Point of Law: Section 31(7)(a) of Act deals with grant of pre-award interest.

JUDGMENT :

Sandeep Sharma, J.

By way of above captioned arbitration cases filed under S.34 of Arbitration and Conciliation Act (hereinafter, ‘Act’), challenge has been laid to Award dated 19.8.2011 passed by arbitral tribunal consisting of sole arbitrator Justice Vijender Jain (retired), whereby learned Arbitrator, while allowing the claim set up by M/s SAB Industries, petitioner in Arb. Case No. 6 of 2012 (hereinafter referred to as, ‘claimant’) awarded Rs.1,40,36,158/- in its favour and against the State of Himachal Pradesh, petitioner in Arb. Case No. 92 of 2011 (hereinafter referred to as, ‘employer’).

2. For having bird’s eye view of the matter, facts shorn of unnecessary details, necessary for the adjudication of the case at hand are that an item rate tender for deposit work for construction of Himachal Pradesh Dental College, Shimla (Building portion Block-A & B including water supply and SI, external water supply, sewerage and development of site) was approved and awarded in favour of M/s SAB Industries Ltd. for total amount of Rs.4,94,85,169/- (which was 166.13% above total amount put to tender) with deviation limit of 30% as per Clause 2(e)(ii) of contract agreement i.e. amount of Rs.1,48,45,550/- and stipulated period of completion of work as per award letter dated 23.8.1996 was two years i.e. from 8.9.1996 to 7.9.1998. The contract period was admittedly extended by the petitioners on the requests made by claimant from time to time by granting six authorized time extensions. The work was completed on 30.6.2000. There was no dispute between the parties that upto 46th running bill, total amount to the tune of Rs.5,39,07,701/- stood paid to claimant by the department. Thereafter, in the 47th bill (final bill) an amount of Rs.32,54,503/- was claimed by the claimant for substituted and extra items from the employer. Since no payment was made by the employer, the claimant raised dispute in terms of Clause 25 of the agreement for Rs.2,72,90,155/- under following heads:

(a) Whether the claimant company is entitled to the claims set out in items A to J, paragraphs 7-44 of the claim petition (Vol.) as due and payable by the respondent?

(b) In case these claims are not proved in their entirety, what claim amount the claimant can be held entitled which may be just and equitable?

(c) Whether the extension of contract period was due to default of the respondent on account of the acts of omission and commission on the part of the concerned employees and to what effect?

(d) Whether the claimant company is entitled to any amount of claim on account of deviations, escalations, substituted items and extra items and how much

(e) Whether the claimant is entitled to an interest and if so from which date and at what rate?

(f) Whether the claim of the petitioner company is time barred?

(g) Whether the claimant is stopped from making the claim in question.

3. Earlier Superintending Engineer (Arbitration Cell) was appointed as arbitrator on 13.3.2002 and he entered into reference on 16.2.2002, however, later said post was abolished and as such, this Court vide order dated 6.3.2003 appointed late Justice Roop Singh Thakur, as an Arbitrator but due to untimely death of said arbitrator, this court vide order dated 31.10.2008, appointed Justice Virender Jain, former Chief Justice, Punjab and Haryana High Court as an arbitrator. Since pleadings were completed during the tenure of late Justice Roop Singh Thakur, parties agreed to continue with arbitration proceedings, from the stage, left by earlier arbitrator, who entered into reference after being appointed as an arbitrator.

4. The claimant claimed following amounts in its claim filed before the Arbitrator:

A. Payment against work done including escalation Rs.84,76,158/-

B. Release of security Rs.50,000/-

C. Payment due against loss caused to the claimant by the Department by obstructing claimant from executing and completing the work of total estimated cost of Rs.4,94,85,169/- till original time limit i.e. u