SUDHIR BROTHERS Vs. DELHI DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) Leave granted.

(2.) The only issue involved in this appeal relates to the power and jurisdiction of an arbitrator to award interest for the period between the making of the reference to the arbitrator and his entering upon the reference (pre-reference period) after the coming into force of the Interest Act, 1978 (post-interest Act era).

(3.) A reference to brief facts for deciding the issue would be apropos. The first respondent - Delhi Development Authority - awarded certain work of construction of middle income group houses at Pritam Pura, New Delhi to the appellant and entered into a contract with him. Differences and disputes arose between the parties relating to the execution of the contract on 1/4/1984, when a reference to arbitration was sought by the appellant and interms of clause 25 of the General Conditions of Contract, the same were referred to arbitration of the second respondent. The arbitrator entered upon the reference on 8/2/1985. He made an award on 15/7/1987. The award together with the proceedings was filed in the court by the learned arbitrator. The award was substantially in favour of the appellant. The arbitrator also awarded 12% simple interest on the amount awarded from 1/4/1984 to the date of payment. The appellant filed an application under S. 14 and 17 of the Arbitration Act for making the award a rule of the court. On notice being issued to Respondent I, objections were filed to the award being made a rule of the court. On 21/12/1990, the learned Single Judge of the Delhi High court made the award rule of the court except in respect of claims under clauses 1, 3 and 4. The court also rejected the claim of the appellant relating to both the award of pendente lite interest as well as the pre- reference interest and set aside the award to that extent. On appeal before the division bench, pendente lite interest, (between 8/2/1985 and 15/7/1987 as awarded by the arbitrator, was restored but the order of the learned Single Judge refusing the pre-reference interest as well as the claim under clauses I, 3 and 4 amounting to Rs. 23,685. 00 was upheld. The division bench opined: