UNION OF INDIA Vs. CONBES INDIA PVT LTD

JUDGEMENT

(1.) This intra court appeal is preferred by the Union of India challenging the orders dated 5.4.2010 passed by the learned Single Judge in CS (OS) 122/2009 preferred by the appellant which was a petition under Section 14 & 17 of the Arbitration Act, 1940 filed by the respondent herein for making the award passed by the Arbitrator as a rule of the Court. On receipt of notice of the said petition, the appellant had filed objections under Section 30 & 33 of the Arbitration Act, (hereinafter referred to as "the Act, 1940?). Specific objection was laid to the award in respect of Claims No. 1,2,5,6, and 8 etc. Objection qua Claims No. 1,2,5 and 6 were rejected and qua claim no.8, objections were sustained thereby reducing the amount awarded under this claim to Rs. 1,75,000/-. Insofar as this part of the order of the learned Single Judge is concerned, there is no dispute. In this behalf, though the order of the learned Single Judge sustaining the claims is challenged, the same was not pressed at the time of arguments and only controversy which is raised before us pertains to the award of pendente lite interest by the learned Arbitrator. The submission of the appellants was that the Arbitrators could not have awarded any interest on the awarded amount in view of Section 16 (2) of the General Conditions of Contract (GCC). However, this contention did not find favour with the learned Single Judge who has, by means of impugned order, held that notwithstanding the aforesaid contractual provision, the Arbitrator had the jurisdiction to award the interest. While taking this view various judgments cited by the learned Counsel for the parties on either side have been taken note of and considered, to which we shall be referring to at an appropriate stage.

(2.) When the matter came up for argument before the Division Bench, the Division Bench took note of the judgments cited on either side and prima facie found that there appears to be some conflict and, therefore, the vexed question needed consideration by a Larger Bench. Vide orders dated 5.12.2011, the matter was referred to the Larger Bench. Since this order takes note of the controversy involved, we reproduce that order in verbatim:-

(3.) We have heard Mr. A.S.Chandhiok, learned ASG for the appellant and Mr.Vivekanand, learned counsel who appeared for the respondent.