The main legal point established in the judgment is the interpretation and application of the contractual clauses regarding the entitlement to deduct the amount and the prohibition of interest, as well as the applicability of section 31(7) of the Arbitration and Conciliation Act, 1996 to the award of interest.

1. By this petition filed under section 34 of the Arbitration and Conciliation Act, 1996 the petitioner has impugned the arbitral award dated 20th December, 2017 allowing the claim of Rs.74,16,707/- which amount was deducted by the petitioner from the bill of the respondents is concerned and also impugns part of the award awarding interest at the rate of 15% per annum from the date of deduction to the date of award and from the date of the award till date.

2. Insofar as the claim of Rs.74,16,707/- allowed by the learned arbitrator in favour of the respondents is concerned, Mr. Merchant, learned senior counsel for the petitioner invited my attention to clause (23) of the contract and would submit that the petitioner was entitled to deduct this amount from the invoices as and when raised by the respondents towards the maintenance charges. He submits that during the course of the execution of the work, the equipments of the respondents did not work to the full extent and thus the petitioner was entitled to deduct the maintenance charges from the bills raised by the petitioner. It is submitted that though the learned arbitrator has rendered a finding that the petitioner was entitled to deduct such amount under the said provision from the invoices raised by the respondents, the learned arbitrator has rejected the deduction made by the petitioner under clause (23) of the contract on the ground that the said deduction was barred by law of limitation and did not allow the said claim made by the respondents for refund of the said amount on merits.

3. Insofar as claim for interest awarded by the learned arbitrator is concerned, learned senior counsel invited my attention to clause (42) of the contract which reads as under:-

42. No interest on account of delayed payments :

No interest will be payable nor any claim for interest will be entertained by the Employer with respect to any monies or balance which may be in their hands owing to any disputes between themselves and the contractor or with respect to any delay on the part of the Employer in making payment.

4. It is submitted that in the impugned award, the learned arbitrator however has awarded interest 15% per annum from the date of deduction till the date of award which is in the teeth of the said provision of the contract.

5. The next submission of the learned senior counsel is that the counter claim is wrongly rejected by the learned arbitrator as time barred.

6. Learned counsel for the respondents on the other hand invited my attention to the findings rendered by the learned arbitrator. Insofar as the claim for refund of the amount deducted by the petitioner from the invoices raised by the respondents is concerned, he invited my attention to the findings of the learned arbitrator and more particularly paragraph (19). It is submitted that the petitioner had already deducted a sum of Rs.2,72,37,794/- under the said head from the bill raised by the respondents in the month of April 2002. It is submitted that the claim for refund of the said amount of Rs.2,72,37,794/- made by the respondents arising out of the said deduction has been rejected by the learned arbitrator on the ground that the said claim was time barred.

7. Insofar as claim no.3 is concerned, a perusal of the impugned award clearly indicates that the petitioner had deducted a sum of Rs.2,72,37,794/-from the invoice of the respondents by pressing in service clause 23 of the contract in the year 2002 when there was alleged break down of the equipments of the respondents. The respondents also had made a claim for refund of the said amount of Rs.2,72,37,794/- before the learned arbitrator in the statement of claim filed after expiry of three years from the date of such deduction. The learned arbitrator rejected the said claim for refund of Rs.2,72,37,794/- on the ground of limitation. The respondents did not challenge the said award. The learned arbitrator has applied the same analogy insofar as the deduction of Rs.74,16