Om Prakash Sawhney vs Delhi Development Authority
1994 Latest Caselaw 519 Del

JUDGMENT

R. C. Lahoti, J.

1. This is a petition under Section 14 of the Arbitration Act, 1940, seeking filing of the award dated 30.7.1992 made by the Arbitrator, respondent No. 3 and making the same a rule of the court. It appears that the petitioner had entered into a works contract with the respondent-DDA. There were certain disputes arising out of the contract, which were required to be referred for adjudication by the Arbitrator. The reference was made. The Arbitrator has given his award on 30.7.1992.

2. On being noticed of the filing of the award, the respondent-DDA raised two objections (i) that the Arbitrator ought not have awarded interest pendente lite at the rate of 12% p.a.; (ii) that the Arbitrator misconducted himself by awarding interest to the tune of Rs. 1,08,629/- for the period 21.3.1973 to 27.2.1985 vide item 'Additional Claim No. 1'.

3. In so far as, the power of the Arbitrator to award interest is concerned, the point is covered and well-settled by three decisions of their Lordships of the Supreme Court in Jugal Kishore Prabhatilal Sharma v. Vijayendra Prabhatilal Sharma (1993 (1) SC 114); Hindustan Construction Co. Ltd. v. State of Jammu and Kashmir and Secretary, Irrigation Department, Government of Orissa v. G. C. Roy . It follows from the above said decisions of the Supreme Court that the Arbitrator does have the power to award interest pendente lite. The first objection, therefore, fails.

4. In so far as the second objection is concerned, the dispute was referred to the Arbitrator for adjudication. The Arbitrator has found that there was an unreasonable delay of 13 years on the part of the authority in making payment of the final bill. For the period of inordinate delay, the contractor has been held entitled to award of interest the rate whereof does not exceed 12% p.a. The Arbitrator cannot be said to have misconducted himself.

5. The two objections raised by the authority are found to be devoid of any merit and the same are hereby rejected.

6. Consequently, the award is directed to be made a rule of the court. The claimant-petitioner is further held entitled to recover the awarded amount with interest calculated at the rate of 9% p.a. on the principal amount from the date of the decree till realisation. Let a decree be drawn accordingly.