all the three stages of the arbitration namely pre-arbitration, pendent<\/p>\n
lite and post-award period. He, therefore, submitted that since the<\/p>\n
Bank rates have been constantly falling and the present Banks also<\/p>\n
paid interest at the rate of 9% per annum, the impugned order of
\n CR 127\/03 – M\/s Chaudhary Construction Co., Jaipur Vs. State & Anr.   Judgment dt.3.3.09<\/p>\n
                                             3\/5<\/span><\/p>\n
learned District Judge does not require to be interfered with in the<\/p>\n
revisional jurisdiction of this Court.\n<\/p>\n<\/p>\n
5.              The Hon’ble Supreme Court in B.L. Gupta Construction<\/p>\n
Company’s case (Supra) held that the arbitrator had exercised his<\/p>\n
jurisdiction under Section 34 of the C.P.C. by grant of pendente lite<\/p>\n
interest at the rate of 18% per annum and the High Court could not<\/p>\n
have interfered with the said discretionary order where no reason was<\/p>\n
assigned for the same.               The Hon’ble Supreme Court, however,<\/p>\n
reduced the rate for pre-reference stage and pre-arbitration stage to<\/p>\n
10% per annum payable to the party. In Paradip Port Trust’s case<\/p>\n
where High Court modifying the award, denied the interest on the<\/p>\n
ground that there was no claim for interest pendente lite, the Hon’ble<\/p>\n
Supreme Court modified that part of the order of the High Court and<\/p>\n
awarded 18% interest per annum pendente lite and future interest or<\/p>\n
post-award interest at the rate of 12% per annum from the date of<\/p>\n
decretal payment. Similarly this Court in Alim & Company’s case<\/p>\n
(supra) modified the impugned order of the learned District Court and<\/p>\n
modified the arbitration award by awarding interest at the rate of 18%<\/p>\n
per annum and awarding the arbitrator award also made rule of Court.<\/p>\n
6.              The judgment relied upon by the learned counsel for the<\/p>\n
respondents of course indicates that the Hon’ble Supreme Court
\n CR 127\/03 – M\/s Chaudhary Construction Co., Jaipur Vs. State & Anr.   Judgment dt.3.3.09<\/p>\n
                                             4\/5<\/span><\/p>\n
reduced the rate of interest from 18% per annum to 9% per annum by<\/p>\n
observing that “Here also we may add that we do not wish to interfere<\/p>\n
with the Award except to say that after economic reforms in our<\/p>\n
country the interest regime has changed and the rates have<\/p>\n
substantially reduced and, therefore, we are of the view that the<\/p>\n
interest awarded by the Arbitrator at 18% for the pre-arbitration<\/p>\n
period, for the pendente lite period and further interest to be reduced<\/p>\n
to 9%”, however, with great respects, this reduction of interest by the<\/p>\n
Hon’ble Supreme Court in the facts of the peculiar case without<\/p>\n
laying down it is a matter of law that the learned District Court or for<\/p>\n
that matter the High court in revisional jurisdiction to reduce the rate<\/p>\n
of interest as awarded by the learned Arbitrator in the arbitration<\/p>\n
award, cannot be applied in the facts of the present case. On the other<\/p>\n
hand the judgments relied upon by the learned counsel for the<\/p>\n
petitioner clearly indicate that the rate of interest awarded by the<\/p>\n
arbitration in his discretion as per Section 34 of the C.P.C. cannot be<\/p>\n
reduced without assigning cogent reasons for that. In the present<\/p>\n
order impugned in the revision petition before this Court, no such<\/p>\n
reason is found by this Court and simply in the operative part of the<\/p>\n
impugned order the same has been directed to be paid with pendent<\/p>\n
lite interest at the rate of 9% per annum.\n<\/p>\n<\/p>\n
7.              In these facts and circumstances of this case and in view
\n CR 127\/03 – M\/s Chaudhary Construction Co., Jaipur Vs. State & Anr.   Judgment dt.3.3.09<\/p>\n
                                             5\/5<\/span><\/p>\n
of the judgments cited at the Bar, this Court is of the view that the<\/p>\n
learned District Judge was not right in reducing the rate of interest<\/p>\n
from 18% per annum to 9% per annum.\n<\/p>\n<\/p>\n
8.              Consequently, this revision petition is allowed and the<\/p>\n
impugned part of the order dated 1.6.2002 is set aside and the rate of<\/p>\n
interest instead of 9% per annum shall be substituted by 18% per<\/p>\n
annum as awarded by the learned Arbitrator. No costs.<\/p>\n
                                                   [ DR. VINEET KOTHARI ], J.\n<\/p>\n
\nitem No.1
\nbabulal\/-<\/p>\n","protected":false},"excerpt":{"rendered":"
Rajasthan High Court – Jodhpur M\/S Chaudhary Construction … vs State & Anr on 3 March, 2009 CR 127\/03 – M\/s Chaudhary Construction Co., Jaipur Vs. State & Anr. Judgment dt.3.3.09 1\/5 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR. JUDGMENT M\/s Chaudhary Construction Company, Jaipur VERSUS The State of Rajasthan & Anr. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,19],"tags":[],"class_list":["post-145067","post","type-post","status-publish","format-standard","hentry","category-high-court","category-rajasthan-high-court-jodhpur"],"yoast_head":"\nM\/S Chaudhary Construction ... vs State & Anr on 3 March, 2009 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-chaudhary-construction-vs-state-anr-on-3-march-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S Chaudhary Construction ... vs State & Anr on 3 March, 2009 - 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