Calcutta High Court
Food Corporation Of India vs Hari Prasad Kanoria And Others on 11 March, 1992
Equivalent citations: 96CWN658, AIR1992CAL346, AIR 1992 CALCUTTA 346, (1992) 1 CAL HN 550, (1992) CAL WN 658, (1993) 1 ARBILR 156
Author: Tarun Chatterjee
Bench: N.P. Singh, Tarun Chatterjee
ORDER Tarun Chatterjee, J.
1. This appeal has been filed on behalf of the Food Corporation of India (hereinafter referred to as "the Corporation") against the judgment of a learned Judge of this Court refusing to set aside an award dated 3rd January 1986 in favour of the respondent, directing payment of Rs. 1,78,961.56 with interest at the rate of16% per annum from 16th March 1981 to the date of the payment thereof or the date of the decree, whichever was earlier.
2. The Corporation by a public notice dated 25th April 1980 notified that a public auction for sale of damaged food grains declared unfit fqr human consumption shall be held in the office of the Regional Manager of the Corporation on 15th, 16th and I7th May 1980. It was also notified that intending purchasers might obtain detailed terms and conditions of the sale from the office of the District Manager of the Corporation at Burdwan and Deputy Manager (QC) Office at Calcutta.
3. At the public auction held on 16th May 1980 the respondent was the highest bidder for uncatcgorised damaged wheat stock weighing 7331 quintals 85 K.Gs. at Sector 3 for which he deposited Rs.47,660/- being 25% of the total cost of the total stocks at Rs. 26/- per quintal as earnest money. The Corporation issued a release order for 2000 quintals on 5th June 1990, the cost being Rs. 52,000/- which was partly deposited and partly adjusted from the earnest money. The respondent was also the highest bidder in respect of Sector 6 for the uncategorised damaged wheat weighing 27020.63 quintals. The respondent deposited Rs. 1,39,895/-being 25% of the total cost at the rate of Rs. 19.40 per quintal as earnest money. On 11th June 1980 the Corporation issued a release order for 1000 quintals, after deposit of a Bank Draft for Rs. 15,550/- and adjustment of Rs. 4,864.35 from the earnest money above. It is an admitted position that the respondent lifted the stock of 2000 and 1000 quintals only under the aforesaid two release orders dated 5th June 1980 and 11th June 1980 respectively.
Since the respondent failed and neglected to lift the balance stock and to pay the balance price for the same, the Corporation by two Notices dated 16th March 1981 forfeited the earnest money deposited by the respondent purporting to be in accordance with the terms and conditions for sale of the food grains in question.
4. The said terms and conditions for the sale of the food grains in question also contained an arbitration clause saying that all disputes, differences and questions which may at any time arise between the parties hereto touching or arising out or in respect of the subject-matter thereof shall be referred to the sole arbitration of any person appointed by the Zonal Manager of the Corporation and the award of such Arbitrator shall be final and binding on the parties to the said contract.
5. As a dispute arose between the parties as to whether in the facts and circumstances of the case it was open to the Corporation to forfeit the earnest money deposited on behalf of the respondent, an application u/S. 20 of the Arbitration Act (hereinafter referred to as "the Act") was filed for filing of the arbitration agreement and for appointment of an Arbitrator.
6. A learned Judge of this Court passed an order on 6th July 1984 directing the Zonal Manager, of the Corporation to appoint an Arbitrator within six weeks from the date of receipt of the order. The Arbitrator was directed to make his award within six months from the date of entering upon the reference.
7. The Zonal Manager of the Corporation by his letter dated 13th August 1984 appointed Shri M.L. Gupta, Additional Legal Adviser (Arbitrator) Director General, Supplies and Disposals, Government of India as the sole Arbitrator. After some preliminary orders the Arbitrator ultimately made and published the award on 3rd January 1986. According to the award aforesaid it was not open to the Corporation to forfeit the earnest money, before the contract relating to sales in question had been cancelled. It was held thatthe forfeiture was illegal and invalid and as such the contractor was entitled to refund of Rs. 1,78,961.56 p. along with interest at the rate of 16% per annum from the date of the forfeiture notices that is, 16th March 1981 up to the date of payment or the date of the decree, whichever was earlier.
