Award of excess interest by the arbitrator agitated by the aggrieved party,

ORDER :- The first respondent in E.P. No. 66 of 1979 on the file of the District Munsif of Sirkali is the petitioner herein. The first respondent herein as the plaintiff in C.T.I.A. 317 of 1973-74, got an award from the arbitrator of Co-operative Societies, Sirkali, against the petitioner and the second respondent herein on 30th May, 1974 under Section 73 of the Tamil Nadu Co-operative Societies Act (Act 53 of 1961). In that proceedings, the first respondent herein claimed a sum of Rs. 2,270-65 due on a surety bond dated 30-11-1971, with further interest at one paise per rupee per mensem from the date of making the reference to the date of recovery and costs. During the enquiry, the petitioner and the second respondent herein remained ex parte. The arbitrator directed the petitioner and the second respondent herein to pay to the first respondent a sum of Rs. 2,349.22 with interest thereon at two paise per rupee per mensem from the date of the award till realisation. In order to execute this award, the first respondent herein filed E.P. No. 66 of 1979.

2. The main question that was decided in the execution petition was whether the award and claim of excessive interest beyond six per cent per annum for the period subsequent to the award was valid or not and whether the executing Court can decide that matter at the stage of execution. The executing Court found that it cannot go beyond the decree, that under Section 100 of the Tamil Nadu Co-operative Societies Act, the jurisdiction of the Civil Court was barred and as such, the validity or otherwise of the interest granted cannot be gone into by the Civil Court and that the objection is barred by constructive res judicata. With these findings, the Court below ordered execution. As against this order, the present revision petition has been filed.

3. Mr. P. Veeraraghavan, learned counsel for the revision petitioner, contended that the grant of interest which works out at the rate of 24 per cent per annum is not correct and that applying the decision in Gurunathan v. Villupuram Co-operative Urban Bank Ltd., 1979 TLNJ 448, the revision has to be allowed, Mr. S. Jayaraman, on the other hand, pointing out the provisions of the Tamil Nadu Co-operative Societies Act, submitted that the Civil Court has no jurisdiction to go into the matter and that the executing Court cannot go beyond the decree or the award passed in this case.

4. It is clear from the facts of the case, that the decree holder claimed interest at one paise per rupee per mensem. But, the arbitrator has given an award to the effect that the decree holder is entitled to interest at two paise per rupee per mensem. This award works out to 24 per cent per annum. It is clear form the decisions rendered by our High Court and the Supreme Court that Section 34, C.P.C. though not applicable directly to the arbitration proceedings, the principle of that section can be applied by the arbitrator for awarding interest. This is clear from the decision reported in Thawardas Pherumal v. Union of India, AIR 1955 SC 468. Thus, the Supreme Court has placed the subject matter beyond the controversy by holding that Section 34, C.P.C. will be applicable to proceedings before an arbitrator also.

5. The learned Chief Justice of our Court in C.R.Ps. 818 and 819 of 1979 reported in Gurunathan v. Villupuram Co-operative Urban Bank Ltd., 1979 TLNJ 448, after accepting the proposition laid down by the Supreme Court in the decision cited above, interfered with the interest awarded by the arbitrator on the ground that the same is more than six per cent and that such award of interest more than 6 per cent is not envisaged by Section 34, C.P.C. Accordingly the learned Chief Justice modified the award and stated that the award amount will carry interest at six per cent and not at 18 per cent as awarded by the arbitrator. With this modification, the learned Chief Justice dismissed both the revisions.

6. Mr. P. Veeraraghavan, learned counsel for the revis