State of Karnataka vs R.S. Shetty and Co.

Shivaprakash, J.—Delay in filing these Appeals is condoned and the matters are taken up for hearing at the admission stage itself by consent of parties. After hearing both the learned Counsel, we pass the following order.

The first contention urged by Sri H.J. Sunder Kumar, the learned High Court Govt. Advocate, is that grant of interest by the Court for the period during which the matters were pending before it, is in excess of what is provided u/s 34 C.P.C.

From the decrees, under appeal, we see that in each of the award the Arbitrator himself had granted interest at 18% from the date of entering upon the reference till the date of payment or the decree whichever is earlier. In Hindustan Construction Co. Ltd. Vs. State of Jammu and Kashmir, , the Supreme Court while considering the power of the Arbitrator to award interest has ruled, that the Arbitrator is competent to award interest for the period commencing from the date of the award to the date of decree or date of realisation whichever is earlier. The Supreme Court has ruled that the grant of interest for the post-award period is a matter of procedure. In the light of this Ruling, the submission made by the learned Govt. Advocate that the interest that could be awarded by the Court during the pendency of the matter before it cannot exceed what is provided u/s 34 C.P.C. cannot be accepted, since in the instant cases the interest has been awarded by the Arbitrator himself till the date of realisation or till the date of decree whichever is earlier. In Secretary, Irrigation Department, Government of Orissa and others Vs. G.C. Roy, the Supreme Court has ruled that Arbitrator has power to award pendente lite interest.

The second contention urged by the learned Govt. Advocate is that the interest awarded for the period subsequent to the date of decree is also in excess of what is provided u/s 34 of C.P.C. Section 29 of the Arbitration Act, 1940 empowers the Court for granting interest from the date of the decree at such rate as the Court deems reasonable, to be paid on the principal sum as adjudged by the award and confirmed by the decree. What has been done in the instant cases is, that in view of the fact that no objections were filed by the parties, the awards have been made the rule of the Court and interest is" granted in terms of the provisions of Section 29 referred above.

In this view of the matter, we do not see any infirmity in the decrees under Appeal. These Appeals, therefore, fail and the same are dismissed.