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1
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN
AT JODHPUR
(1) S.B. Civil Writ Petition No.!1"#!1$
Union o% In&i' Or.
*#.
+#. S,ri G'ne, Govern-ent Contr'tor R/r'l Wor0 Anr.
() S.B. Civil Writ Petition No.$#!1$
Union o% In&i' Or.
*#.+#. S,ri G'ne, Govern-ent Contr'tor R/r'l Wor0 Anr.
Date of Order ::: 10.11.2014
PRESENT
HON2B3E +R. JUSTICE P.4. 3OHRA
Mr. Jagdish Vyas, for the petitioners.
Mr. Shyam Ladrecha, for the respondents.
Re5ort'6le
oth these !rit petitions are fo"nded on identica# facts and the
$"estion of #a! in%o#%ed therein is common, therefore, these petitions are
disposed of &y this common order.
'acts in &re%ity, as pro(ected in S.. )i%i# *rit +etition
o.201-2014, are narrated in chrono#ogica# order as "nder:/
t the thresho#d, a contract for !or of hand#ing of goodsparce#s
transshipment !as a!arded to the first respondent for a period of three
years commencing from 14th Octo&er, 134 and p"rs"ant thereto an
agreement !as signed &et!een the petitioners and the first respondent on
1th Octo&er, 134 containing ar&itration c#a"se. S"&se$"ent#y, another
contract of same nat"re !as a!arded to the first respondent for a period of
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three years commencing from 1-th May, 10 and an agreement &et!een
the parties !as e5ec"ted for the same on 16th May, 10 ha%ing ar&itration
c#a"se. On comp#etion of &oth the contracts, a disp"te cropped "p &et!een
the ri%a# parties regarding payments, and therefore, first respondent for
redressa# of his grie%ances in%oed ar&itration c#a"se and initiated the
proceedings for appointment of ar&itrator for &oth the contracts. y
("dicia# inter%ention, s"&(ect/matter of disp"te in &oth the contracts !ere
referred to an ar&itrator and Shri La# Singh 7((a!a#, retired Di%isiona#
Manager, orth/*estern 8ai#!ay, Jodhp"r !as appointed as so#e ar&itrator.
9he ar&itrator passed separate a!ards for &oth the contracts of e%en date i.e.
1st March, 200.
eing aggrie%ed &y the ar&itra# a!ards, petitioners #aid separate
petitions "nder Section 4 of the r&itration and )onci#iation ct, 1-
;for short, hereinafter referred to as <the ct of 1-<= &efore the #earned
District J"dge, ianer raising certain o&(ections against the a!ards. #ong
!ith the petitions "nder Section 4 of the ct of 1-, petitioners a#so fi#ed
separate app#ications "nder Section 6 of the Limitation ct for condonation
of de#ay. 9he #earned District J"dge, ianer, !hi#e re#ying on a decision
of >on<&#e pe5 )o"rt, re(ected &oth the petitions "nder Section 4 of the
ct of 1- &y ho#ding that in these proceedings, pro%isions of Section 6 of
the Limitation ct are not app#ica&#e. 9h"s, &oth the petitions !ere thro!n
a!ay so#e#y on the gro"nd of #imitation.
'ee#ing dismayed !ith the order of the #earned District J"dge,
ianer, petitioners preferred t!o separate appea#s &efore this )o"rt "nder
Section of the ct of 1- and this )o"rt !as p#eased to decide &oth
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these appea#s &y a common order dated 1-th 'e&r"ary, 2006. 9he )o"rt
he#d that petitions "nder Section 4 of the ct of 1- are not time &arred,
and therefore, !hi#e a##o!ing the appea#s, matter !as remanded &ac to the
#earned District J"dge for deciding o&(ections of the petitioners afresh on
merits. 9he operati%e portion of the order reads as "nder:/
9he net res"#t is that the imp"gned order cannot
&e s"stained. 9he appea# is therefor a##o!ed, the
imp"gned order is set aside, and the matter is sent &ac
to the #earned tria# )o"rt, !ith a direction to decide theo&(ections on merits, in accordance !ith the #a!, and
most e5peditio"s#y.
9he parties are directed to appear &efore the
#earned tria# )o"rt on 11th March 2004, as prayed.
fter remand, the petitions "nder Section 4 of the ct of 1- fi#ed
on &eha#f of the petitioners !ere considered de/no%o on merits &y the
#earned dditiona# District J"dge o.2, ianer ;for short, <#earned tria#
)o"rt<=. 9he #earned tria# )o"rt after e5amining the o&(ections on merits
fo"nd that there is no s"&stance in the o&(ections and conse$"ent#y &y order
dated 14th May, 200 dismissed the petitions of the petitioners "nder
Section 4 of the ct of 1-. ?t is apparent from the p#eadings that after
re(ection of the petitions s"&mitted &y the petitioners "nder Section 4 of
the ct of 1-, no endea%o"r !as made at their &ehest to cha##enge the
order of the #earned tria# )o"rt, and therefore, &y eff#"5 of time order
attained fina#ity.
ccording to %ersion of the petitioners, after e5piry of period of
#imitation from the date of order dated 14th May, 200, !ithin reasona&#e
period, the re$"isite amo"nt !as paid to the contractor !ith interest in
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terms of ar&itra# a!ards. 9he re$"isite amo"nt !as paid in the month of
Decem&er, 200.
