Hon’ble Amitava Lala, J.—This appeal has been preferred by the State of U.P. under Section 39 of the Arbitration Act, 1940 (hereinafter in short called as the ‘Act, 1940’) challenging the judgment and order dated 20th February, 2001 passed by the learned District Judge, Bulandshahar in Original Suit No. 6 of 2000 (State of U.P. v. Allied Construction) under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter called as the ‘Act, 1996’). By the order impugned the Court below dismissed the application for setting aside the arbitral award dated 8th May, 1998 passed by one Sri K.K. Sahanan, Chief Engineer, Irrigation Department, U.P.

2. The State-appellant has already acted upon the award by paying the principal sum, so determined by the arbitrator, to the respondent-contractor but raised a dispute with regard to interest. As per the award, rate of interest for the pre-reference period is fixed @ 15% per annum, whereas for the pendente lite and subsequent period is fixed @ 18% per annum.

3. At the initial stage when the appeal was not open for hearing, a prayer was made by the State appellant to reduce the rate of interest though as per Section 31 (7)(b) of th