- (1.) The judgment dated 27.02.2010 passed by the Additional District Judge, Sonepat, dismissing the petition filed by the petitioner-appellant (hereinafter referred as 'the appellant') under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the Award dated 20.09.2006 (later on corrected on 14.11.2006) passed by respondent No. 2, is under challenge. The main dispute raised in the case is, "whether the respondents are entitled to interest on the awarded amount'". The Arbitrator had awarded interest on delayed payment and not on the items of contract as per agreement between the parties. The counsel for the Board has urged that as per clause 25-A of the agreement, the respondent was not entitled to any interest.
(2.) Heard, admittedly, there is Clause No. 25-A in the agreement with regard to the fact that the Arbitrator would not award any interest to the parties on any of the items of the agreement. The relevant extract from Clause 25-A of the agreement is reproduced as under:- 25-A. ......It shall also be term of the contract agreement that the arbitrator shall give speaking award, otherwise the award shall be null and void. It will not be binding on the parties. It shall also be a term of this contract that in any dispute/difference referred to the arbitrator, the arbitrator shall not award interest to the parties on any of the items of contract agreement executed between the parties. If the arbitrator awards interest, the same shall not be binding on the parties.
(3.) Now while passing the Award dated 20.09.2006, which was later on corrected on 14.11.2006, the Arbitrator has not awarded interest on the items of the contract, but on the delayed payment. The relevant observations made by the Arbitrator are as under:- I observe that the Division Office did not release the final dues of the agency i.e. amount of the final bill entered by the field officer and checked and as awarded in para No. 1 for Rs. 2,48,320/-. So I consider that the claimant deserves compensation in the shape of interest. Accordingly, I consider that simple interest @ 9% per annum should be given to the agency for the justified payments not released by the Division Office/respondent till today. Accordingly, I give an award on account of interest for Rs. 3,65,429/- (Rs. 2,48,320/- on account of final bill + Rs. 19,109/- on account of 25% security lying pending + Rs. 92,000/- awarded under claim No. 2 + Rs. 6000/- awarded under claim No. 5) i.e. simple interest @ 9% per annum for a period of 12 years, 10 months, 22 days which works out to Rs. 4,24,131/-. CLAIM No. 9. Since 75% security had not been released by the respondent even after 3 months of acceptance of completion work i.e. upto 28.07.1993, but the payment was released only on 29.10.1993, thus, the respondent kept Rs. 51,327/-. In the ends of natural justice, the claimant should be awarded compensation on this amount as well, hence, I give an award of Rs. 16,678/- as an interest @ 8% per p.a.;