9he respondent/contractor fee#ing dis/satisfied !ith the action of the
petitioners in maing comp#iance of the ar&itra# a!ard initiated e5ec"tion
proceedings in the year 2010 for c#aiming interest on the tota# amo"nt
a!arded &y the ar&itrator @12A from the date of the a!ard. 9he prayer
made in the e5ec"tion petition on &eha#f of the respondent/contractor !as
resisted &y the petitioners and a rep#y !as s"&mitted, !herein it is a%erred
that the re$"isite amo"nt in terms of ar&itra# a!ard !ith interest has &een
paid to the petitioner and as s"ch it is not entit#ed for interest @12A on the
aforesaid amo"nt from the date of a!ard. 9he #earned District J"dge,
ianer ;for short, <#earned e5ec"ting )o"rt<= after hearing the ri%a# parties
passed the imp"gned order dated th o%em&er, 201, !here&y the
petitioners are directed to pay interest to the respondent/contractor @12A
from the date of a!ard on the entire c#aim for !hich respondent !as
dec#ared entit#ed &y the ar&itrator. 9he order of #earned e5ec"ting )o"rt is
"nder cha##enge in the !rit petition.
Learned co"nse# for the petitioners, Mr. Jagdish Vyas, has
%ehement#y arg"ed that order imp"gned is dehors the ar&itra# a!ard
inasm"ch as for certain c#aims, the ar&itrator has not a!arded any interest to
the respondent, yet the #earned e5ec"ting )o"rt has a##o!ed interest @12A,
!hich is an error apparent on the face of record, and therefore, imp"gned
order cannot &e s"stained. Mr. Vyas, #earned co"nse# for the petitioners,
!o"#d contend that an ar&itra# a!ard on attaining fina#ity is e5ec"ta&#e as a
decree of a ci%i# co"rt, and therefore, the po!ers of the e5ec"ting )o"rt, in
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this regard, are ain to a ci%i# )o"rt to grant re#ief to the decree/ho#der in
terms of the decree and not &eyond the same. B#a&orating his s"&missions,
in this &eha#f, #earned co"nse# has s"&mitted that the #earned e5ec"ting
)o"rt has e5ceeded its ("risdiction &y a##o!ing interest @12A to the
respondent, !hich !as &eyond the scope of the a!ard itse#f and as s"ch the
a!ard imp"gned merits ann"#ment in e5ercise of certiorari ("risdiction of
this )o"rt. Learned co"nse# for the petitioners has s"&mitted that the
o&(ections #aid &y the petitioners "nder Section 4 of the ct of 1- !ere
re(ected on 14th May, 200 and thereafter !ithin a reasona&#e period
che$"es of the re$"isite amo"nt !ere deposited in the )o"rt on 26th
Septem&er, 200, and therefore, interest c#aimed &y the respondent/
contractor !as not at a## admissi&#e in terms of Section - of the ct of
1-, !hich is a %ery %ita# iss"e, !hich !as not considered &y the #earned
)o"rt &e#o!, !hi#e passing the imp"gned order. Last#y, #earned co"nse#
has "rged that in terms of Section 1;=;a= of the ct of 1- interest !hich
!as disa##o!ed on certain c#aims to the respondent/contractor &y the
ar&itra# 9ri&"na# !as not at a## admissi&#e and yet the #earned )o"rt &e#o!
has a##o!ed the same contrary to the mandate of #a!, !hich is serio"s
("risdictiona# error !arranting interference &y this )o"rt in e5ercise of
s"per%isory ("risdiction of this )o"rt enshrined "nder rtic#e 22 of the
)onstit"tion.
Learned co"nse# for the petitioners in s"pport of his contentions has
p#aced re#iance on a decision of >on<&#e S"preme )o"rt in case of St'te o%
H'r7'n' Or. *#. +#. S.3. Aror' Co-5'n7 8AIR !1! SC 1911:;
!hi#e #aying stress on paras 13.2 and 13.4 of the %erdict. 9he )o"rt in para
13 has he#d as "nder:/
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13. s there is some conf"sion as to !hat section 1;=
a"thoriCes and !hat it does not a"thoriCe, !e !i##
attempt to set o"t the #ega# position regarding a!ard of
interest &y the ar&itra# tri&"na#s, as emerging fromsection 1;= of the ct.
13.1. 9he pro%ision for interest in the ct is contained
in section 1 dea#ing !ith the form and contents of
ar&itra# a!ard. ?t emp#oys t!o significant e5pressions
!here the ar&itra# a!ard is for payment of money
and the ar&itra# tri&"na# may inc#"de in the s"m for
!hich the a!ard is made, interest..... on the !ho#e or
any part of the money. 9he #egis#at"re has th"s made
it c#ear that a!ard of interest "nder s"&/section ;= of
section 1 ;and a!ard of costs "nder s"&/section ;3= of Section 1 of the ct= are anci##ary matters to &e
pro%ided for &y the a!ard, !hen the ar&itra# tri&"na#
decides the s"&stanti%e disp"tes &et!een the parties.
9he !ords Es"m for !hich the a!ard is made< and Ea
s"m directed to &e paid &y an ar&itra# a!ard<
conte5t"a##y refer to a!ard on the s"&stanti%e c#aims
and not anci##ary or conse$"entia# directions re#ating to
interest and costs.