8. An application was filed on behalf of the Corporation for setting aside the said award before a learned Judge of this Court primarily on the grounds, that -
(i) the award was null and void having been made and/or filed after the expiry of the period of six months from the date of entering upon the reference;
(ii) the direction to refund the earnest money to the respondent on the finding that the forfeiture of the earnest money by the Corporation was invalid, amounted to an error on the face of the award;
(iii) the Arbitrator should not have awarded interest pendente lite to the respondent from the date of entering upon the reference up to the date of making/publishing of the award;
(iv) the Arbitrator should not have awarded interest to the respondent from the date of the award up to the date of the decree or the date of payment, whichever was earlier;
9. As already stated above, the learned Judge after consideration of the submissions made on behalf of the parties rejected the application filed on behalf of the Corporation for setting aside the award aforesaid. The learned Judge, however, deleted that part of the award which had allowed interest from the date of entering upon the reference by the Arbitrator up to the date of the award on a finding that it was not permissible in law.
10. Mr. Sinha, appearing on behalf of the Corporation, urged that from the different orders passed by the Arbitrator it shall appear that he had entered upon the reference on and from 16th March 1985 and, in any case, on and from 25th June 1985, as such when the award was made and published on 3rd January 1986 it was beyond the period of six months from the date of entering upon the reference by the Arbitrator and as such the award was invalid.
11. In order to appreciate the contention of Mr. Sinha, it will be proper to refer to the aforesaid orders of the Arbitrator which are as follows:--
"16-3-1985:
A letter has been received from M / s. B. M. Bagaria & Co. Solicitors & Advocates for the contractor firm for months Senior Partner Shri B. M. Bagaria.
The contractor is allowed time to file claim Statement with supporting documents and copy to the respondent by 2nd April, 1985. The FCI may file reply with documents by 17th April, 1985 or in any case within 15 days of the receipt of the claim statement by it. Since it is an old case expedite the filing of their respective pleadings at the earliest. Inform all concerned.
M.I., Gupta, Sole Arbitrator."
"25-6-1985.
The contractor has submitted his rejoinder to the counter statement and counter claim filed by the FCI. A copy of the rejoinder is said to have been sent to the FCI.
Pleadings and the documents more or less are complete. The parties had desired a hearing at Calcutta. It will be posible to fix hearing of the case at Calcutta in the month of August, 1985. The parties and their counsel may convey a mutually agreed date to me, which could be fixed for hearing at Calcutta. The case could be heard for three days, in which parties may lead evidence and argue the case.
The two parties or the FCI may arrange an open air ticket from New Delhi to Calcutta and back and send it to me so that hearing at Calcutta may be fixed.
M. L. Gupta.
Sole Arbitratpr."
12. From a bare reference to order dated 16th March 1985 passed by the Arbitrator it shall appear that on the basis of a letter received from the Solicitors and Advocates for the respondent he allowed time to file the statement of claim with supporting documents. A direction was also given to the Corporation to file a reply along with documents within the time fixed in the said order.
13.From the order dated 25th June 1985 it is apparent that the Arbitrator noted that the respondent had submitted his rejoinder to the counter-statement and counter-claim filed on behalf of the Corporation and thereafter he observed that pleadings and documents were more or less complete and as the parties desired that the sittings should be at Calcutta they may convey a mutually agreed date to him which should befixed for his sitting at Calcutta. It is also apparent from the order dated 25th June 1985 that the next date fixed was 11th September 1985. The order of that date shows further that counsel appearing for the respondent dispensed with the formal proof of the documents filed on that day onbehalf of the Corporation except some documents which have been specifically mentioned in the order-sheet ofthatdate. It was further noted that counsel appearing for the Corporation had promised to send admission/denial of the claimant's documents within 15 days' time and the claimant was to file affidavits of their witnesses by 15th November 1985 positively. It also appears from the order dated 25th June 1985 that the Corporation was granted time up to 7th December 1985 to file counter-affidavits of their Witnesses and liberty was given to both parties to file documents, if any, by 30th November 1985, with copies to the other side and later dates were fixed for evidence and arguments.
14. On behalf of the respondent it was pointed out that from the order dated 25th June 1985, referred to above, it is apparent that the Arbitrator till that date had not applied his mind to the dispute in question and had passed some orders at Delhi and it was only on 11th September 1985, the counsel on behalf of the appellant Corporation as well as the respondent appeared before the Arbitrator and a direction was given in respect of dispensing with the formal proof of some of the documents and in respect of filing of affidavits and counter-affidavits. As such it shall be deemed that the Arbitrator entered upon the reference only on llth September 1985. As the award was made and published on 3rd January 1986, it shall be deemed to have been made and published within six months from the date of entering upon the reference.
