STATE OF ORISSA Vs. LAL CHAND KAPANI

JUDGEMENT

(1.) - This is an appeal pursuant to the special leave granted filed by the State of Orissa against the judgment of the High Court. The matter arises out of arbitration proceedings and the dispute is regarding the interest that was awarded.

(2.) The arbitrator awarded the amount of Rs. 63,186/- by way of interest though the claim was of Rupees 2,74,230/-. The Subordinate Judge accepted the award regarding the interest and also made it the rule of the Court. Aggrieved by the same the State of Orissa filed an appeal before the High Court and it is held that the direction for payment of interest given by the arbitrator is legal and correct. No other details are given in the judgment of the High Court.

(3.) In this appeal before us, Mr. R. K. Mehta, learned Counsel for the appellant submits that the award in the instant case was passed on 7-3-79 i.e. prior to the Interest Act (i.e. 1978 Interest Act which came into force in August 1981) and as the position stood then the claimant was not entitled to interest during the pre-reference period and, therefore, the interest part of it should be struck down. The learned Counsel placed considerable reliance on the judgment of this Court in Executive Engineer (Irrigation), Balimela v. Abhaduta Jena, (1988) 1 SCC 418 : (AIR 1988 SC 1520 at p. 1523, para 6), wherein it was held that: