HINDUSTAN PRAFEB LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner is a limited company under the Companies Act having its registered office at Jangpura, New Delhi. THE present petition under Section 14 and 17 of the Arbitration Act has been filed by the Chairman-cum-Managing Director of the petitioner company. As per the averments the petitioner entered into a contract with respondent No. 1, the Director General of works, C.P.W.D. for the construction of Office building Phase-I, R.K. Puram, New Delhi; that subsequently a formal agreement was also executed which contained an arbitration clause for reference of disputes to arbitration in case of disputes arising out of or in connection with the said agreement: that after the completion of the contract in all respects and handing over the said building to respondent No. 1, the petitioner sent their bill for escalation on steel and cement, sales tax, shaft area claim etc. in accordance with the terms of the contract to respondent No. 1 for its payment; that the respondents however, refused to entertain the said claim of the petitioner on false and frivolous pleas; that the disputes and differences having arisen between the parties the same were referred to the sole arbitration of Shri S.C. Jain of Ministry of Works and Housing, Nirman Bhawan, New Delhi; that the parties put their claims and counter claims before the said arbitrator; after hearing the parties at length and considering the documents and oral submissions made, the said sole arbitrator made and signed his award on 23.12.1983 awarding a sum of Rs. 4,02,019.12 alongwith interest @ 12% per annum w.e.f. 7.9.1978 till the date of payment or decree of the Court which-ever is earlier, to the petitioner, vide his notice dated 23.12.1983 publishing his award to the parties by supplying a signed copy of the award. Hence the present petition praying for the filing of the award alongwith the arbitration proceedings and making the same rule of the court and passing of the decree in terms thereof.

(2.) AFTER the service of the notice the learned arbitrator filed the award and the proceedings initiated by him. Upon the receipt of the award notice was sent to the parties for filing their objections, if any, within the stipulated period. The Union of India filed the objections praying for the setting aside of the award. The only ground urged in the objection petition is that the award of interest by the arbitrator is beyond the scope of reference since the appointing authority namely. The Chief Engineer (NDZ), C.P.W.D. New Delhi did not refer the dispute relating to the interest and as such he has over-stepped his jurisdiction in awarding the interest from 7.91978. As this objection was a legal one, the claimant has not cared to file the reply. Subsequently the respondent/Union of India deposited a cheque for a sum of Rs.4,02,019.12 in Court in order to avoid any possibility of payment of future interest.