15.In the case of Ramnath Agarwalla v. Goenka & Co., , a Full Bench of this Court held as follows (at p. 258 of AIR) :
"An Arbitrator does not enter on the reference as soon as he assumes the office of an Arbitrator. An Arbitrator does not necessarily enter on the reference when he actually commences the decision ofthe matter in the presence of both parties or ex parte. An Arbitrator enters on a reference when he first applies his mind to the dispute or controversy before him depending on the facts and circumstances of each case".
16.Mr. Sinha, appearing for the Corporation, placed reliance on the judgment of a learned Judge of this Court in the case of Bright Wire and Steel Industry v. Union of India, in support of his contention that 25th June 1985 should be taken as the date of entering upon the reference because on that date the Arbitrator, while granting time to one of the parties to file replication and documents, had exercised a judicial function in furtherance of his work of arbitration. Even in that decision it has been impressed that an Arbitrator will be deemed to have entered upon the reference only when he does something in furtherance and execution of the work of the arbitration. It will include any judicial function discharged by the Arbitrator for conducting the arbitration proceeding for determination of the dispute and/ or controversy referred to him. It is true that some of the observations made by the learned Judge in the aforesaid case helps the appellant Corporation. But in view of the Full Bench judgment referred to above, it is not possible for me to hold that the Arbitrator entered upon the reference on 25th June 1985 when he passed an order saying that the contractor had submitted his rejoinder to the counter-statement and counter-claim filed On behalf of the Corporation and as such the pleadings and the documents were more or less complete, a date of hearing can be fixed at Calcutta where the parties may lead evidence and make submissions. There is nothing in the orders dated 16th March 1985 and 25th June 1985 from which it can be inferred that the Arbitrator had applied his judicial mind to the dispute referred to him.
17. In the case of M/s. Jolly Steel Industries Pvt. Ltd. v. Union of India, it was pointed out as follows (at pp. 217-218 of AIR) :
"Thus the arbitration proceeding consists of two stages. One such stage consists of merely ministerial acts while the second stage consists of effective adjudicative acts in furtherance of the work of arbitration, namely of proceedings to decide controversies in between the parties, whether arising out of the main dispute or procedural aspects in the disposal thereof. The arbitrator cannot be said to have entered on the reference, unless the second stage can be said to have been reached someway or the other, looked at from this point of view it is impossible to hold that the Arbitrator had entered on reference on 17-11-71 when nothing had happened on that date beyond the Arbitrator issuing notices to the parties to file their statement of claims. The resume of events in this case indicates that no effective step was taken by the Arbitrator, till the hearing of the dispute commenced on 21-2-1992. Each one of the earlier stages covered merely some or the other of the ministerial acts such as issuing of notices, acceptance of statement of claims and adjourning the case to suit the conveniences of the parties. 2Ist February, 1972 must be held, on the facts and in the circumstances of the case, to be the date on which the Arbitrator had entered on reference. The award dated 15-5-72 was within four months prescribed under Clause 3 of Schedule-I of the Arbitration Act. In this view of the matter, the finding recorded by the learned Judge on this point is liable to be set aside."
18. Same view has been expressed by a Bench of this Court in the case of Smt. Bharati Mukherjee v. Shiva Trading Co. where it was held that the Arbitrator did not apply his mind to the dispute or the controversy referred for arbitration at the stage when the Arbitrator sent notice calling upon one or the other party to file a counter-statement.
19. Mr. Sinha, appearing for the Corporation, made a reference to the judgment of the Supreme Court in the case of the Secretary to the Govt. of Orissa v. Sarbeswar Rout, in support of his contention that date of entering upon the reference would be the date on which the Arbitrator directs the parties to submit their statements. From a bare reference to the judgment aforesaid of the Supreme Court it shall appear that the question which was under consideration was in respect of payment of interest from the date of 'commencement of arbitration proceeding'. In that connection it was said (at p. 2261 of AIR) :
"The Arbitrator in the present case was appointed on 16th March, 1982. He after being informed about his appointment, directed the parties to submit their statements of claim by the 20th April, 1982. The actual date when this order was made is not known. The contractor-respondent filed his statement on 5th May, 1982 and the appellant on 9th July, 1982. Relying on the observation in lossifoglu v. Coumantaros, (1941) 1 KB 396 and those of Raghubar Dayal, J. in Hari Shankar Lal v. Shambunath Prasad, , Mr. Panda, learned Counsel for the appellant contended that the arbitrator cannot be said to have entered on the reference earlier than April 20, 1982. According to the learned Counel for the respondent it could not be before 9th July, 1982 when the Arbitrator applied his mind to the cases of the parties. Reference was made to the decisions of several High Courts. In our view none of these cases is helpful to resolve the present controversy. They were not concerned with the question as to when a proceeding before an Arbitrator is deemed to commence."
