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1. These two cross appeals, one filed by State and another by the Contractor are directed against the order of the learned Additional District Judge, Raisingh Nagar, District Sri Ganganagar dated 9.8.2007 whereby the learned court below made the arbitration award dated 30.6.2001 as rule of Court awarding a sum of Rs.4,77,823.18 against the PWD department of the State in favour of the Contractor.

2. The State has preferred this appeal challenging the said Rule of Court on the ground that the learned Arbitrator had awarded the transportation cost in favour of the contractor beyond the rates (1) CMA-113/2009 (State of Rajasthan Vs. M/s Gyan Chand Mehta & Anr.) (2) cma -615/2008 (M/s Gyanchand Mehta Vs. State of Raj. & Ors.) Judgment dt.13.7.2009 prescribed in "G" Schedule of the Contract and, therefore, the award deserves to be set aside.

4. The learned counsel for the respondent Contractor has (1) CMA-113/2009 (State of Rajasthan Vs. M/s Gyan Chand Mehta & Anr.) (2) cma -615/2008 (M/s Gyanchand Mehta Vs. State of Raj. & Ors.) Judgment dt.13.7.2009 also relied upon a decision of this Court in case of M/s Choudhary Construction Company Vs. State of Rajasthan (S.B. Civil Revision Petition No.127/2003) reported in 2009(1)DNJ 543.

6. The learned counsel for the State, Mr. Mukul Singhvi however urged that since the award was unsustainable as the learned Arbitrator had given the rates for transportation in favour of the contract beyond "G" Schedule, the same was unsustainable and deserves to be set aside. He also justified the reduction of rate of interest by the learned ADJ in the impugned judgment.

7. Having heard learned counsels and in view of the judgments cited at the Bar, this Court does not find any force in the appeal filed by the State. Since arbitration proceedings were initiated in 1989 itself, therefore, the proceedings were governed by the earlier Act of 1940. As per the aforesaid two Supreme Court decisions cited at the Bar, there is considerable force in the contention raised by the learned counsel for the respondents that the State could not file the application under Section 34 of the new Arbitration Act, 1996 for setting aside of the impugned award. Moreover there is apparent contradiction in the impugned judgment dated 9.8.2007. On the one hand the learned court below held that the proceedings are governed by the 1996 Act under which admittedly there is no need to make the arbitration award, a rule of Court ,as there is no such provision in the (1) CMA-113/2009 (State of Rajasthan Vs. M/s Gyan Chand Mehta & Anr.) (2) cma -615/2008 (M/s Gyanchand Mehta Vs. State of Raj. & Ors.) Judgment dt.13.7.2009 new enactment of 1996 and the Arbitration Award itself is an enforceable decree, and on the other hand still while making the arbitration award in question a rule of Court thereby the learned court below resorted to the provisions of old Arbitration Act, 1940. The learned court below also reduced the rate of interest from 18% awarded by the learned Arbitrator to 6% without any valid reason. This Court in M/s Choudhary Construction Company's case (Supra) after discussing the decision of the Hon'ble Supreme Court in case of B.L. Gupta Construction Company (P) Ltd. Vs. Bharat Cooperative Group Housing Society Ltd. - 2003 (3) Arb.LR 570 (SC) has held that learned District Judge while deciding the application for making arbitration award a rule of Court cannot interfere with the rate of interest awarded by the learned Arbitrator. The relevant portion of the aforesaid judgment is quoted below:-

"5. The Hon'ble Supreme Court in B.L. Gupta Construction Company's case (Supra) held that the arbitrator had exercised his jurisdiction under Section 34 of the C.P.C. by grant of pendente lite interest at the rate of 18% per annum and the High Court could not have interfered with the said discretionary order where no reason was assigned for the same. The Hon'ble Supreme Court, however, reduced the rate for pre-reference stage and pre-arbitration stage to 10% per annum payable to the party. In Paradip Port Trust's case where High Court (1) CMA-113/2009 (State of Rajasthan Vs. M/s Gyan Chand Mehta & Anr.) (2) cma -615/2008 (M/s Gyanchand Mehta Vs. State of Raj. & Ors.) Judgment dt.13.7.2009 modifying the award, denied the interest on the ground that there was no claim for interest pendente lite, the Hon'ble Supreme Court modified that part of the order of the High Court and awarded 18% interest per annum pendente lite and future interest or post-award interest at the rate of 12% per annum from the date of decretal payment. Similarly this Court in Alim & Company's case (supra) modified the impugned order of the learned District Court and modified the arbitration award by awarding interest at the rate of 18% per annum and awarding the arbitrator award also made rule of Court.