Orissa High Court
State Of Orissa And Anr. vs United Commercial Company, Engineers ... on 11 March, 1996
Equivalent citations: AIR1996ORI217, 1996(I)OLR437, AIR 1996 ORISSA 217, 1996 (1) ARBI LR 559, (1996) 1 ARBILR 559, (1996) 1 ORISSA LR 437, (1996) 2 CURCC 330
Author: P.K. Misra
Bench: P.K. Misra
JUDGMENT P.K. Misra, J.
1. This is an appeal under Section 39 of the Arbitration Act (hereinafter referred to as the 'Act').
2. The Arbitration Tribunal passed an award on 13-2-1990 directing the State to pay an amount of Rs. 52,413/- and to release the EMD and ISD amounting to Rs. 8,160/- in full and final settlement of all the claims arising out of the dispute relating to Agreement No. 140 P2 of 1970-71 of Ganjam R. & B. Division concerning construction of H. L. Bridge over Khari Nalla on N.H. 5, Chhatrapur bye-pass in the district of Ganjam in Arbitration Case No. 138C/83. The award was challenged by the claimant-respondent as well as by the State. The State filed Misc. Case No. 185 of 1992 questioning the correctness of award in respect of Claim Item Nos. 11, 14-A and 15. The claimant filed Misc. Case No. 395 of 1992 challenging the rejection of Claim Item Nos. 1 to 10, 13 and 19 by the Arbitration Tribunal. Claimant had also contended that the Arbitration Tribunal should have awarded interest in favour of the claimant from the date of the award till the date of the decree. Both the Misc. Cases were taken up together and dismissed by a common order dated 16-1-1995. However, the Subordinate Judge has directed that the awarded amount is to be paid with interest at the rate of 12 per cent per annum from the date of award i.e. 13-2-1990 till the actual payment. Appeal has been preferred by the State but the claimant-respondent has not filed any appeal or cross-objection.
3. It was first contended by the learned Government Advocate that the Arbitration Tribunal has committed error in passing award in favour of the claimant in respect of Claim Item Nos. 11, 14-A and 15 as the materials on record were not sufficient to sustain the claim of the claimant in respect of all these items, Section 30 of the Act reads as follows:--
"30. Grounds for setting aside award--An award shall not be set aside on one or more of the following grounds, namely:
(a) that an arbitrator or umpire has misconducted himself or the proceedings;
(b) that an award has been made after the issue of an order by the Court superseding the arbitration or after the Arbitration proceedings have become invalid under Section 35;
(c) that an award has been improperly procured or is otherwise invalid."
The objections raised by the State before the Subordinate Judge and repeated in this Court do not come within the scope of any of the clauses in Section 30 of the Act. The Subordinate Judge while deciding the matter under Sections 30 and 33 of the Act does not sit in appeal over the award of the arbitrator. Law is well settled that when the parties choose their own arbitrator, they cannot dispute the decision either upon law or on facts when the award is good on the face of it. Even where an arbitrator commits mistakes either in law or in fact while deciding the matter referred to him the Subordinate Judge cannot disturb the award nor remit the same unless the mistakes are apparent on the face of the award and the documents incorporated in the award. Keeping in view the limited scope of interference by the Subordinate Judge under Sections 30 and 33 of the Act and the appellate Court under Section 39 of the Act, I am satisfied that there is no merit in the contentions raised by the learned Government Advocate.
4. The Subordinate Judge while dismissing both the objections has directed that the awarded amount should be paid with interest from the date of the award till the actual payment is made. The learned Government Advocate contends that under Section 29 of the Act, the Subordinate Judge has power to grant interest only from the date of the decree till realisation and not from any date prior to the decree.
5. In the present case, the entire discussion of the Subordinate Judge is as follows :--
"So far as the interest is concerned, there is no difficulty or bar in the law to grant interest in favour of the claimant-plaintiff from the date of award till actual payment is made in this case."
The power of the Court under the Act to grant interest flows from Section 29 of the Act. Section 29 of the Act is extracted hereunder:--
"Interest on awards-- Where and in so far as an 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."
From the express words of Section 29, it is apparent that the Court can direct payment of interest only from the date of the decree, and not from any date anterior to that. It has been faintly suggested that the Court has power to award interest from the date of the award and at any rate for the period when the matter remains pending before the Court by applying the principles of Section 34, C.P.C. read with Section 41 of the Act. Section 41 of the Act reads as follows:--
"41. Procedure and powers of Court--Subject to the provisions of this Act and of rules made thereunder:--
(a) the provisions of the Code of Civil Procedure, 1908, shall apply to all proceedings before the Court, and to all appeals, under this Act; and
(b) the Court shall have, for the purpose of and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purposes of, and in relation to, any proceedings before the Court;
Provided that nothing in Clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect to any of such matters."
The opening words of Section 41 themselves make it clear that the provisions of the C.P.C. shall apply to all proceedings before the Court subject to the provisions of this Act (Arbitration Act) and of rules made thereunder. When specific provision has been made under Section 29 of the Act regarding the permissibility of payment of interest from the date of the decree such specific provision has to govern the field and provisions of Section 34, C.P.C. must give way to Section 29 of the Act. If the Court intends to grant interest in a case where interest has not been awarded by the Arbitrator it can do so under Section 29 of the Arbitration Act and not under Section 34, C.P.C. Section 29 is exhaustive of the whole law upon the subject of interest on award so far as the Civil Court is concerned. The Section expressly makes provision for directing payment of interest on the principal sum as adjudged by the award and confirmed by the decree, from the date of the decree and it must be held that it carries a negative import to the effect that it shall not be permissible to the Court to award interest for a period anterior to the date of passing of the decree. In such view of the matter, the direction of the Subordinate Judge regarding payment of interest at the rate of 12 per cent per annum from the date of award till the actual payment requires to be modified and such direction can be operative only from the date of the decree.
6. In the result, the appeal is dismissed subject to the modification that the principal sum awarded and confirmed by the Subordinate Judge shall carry interest at the rate of 12 per cent from the date of the judgment of the Subordinate Judge i.e. 16-1-1995 which is deemed to be the date of the decree till the actual payment and not from the date of the award. There will be no order as to costs.