GREATER COCHIN DEVELOPMENT AUTHORITY Vs. LEELAMMA VALSON
SUPREME COURT OF INDIA
GREATER COCHIN DEVELOPMENT AUTHORITY
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Ruma Pal, J. -
(2.)An agreement was entered into between the appellant and the respondent by which the respondents undertook the construction of residential flats. The agreement contained an arbitration clause. After the completion of the work, disputes arose between the parties. The disputes were referred to a panel of three arbitrators under the provisions of the Arbitration Act, 1940 (referred to as the Act). By an award made on 31st December, 1987 the arbitrators directed the appellant to pay the respondents various amounts towards the several heads of claim put forward by the respondents. The arbitrators also awarded interest in respect of certain of the respondents' claims. As the dispute in this appeal centers around the right of the respondent to claim interest, the relevant portion of the award in this context is extracted (wherein the appellant herein is referred to as 'the respondent' and the respondent herein as 'the claimant') :
"Respondent to pay claimant interest @9% from 29-5-1980.
Respondent to pay claimant interest at 10% from 1-2-1985 on claims III to IX and on Claim XII only."
(3.)The award was filed in the local Court which issued notice under Sec. 14 (1) of the Act, to the appellant. The appellant filed an application challenging the award on several grounds, one of the grounds being that the award of interest pendente lite was illegal. The respondents also filed an application in which the first prayer was to pass a decree in terms of the award. The second prayer was to :
"Grant interest at 18% per annum on the amounts due under the decree to be so passed from the date of decree till date of payment or realization, in accordance with S. 29 of the Arbitration Act."
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