Skip to content


Executive Engineer, Rural Engineering Organisation, Khurda Vs. D.N. Senapati and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtOrissa High Court
Decided On
Case NumberMisc. Appeal No. 69 of 1978
Judge
Reported inAIR1980Ori74; 47(1979)CLT472
ActsArbitration Act, 1940 - Sections 13 and 30
AppellantExecutive Engineer, Rural Engineering Organisation, Khurda
RespondentD.N. Senapati and anr.
Appellant AdvocateR.K. Patra, Standing Counsel
Respondent AdvocateR.K. Rath, Adv. for Respondent No. 1
Excerpt:
.....and of the supreme court that unless there is specific clause in the agreement prohibiting award of interest, the arbitrator has jurisdiction to award interest from the date of the award till the due date of payment......in that petition the appellant objected to the assessment made in respect of item no. 1 of the claim (item no. 1 of the award) on the ground that the assessment in respect of that item of claim had not been made in accordance with clause (3) of the agreement between the parties, the agreement does not form a part of the award. clause (3) of the agreement, on which the above objection is based, is neither quoted not the provisions of the same have been mentioned in detail in the award. the arbitrator in one portion of his award has merely stated in short the respective cases of the parties and the claim made by the respondent in respect of the different items and the manner in which he disposed of this matter. after stating all that, he has given his award on the different items in.....
Judgment:

S. Acharya, J.

1. The appellant in this appeal filed a petition in the court below u/s 30 of the Arbitration Act to set aside the award dated 10-8-1977 in its entirety on several grounds stated in that petition. That petition has been partly rejected by the court below. Hence this appeal.

2. The award in question was given by the Superintending Engineer, Balimela Dam Circle, Chitrakonda, Koraput. Respondent No. 1 made an application before the court below under Section 17 of the Arbitration Act to pass a judgment and decree in accordance with the said award. At that stage the appellant filed the petition u/s 30 of the Arbitration Act. In that petition the appellant objected to the assessment made in respect of item No. 1 of the claim (item No. 1 of the award) on the ground that the assessment in respect of that item of claim had not been made in accordance with Clause (3) of the agreement between the parties, The agreement does not form a part of the award. Clause (3) of the agreement, on which the above objection is based, is neither quoted not the provisions of the same have been mentioned in detail in the award. The Arbitrator in one portion of his award has merely stated in short the respective cases of the parties and the claim made by the respondent in respect of the different items and the manner in which he disposed of this matter. After stating all that, he has given his award on the different items in the Appendix portion of his award. In respect of item No. 1 of the claim he has again narrated some facts regarding this item, and at last he has merely stated that on being convinced he awarded an amount of Rupees 1,41,100.96 paise on that item. Ha has not given any reason for awarding the aforesaid amount in respect of that item of claim. The learned Standing Counsel appearing for the appellant id not able to make out from the award itself any error either of fact or of law in respect of the said assessment. It is the settled position of law that the court has no jurisdiction to enter into the merits of the case or to examine the documents and oral evidence placed before the Arbitrator, which do not form a part of the award, for the purpose of finding out whether or not the Arbitrator has committed any error, either of law or of fact, in awarding an amount in respect of a particular item of claim. From the award it is not possible to say that the amount awarded by the Arbitrator in respect of this item of claim is contrary to the agreement between the parties,

On hearing the counsel appearing for both the parties I find that no legally permissible ground for interfering with the award in respect of this item of claim is made out. Accordingly, the court below was justified in not interfering with the award of the Arbitrator in respect of this item,

3. It is urged on behalf of the appellant that the Arbitrator was not legally Justified in awarding interest from 1-8-1973 to 31-7-1977 on the amount of the award. It is now well settled by A series of decisions of this Court and of the Supreme Court that unless there is specific clause in the agreement prohibiting award of interest, the Arbitrator has jurisdiction to award interest from the date of the award till the due date of payment. (See AIR 1972 SC 1507; 1967 SCD 937; AIR 1967 SC 1032; (1974) 2 Cut WR 917 and (1978) 45 Cut LT 443),

In this case, the Arbitrator after assessing the amounts in respect of the claim under items 1 and 6 has awarded interest @ 9 per cent per annum for the period 1-8-1973 to 31-7-1977. He has of course not stated the reasons as to why he granted interest only for the aforesaid period. From the appendix it appears that the work in question was actually completed on 31-5-1973. So possibly 2-8-1973 was the due date of payment of the amount due on the work executed by respondent No. 1. The Arbitrator was appointed on 30-9-1975 and the award was passed on 10-8-1977. The Arbitrator for some reason or other has not granted any future interest after 31-7-1977. But for the period for which interest has been granted, i.e. 1-8-1973 to 31-7-1977, the Arbitrator had jurisdiction to grant interest, and no exception can be taken to his award to that effect. As nothing is shown that there is anything in the agreement prohibiting payment of interest and there is no error apparent on the face of the award to that effect, the award, so far as it relates to the payment of interest also, cannot be interfered with.

4. The award or the order of the court below is not challenged on any other ground by the appellant.

5. This appeal has, therefore, no merit and it is accordingly dismissed.

6. Respondent No. 1 has preferred a cross-objection against the order of the court below contained in paragraph 3 of the impugned order by which the amount of Rs. 5,000/- awarded by the Arbitrator in respect of item No. 6 of the claim has been set aside. As against the claim of Rs. 1,20,000/- laid down by respondent No. 1 on this item, the Arbitrator, without assigning any reason, has awarded only a sum of Rs. 5,000/-, No reason for assessing or fixing that amount has either been stated in the award or in the appendix attached to the award. Mr. Patra, the learned counsel for the appellant, is not able to show in what manner the award in respect of this item is erroneous either in law or on facts. As the award in respect of this item of claim is not based on any reasonings, and no error, either of law or of fact, is made out on the face of the award, the court had no jurisdiction to enter into the merits of the amount assessed on that item of claim. Therefore, the decision of the court rejecting the aforesaid claim was unwarranted and is illegal. Respondent No. 1, therefore, is entitled to the amount of Rs. 5,000/-awarded in item No. 6 of the award, and the decision of the court below to that effect is set aside.

7. The other ground taken in the cross objection is that the court below should have granted interest on the amount awarded from the date of the decree till the date of realisation of the said amount, Mr. Rath, the learned counsel for respondent No. 1, submits that respondent No. 1 filed a petition to that effect in the court below, but it did not pass any order on that petition. Mr. Patra, the learned Standing Counsel for the appellant, states that under Section 29 of the Arbitration Act it was discretionary on the part of the court either to grant or not to grant interest on the amount of the award, and as the court has not passed any order on that petition it should be deemed to have been dismissed by that court.

This court while admitting this appeal did not grant stay of realisation of the decretal amount. Therefore, respondent No. 1 was free to execute the decree for the realisation of the decretal amount immediately after he obtained the decree. As he has not taken any steps for the realisation of the decretal amount, I am not inclined to grant him any interest for the period succeeding the passing of the decree till now. However, as the decretal amount has fallen due since a long time, the appellant shall pay up the same within three months from today. If that amount is not paid within 3 months from today, respondent No. I will be entitled to interest on that amount at the rate of 6 per cent per annum from today till the date of realisation of the same. If the amount is paid within 3 months from today, it will not carry any interest on it.

The cross appeal is allowed to the extent mentioned above. In the facts of this casa parties will bear their own costs of the appeal and the cross objection.

The L.C.B. be sent back immediately.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //