- (1.) THIS is a revision application by the defendant against an appellate order of additional District Judge, Ajmer, holding that the arbitrator was competent to award interest on the principal amount found due in favour of the plaintiff for the period during which the arbitration proceedings remained pending before him and till the realisation of the amount.
(2.) THE defendant entered into forward transactions in maize with the plaintiff through the Tijarti Chamber Sarafa, Beawar, One of the terms of the contract between the parties was that the question or dispute which arises relating to taking or giving money in respect of the transactions will be referred to the arbitration of the Tijarti Chamber Sarafa, Beawar under its rules. The defendant having failed to pay the amount the plaintiff filed a claim before the Tijarti chamber Sarafa for being decided by arbitration. In this claim he asked for interest from the date the amount became due against the defendant to the date of realisation. This interest was awarded by the arbitrator. It was contended by the defendant before the learned Additional District Judge that the arbitrator had no power to award such interest. He relied on the decision of the Supreme Court in thawardas v. Union of India, AIR 1955 SC 468.
(3.) THE learned Additional District Judge however relied on some observations made by the Supreme Court in Ashok Construction Co. v. Union of India, 1970 wln 24 = 1970 UJ (SC) 367, which run as follows;- "the High Court did not record a Ending on the plea of the Union that the arbitrator exceeded jurisdiction in making the award. The claim made by the appellants before the arbitrator consisted of three items: rs. 64,006. 71 for works done; Rs. 1,83,393. 77 for damages at 18% per annum; and Rs. 1,96,099. 88 for depreciation for purchase value of money. It is true that the last claim was unjustifiable. But out of the total claim made by the appellants for Rs. 4,41,440. 20 only Rupees 1,79,843. 80 were awarded. The arbitrator has given no reasons for accepting the claim of the appellants for the sum awarded by him. It cannot be said that he has taken into account any amount claimed as 'depreciation for purchase value of money'. In the view of the Deputy commissioner under Clause 25 of the arbitration agreement, the arbitrator was not empowered to go into the "question of loss of goodwill, or damages by way of interest, and that the arbitrator could not award interest by way of damages for detention of money and that is really what the claim for 'damages' amounts to". The appellants made a claim for interest on the amount withheld after the due date and the arbitrator was competent to decide that claim. The arbitration agreement by C-l. 25 provides: "except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs and instructions hereinbefore mentioned and as to the quality of workmanship or materials used on the work or as to any other questions, claim, right, matter or thing, whatsoever, in any way arising out of, or relating to the contract, designs, drawing, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whatever arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the superintending Engineer. . . . . . . . . . . . . . . . The terms of the arbitration agreement did not exclude the jurisdiction of the arbitrator to entertain a claim for interest, on the amount due under the contract. The award of the arbitrator cannot be said to be invalid. " On behalf of the defendant it is contended before me that the above case is distinguishable as the amount of interest which was claimed was specifically referred to arbitration and as the arbitration agreement was couched in much wider terms. I am unable to accept this contention.;