13.2. 9he a"thority of the ar&itra# tri&"na#s to a!ard
interest "nder section 1;=;a= is s"&(ect to the contract
&et!een the parties and the contract !i## pre%ai# o%er
the pro%isions of section 1;=;a= of the ct. *here the
contract &et!een the parties contains a pro%ision
re#ating to, or reg"#ating or prohi&iting interest, the
entit#ement of a party to the contract to interest for the
period &et!een the date on !hich the ca"se of action
arose and the date on !hich the a!ard is made, !i## &e
go%erned &y the pro%isions of the contract, and thear&itra# tri&"na# !i## ha%e to grant or ref"se interest,
strict#y in accordance !ith the contract. 9he ar&itra#
tri&"na#s cannot ignore the contract &et!een the
parties, !hi#e dea#ing !ith or a!arding pre/a!ard
interest. *here the contract does not prohi&it a!ard of
interest, and !here the ar&itra# a!ard is for payment of
money, the ar&itra# tri&"na# can a!ard interest in
accordance !ith Section 1;= ;a= of the ct, s"&(ect to
any term regarding interest in the contract.
13.. ?f the contract pro%ides for compo"nding of
interest, or pro%ides for payment of interest "pon
interest, or pro%ides for interest paya&#e on the
principa# "pto any specified stages &eing treated as
part of principa# for the p"rpose of charging of interest
d"ring any s"&se$"ent period, the ar&itra# tri&"na# !i##
ha%e to gi%e effect to it. "t !hen the a!ard is
cha##enged "nder Section 4 of the ct, if the co"rt
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finds that the interest a!arded is in conf#ict !ith, or
%io#ating the p"&#ic po#icy of ?ndia, it may set aside
that part of the a!ard.
13.4. *here an ar&itra# tri&"na# a!ards interest "nder
section 1;=;a= of the ct, it is gi%en discretion in
three areas to do ("stice &et!een the parties. 'irst is in
regard to rate of interest. 9he 9ri&"na# can a!ard
interest at s"ch rate as it deems reasona&#e. 9he second
is !ith reference to the amo"nt on !hich the interest is
to &e a!arded. ?nterest may &e a!arded on the !ho#e
or any part of the amo"nt a!arded. 9he third is !ith
reference to the period for !hich the interest is to &ea!arded. ?nterest may &e a!arded for the !ho#e or any
part of the period &et!een the date on !hich ca"se of
action arose and the date on !hich the a!ard is made.
13.6. 9he ct does a!ay !ith the distinction and
differentiation among the fo"r interest &earing periods,
that is, pre/reference period, pendente #ite period, post/
a!ard period and post/decree period. 9ho"gh a
di%iding #ine has &een maintained &et!een pre/a!ardand post/a!ard periods, the interest &earing period can
no! &e a sing#e contin"o"s period the o"ter #imits
&eing the date on !hich the ca"se of action arose and
the date of payment, s"&(ect ho!e%er to the discretion
of the ar&itra# tri&"na# to restrict the interest to s"ch
period as it deems fit.
13.-. )#a"se ;&= of Section 1;= is intended to ens"re
prompt payment &y the a!ard/de&tor once the a!ard ismade. 9he said c#a"se pro%ides that the s"m directed
to &e paid &y an ar&itra# a!ard sha## carry interest at
the rate of 13A per ann"m from the date of a!ard to
the date of payment if the a!ard does not pro%ide
other!ise in regard to the interest from the date of the
a!ard. 9his maes it c#ear that if the a!ard grants
interest at a specified rate "p to the date of payment, or
specifies the rate of interest paya&#e from the date of
a!ard ti## date of payment, or if the a!ard specifica##y
ref"sed interest, c#a"se ;&= of Section 1 !i## not comeinto p#ay. "t if the a!ard is si#ent in regard to the
interest from the date of a!ard, or does not specify the
rate of interest from the date of a!ard, then the party in
!hose fa%o"r an a!ard for money has &een made, !i##
&e entit#ed to interest at 13A per ann"m from the date
of a!ard. >e may c#aim the said amo"nt in e5ec"tion
e%en tho"gh there is no reference to any post a!ard
interest in the a!ard. B%en if the pre/a!ard interest is
at m"ch #o!er rate, if the a!ard is si#ent in regard to
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post/ a!ard interest, the c#aimant !i## &e entit#ed to
post/a!ard interest at the higher rate of 13A per
ann"m. 9he higher rate of interest is pro%ided in c#a"se
;&= !ith the de#i&erate intent of disco"raging a!ard/de&tors from adopting di#atory tactics and to pers"ade
them to comp#y !ith the a!ard.
On the other hand, #earned co"nse# for the respondent/contractor has
"rged that the imp"gned order passed &y the #earned e5ec"ting )o"rt is in
consonance and conformity !ith the pro%isions of Section 1;=;&= of the
ct of 1-, and therefore, no interference !ith the same is ca##ed for in
e5ercise of certiorari ("risdiction of this )o"rt. Learned co"nse#, Mr.
