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43. The question still remains whether arbitrator has the power to award interest pendente lite, and if so on what principle. We must reiterate that we are dealing with the situation where the agreement does not provide for grant of such interest nor does it prohibit such grant. In other words, we are dealing with a case where the agreement is silent as to award of interest. On a conspectus of aforementioned decisions, the following principles emerge:

(i) A person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This basic consideration is as valid for the period the dispute is pending before the arbitrator as it is for the period prior to the arbitrator entering upon the reference. This is the principle of Section 34, Civil Procedure Code and there is no reason or principle to hold otherwise in the case of arbitrator.

8. Generally, the question of award of interest by the arbitrator may arise in respect of three different periods, namely: i) for the period commmencing form the date of dispute till the date the arbitrator enters upon the reference; ii) for the period commencing from the date of the arbitrator's entering upon reference till the date of making the award; and iii) for the period commencing from the date of making of the award till the date the award is made the rule of the court or till the date of realisation, whichever is earlier. In the appeals before us we are concerned only with the second of the three aforementioned periods. In Executive Engineer (Irrigation) Balimela v. Abhaduta Jena (1988) 2 SCC 721, two questions arose for consideration of the Court, namely i) the power of the arbitrator to award interest for the period prior to his entering upon reference, and; ii) the powers of the arbitrator to award interest for the period the dispute remained pending before him pendente lite. Since, the Court dealt with the second question in detail and held that the arbitrator had no jurisdiction or authority to award interest pendente lite, we think it necessary to consider the reasons for the decision. Justice Chinnappa Reddy, J. speaking for the bench held that neither the Interest Act, 1839 nor the Interest Act, 1978 conferred power on the arbitrator for awarding interest pendente lite. The learned Judge observed that Section 34 of the Civil Procedure Code which provides for the same did not apply to arbitrator inasmuch as an arbitrator is not a court within the meaning of the said provision. Consequently the arbitrator could not award interest pendente lite.

68. The aforesaid view would also find support from the fact that once a reference has been sought and if the matter is pending in the Court for considerable period of time a party who has to recover the amount should not be put at a disadvantage. The matter was pending in this Court from 1985 till the same was decided in 1994. Thereafter also time was taken by the respondent in appointing the Arbitrator and the Arbitrator entered upon reference as a consequence thereof only in 1998. The petitioner can hardly be blamed for the same.