UNION OF INDIA Vs. M/S AMBIKA CONSTRUCTION

JUDGEMENT

(1.) The issue involved in this case is in regard to the award covered by the Arbitration act, 1940. The Arbitrator has awarded pendente lite interest ignoring an express bar in the contract regarding award of interest.

(2.) There are two decisions of this Court which have taken the view that the Arbitrator can award pendente lite interest. They are Board of Trustees for the Port of Calcutta Vs. Engineers-De-Space-Age 1996 (1) SCC 516 followed in Madnani Construction Corpn. (P) Ltd. Vs. Union of India & Ors. 2010 (1) SCC 549.

(3.) In two other decision that is, Syed Ahmed & Co. Vs. State of U.P. 2009 (12) SCC 26 and Sree Kamatchi Amman Construction Vs. Divisional Rly.Manager/Works & Ors. 2010 (8) SCALE 293 , this Court has expressed a doubt whether the decision in Engineers-De-Space-Age (supra) is good law in view of the Constitution Bench judgments in Irrigation Department, Govt. of Orissa Vs. G.C. Roy 1992 (1) SCC 508 and Executive Engineer, Dhenkanal Minor Irrigation Division Vs. N.C. Budharaj 2001 (2) SCC 721 , which held that Arbitrator had the jurisdiction and authority to award interest in regard to three periods, namely, pre-reference period, pendente lite and future period, if there was no express bar in the contract regarding award of interest. However, this Court in Syed Ahmed & Co. and Sree Kamatchi Amman Construction (supra) did not examine the matter further as those cases related to matters arising under the new Act, namely, Arbitration and Conciliation Act, 1966.