20. The Supreme Court in the aforesaid case has clearly said that in the facts of that case the question at issue was not as to when the Arbitrator entered upon the reference, but the question which Was to be answered was as to when a proceeding before an Arbitrator is deemed to have commenced. As such the said judgment of the Supreme Court is of no help to the appellant. The award cannot be held to be invalid on the ground that it has been made and published beyond the period of six months from the date the Arbitrator entered upon the reference.
21. It was then urged on behalf of the appellant that the award was liable to be set aside on the ground that there was an error of law apparent on the face of the award. In this connection it was pointed out that the Arbitrator overlooked clause (d)(i) of the terms and conditions of the auction notice which provided that the balance of 75% cost of the sale shall be paid within 14 or 21 days from the date of the auction, in favour of the District Manager of the Corporation, Burdwan and in the event of failure ot pay the balance amount, the earnest money was liable to be forfeitted. In other words, as the respondent did not deposit the balance amount of 75% of the price of the food grains i'n question within the period prescribed from the date of auction, the Corporation was at liberty to forfeit the earnest money deposited on behalf of the respondent. According to Mr. Sinha as the Arbitrator has not properly construed the terms and conditions of the auction notice, that shall amount to an error of law on the face of the record and shall vitiate the award itself.
22-23. Mr: Das, appearing for the respondent, pointed out with reference to the two notices of forfeiture of the earnest money issued by the Corporation to the respondent that there was no statement in those notices, that the contract regarding sales in question had been cancelled and the earnest money deposited on behalf of the respondent was being forfeitted. It will be proper to refer to the relevant clauses of the terms and conditions of the auction notice which are as follows:
"
(i) Cash payment or demand draft/DCR on the State Bank of India or any other scheduled National Bank at Calcutta in favour of Regional Manager, Food Corporation of India, Calcutta of not less than 25% the amount on the total price calculated on the declared quantity be made on the spot as earnest money immediately on the fall of the hammer. The balance 75% cost shall be paid within 14 or 21 days from the date of auction in favour of District Manager, F.C.I., Burdwan. The earnest money wilt be liable to be forfeited if the successful bidder fails to pay the balance amount within aforesaid period.
... ......
(iv) In the event of failure to complete the payment within the specified time the sale relating 10 such lot or lots shall be cancelled and the earnest money in full shall be forfeited and Food Corporation of India shall be entitled to resell the goods or part thereof to another party at the risk and cost of the original buyer and also to recover any loss suffered by it as a result of such failure. Any gain on any resale as aforesaid shall accrue to the Food Corporation of India and the buyer shall not have any claim over it."
24. On a plain reading of clause d(iv) aforesaid before the earnest money in full could have been forfeited the sale relating to such lot or lots had to be cancelled. It is an admitted position that the contract regarding sale of lots in question was nevr cancelled before notices forfeiting the earnest money were issued to the respondent. The Arbitrator has also considered this aspect of the matter in his award as follows:
"I have given due consideration to this plea of the parties. Forfeiture as per terms and conditions of the auction sale would not mean that the contract for sale had been cancelled as contended by the counsel for F.C.I. Without cancelling the contract or the sale of the lots, the earnest money could not be forfeited by the F.C.I. I am, therefore, of the view that the forfeiture notice or the forfeitureitself was illegal and invalid in law. The forfeiture in respect of the price of unlifted stocks was also not in accordance with any of the terms and conditions of the auction. The FCI could at most resell the unlifted stocks and claim damages/losses from the contractor. Forfeiture in this respect was also illegal."
I am in complete agreement with the view taken by the Arbitrator that before the earnest money could have been forfeited, clause d(iv) of the terms and conditions of the auction notice required the contract relating to sales in question to be cancelled first. There is no dispute that two notices had been issued saying that in view of the failure on the part of the respondent to deposit the balance of the 75% of the value of the goods and for non-lifting thereof, the earnest money deposited on behalf of the respondent was being forfeited. It is difficult to accept the contention on behalf of the Coropration that when the notices of the forfeiture of the earnest money were issued. It shall amount to cancellation of the contract itself by implication. The construction put by the Arbitrator in respect of clauses d(i) and (d)(iv) of the terms and conditions of the auction notice, in my view, shall not amount to an error apparent on the face of the award calling for an interference by the Court.