Ladrecha, has s"&mitted that e%en if for certain c#aims, the ar&itra# 9ri&"na#
has not a!arded interest, the respondent is entit#ed for interest post ar&itra#
a!ard &y %irt"e of c#a"se ;&= of Section Section 1;= of the ct of 1-
and the #earned e5ec"ting )o"rt has passed the imp"gned order &y re#ying
on the said c#a"se, !hich is a ("st decision !arranting no interference in
e5ercise of s"per%isory ("risdiction of this )o"rt. B#a&orating his
s"&missions, in this &eha#f, Mr. Ladrecha !o"#d contend that interest
en%isaged "nder Section 1;=;a= of the ct of 1- refers to interest on the
amo"nt a!arded anterior to the ar&itra# a!ard, !hereas c#a"se ;&= of
Section 1;= dea#s !ith interest on the amo"nt a!arded &y the ar&itra#
9ri&"na# posterior to the a!ard and for !hich grant of interest on the entire
a!ard @13A per ann"m is mandated and &y the imp"gned order the
#earned e5ec"ting )o"rt has a!arded interest @12A on#y, !hich cannot &e
fa"#ted so as to mae s"&(ect matter of ("dicia# scr"tiny.
?n s"pport of his contentions, Mr. Ladrecha has a#so p#aced re#iance
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on paras 1-, 1 as !e## as 13.4 and 13.- of the %erdict of >on<&#e S"preme
)o"rt in State of >aryana F Ors. ;s"pra=. +aras 1- and 1 read as "nder:/
1-. Some r&itra# 9ri&"na#s ha%e misconstr"ed c#a"se
;&= of section 1;= of the ct and ass"med that the
said pro%ision re$"ires the rate of post/a!ard interest
in a## ar&itra# a!ards sho"#d &e 13A per ann"m, and
that they do not ha%e any discretion in regard to post/
a!ard interest. Some ha%e misconstr"ed it f"rther to
infer the rate of interest mentioned therein is an
indication that in%aria&#y the rate of interest in
ar&itrations, either pre/a!ard or post/a!ard, sho"#d &e
13A per ann"m. oth these ass"mptions are &ase#essand erroneo"s. ?f that !as the #egis#ati%e intention,
there !o"#d ha%e &een no need for %esting discretion in
r&itra# 9ri&"na#s, in the matter of interest, "nder
section 1;=;a=. 9he princip#es re#ating to a!ard of
interest, in genera#, are not different for co"rts and
ar&itra# tri&"na#s, e5cept to the e5tent indicated in
section 1;= of the ct and )+). comparati%e#y
high rate of post/a!ard interest is pro%ided in section
1;=;&= of the ct, not &eca"se 13A is the norma# rate
of interest to &e a!arded in ar&itrations, &"t p"re#y as adeterrent to a!ard/de&tors from a%oiding payment or
"sing de#aying tactics. ?n fact a pro%ision simi#ar to
section 1;=;&= of the ct, if pro%ided in section 4 of
)ode of )i%i# +roced"re, !i## considera&#y red"ce the
tra%ai#s of p#aintiffs in e5ec"ting their decrees in ci%i#
cases. e that as it may.
1. 9he difference &et!een c#a"ses ;a= and ;&= of
section 1;= of the ct may con%enient#y &e noted at
this stage. 9hey are:
;i= )#a"se ;a= re#ates to pre/a!ard period and c#a"se ;&=
re#ates to post/ a!ard period. 9he contract &inds and
pre%ai#s in regard to interest d"ring the pre/a!ard
period. 9he contract has no app#ication in regard to
interest d"ring the post/a!ard period.
;ii= )#a"se ;a= gi%es discretion to the r&itra# 9ri&"na#
in regard to the rate, the period, the $"ant"m ;principa#
!hich is to &e s"&(ected to interest= !hen a!ardinginterest. "t s"ch discretion is a#!ays s"&(ect to the
contract &et!een the parties. )#a"se ;&= a#so gi%es
discretion to the r&itra# 9ri&"na# to a!ard interest for
the post/a!ard period &"t that discretion is not s"&(ect
to any contractG and if that discretion is not e5ercised
&y the ar&itra# 9ri&"na#, then the stat"te steps in and
mandates payment of interest, at the specified rate of
13A per ann"m for the post/ a!ard period.
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;iii= *hi#e c#a"se ;a= gi%es the parties an option to
contract o"t of interest, no s"ch option is a%ai#a&#e in
regard to the post/a!ard period.
?n a n"tshe##, in regard to pre/a!ard period,
interest has to &e a!arded as specified in the contract
and in the a&sence of contract as per discretion of the
r&itra# 9ri&"na#. On the other hand, in regard to the
post/a!ard period, interest is paya&#e as per the
discretion of the r&itra# 9ri&"na# and in the a&sence
of e5ercise of s"ch discretion, at a mandatory stat"tory
rate of 13A per ann"m.
Mr. Ladrecha has a#so p#aced re#iance on a yet another decision of
>on<&#e pe5 )o"rt in case of In&i'n H/-e Pi5e Co. 3t&. *#. St'te o%
R'<'t,'n; reported in !1! CDR =" (SC). ?n this %erdict, the pe5 )o"rt
has reiterated the princip#es #aid do!n in case of State of >aryana ;s"pra=.
