STATE OF ORISSA Vs. SUDHAKAR DAS

JUDGEMENT

(1.) This appeal by special leave arises out of arbitration proceedings. The High Court of Orissa dismissed an appeal filed by the appellant against the order of Subordinate Judge, Bhubaneshwar making an award made by the Arbitrator a rule of the Court. The three main issues with which we are concerned in this appeal are :

(2.) It is not disputed that the arbitration agreement contained no escalation clause. In the absence of any escalation clause, an Arbitrator cannot assume any jurisdiction to award any amount towards escalation. That part of the Award which grants escalation charges is clearly not sustainable and suffers from a patent error. The decree, insofar, as the award of escalation charges is concerned, cannot, therefore, be sustained.

(3.) It is conceded by Ms. Mana Chakraborty, learned counsel for the State that the issue relating to the power of the Arbitrator to grant interest pendente lite where the agreement between the parties, as in the present case, did not prohibit grant of interest andd the dispute referred to the Arbitrator included the claim of interest, is no longer res integra and stands settled in favour of the claimant and against the State in Secretary, Irrigation Department, Government of Orissa v. G. C. Roy, (1992) 1 SCC 508 : (1992 AIR SCW 389 : AIR 1992 SC 732), overruling the view to the contrary as expressed in Executive Engineer (Irrigation) Balimela v. Abhaduta Jena, (1988) 1 SCC 418 : (AIR 1988 SC 1520). The decree to the extent, it awards pendente lite interest in favour of the respondents, therefore, is sustained and the challenge to it fails.