STATE OF ORISSA Vs. B N AGARWALA

JUDGEMENT

(1.) Civil Appeal No. 3096 of 1981 arises from the judgment of a learned single Judge of Orissa High Court in Miscellaneous Appeal No. 253 of 1980. Civil Appeal No. 3097 of 1981 arises from Miscellaneous Appeal No. 254 of 1980. The appeals pertain to two identical contracts entered into between the State of Orissa and the respondent, Sri B. N. Agarwala. All the relevant facts and contentions are identical in both the appeals. It would, therefore, be sufficient if we refer to the facts in Civil Appeal No. 3096 of 1981.

(2.) An agreement No. 8-F2/67-68 was entered into between the State of Orissa (appellant) and the respondent for construction of Kukuteswar Minor Irrigation Project. The value of the agreement was Rs. 3,84,690/-. The work was completed on 11-9-69. On 8-8-77, the respondent claimed certain amount on account of extra work done by him, which dispute was referred to Sri B. N. Das, Superintending Engineer, as the sole Arbitrator. He made a reasoned award on 25-2-1980 granting a total sum of Rs. 1,59,298/-. This amount comprised of Rs. 61,086.61 p. towards interest and Rs. 98,212.09 p. towards the extra work done by the respondent. The interest amount Rs. 61,086.61 p. represented interest for the period 10-10-69 to 24-2-80. In other words this sum represented interest both for the pre-reference period as well as for the period the Arbitration proceedings were pending (Pendente lite interest). The Arbitrator directed that the said sum of Rs. 1,59,298/-should be paid within a period of three months, in default whereof it shall carry interest at the rate of 9 per cent per annum till the payment is made or till the passing of the decree by the Civil Court, whichever is earlier.

(3.) The appellant applied for setting aside the award while the respondent applied for making it the Rule of the Court. The learned Subordinate Judge overruled the objections raised by the appellant and made the award a rule of the Court. So far as interest is concerned, he directed, evidently under a mistake, that the amount awarded by the Arbitrator shall carry "interest at the rate of 6 per cent per annum as per the award." (As stated hereinbefore the arbitrator awarded interest at the rate of 9 per cent and not 6 per cent. For the period subsequent to the award, however, he awarded interest at the rate of 6 per cent).