The main legal point established in the judgment is the competence of the arbitral tribunal to award interest for different periods and the need for the tribunal to exercise discretion in awarding interest based on all the facts and circumstances of the case, keeping the ends of justice in view.

JUDGMENT :

Heard learned counsel for the parties.

2. This revision application has been filed under Section 13 of the Bihar Public Works Arbitration Tribunal Act, 1996 questioning the legal sustainability of the award dated 17.05.2016 passed in Reference Case No. 175 of 2014.

3. The work contract between the petitioner and the respondents is admitted fact and further the fact that the petitioner had completed the work as agreed is also not in dispute. However, due to non-payment of the amount by the respondents to the petitioner for the work done, the petitioner filed Reference Case No. 175 of 2014 mainly claiming for an award for payment of admitted due amount against the work done and further for payment of interest @ 16% per annum on awarded amount from the cause of action (date of submission of bill) till the date of award with 18% per annum statutory interest from the date of award till the date of payment. It has however, been accepted on behalf of the petitioner that the dues against the work done as claimed in the reference case was paid on 29.03.2015 during the pendency of the said reference case. The learned tribunal, however, heard the parties and has passed the impugned award holding the petitioner to be entitled to simple interest at the rate of 10% per annum on the principle amount (which was already paid by the respondents to the petitioner during the pendency of the reference case) from the date of filing of reference case i.e. 31.12.2014 till the date of payment i.e. 29.03.2015.

4. Learned counsel for the petitioner, during the course of submission, has summed up the grievance of the petitioner on three scores. Firstly, that the tribunal has wrongly declined to award the pre-reference interest i.e. from the date of cause of action accruing to the petitioner for payment of the due amount till the filing of the reference case; secondly that the petitioner is entitled to award of 18% interest as envisaged under Section 31 (7) (a) (b) of the Arbitration and Conciliation Act, 1996 but the tribunal has awarded interest only at the rate of 10% per annum and thirdly that the tribunal has awarded interest only on the principal amount and not on the sum which includes the principal amount and the interest.

5. Learned counsel for the respondents has supported the impugned award and has submitted that there is no illegality in exercise of its discretion by the learned tribunal in declining the claim of the petitioner for payment of interest as made.

6. Learned counsel for both the parties have relied upon a number of decisions by the Apex Court in support of their rival submissions and the same shall be considered appropriately hereinafter.

7. The ikrsome issue pertaining to the competence of the arbitrator to award interest for the three periods namely the period from the date of cause of action till the date when the arbitrator enters upon the reference, the period thereafter till the date of making the award and the period after the award till the payment is made has come up for consideration in several authoritative pronouncements by the Apex Court. The reference in this regard may mainly be made to the decision in Executive Engineer (irrigation) Vs. Abhaduta Jena, (1988) 1 SCC 418, the Constitution Bench decision in Secretary, Irrigation Department Vs. G.C. Roy, (1992) 1 SCC 508 and another Constitution Bench decision in Executive Engineer, Dhenkanal Minor Irrigation Division Vs. N.C. Budharaj, (2001) 2 SCC 721. However, in all these cases, the controversy had arisen before coming into force of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘Arbitration Act, 1996’). There is no dispute between the parties that the issue (s) in the present case between the parties is governed by the provisions of the Arbitration Act, 1996. The competence of the arbitral tribunal to award interest has been expressly recognized in Section 31 (7) of this Act which is reproduced hereinbelow for ease of reference:

“31 (7) (