Mr. Ladrecha has contended that after passing of the ar&itra# a!ard, the
protracted ("dicia# proceedings at the &ehest of the petitioners has de#ayed
the payment of re$"isite amo"nt for more than si5 years, therefore,
entit#ement of the respondent for interest in terms of Section 1;= of the
ct of 1- is "n$"estiona&#e and as s"ch the interest a!arded &y the
#earned e5ec"ting )o"rt cannot &e categoriCed as infirm or !itho"t
("risdiction. )o"ntering the arg"ment of the #earned co"nse# for the
petitioners that the #earned e5ec"ting )o"rt has tra%e##ed &eyond the terms
of the a!ard, Mr. Ladrecha !o"#d contend that post ar&itra# a!ard interest
is a right of the respondent contractor, !hich emanates from the mandatory
pro%ision of #a! and same cannot &e constr"ed as &eyond the scope of the
ar&itra# a!ard.
? ha%e heard #earned co"nse# for the parties and per"sed the
imp"gned orders.
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12
SCC "$:; !hi#e reiterating the same princip#e, the pe5 )o"rt in para
has he#d as "nder:/
. ?t is o&%io"s that the e5ec"ting co"rt had no
("risdiction to direct the reco%ery of any amo"nt !hich
!as not granted &y the decree "nder e5ec"tion since the
decree !as for a mere dec#aration. 9he order of the
e5ec"ting co"rt &eing !itho"t ("risdiction, it !as the
d"ty of the >igh )o"rt to ha%e corrected that error of
("risdiction. >o!e%er, the >igh )o"rt has fai#ed to do
so.
?n case of R'<'t,'n Fin'ni'l Cor5or'tion *#. +'n In&/tri'l
Cor5or'tion 3t&. 8(!!=) SCC 9:; !hi#e reiterating the princip#e that
e5ec"ting )o"rt cannot go &eyond the decree, the pe5 )o"rt he#d in para
13 as "nder:/
13. *e ha%e considered the ri%a# s"&missions.
9here can &e no disp"te to the proposition that the
e5ec"ting )o"rt cannot go &eyond the decree. 9here
can &e no disp"te that the e5ec"ting )o"rt m"st tae
the decree according to its tenor. #so as has &een set
o"t in Hreater )ochin De%e#opment "thority case
!hen a decree is in terms of an a!arddoc"ment then
the terms of that doc"ment ha%e to &e #ooed at. ?n this
case the decree is in terms of the compromise deed.
9he decree does not pro%ide that the compromise deedor any of its terms ha%e &een %aried. 9o &e
remem&ered, that the decree is passed "nder Order 2
8"#e )i%i# +roced"re )ode. 7nder this pro%ision
norma##y the )o"rt passes the decree in terms of the
compromise. Of co"rse, the )o"rt can mae a change.
>o!e%er, if the )o"rt !as maing a change it !o"#d
ha%e had to record !hy it !as maing the change and
!hat change it !as maing. ?t co"#d not then pro%ide
that the decree !as in terms of the compromise. ?f the
)o"rt !as not passing the decree in terms of thecompromise then this opening portion of the decree
co"#d not ha%e &een there. 9he s"&se$"ent portion is
mere c#assificatory in nat"re as to !hich of the options
!as to &e e5ercised. 9his does not go%ern or detract
from the main terms of the decree !hich is a decree in
terms of the compromise. )#a"ses 2 and of the
compromise deed mae it %ery c#ear that the appe##ants
!ere entit#ed to charge interest on ha#f year#y &asis. *e
see no s"&stance in the s"&mission that the ha#f year#y
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rests !ere to app#y on#y if the rate of interest !as to
&e decided &y the appe##ants. 9hese !ords c#ear#y
app#ied to &oth the options. ?n the c#assificatory portion
the !ords on ha#f year#y &asis ha%e not &eenmentioned &eca"se the portion is on#y c#arifying ho!
interest !as to &e ca#c"#ated. 9his portion th"s does not
detract from the fact that the decree is in terms of the
compromise deed. Mere#y &eca"se some other minor
changes, !hich appear to &e inad%ertent changes, ha%e
crept in do not a#so detract from the fact that the decree
is in terms of the compromise deed. *e a#so do not
find any "ncertainty in the decree.
?n case of J 4 B'n0 3t&. Or. *#. J'>&i, C. G/5t' 8(!!$)
1! SCC 9":; three J"dges ench of >on<&#e S"preme )o"rt, !hi#e di#ating
on the po!ers of the e5ec"ting )o"rt "nder Section 4 )+), reiterated the
same princip#e that e5ec"ting )o"rt cannot go &eyond the decree and he#d
in para 2 as "nder:/
2. 9he short $"estion in%o#%ed in the case is
!hether the e5ec"ting co"rt co"#d go &eyond the
decree &y directing that the respondent &e promoted to
the post of )hief Manager. ?t is no more res integra
that the e5ec"ting co"rt has no ("risdiction to go
&ehind the decree. ?t is not disp"ted that the decree did
not contain any direction to promote the respondent to
the post of chief Manager. 7nder s"ch circ"mstances,!e are of the %ie! that the e5ec"ting co"rt as !e## as
the >igh )o"rt fe## in error in iss"ing directions in
e5ec"tion case that the respondent &e promoted to the
post of )hief Manager. 9he order "nder cha##enge,
therefore, deser%es to &e set aside. *e order
according#y. 9he appea# is a##o!ed. 9here sha## &e no
order as to costs.
9h"s, the #ega# position remains no more res/integra that e5ec"ting
)o"rt cannot go &eyond the terms of the decree. So far as the present case
is concerned, a!arding interest post ar&itra# a!ard for !hich the ar&itrator
has not a!arded interest on a partic"#ar c#aim, ? am afraid, it is diffic"#t to
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pres"me that the ar&itrator has disa##o!ed f"t"re interest. 9he recita#s
contained in the ar&itra# a!ards, no!here indicate that ar&itrator has
dec#ined f"t"re interest on the c#aim a##o!ed to the respondent/contractor.
