Union of India (UOI) vs Bawa Ram and Co.

K.S. Radhakrishnan, C.J.—The only question to be considered in this case is whether an Arbitrator possesses power to grant interest?

Learned Single Judge declared that it has.

Aggrieved by the same, this appeal has been filed by Union of India.

The question as to whether an Arbitrator exercising powers under the Arbitration Act has got the power to grant interest is no more res Integra.

The question has been elaborately considered by the Apex Court. Generally, the question of award of interest arises in respect of three periods,

namely: (i) the period from the date of dispute to the date an arbitrator enters upon the reference; (ii) the period from the date the arbitrator enters

upon the reference till the award is made and (iii) the period between the date of award and till the dale of decree or date of realization.

The question regarding pre-reference interest came up before the Constitution Bench of the Apex Court in Executive Engineer, Dhenkanal

Minor Irrigation Division v. N.C. Budharaj (2001) 2 SCC 721 and the Apex Court took the view that contention that arbitrator cannot have

jurisdiction to award interest for the period prior to the date of his appointment or entering into reference, which alone confers upon him power, is

too stale and technical to be countenanced. Reference may also be made to Secretary, Irrigation Department, Government of Orissa and others

Vs. G.C. Roy, , wherein the Supreme Court considered the question whether arbitrator has got power to award pendente lite interest and the

Supreme Court held in/affirmative. Reference may also be made to the decision of the Apex Court in Hindustan Construction Co. Ltd. Vs. State of

Jammu and Kashmir, , wherein the Supreme Court dealt with the question as to the arbitrator's power to award interest and the Court held in

affirmative.

In view of the above settled proposition of law, we are of the view that the learned Single Judge is right in holding that the arbitrator is possessed

with power to award interest.

We find no merit in this appeal. It is dismissed.