High Court Of Calcutta
PRABIR KUMAR MAJUMDAR
STATE - Appellant
Versus
BENGAL BUILDERS - Respondent
Award Case 60 Of 1988
Decided On : 11/17/1988
ARBITRATION - SETTING ASIDE AWARD - GROUNDS - MISCONDUCT OF ARBITRATOR - ERROR OF LAW ON FACE OF AWARD - INTEREST AWARDED BY ARBITRATOR - COMPETENCY OF ARBITRATOR TO AWARD INTEREST - PENDENTE LITE INTEREST - FUTURE INTEREST.
Fact of the Case:
Petitioner, the State of West Bengal, challenged an arbitration award made in favor of the respondent, Bengal Builders, on various grounds, including misconduct of the arbitrator, error of law on the face of the award, and the arbitrator's competence to award interest.
Finding of the Court:
The court found that the petitioner failed to establish misconduct of the arbitrator or any error of law apparent on the face of the award. The court further held that the arbitrator was not competent to award pendente lite interest but could award future interest from the date of the award till the date of realization or decree.
Issues: 1. Whether the arbitrator misconducted himself or committed an error of law apparent on the face of the award. 2. Whether the arbitrator was competent to award interest, and if so, what type of interest could be awarded.
Ratio Decidendi: 1. The court held that the arbitrator did not misconducted himself or commit any error of law apparent on the face of the award. The court reasoned that the arbitrator had considered the evidence and submissions of the parties and had provided a reasoned award, even though it was not required to do so. 2. The court held that the arbitrator was not competent to award pendente lite interest, but could award future interest from the date of the award till the date of realization or decree. The court relied on earlier Supreme Court decisions which held that the provisions of Section 34 of the Civil Procedure Code apply to arbitration proceedings and allow the arbitrator to grant interest from the date of the award.
Final Decision: The court upheld the arbitration award with a modification that the interest awarded by the arbitrator would be limited to future interest from the date of the award till the date of payment or decree, whichever is earlier.
( 1 ) THIS is an application for setting aside an award dated Feb. 10, 1988 made and published by Mr. P. C. . Majumdar, the Sole Arbitrator. There is also a prayer for condonation of delay under S. 5 of the Limitation Act in making this application for setting aside the award.
( 2 ) THE learned arbitrator made an award for a sum of Rs. 5,05,000/- in favour of the respondent, Bengal Builders. The learned arbitrator also made an award for interest at 9% per annum on the said sum of Rs. 5,05,000/- for the period from the date of entering upon the reference by the learned arbitrator, i. e. April 27, 1987, till the date of payment or decree by the competent court, whichever is earlier. The learned arbitrator made the said award for Rs. 5,05,000/- in full and fianl settlement of all the claims and counter-claims of the parties, which had been referred to the arbitrator.
( 3 ) THE material portion of the impugned award is as follows : -"firstly That I award and direct the respondent, the State of West Bengal, shall pay to the claimant M/s. Bengal Builders in the present case, a sum of Rs. 5,05,000. 00/- (Rupees Five Lakhs and five thousand) only in full and final settlement of all the claims and counter-claims of the Parties which have been referred to me. All the claims and counter-claims of the Parties are merged into and extinguished by the said sum of Rs. 5,05,000. 00/- (Rupees Five Lakhs and Five Thousand) only. SECONDLY That I award and direct the respondent, State of West Bengal, shall pay to the claimant M/s. Bengal Builders, interest on the said sum of Rs. 5,05,000. 00/- (Rupees Five Laks and Five Thousand) only at the rate of 9 (Nine) Per Cent per annum from date of entering into reference by me, i. e. 27th. April 1987, till the date of payment or decree by the competent Court, whichever is earlier. "
( 4 ) ONE Debasis Das on behalf of the State-respondent by an affidavit affirmed on April 8, 1988 has stated that the notice for filing of the award dt. Feb. 10, 1988 was received by the respondent on Feb. 24, 1988. The Notice of Motion was taken out on March 31, 1988. According to the period prescribed by the laws of limitation, the Notice of Motion should have been taken out by March 24, 1988. So there has been a delay for a few more days. By way of an explanation the said Debasis Das has stated in his said affidavit that the said notice was addressed to the Executive Engineer, Irrigation and Waterways Directorate, Teesta Barrage Division No. I at his office at Oodlabari, District Jalpaiguri. According to the said deponent, as the notice was received at the end of the financial year it was not possible for the respondent to take action on the said notice. He has further stated that after arranging for some urgent matters the said notice was duly forwarded to the Advocate-on-record for the State of West Bengal with instruction to draw and file a petition for setting aside the said award. As stated earlier, the Notice of Motion was taken out on March 31, 1988.
( 5 ) MR. P. K. Bose, learned Counsel appearing for the petitioner, submits that this should be taken as a sufficient ground for condonation of delay which was for about seven days. The learned Counsel for the respondent, however, submits that just that the notice was received at the close of the financial year is not itself a good ground for condonation of the delay. Considering the circumstances stated in the said affidavit and that the delay was for about 6/7 day's, I condone the delay.
( 6 ) NOW, I shall deal with the merits of the case. The petitioner has challenged the award on the grounds stated in the petition. The principal ground is that the claims of the claimant had not been proved before the learned arbitrator and the learned arbitrator in making the said impugned award mis-conducted himself and the proceedings. The other ground is that the learned arbitrator mis-conducted himself and the proceedings in making the award in favou
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