Andhra Pradesh High Court
Judges : P.KODANDA RAMAYYA, PUNNAIAH
Government Of A.P. - Appellant
Versus
Gammon India Ltd. - Respondent
C. M. A. Nos. 989 to 991/1982
Decided On : 09-19-83
Advocates Appeared :
Mr. Y. Sivarama Sastry
Held: 1) If there is no reference regarding claim of interest either expressly or impliedly, the Arbitrator has no power to award interest. (2) If there is a reference relating to the claim of interest the Arbitrator can award interest from the date of reference till the date of award or upto date of the decree if the reference is with the intervention of the Court. (3) The Arbitrator has no power to award interest after the date of the decree and the Court alone is competent to award interest after the date of the decree under Sec. 29 of the Arbitration Act. (4) The Court has no power to award interest from the date of the award till the date of the decree or from the date of the suit till the date of the decree as the same was impliedly prohibited by Sec. 29 of the Act and the Arbitrator alone is entitled to do so by virtue of the reference.
In this case once an application is filed and it was entertained on merits and Court adjudged the matter, the adjudication squarely falls within Sec. 39 (1) (vi). Hence an appeal lies against the order overruling the objections to set aside the award. Further the award granting future interest was modified substituting a new clause directing interest payable from the date of the suit till the date of realisation. This Clearly constitutes a modification or correction of an award within the meaning of Sec. 39 (1) (ii) and as such an appeal lies against that order.
The appellate Court while exercising the powers under Sec. 39 against the orders refusing to set aside the award, has got power to correct the errors of the trial Court in exercise of its powers, and it can also exercise the powers of the trial Court given to it under Sec. 29.
C. M. As. Allowed.
( 1 ) THE State of Andhra Pradesh represented by the Superintend in Engineer (Civil), Srisailam Project, Kurnool is the appellant in this batch of three Civil Miscellaneous Appeals. They arise out of proceedings under the Arbitration Act X of 1940. The parties are the same in all the three appeals, and identical contentions are raised by the learned Advocate General in these appeals and hence it is enough if we state the facts in one case. We have reserved the judgment on 18-8-1983. At the instance of the learned counsel for the respondents we have reheard the case on 31-8-1983. Hence we are stating the case as per the final hearing.
( 2 ) C. M. A. No. 989 of 1982 arises out of O. S. No. 749/81 on the file of the Additional Judge, City Civil Court, Hyderabad and O. S. No. 859/81 on the file of the same Court. The Ist respondent in these appeals entered into an agreement for execution of works contract at Srisailam Project Disputes have arisen regarding the claims due to the contractor and the matter was referred to the sole Arbitrator Sri K. Srinivasarao, a retired Chief Engineer, Hyderabad, the 2nd respondent herein. The Arbitrator passed an award on 28-6-1981 specifying amount for each claim and granted interest at 10% p. a. from the date of the award. The 1st respondent filed an application under S. 14 (2) of the Act to direct the Arbitrator to file the award into Court to make it a rule of Court. It appears even before that notice was served on the Arbitrator, the Arbitrator himself filed the award into Court under S. 14 (1) of the Act and the said application of the Arbitrator himself filed the award into Court under S. 14 (1) of the Act and the said application of the Arbitrator was registered as O. S. No. 859/81 and the application of the Ist respondent was registered as O. S. No. 749/81. The appellant-the State herein filed a separate application in O. S. No. 859/81 under S. 33 of the Act to set aside the award but the said application was not separately registered but the court below tried both the suits together and after hearing the parties accepted the award and passed a decree for a sum of Rs. 3,53,590-45 ps. But modifying the interest clause only at 6% p. a. from the date of the suit viz. 7-7-1981 till the date of realisation. Similarly the other two appeals in respect of claims of other works were filed. Against O. S. No. 750/61 and O. S. No. 857/81 C. M. A. 990/82 was filed and C. M. A. 991/82 was filed against O. S. Nos. 747 and 859/81. The court similarly modified the awards in these two cases also, regarding interest only, and hence it is unnecessary to give other details of those appeals.
( 3 ) APART from the general attack, that the awards ae vitiated by errors apparent on the face of the record, the learned Advocate General broadly raised two contentions. (1) The award is inconsistent and contradictory and must be set aside as the Arbitrator having rejected the claim for excess interest directed that the interest be waived beyond a period of twelve months from the date of the receipt of instalment of advance in C. M. A. 989/82, Similarly clause (e) relates to excess interest liability in C. M. A. 990/82 AND Claim No. 1 (5) in C. M. A. 991/82. (2) The Arbitrator has no power to grant future interest and in any view the Court having set aside that direction in the award erred in granting interest from the date of the suit which is wholly without jurisdiction and void as being opposed to S. 29 of the Act.
( 4 ) SRI Y. Sivarama Sastry, the learned counsel appearing for the Ist respondent raised a preliminary point stating that no appeal lies against the decrees and there was no application to set aside the award and consequently these appeals are incompetent under Sec. 39 of the Act. On merits he submitted that there is a reference in the award as per para 56 of the claims statement and consequently the Arbitrator was right in granting the future interest and the same was affirmed by the co
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