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2025 Supreme(Jhk) 1446
IN THE HIGH COURT OF JHARKHAND AT RANCHI
M. S. Ramachandra Rao, C.J., Deepak Roshan, J.
C.I.S.C.-S.R.S.C. (Joint Venture) - Petitioner
Versus
Central Coalfields Limited - Respondent
C.M.P. No. 1064 of 2022
Decided On : 25-04-2025
Important Points
Subject
Commercial Law - Arbitration
Act Referred
Headnote
(B) Judicial review under Article 227 - Limits of interference by the High Court do not extend to re-evaluation of merits or substituting judgments unless serious dereliction of duty is evident. (Paras 52, 54)
Facts of the case:
The petitioner, a joint venture, sought enforcement of an arbitral award against the respondent, a government undertaking, pertaining to a dispute over a contractual agreement for coal extraction. The petitioner contested the computation of interest directed by the Commercial Court, claiming a higher rate based on the unamended statute.
Findings of Court:
The Commercial Court appropriately applied the unamended Section 31(7)(b), ruling that since no consent was given for the amended provision, the older statute must govern.
Issues: Whether the Commercial Court's directive on interest computation contravened provisions of the Arbitration Act, and whether the Court could interfere under Article 227.
Ratio Decidendi: The terms of the arbitral award must be adhered to, and without specific interest rates detailed in the award, claims for statutory rates are not valid.
Result: Petition dismissed with costs.
For the Petitioner:Mr. Sumeet Gadodia, Advocate, Mr. Prakash Narayan, Advocate.
For the Respondent:Mr. Amit Kr. Das, Advocate
| Table of Content |
|---|
| 1. petitioner is a joint venture and background disputes (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 10) |
| 2. details of the arbitral award and interest claims (Para 11 , 12 , 14 , 19) |
| 3. commercial court's direction on interest calculation (Para 21 , 22 , 23 , 24) |
| 4. jurisdictional considerations and law application (Para 32 , 35 , 36 , 37) |
| 5. final judgment and dismissal of the case (Para 41 , 43 , 44 , 56) |
JUDGMENT :
M.S. Ramachandra Rao, C.J.
This Civil Miscellaneous application is filed under Article 227 of the Constitution of India challenging the order dt. 25.08.2022 of the Commercial Court, Ranchi in Commercial Execution Case No. 40 of 2015.
2. The petitioner is a joint venture entity of the Calcutta Industrial Supply Corporation Limited and Shri Rani Sati Carriers styled as M/s.C.I.S.C.-S.R.S.C. (JV).
3. The respondent is the Central Coalfields Limited, which is a Government of India undertaking.
The Background facts
4. The respondent had issued a tender dt. 27.05.2002 for extraction/breaking of coal/coal measures data in slices/layers without resorting to drilling and blasting and then loading/transfer of broken materials into tipping trucks/dumpers provided by the project management with a specification that the broken materials should not be greater than 100 MM of size.
5. The petitioner became the successful tenderer and was issued a Letter of Intent on 26.10.2002 to start the said work.
6. The work started on 29.11.2002 and the agreement/contract between the parties was signed on 12.04.2003.
7. Disputes arose between the parties.
8. The petitioner herein filed an application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 ( for short ‘the Act’) being Arbitration Application No.38 of 2004 in this Court.
9. During the pendency of the said application, the respondent stated that an ex-CMD by name S.K. Verma was appointed as the sole arbitrator.
10. Later, he was replaced by another arbitrator by name M.A. Ubaid, who was also an ex-CMD. The Arbitral Award
11. The learned Arbitrator rendered an award on 22.12.2007 allowing certain claims made by the petitioner and rejecting the counter claims made by the respondent. He awarded Rs.2,62,02,434/- to the appellant.
12. With regard to interest on claim, the arbitrator stated in para 25 of the the award that “interest at prevalent rates for claim due and ordered, is to be paid for the period it is due to the date of payment”.
13. In this Revision, we are concerned with only this aspect of the matter.
14. The said award of the arbitrator was challenged by the respondent under section 34 read with section 16 (b), 17 of the Act before the court of the Sub-Judge, VIII, Ranchi in Arbitration Miscellaneous Case No. 24 of 2008. He dismissed the said challenge vide order dt. 30th January, 2015.
15. The respondent then filed Arbitration Appeal No. 4 of 2015 before this High Court against the decision dt. 30.01.2015 of the Sub-Judge, VIII, Ranchi in the Arbitration Miscellaneous Case No. 24 of 2008.
16. This Arbitration Appeal No. 4 of 2015 was also dismissed by this Court on 06.07.2020.
17. In the meantime, the petitioner had filed before the Commercial Court, Ranchi, Commercial Execution Case No. 40 of 2015, praying for issuance of appropriate directions for directing the respondent to pay the decretal amount along with interest.
18. In the said application, he gave computation of interest as per the Arbitral Award read with section 31 (7) (b) of the Act (unamended), claiming interest at the rate of 18% per annum from the date of the Arbitral Award.
19. The respondent filed its objection thereto disputing the calculation of interest submitted by the petitioner. The contention of the respondent was that section 31 (7) (b) of the Act, as amended would apply; and since the Arbitral Tribunal had not prescribed the rate of interest payable on the arbitral award, interest is to be calculated in terms of the amended section 31 (7) (b) of the Act. It contended that the “current” rate of int
