An arbitrator has no power to award future interest unless specifically provided in the Act or rules governing the arbitration.

D.K.Mahajan, J.

1. This appeal under clause X of the Letters Patent is directed against the decision of a learned Single Judge of this Court and the only point that has been debated before us relates to the grant of future interest.

2. Messrs Suraj Ram and Sons (hereinafter referred to as the firm) consisted of two partners, Prehlad Kumar and Amar Kumar, entered into an agreement with Kot Kapura Cooperative Marketing Society, Kot Kapura (hereinafter referred to as the Society) for making purchases from the said Society. It was also agreed that if there was any dispute it was to be referred to an arbitrator to be appointed by the Registrar, Co-operative Societies. Later on, disputes arose between the firm and the Society and they were referred to the Registrar, Cooperative Societies. The Registrar entrusted the dispute to an arbitrator under section 56 of the Co-operative Societies Act (hereinafter referred to as the Act). The arbitrator gave his award on July 15, 1966. An appeal was taken against his award, but was dismissed as barred by time. A revision against the award also failed. The firm then preferred a petition under Articles 226 and 227 of the Constitution of India in this Court. In this petition two submissions were made :-

(a) that one partner could not refer the matter to the arbitrator; and

(b) that the arbitrator had no jurisdiction to allow future interest.

The learned Single Judge after hearing the parties held

as follows :-

(1) that a dispute between the firm, which is itself a member of the Society, and the Society, could be referred to an arbitrator; and

(2) that the arbitrator could award future interest.

The firm being dissatisfied has come up in appeal to this Court.

3 The contention of the learned counsel for the appellant is that there is no provision in the Act or in the rules framed under section 85 of the Act wherein a power has been given to an arbitrator to award future interest. With regard to the grant of interest, the matter was in dispute as would be clear from Annexure `A to the petition. Therefore, the dispute as to grant of interest was subject-matter of adjudication like the principal amount. The question of future interest was not the subject-matter of reference. It is not necessary for us to advert at this stage to the question whether the dispute as to future interest can be made a subject-matter of dispute before the arbitrator. So far as the Punjab Cooperative Societies Rules (hereinafter referred to as the Rules) are concerned, they provide for the award of costs. Rule 56 of the Rules is in the following terms :-

"The arbitrator or the Registrar, as the case may be, shall have the power to order the expenses of determining a dispute or the costs of either party to be borne by such party or parties to the dispute as he may think fit;"

but there is no similar provision in the rules with regard to the grant of future interest. It is well known that future interest is granted by Courts in view of section 34 of the Code of Civil Procedure. If section 34 of the Code of Civil Procedure was to be eliminated, the Courts will have no power to grant future interest. So far as the present Act is concerned, it is silent with regard to the grant of future interest. Faced with this situation, Mr. Kuldip Singh, learned counsel for the Society places reliance on form of award given in Appendix "F".

Appendix "F" has been framed under rule 79 of the Rules. Rule 79 is in the following terms :-

"The award of the arbitrator shall be in the form given in Appendix F and the order of liquidator under clause (E) of sub-section (2) of section 59 in the form given in Appendix G;"

and the relevant part of the form of award in Appendix "F" is as follows :-

"FORM OF AWARD

Whereas ...................................................... Now, Therefore, I ...................... having duly considered the matter, hereby direct that ...................... to pay to .................. interest at .................