STATE OF ORISSA Vs. B N AGARWALLA

JUDGEMENT

(1.) The main question which arises for consideration in these cases relates to the power of the Arbitrator to award interest.

(2.) The contention on behalf of the appellants against whom interest has been awarded by the arbitrators, is that this Court held in Executive Engineer (Irrigation) v. Abhuduta Jena, (1988) 1 SCC 418: (AIR 1988 SC 1520) that the arbitrator has no power to award interest in respect of pre-reference period in the absence of the claimant having a right under the contract or a provision of substantive law, to get interest. On the other hand, it is the submission on behalf of the claimants/respondents that the aforesaid decision in the case of Abhaduta Jena (supra) has been overruled by a Constitution Bench of this Court in the case of Secretary, Irrigation Department, Govt. of Orissa v. G. C. Roy, (1992) I SCC 508: (1992 AIR SCW 389) and it has been held that the arbitrator could award pre-reference, pendente lite and future interest.

(3.) Before dealing with the facts of each case it will be appropriate to examine the relevant decisions of this Court in order to determine the correct legal position with regard to the jurisdiction of the arbitrator to award interest in respect of the periods for which interest can be awarded namely-(i) for the period commencing from the date of dispute till the date Arbitrator entered upon the reference, or the pre-reference period: (ii) for the period commencing from the date the Arbitrator entered upon reference till the date of making the award (pendente lite interest) and : (iii) for the period commencing from the date of making of the award till the date the award is made the rule of the Court or till the date of realisation, or the post award interest.