Harinder Paul Singh vs State of Haryana and another

T.H.B. Chalapathi, J.—This writ petition is filed against the award of the Arbitrator dated June 20, 1978. The petitioner became liable to pay a sum of Rs. 1900/ to respondent No. 3. As the petitioner failed to pay the said amount, a reference was made to the Arbitrator, who by his order dated June 20, 1978, directed the petitioner to pay a sum of Rs. 2302/, with interest at the rate of 12 per cent per annum until the realisation of principal amount of Rs. 1900/. Challenging the said award, the petitioner filed the above writ petition.

The learned counsel for the petitioner contended that interest claimed by the society amounting to Rs. 2622/ and the costs awarded by the Arbitrator are unreasonable as the amount payable was a clean advance and that there was no agreement to pay interest and therefore no interest was payable and the award of costs of Rs. 787/ on amount of Rs. 1900/ was contrary to all known principles of law. Therefore, the award is liable to be set aside. He further submitted that he is prepared to pay the principal amount of Rs. 1900/ at reasonable interest from the date of the award. There is no doubt that petitioner is liable to pay Rs. 1900/ as clean advance to respondent No. 3. There is nothing on record to show that this amount which is lying with the petitioner as clean advance carries interest. There is nothing on record that there is any agreement to pay interest. Therefore, the claim of the society for interest prior to initiation of recovery proceedings by referring the matter to Arbitrator cannot be allowed. However, the petitioner is liable to pay interest during the pendency of the proceedings before the Arbitrator and also future interest at the rate of 6 per cent annum. Further, the award of costs of Rs. 787/ on a principal amount of Rs. 1900/ cannot also be justified.

In the circumstances of the case, I allow this writ petition and direct the petitioner to pay a sum of Rs. 1900/ with interest at the rate of 6 per cent per annum from January 1, 1977, and a sum of Rs. 300/ towards costs of the Arbitration. By an interim order dated March 25, 1981, this Court directed the petitioner to deposit a sum of Rs. 1900/ as condition for staying the recovery of the balance amount. If the said amount is deposited, the same shall be given credit to. No order as to costs.