?t is on#y interest pendente #ite !hich is disa##o!ed to the respondent/
contractor in respect of some of the c#aims. 9herefore, the intention of the
ar&itrator !as to disa##o! interest on the c#aim amo"nt from the date of
accr"a# of ca"se of action "p/ti## passing of the a!ard and not for the f"t"re
interest. ?n s"ch a sit"ation the irresisti&#e conc#"sion of this )o"rt is that
p#ea can%assed &y the #earned co"nse# for the petitioners rhetorica##y that
e5ec"ting )o"rt has a!arded f"t"re interest to the respondent/contractor
&eyond the terms of the decree &y transgressing its ("risdiction cannot &e
s"stained.
9here remains no $"arre# that Section - of the ct of 1- c#ear#y
en%isages that after attaining fina#ity an ar&itra# a!ard sha## &e enforced
"nder )+), in the same manner as if it !ere a decree of the )o"rt. ?n the
instant case, &oth the ar&itra# a!ards attained fina#ity on re(ection of the
petitions "nder Section 4 of the ct of 1- #aid &y the petitioners on 14th
May, 200. 9he so#e ar&itrator in &oth the a!ards &if"rcated c#aims of the
respondent/contractor in ten and si5 parts respecti%e#y. *hi#e passing the
a!ard in &oth the cases, the ar&itrator has a!arded interest @3A per ann"m
for certain c#aims and pertaining to some of the c#aims, no interest !as
a##o!ed to the respondent/contractor. ?tem/!ise s"mmary of &oth the
a!ards indicating amo"nt c#aimed, amo"nt a!ardedamo"nt not a!arded
and the interest a!arded in &oth the petitions are reprod"ced as "nder:/
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S.. )i%i# *rit +etition o.201-2014
?tem
o.
?tem/!ise a!ard )#aim mo"nt
;8s.=
!ard mo"nt
;8s.=
?nterest
1 )#aim on acco"nt of
imposting additiona#fines for discriminati%e
specia# condition.
,06, 01.00 2,00,000.00 o
interesta##o!ed.
2 )#aim on acco"nt of
!rong#y ded"cted and
!rong#y !ithhe#d d"e
payments from the &i##s
against ?tem I)M ;3
*hee#ed coa# co%ered
!agons .H.
,0,34.00 ,36,000.00 3A
interest
a##o!ed.
. )#aim on acco"nt of
!rong interpretation
and !rong app#ication
on .H., IOK 3
!hee#er open coa#
!agons.
1,42,0.00 ?L o
interest
a##o!ed.
4. )#aim on acco"nt of
ser%ices done a&o"t
c#earance of yard and
goodshed at DBB ;9=and DL9
6,00,000.00 ?L o
interest
a##o!ed.
6. )#aim for ref"nd of
cost of La&o"r
4-,40-.00 1600.00 3A
interest
a##o!ed.
-. )#aim for "npaid
reg"#ar i##s.
1,2,416.00 1,1,000.00 3A
interest
a##o!ed.
. 8ef"nd for !rongf"#and "n("stified
dem"rrage charges
reco%ered.
,60,6-.00 2,20,000.00 ointerest
a##o!ed.
3. )#aim for sett#ement of
rates for item o.3 of
the SO+
-,000.00 2-000.00 3A
interest
a##o!ed.
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?tem
o.
?tem/!ise a!ard )#aim mo"nt
;8s.=
!ard mo"nt
;8s.=
?nterest
. )#aim for !rongforfeit"re of sec"rity
deposit amo"nt.
26,000.00 ?L ointerest
a##o!ed.
10. )#aim for
compensatory damages
for &reach of contract
"nder different head.
2-,26,000.00 66,000.00 o
interest
a##o!ed.
9O9L 60,6,632.00 10,20,600.00
S.. )i%i# *rit +etition o.22342014
)#aim
o.
+artic"#ars mo"nt
)#aimed
mo"nt
!arded
?nterest
1 9he )#aim on
acco"nt of !rongf"#
reco%ery F
"n("stified!ithho#ding of d"es.
1,6,64/ 1,21,000/ 3A interest
a##o!ed.
2. 9he c#aim on acco"nt
of non/sett#ement of
rates and
rem"neration for
hand#ing of f"## #oad
!agons of ?ron
commodities for the
period 14.10.34 to
1.0.33.
,-0,000/ 63,400/ 3A interest
a##o!ed.
. 9he c#aim on acco"nt
of non/sett#ement of
rates and
rem"neration<s for
the ser%ices for
s!eeping of 8#y.
ard, goods shed
area and disposa# of
ref"se. 'or the period 16.04.13- to
1.0.133.
,62,600/ 1,2,000/ 3A interest
a##o!ed.
4. 9he c#aim on acco"nt
of "n("stified
reco%ery of
dem"rrage charges
for the period Jan.,
13- to March, 133.
1,6-,000/ -0,000/ o interest
a##o!ed.
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)#aim
o.
+artic"#ars mo"nt
)#aimed
mo"nt
!arded
?nterest
6. 9he c#aim on acco"ntof compensatory
damages for non/
payment of
#egitimate d"es for
more than 12 years
and &reach of
contract.
