JUDGMENT

Ranjan Gogoi, J.-This appeal is directed against the judgment and order dated 20th July, 2006 passed by the High Court of Uttaranchal at Nainital whereby the decree passed by the learned trial court under the Arbitration Act, 1940 (hereinafter referred to as ‘the Act’) has been modified.

The terms of award as passed by the learned Arbitrator and the decree passed by the learned trial court as well as the modification thereof by the High Court will now have to be noticed:

2. The appellants and the respondent herein had entered into a contract for execution of certain works in connection with the Tehri Hydro Dam Project. The agreement between the parties was executed on 29th March, 1978 and the works in question were completed on 31st December, 1985. The completion certificate was issued by the competent authority of the appellant-Corporation on 27th April, 1986. As the final bill of the respondent-contractor had not been prepared and security money, furnished by way of bank guarantee was not released, the parties went to arbitration in accordance with the Arbitration clause under the contract/agreement. In the course of the aforesaid Arbitration proceeding the appellant- Corporation submitted a final bill which according to the respondent- Contractor entitled it to receive a sum of Rs.10,17,461.09 on account of work done besides a sum of Rs. 12..50 lakhs that was lying in deposit with the Corporation. As the amounts due according to the respondent- contractor, had become crystallized, another arbitration proceeding between the parties for the aforesaid specific claims commenced in accordance with the arbitration clause of the agreement.

3. The award in the aforesaid arbitration proceeding was passed on 29th January, 1996 holding the respondent – contractor to be entitled to the sum of Rs. 10,17,461/- with the interest at the rate of 6% per annum from the date of invocation of the claim till the date of the award and at the rate of 12% per annum from the date of the award till payment or till the award is made Rule of court, whichever is earlier. Insofar as the claim of the respondent – contractor to the sum of Rs. 12.50 lakhs lying in deposit with the Corporation, the Arbitrators held the said amount to be beyond the scope of the dispute raised in the arbitration proceeding. Accordingly, the respondent – contractor was left with the option of settling the said claim in an amicable manner or by resorting to a civil suit for recovery of the same.

4. Objections against the specific parts of the award by which the respective parties felt aggrieved were filed before the learned District Judge, Tehri, Garhwal. The learned District Judge by his order dated 15th October, 1997 upheld the claim of the respondent – contractor to the sum of Rs.10,17,461/- lakhs as awarded. In so far as the claim of Rs.12.50 lakhs is concerned, the learned trial court, notwithstanding the fact that the arbitrator did not decide the said claim, went into the issue and held the respondent – contractor to be entitled to the said amount also. Thereafter, a decree was passed in respect of the two amounts alongwith interest thereon at the rate of 12% pendente lite and 6% for the post award period. Aggrieved by the aforesaid order passed by the learned District Judge, Tehri Garhwal, the appellant moved the High Court of Uttaranchal by filing an appeal under the provisions of the Act. The High Court by its order dated 20th July, 2006 allowed the appeal in part. While the claim of Rs.10,17,461/- awarded in favour of the respondent- contractor was maintained in so far as the claim of Rs. 12.50 lakhs is concerned, the High Court took the view that the aforesaid amount could not have been awarded by the learned trial court as the said entitlement was not gone into by the learned Arbitrators. Accordingly, the High Court remanded the aforesaid claim to be settled by an Arbitrator appointed by it. Insofar as the question of interest is concerned, the High Cour