MAHINDRA AND MAHINDRA LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The challenge in this suit is to an Arbitration Award dated 21.4.1995 rendered by the Sole Arbitrator Shri Ram Bahadur, who at the relevant time was an Additional Legal Adviser to the Government of India, Ministry of Law, Justice and Company Affairs, New Delhi. The Arbitrator entered upon the reference consequent upon disputes having arisen between M/s. Mahindrar& Mahindra Limited and Union of India (DGS&D, New Delhi) in respect of a contract contained in A/T No.SV- 7/RC-8291/M&M/872 dated 28.5.1970. The claims before the Arbitrator.were filed by both the parties but the challenge to the A ward has been made only by the Contractor, M/s. Mahindra & Mahindra Limited. The Union of India chose not to file any objections thereto.

(2.) During the course of hearing, Learned Senior counsel appearing for the Contractor gave up all the objections to the Award except in respect of claim No.6. This claim was interconnected with claim No.5. Whereas, in claim No.5 the contractor claimed a direction to the respondent to pay a sum of Rs.2,57,204/ - wrongfully deducted from the contractor's bill for the supply of vehicles under the Rate Contract dated 11.8.1971, in claim No.6 the contractor claimed interest at 12% per annum on the above claimed amount from the date of deduction till payment. The Arbitrator allowed the amount under Claim No.5 on the ground that the Union Of India had withheld the amount of the contractor beyond its claim for general damages which was to the tune of Rs.13 lacs. The grievance of the contractor is that having allowed claim No.5 the arbitrator disallowed interest thereon which was the subject matter of claim No.6 by simply stating that the said claim was not justified in the facts and circumstances of the case.

(3.) It is stated by learned counsel appearing for the contractor that the Arbitrator having held that the amount of Rs.2,57,204/- was wrongly withheld by the Union of India, there was no justification for his not having r awarded interest thereon pendente lite as well as future. Reference in this regard has been made to a judgment of the Apex Court rendered in Secretary. Irrigation Department of Orissa and others Vs. G.C.Roy (1992) 1 S.C.C.508 wherein it has been held that a person who is deprived of use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name, interest, compensation or damages.