The court emphasized the arbitrator's discretion in awarding interest and the court's power to balance equities by awarding interest.

JUDGMENT :

1. Heard Shri Javed Husain Khan, learned counsel for the petitioner and learned Standing Counsel for the State-respondents.

2. The petitioner was A-class Contractor and was assigned certain construction activity by the respondent-Irrigation Department. There is no dispute between the parties that the work was completed by the petitioner on 28.05.2011 with full satisfaction of the authorities, however the dispute was that the amount payable to the petitioner was not paid to him.

3. Since, the aforesaid work commenced and completed in pursuance of an agreement dated 03.03.2011, a copy whereof has been filed along with the supplementary affidavit, the dispute was to be resolved through arbitration.

4. Under the aforesaid facts of the case, the petitioner filed a petition being Arbitration and Conciliation Application under section 11(4) No. 27 of 2015 before this Court, during the course whereof, an Arbitrator was appointed with the consent of the parties and accordingly, the said case was dismissed as infructuous.

5. Later on, the respondent No. 1, Superintending Engineer, Irrigation Department, Vivek Khand Gomti Nagar, Lucknow in the capacity of an Arbitrator, passed an award dated 04.04.2016 holding the petitioner as entitled to get the entire amount and issuing direction for payment of sums to the petitioner within a period of three months, however, cost was denied under the award.

6. Learned counsel for the petitioner submits that there was an error in the award to the effect that though the petitioner had claimed 18% interest on the amount payable to him, the award is silent on the said aspect. He submits that for the correction of the aforesaid error, the petitioner moved an application dated 21.04.2016 before the Arbitrator under section 33 of the Arbitration and Conciliation Act, 1996 which was followed by another application dated 02.11.2016, however the same have not been considered by the Arbitrator.

7. The present writ petition has been filed with a prayer to issue a writ, order or direction in the nature of mandamus commanding the respondent No. 1, i.e. Arbitrator, to make an additional award as claimed by the petitioner through the aforesaid application and reminder.

8. Learned Standing Counsel submits that the award was made and the amount was directed to be paid after deduction of Sales Tax, Income Tax, etc., and, therefore, the award is valid.

9. I have perused the record of the proceedings as well as the agreement dated 03.03.2011. There is no clause under the agreement whereby the payment of interest has been denied, that is to say that there was no agreement in between the parties that whatever amount is found to be due to be paid to the Contractor, no amount of interest shall be payable.

10. Learned counsel for the petitioner has placed reliance upon section 31(7)(a) of the Arbitration and Conciliation Act, 1996, which reads as follows:

“31. Form and contents of arbitral award.

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(7)(a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.”

11. He, therefore, submits that an Arbitrator has power to award interest, unless otherwise agreed by the parties and that there is no otherwise agreement in between the parties that interest shall not be paid.

12. He also placed reliance upon the judgment of Supreme Court in the case of Executive Engineer (R and B) and other vs Gokul Chandra Kanungo (Dead) through His Legal Heirs reported in AIR 2022 Supreme Court 4857, with special reference to paragraph 17 of the judgement, which is reproduced as follows:

“17. This Court, in the case of Mcdermott International Inc vs. Burn Standard Co. Ltd. & Others reported in 2006 (11) SCC