16,00,000/ 1,00,000/ o interesta##o!ed.
-. 9he c#aim for the
cost of #itigation in
the )o"rts.
26,000/ 10,000/ o interest
a##o!ed.
9ota# 26,4,04/
;9!entyfi%e
#ahs, fo"rty/
se%en
tho"sand,
thirtyfo"r
on#y=
6,41,400/
;'i%e #ahs,
'o"rtyone
tho"sand,
fo"r
h"ndred
on#y=
3A interest on
8s.,1,400/
;9hree Lahs,
se%entyone
tho"sand, fo"r
h"ndred on#y=
8s.1,0,000/
;One #ah
se%enty
tho"sand on#y=
to &e paid
!itho"t
interest.
?n S.. )i%i# *rit +etition o.201-2014, the ar&itrator has not
a##o!ed interest on the amo"nt a!arded to the respondent/contractor for
c#aim os.1, and 10 and o&%io"s#y there !as no $"estion of a!arding
interest on c#aim os., 4 and , !hich !ere re(ected &y the so#e ar&itrator.
Vis/a/%is ar&itra# a!ard in S.. )i%i# *rit +etition o.22342014 ar&itrator
a##o!ed interest @3A on the amo"nt a!arded in re#ation to c#aim os.1 F
2 on#y and for the rest of the c#aims i.e. for c#aim os. to - tho"gh
amo"nt has &een a!arded, &"t no interest has &een a##o!ed to the
respondent/contractor. 'or the c#aims !herein tho"gh certain amo"nt is
a##o!ed &y the ar&itrator and interest is not a##o!ed, it is o&%io"s that the
respondent/contractor is not entit#ed for interest on the amo"nt a!arded
anterior to the ar&itra# a!ard and s"ch a c#aim of the contractor is per se
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&eyond the scope of the ar&itra# a!ard.
d("dication of c#aim fa%o"ra&#e to the respondent is c#ear
affirmation a&o"t its #egitimacy, and therefore, retention of this amo"nt &y
the petitioners !as "n("st may &e d"e to protracted ("dicia# proceedings,
and therefore, &y a##o!ing interest to the respondent on the entire amo"nt in
&oth the e5ec"tion petitions from the date of a!ard "p/ti## payment is made,
the e5ec"ting )o"rt has not committed any ("risdictiona# error. ?n common
par#ance, in a contract party responsi&#e for &reach of contract is o&#iged to
pay damages "nder Section of the ?ndian )ontract ct, 132 to the
s"fferer contracting party. +ayment of interest in the form of damages in
case of &reach of contract is a#so recogniCed &y #a! )o"rts "nder Section
of the )ontract ct.
9he disp"te no! remains on#y !ith respect to the f"t"re interest or
interest post ar&itra# a!ard, !hich is precise#y a##o!ed to the respondent/
contractor &y the e5ec"ting )o"rt in the imp"gned order to e5amine the
same !ithin the fo"r corners of the ct of 1-.
9he #ega# position is no more res integra that in case of ar&itra#
a!ard, pro%isions of Section 4 )+) as s"ch are not app#ica&#e #ogica##y
for the reason that there is a separate and distinct pro%ision for a!arding of
interest in re#ation to ar&itra# a!ard "nder Section 1;= of the ct of 1-.
Moreo%er, Section 4 )+) refers to a )o"rt !hich does not inc#"de ar&itra#
9ri&"na#. My this %ie! if f"##y fortified from a decision of >on<&#e pe5
)o"rt in case of B,'>'ti O7>en 3t&. *#. Hin&/t'n Co55er 3t&.
8(!!9) " SCC $":. ?n this %erdict, !hi#e di#ating on tr"e p"rport of !ord
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<)o"rt< as en%isaged "nder Section 4 )+), the )o"rt in para he#d as
"nder:/
. o! Section 4 of the )ode of )i%i# +roced"re
has no app#ication to ar&itration proceedings since the
ar&itrator cannot &e said to &e a Ico"rt !ithin the
meaning of the )ode. "t an ar&itrator has po!er and
("risdiction to grant interest for a## the three stages
pro%ided the rate of interest is reasona&#e.
*e## it is tr"e that ar&itra# 9ri&"na# is not a )o"rt !ithin the meaning
of Section 4 )+), &"t the decision in hag!ati O5ygen Ltd. ;s"pra=
d"#y recogniCes the po!ers of the ar&itrator to a!ard interest, !hich
inc#"des post ar&itra# a!ard interest.
s per scheme of the ct of 1-, an ar&itrator is competent to
a!ard interest for the fo"r stages. 9he >on<&#e pe5 )o"rt in case of T.P.