25. In support of the contention that it is open to the Court to set aside an award on the ground of error of law on the face of the award, reference was made on behalf of the Corporation to the decision of the Privy Council in the case of Champsey Bhara & Co, v. Jivraj Ballu Spinning & Weaving Co. Ltd., (1923) 50 Ind App 324 : (AIR 1923 PC 66). Reference was also made to the case of F. R. Absalom Ltd. v. Great Western (London) Garden Village Society Ltd., (1933) AC 592 where ii was said that Court is entitled to look to the terms and conditions to ascertain whether the construction placed by the Arbitrator was wrong. Reliance was also placed on behalf of the Corporation to the case Giaeomo Costa Fu Andreav. British Italian Trading Co. Ltd., (1962) 2 All ER 53 in support of the proposition that an award can be set aside if there was an error on the face of such award. On behalf of the Corporation reference was also made to the judgment of the Supreme Court in the case of M/ s. Alien Berry & Co. Pvt. Ltd. v. Union of India, which pointed out as follows (at p. 701 of AIR):
"The dispute, amongst other disputes referred to the umpire and crystallized by him in the form of issues on the pleadings of the parties involved, as already stated, the question first as to what was sold, and secondly, arising out of that, the question whether besides the said sale-notes 160 and 197, the subsequent clarifications or explanations were binding on the Government. There were, no doubt, questions partly of fact and partly of law. But questions both of fact and law were referred to the umpire and prima facie his findings on them would bind the parties unless, as explained earlier, the umpire had laid down any legal proposition, such as a construction which is made on the basis of the award and is on the face of the award an error."
It was then said (at p. 701 of AIR) :
"The point is, is this such a case? It is true that this is not a case where a question of law is specifically referred to. It is clearly a case falling in the category of cases, like 1923 AC 395, where in deciding the questions referred to him the umpire has to decide a point of law. In doing so, the umpire, no doubt, laid down the legal proposition that the clarifications or assurances given subsequent to the dates of the said sale-notes by an officer or officers of the department were not binding on the respondents nor could they affect the scope of the sales. That answer the umpire was entitled to give. But the fact that he answered a legal point does not mean that he has incorporated into the award or made part of the award a document or documents the construction of which, right or wrong, is the basis of the award. The error, if any, in such a case cannot be said to be an error apparent on the face of The award entitling the Court to consider the various documents placed in evidence before the umpire but not incorporated in the award so as to form part of it and then to make _search if they have been misconstrued by him. This, in our understanding, is the correct principle emerging from the decisions which counsel placed before us. In any event, this is not a case where the umpire, in the words of Lord Dunedin. "tied himself down to a legal propositionwhich on the face of the award was unsound. The award makes it clear in so many words that he looked into the entire evidence, including the documents relied on by counsel and then only came to the conclusion that it did not assist the company in its contention as to the scope of the sales. Contentions 1 and 2 raised by Mr. Agarwal, therefore, cannot be upheld."
Ultimately it was held in that case as follows :
"Even assuming, however, that there was an error of construction of the agreement or even that there was an error of law in arriving at a conclusion such an error is not an error which is amenable to correction even in a reasoned award under the law."
I do not appreciate as to how the aforesaid judgment of the Supreme Court helps the Corporation. The Supreme Court has also considered the same question in the case of Food Corporation of India v. Jagindar Pal Mohinder Pal, . In that case also the Arbitrator made a speaking award after construing the scope and effect of a particular clause of the contract. The Supreme Court held in that case that it could not be said that such a construction was not conceivable and was possible. It was further. said that even if it was assumed for argument's sake that there was some mistake in the construction such mistake in the award was not amenable to be corrected by the Court.
26. In yet another case of Sudarshan Trading Company v. Govt. of Kerala, , it was said by the Supreme Court that the decision of an Arbitrator on the interpretation of the terms and conditions of the agreement in the award, if that was a possible view, cannot be examined by the Court in connection with the application for setting aside of such award.
27. So far as the facts of the preseni case are concerned, as already pointed out, clause d(iv) of the terms and conditions of the auction notice required the contract relating to sales in question to be cancelled first before the earnest money in full could have been forfeited and it being an admitted position that in the two notices forfeiting the earnest money there being no statement that the sale relating to the lots in question were being cancelled, can it be said that the view taken by the Arbitrator was not a possible view so far the construction of clause d(iv) of the terms and conditions of the auction notice is concerned. According to me, the view taken by the Arbitrator in the award that as the contract in respect of sale of the lots in question had not been cancelled, there could not be any forfeiture of the earnest money, cannot be held to be an error on the face of the award. The learned Judge rightly rejected the said ground for setting aside the award, taken on behalf of the Corporation.
