Gupta Brothers vs Municipal Corporation of Delhi

Valmiki J Mehta, J.—This petition u/s 34 of the Arbitration and Conciliation Act, 1996 challenges the only one issue in the Award dated 30.11.2007 passed by the sole Arbitrator.

The issue which has been urged by the counsel for the objector is that with respect to Claim No. 3 while awarding the claim for escalation, the Arbitrator has failed to Award any interest on such awarded amount.

A reference to the Award shows that whereas with respect to certain claims interest has been awarded however with respect to Claim No. 3 interest has specifically not been awarded. Surely, the Arbitrator is entitled to exercise discretion on a claim which is granted to a contractor. An award on many issues takes many aspects into account for awarding or disallowing claims. I may note that the Arbitrator herself, while disposing of the application u/s 33 filed by the present petitioner, has in fact very clearly expressed that on merits the interest for this claim has not been awarded but interest for other claims has been awarded. The relevant portion in the order dated 5.3.2008 whereby the application u/s 33 of the present petitioner is dismissed is as under:

In this case, Award was made and published on 30th November, 2007 and the present Application has been filed on 26.12.2007 i.e. within time. The grounds on which the present application has been based is that while awarding Claim No. 3, the Award is silent with regard to interest. This argument has no merits because reading of the Award as a whole makes it clear that the Arbitral Tribunal awarded the principal amount with interest against Claim No. 1 and 2 but did not award interest against Claim No. 3. This is also clear from the concluding para of the Award, where it is again reiterated that the interest is awarded against Claim No. 1 and 2 and not against Claim No. 3.

(Emphasis supplied)

In view of the aforesaid, I do not find any illegality or perversity in the refusal of the grant of the interest under Claim No. 3 to the petitioner.Merely because two views are possible, this Court will not interfere in the Award passed by the Arbitrator more so the Arbitrator keeps in mind what is the final/ultimate fair compensation which the contractor is entitled to. Therefore, while determining this issue, if the Arbitrator on merits has found that interest ought not to be awarded for the Claim No. 3, as awarded for other claims, it is not permissible for this Court to sit as an Appellate Court, and grant interest which has been specifically/categorically refused by the Arbitrator.

Accordingly, there is no merit in this petition and the same is accordingly dismissed leaving the parties to bear their own costs.