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1986 Supreme(MP) 166

High Court Of Madhya Pradesh
B. C. Varma and K. K. Adhikari, JJ.
STATE OF MADHYA PRADESH
Versus
M. B. GHARPURAY, POONA
Misc. A. No. 179 of 1982 Of
Decided On : Jul 14,1986

Advocates Appeared:
R.K.Thakur, D.M.Dharmadhikari

Headnote:(1) Arbitration Act, 1940-S. 30-no objection raised before arbitrator-award cannot be set aside on such objection.

       Learned Government Advocate argued that since the contract was for a lumpsum amount of Rs.16 lacs, the arbitrators ought not to have entertained the claim against specific items.

       Held: This argument must be rejected for the Simple reason that no objection of this kind was raised before the arbitrator. [Para 4

       (2) Arbitration Act, 1940- S.30- award cannot be set aside as vitiated for non-mention of evidence adduced or there is no reason for conclusion reached

       The arbitrator is not bound to record his reasons or state the principles of law on which he proceeds. 1976 JLJ 521 and AIR 1967 SC 378 relied on. [Para 5

       3. Arbitration Act, 1940-S.30-defective or bad part of award separable from remaining-such part can be set aside. 1976 JLJ 521 and AIR 1973 SC 683 relied on. [Para 6

       4. Arbitration Act, 1940-S.8-question of awarding interest referred to arbitrator-arbitrator can decide it.

       (5) Civil P.C., 1908 -S. 34 -principles under-applicable to arbitration proceeding-arbitrator can award interest subsequent to passing of award.

       Where a dispute as to interest is referred to arbitration, it is an implied term of the reference that the arbitral or will decide the dispute according to existing law and give such relief with regard to interest as the Court would give if it decided the dispute. Principles of S. 34 Code of Civil Procedure wert held applicable in such cases and the arbitrator is held to have jurisdiction to allow interest subsequent to the passing of the award. AIR 1955 SC 498 referred to. AIR 1967 SC 1030, AIR 1972 SC 1007 and AIR 1967 SC 1032 followed. [Para 7

       (6) Civil P.C. 1908-S. 34-interest--cannot be allowed more than 6% per annum. [Para 7

       (7) Sale of Goods Act. 1930-S. 61 (2)-interest under-can be awarded at the rate Court thinks fit-no outer limit prescribed.

       It is pertinent to note that section 61 (2) of the Sale of Goods Act permits the Court to award interest at such rate as it thinks fit. This is, of course, in absence of any contract to the contrary. No outer limit of the rate of interest is prescribed. AIR 1972 SC 1507 relied on. [Para 7

       

JUDGMENT :

B.C.VARMA, J.

( 1. ) This is an appeal under section 39 of the Arbitration Act.

( 2. ) The State of Madhya Pradesh invited certain tenders for the construction of a foot bridge across Narmada river at Onkareshwar. The respondents tender of Rs. 16 lacs was accepted on a lump sum basis. The agreement was reduced into writing embodying the terms of the contract. Clause 17 of the contract provides for settlement of dispute arising out of and under the said contract to arbitration. The respondent undertook the work but disputes arose. Shri M.P. Apte was appointed arbitrator by the respondent while States nominee was shri V.N. Rao. Shri Y.K. Patil was appointed the umpire. The arbitrator could not pronounce the award in time and, therefore, the time was extended for making award. On 20-3-1980, the award was pronounced and later filed in Court. While the respondent prayed for a decree in terms of the award, the appellant objected on various grounds. The lower Court substantially accepted the award returned by the arbitrators and passed the decree which is the subject matter of this appeal.

( 3. ) A perusal of the award would indicate that the respondent raised many items of claim before the arbitrators. Not only this, he also claimed that he was entitled to interest on all the amount payable to him. The appellant joined issues and the parties filed agreed issues before the arbitrator. The appellant answered each item of the claim made by the respondent and contested it before the arbitrator who gave the parties full opportunities of substantiating their contentions and then after hearing them passed the impugned award. This award also includes a direction for payment of interest at nine per cent per annum on the amount found due to the respondent from a period after a month of the award, i.e. from 28-4-1980, until realisation. Before the lower Court also the amount found by the arbitrator as due to the respondent against different heads was challenged and so also was challenged the award of interest. The Court did not find the arbitrator guilty of misconduct or of misconducting the proceedings.

( 4. ) Before us Shri R.K. Thakur, learned Government Advocate, first argued that since the contract was for a lump sum amount of Rs. 16 lacs, the arbitrator ought not to have entertained the claim against specific items. This argument must be rejected for the simple reason that no objection of this kind was raised before the arbitrator. Instead of protesting to the laying of claim under various heads, the appellant/State joined issues and the parties submitted agreed issues for decision by the arbitrator. The award shows that the State placed before the arbitrator all material at its command to demonstrate that the claim made by the respondent was untenable. Even after the close of evidence when the parties addressed the arbitrators no such contention was raised. It will, therefore, be too late in the day now to permit such an objection to be raised. Even otherwise, what we find is that although the contractor was agreed to be paid a lump sum amount, he had to specify and particularise his claim which could be done only by mentioning the amount due to him against various items of work and on different counts. This contention is, therefore, rejected.

( 5. ) It was then urged that the award is liable to be vitiated for it assigns no reason for the conclusion reached and has not made even a reference of the evidence adduced. This argument has been fully answered by a Division Bench of this Court in Umraosingh vs. State of M.P. 1976 MPLJ 91. It must be remembered that the Court before whom an award by the arbitrator is filed does not deal with that award as a Court of appeal. It has to act within the framework of the Arbitration Act. The award can be set aside only in terms of Section 30. After quoting several authorities of the Supreme Court as also relying upon certain decision, the learned Judges of the Division Bench in Umraosinghs case














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