28. Mr. Sinha, for the Corporation, also contended that the finding of the Arbitrator that there was no stock available with the Corporation to the extent mentioned in the auction notice was wrong and incorrect because uncategorised damaged wheat stocks were available for lifting by the respondent. which shall appear from Annexure I of the List of categorised damaged stocks. In the award this aspect of the matter has been discussed and, according to me, it is not open to the Court to express any opinion on that question because that will amount to enter-taining.an appeal against the award which is not permissible while considering the application for setting aside an award on the grounds mentioned in section 30 of the Act. Reference in this connection may be made to the aforesaid judgment of the Supreme Court in the case of Jagindar Pal Mohindre Pal (supra).
29. Coming to the question of award of interest by the Arbitrator, it has already been pointed out above that the learned Judge while upholding the award and rejecting the prayer to set aside the same, made on behalf of the Corporation, deleted the grant of interest from the date of entering upon the reference i.e. from 11th September, 1985 up to 3rd January 1986.
30. The appellant Corporation has neither taken any objection nor could have taken so far awarding of the interest for the period commencing from 16th March 1981 up to the date of entering upon the reference by the Arbitrator is concerned. The learned counsel for the Corporation, however, took an objection so far the award of interest by the Arbitrator relates to the period from the date of the award up to the date of the decree or payment of the amount in question, whichever is earlier,
31. This aspect of the matter has been considered by the Supreme Court in the case of Gujarat Water Supply & Sewerage Board v. Unique Erectors (Gujarat) (P) Ltd., which is as follows :
"Having regard to the position in law emerging from the decision of this Court in Executive Engineer (Irrigation) Balimela (supra) and S. 29 of the Arbitration Act, 1940 and S. 34 of the Code of Civil Procedure, we would modify the grant of interest in this case. The arbitrator has directed interest to be paid at 17% per annum from 6-8-1981 up to the date of decree viz., 17-6-1986. Since in this case the reference to arbitration was made after the commencement of the (Interest Act, 1978, the arbitrator under S. 3(l)(a) of the said Act was entitled to award interest from 6-8-1981 tilUl-8-1984 in view of this Court's decision in Abhudala Jena's case, (supra). In the light of the same decision, he could not have awarded interest for the period from 22-8-1984 till the date of the publication of the award viz. 19-7-1985. So far as interest for the period from the date of the award (19-7-1985) till the date of the decree is concerned, the question was not specifically considered in Abhaduta Jena's case (supra) but special leave had been refused against the order in so far as it allowed interest for this period. We think interest should be allowed for this period, on the principle that this Court can once proceedings under Ss. 15 to 17 are initiated, gram interest pending the litigation before it, i.e., from the date of the award to the date of the decree. It may be doubtful whether this can be done in cases arising before the Interest Act, 1978 in view of the restricted scope of S. 29 of the Arbitration Act. But there can be no doubt about the Court's power to grant this interest in cases governed by the Interest Act, 1978 as S. 3(1)(a) which was applied by Abhaduta Jena to arbitrators will equally apply to enable this Court to do this in these proceedings."
32. Having pointed out that so far the question of payment of interest for the period from the date of the award till the date of the decree was concerned, that question was not specifically considered in Abhudata Jena's case, ; but interest for the said period was allowed in cases governed by the Interest Act, 1978 as Section 3(1)(a) was equally applicable in such cases. However, from that every judgment it shall also appear that it Was directed to confine the interest on the principal sum or unpaid part only at the rate of 9%. For the period commencing from 16-3-1981 to the date of the entering upon the reference by the Arbitrator, as already pointed out above, the Arbitrator has awarded interest at the rite of 16% per annum For the period commencing from the date of the award till the date of the decree or actual payment, whichever is earlier, we direct payment of interest at the rate of 9% per annum instead of 16% per annum.
33. Accordingly, the appeal is dismissed subject to the modification regarding payment of interest at the rate of 9% per annum instead of 16% per annum as directed by the Arbitrator for the periods mentioned above.
34. In the facts and circumstances of the case, there will be no order as to costs.
N. P. SINGH, C. J.
35. I agree.
36. Appeal dismissed.