Geor>e *#. St'te o% 4er'l' Anr. 8(!!1) SCC 9, !hi#e re#ying on
its ear#ier decision d"#y recogniCed fo"r stages of grant of interest !hi#e
emphasiCing that a!ard of interest o"ght to &e granted in a## cases !hen
there is a decree of money "n#ess there are strong reasons to dec#ine the
same. 9he )o"rt in para 10 has he#d as "nder:/
10. 9he ne5t $"estion is !hether the >igh )o"rt
!as right in setting aside the a!ard of the interest from
the date of the a!ard. 9his )o"rt has he#d in the case
of Jagdish 8ai and ros. %. 7nion of ?ndia that the
a!ard of interest o"ght to &e granted in a## cases !henthere is a decree of money "n#ess there are strong
reasons to dec#ine the same. ?n the case of Jagdish 8ai
F ros. %. 7nion of ?ndia this )o"rt has he#d that there
are fo"r stages of grant of interest, %iC., ;1= from the
stage of accr"a# of ca"se of action ti## fi#ing of the
ar&itration proceedings, ;2= d"ring pendency of the
proceedings &efore the ar&itrator, ;= f"rt"re interest
arising &et!een date of a!ard and date of the decree,
and ;4= interest arising from date of decree ti##
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rea#isation of the a!ard. 9he po!er of )o"rt to grant
interest from date of decree is not in do"&t. ?n the case
of >ind"stan )onstr"ction )o. Ltd. %. State of J F N
this )o"rt has he#d that the ar&itrator is competent toa!ard interest from the date of the a!ard. 9his )o"rt
has he#d in the case of Secy., ?rrigation Deptt., Ho%t. of
Orissa %. H.). 8oy that the ar&itrator has po!er to
grant interest pendente #ite. 8ecent#y in the case of
B5ec"ti%e Bngineer, Dheana# Minor ?rrigation
Di%ision %. .). "dhara( this )o"rt has he#d that an
ar&itrator can a!ard interest for the pre/reference
period. 9h"s as per #a! #aid do!n &y this )o"rt
interest can &e a!arded at a## fo"r stages. 9he
reasoning gi%en &y the >igh )o"rt that interest cannot &e a!arded &y the ar&itrator is th"s fa##acio"s and
cannot &e s"stained. ?n o"r %ie! the direction to pay
interest from the date of a!ard, cannot &e fa"#ted. 9he
imp"gned ("dgment to the e5tent that it disa##o!s the
interest from the date of the a!ard, is set aside.
?t is trite that ar&itra# 9ri&"na# is not ain to a )o"rt !ithin the
meaning of section 4 )+), &"t then that itse#f cannot circ"mscri&e the
po!ers of ar&itrator to a##o! post a!ard interest. ?f the ar&itra# a!ard is
si#ent for post a!ard interest, the pro%isions contained "nder Section 1;=
;&=can &e in%oed to a!ard f"t"re interest &y app#ying ana#ogy "nder
Section 4 )+). s a matter of fact, Section 1;=;&= of the ct of 1-
mandates grant of f"t"re interest @13A per ann"m "n#ess the a!ard
other!ise directs. 9his %ie! finds s"pport from the decisions of >on&#e
pe5 )o"rt in State of >aryana F Ors. as !e## as ?ndian >"me +ipe )o.
Ltd. ;s"pra=. Section 1;= of the ct of 1- !ith emphasis on c#a"se ;&=
reads as "nder:/
1;=;a=. 7n#ess other!ise agreed &y the parties,
!here and in so far as an ar&itra# a!ard is for the
payment of money, the ar&itra# 9ri&"na# may inc#"de in
the s"m for !hich the a!ard is made interest, as s"ch
rate it deems reasona&#e, on the !ho#e or any part of
the money, for the !ho#e or any part of the period
&et!een the date on !hich the ca"se of action arose
and the date on !hich the a!ard is made.
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=1()(6). A /- &irete& to 6e 5'i& 67 'n
'r6itr'l ''r& ,'ll; /nle t,e ''r& ot,erie
&iret; 'rr7 interet 't t,e r'te o% ei>,teen per
centum 5er 'nn/- %ro- t,e &'te o% t,e ''r& to
t,e &'te o% 5'7-ent.
9herefore, &y a##o!ing post a!ard interest to the respondent/
contractor for entire determined c#aim in &oth the a!ards, the #earned
e5ec"ting )o"rt has not committed any manifest error of #a! !arranting
interference in e5ercise of s"per%isory ("risdiction of this )o"rt "nder
rtic#e 22 of the )onstit"tion. ?n fact, the #earned e5ec"ting )o"rt has
passed imp"gned orders in &oth the petitions !hi#e constr"ing mandate of
#a! &y granting interest at a moderate rate i.e. 12A per ann"m.
S"per%isory ("risdiction of this )o"rt enshrined "nder rtic#e 22 of
the )onstit"tion is not ain to appe##ate ("risdiction and as s"ch it is to &e
e5ercised !ith "tmost care and circ"mspection. ?t is not permissi&#e to
"pset a decision of inferior )o"rt9ri&"na#, !hi#e e5ercising its ("risdiction
!hen t!o %ie!s are possi&#e or e%en if decision is erroneo"s, &eca"se
concern of the )o"rt is to e5amine decision maing process and not the
decision itse#f.
9h"s, %ie!ed from any ang#e, ? ha%e not &een a&#e to find any error
m"ch #ess an error apparent on the face of record in imp"gned orders, nor it
is a case !here&y #earned e5ec"ting )o"rt has transgressed its ("risdiction
!hi#e passing the imp"gned orders. 9he imp"gned orders, in my
considered opinion, ha%e not occasioned fai#"re of ("stice or perpetrated
miscarriage of ("stice in any manner re$"iring interference.
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8es"#tant#y, &oth the !rit petitions are &ereft of any merit and
according#y same are dismissed.
)osts are made easy.
(P.4. 3OHRA); J.
a.asopa/