IMPORTANT POINT
Award of interest by Tribunal prevails over statutory interest otherwise payable.

JUDGMENT

SHIVA KIRTI SINGH, J. –

1. Leave granted.

2. Heard Mr. Gourab Banerji, Senior Advocate for the appellant and Mr. Gopal Jain, Senior Advocate for the respondent. The appellant was required to set up some plant or boiler units. For completing that work, appellant issued a notice inviting tender for engaging a sub-contractor to erect, test and commission two 120 MW boilers (Unit II and Unit III) on behalf of the appellant. The value of the contract awarded in favour of the respondent was Rs.6,99,40,000/-. Pursuant to disputes and differences, an Arbitral Tribunal consisting of three arbitrators came to be constituted. The Arbitral Tribunal awarded Rs.69.22 lac on various heads and Rs.25.39 lac on account of interest. The appellant instituted proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 (for brevity, ‘the Act’). That proceeding bearing A.P. No.213 of 2006 was finally decided by a learned Single Judge of the High Court of Calcutta on 04.01.2013. The objections of the appellant were allowed in part in respect of only three counts relating to over-run charges, crane hire charges and interest.

3. The respondent filed an appeal being A.P.O. No.60 of 2013. The Division Bench, by the order under appeal dated 12.06.2013, allowed the appeal in part in respect of charges, namely, crane hire charges and interest. In the present appeal only those two issues have been raised on behalf of the appellant. According to learned senior counsel for the appellant, the Division Bench has wrongly reversed the order of learned Single Judge on the issue of crane hire charges inasmuch as the claim of the appellant asking for payment of crane hire charges by the respondent for Unit III was based upon clause 12.2.2 of the Work Order read with clauses 2.8.11, 3.38.3 and 3.38.14 of the Agreement/Tender Document. In respect of second issue relating to interest, learned senior counsel has confined the claim of the appellant only against grant of pre-Award interest on the basis of clause 1.15.5 of the Tender Document/Agreement.

4. On the other hand, learned senior counsel for the respondent has submitted that the Award in respect of crane hire charges is based on an overall view of entire material available before the Arbitral Tribunal and, therefore, although the Tribunal finally concluded that “there is nothing on record of the Arbitral Tribunal to substantiate the ‘understanding’ between the parties regarding swapping of crane usage days between Units II and III as has been pleaded by the claimant”, it only allowed Rs.8.25 lac in favour of appellant’s claim for such charges. According to him, for the same very reason, taking a holistic view of the whole matter, the Division Bench in the impugned order took the same view. On behalf of respondent, the grant of pre-Award interest could not be successfully defended in view of clause 1.15.5 of the Agreement which provides that “no interest shall be payable by BHEL on earnest money/security deposit or any money due to the contractor by BHEL”. The ambit and scope of aforesaid clause was subject matter in Civil Appeal No.7423 of 2005 between the appellant and M/s. Globe HI-Fabs Ltd. decided on 12.11.2009 wherein this Court accepted and held that in view of such a provision in the Agreement, interest is only payable from the date of the Award. The aforesaid legal position ought to have been accepted by the Division Bench of the High Court in view of law settled by judgments of this Court in the case of Sayeed Ahmed & Co. v. State of U.P. & Ors. (2009) 12 SCC 26 and several other cases including the case of Union of India v. Concrete Products & Construction Co. & Ors. (2014) 4 SCC 416.

5. On the issue of award of interest, learned senior counsel for the respondent tried to persuade us to enhance the post-Award interest granted by the Arbitral Tribunal @ 10.5% to 18% p.a. in th