Jesia Mistry Agencies Pvt. Ltd. vs N.H.P.C. & Anr.
1999 Latest Caselaw 1036 Del

ORDER

Mukul Mudgal, J.

1. On 9th August, 1999, the Objections (IA. 4813/97) of the respondents were dismissed. The reasons in support of the order are as follows:

2. The petitioner and the respondents had entered into an Agreement on 1.6.89 for custom clearance and road transportation of 10 Transformers and 2 Shunt Reactors for the Chamera Hydel Project of the respondents. Subsequently disputes arose between the parties leading to the reference of disputes on 10.12.1993 to Shri K.K. Vohra, the Sole Arbitrator.

3. The plea of the Respondent- Corporation is that claim Nos. iii, vi, vii and viii did not form a part of the demand letter dated 10.3.1993 on the basis of which the dispures were referred to arbitration and any award founded on the said claims is beyond the jurisdiction of the agreement between the parties and hence unsustainable.

4. The Petitioner-Agency in its reply pleaded that no such objection was raised before the arbitrator. These objections were not pursued or pressed except formally raising them in the pleadings by the respondents.

5. As far as other objections of the Respondent- Corporation to the award other than claims iii,vi,vii and viii are concerned, I have gone through them. I find that the Award is reasoned one and the objections cannot be taken into consideration within the limited ambit of challenge admissible under the scheme of the Arbitration Act.

6. The Hon'ble Supreme Court has laid down the following position of law in Hindustan Tea Company Vs. M/s. K. Shashikant Co., :-

"The Award is reasoned one. The objections which have been raised against the Award are such that they cannot indeed be taken into consideration within the limited ambit of challenge admissible under the scheme of the Arbitration Act. Under the law, the Arbitrator is made the final arbiter of the dispute between the parties. The Award is not open to challenge on the ground that the Arbitrator has reached a wrong conclusion or has failed to appreciate facts...."

7. This Court M.L. Mahajan Vs. DDA (1997) Delhi Law Times 734 has held as follows :

"The law is, therefore, well settled that where the reasons have been given by the Arbitrator in making the award the Court cannot examine the reasonableness and sufficiency of the reasons. The Arbitrator is the Sole Judge of the quality as well as the quantity of evidence and it will not be for the Court to take upon itself the task of being a Judge on the evidence before the Arbitrator. This was so tated by the Supreme Court in B.V.Radha Krishna (Supra). The individual claims have already been discussed above and it will not be open for this Court to reappropriate the facts and evidence on record and substitute its own conclusion.The findings of the Arbitrator are with regard to appreciation of evidence which are clearly outside the ambit of Sections 30 and 33 of the Arbitration Act,1940."

8. It is not open for this Court therefore to substitute its own view for that of the Arbitrator as per the aforesaid position of the law. No misconduct has been pleaded in the objections nor is anyone present for the respondent.

9. Accordingly, the objections (IA 4813/97) of the respondents to the impugned Award dated 31.10.1996 for claims iii, vi,vii and viii are dismissed.

10. The objections (IA. 5792/97) filed by the petitioner are only in respect of denial of interest to the petitioner-Agency.

11. Insofar as the claim of interest is concerned, the Arbitrator has relied upon Clause 12.3 of the Contract dated 1.6.89 in his Award dated 31.12.1996 which reads as follows:

"It is an agreed term of the contract that the sum of money withheld or obtained under this Clause by the purchaser will be kept withheld or retained as such by the purchaser or till this claim arising out of in the same contract is either mutually settled or determined by the arbitration or by the competent court as the case may be, and that the contractor shall have no claim for interest or damages whatsoever on this account or any other ground in respect of any sum of money withheld or retained under this clause and full notified as such to the contractor."

12. The learned counsel for the Petitioner/Objector has relied upon a judgment of the Hon'ble Supreme Court in Board of Trustees, Port of Calcutta Vs. Engineers De-Space-Age wherein it was held that in spite of a specific clause in a contract prohibiting the grant of the interest, the arbitrator can grant interest during the pendency of the arbitration proceedings.

13. However, I find the Clause 12.3 relied upon by the Arbitrator is meterially different from the Clause 13(g) of the Contract which was referred to in the decision of Board of Trustees, Port of Calcutta Vs. Engineers-De-Space-Age (supra).

14. The said Clause 13(g) of the Contract relied upon in the judgment of the Hon'ble Supreme Court in Board of Trustees, Port of Calcutta Vs. Engineers De-Space-Age reads as follows:

"No claim for interest will be entertained by the Commissioners, with respect to any money or balance which may be in their hands owing to any dispute between themselves and the contractor or with respect to any delay on the part of the Commissioners in making interim or final payment or otherwise.

15. Clause 12.3 involved in the present dispute reads as follows :

"It is an agreed term of the contract that the sum of money withheld or obtained under this Clause by the purchaser will be kept withheld or retained as such by the purchaser or till this claim arising out of in the same contract is either mutually settled or determined by the arbitration or by the competent court as the case may be, and that the contractor shall have no claim for interest of damages whatsoever on this account or any other ground in respect of any sum of money withheld or retained under this clause and full notified as such to the contractor."

The petitioner is, therefore not right in claimining interest as per the above position of law laid down by the Hon'ble Supreme Court.

16. The Constitution Bench in Secretary, Irrigation Department, Govt. of Orissa Vs. G.C. Roy, 1999 (1) SCC 508 has held as follows :

"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 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:

It will appear from what the Constitution Bench stated to be the legal position, that ordinarily a person who is deprived of his money to which he is legitimately entitled as of right is entitled to be compensated in deprivation thereof, call it by whatever name. This would be in terms of the principle laid down in Section 34 of the Code of Civil Procedure. Their Lordships pointed out that there was no reason or principle to hold otherwise in the case of an arbitrator."

17. In this view of the position of law laid down by the Hon'ble Supreme Court, the reliance on the judgment reported as Board of Trustees, Port of Calcutta Vs. Engineers De-Space-Age AIR 1966 SC 2853 by the petitioner is not justified as there was a clear bar in the present contract insofar as reference of the question of interest to arbitration is concerned unlike Clause 13 (g) of the Contract which formed the basis of the above judgment of the Hon'ble Supreme Court.

18. Clause 12.3 of the present Contract is, therefore, materially different from Clause 13 (g) on which the judgment of the Hon'ble Supreme Court in Board of Trustees, Port of Calcutta (Supra) is founded.

19. Accordingly, the petitioner is not entitled to interest from prereference period to post-reference period. However, from the date of the award till the date of decree, the petitioner is entitled to interest at the rate of 12 per cent and from the date of decree till realization is entitled to interest at the rate of 15 per cent on the amounts in respect of claims and in respect of which the award has been upheld i.e., Claims iii, vi, vii and viii.