P I VARGHEESE Vs. KERALA AUTOMOBILES LIMITED TRIVANDRUM

JUDGEMENT

(1.) The claimant in O.P. (Arbitration) No. 225 of 1986 on the file of the Principal Sub Judges Court, Trivandrum has preferred this appeal against the order dated 27.2.1991 challenging the rejection of award of interest at the rate of 12% per annum from the date of award till the date of decree and rejection of appellants claim of 12% interest from the date of decree till realisation of the amount.

(2.) The respondent Kerala Automobiles Ltd., Poojapura, Trivandrum accepted the tender of the appellant and awarded the contract by order dated 4.11.1980, for construction of a factory building and other infrastructure facilities etc. The work could not be completed within the time stipulated in the agreement and it was extended from time to time by entering into formal agreements. However, there was a dispute between them for which the appellant / claimant sent a claim statement on 17.7.83 to the respondent. Since the claim was not satisfied, the matter was referred to the Arbitrator, as per the terms of the agreement. The Arbitrator, by his non speaking award dated 10.7.1986, granted (a) 25% increase in respect of all payments (less the cost of cement and steel consumed in the works) covered by bills passed after 5.8.1982;.(b) payment of Rs. 2,13,751.56 and (c) Interest at 12% per annum on the above payments, from the date of award to the date of decree. The Award was filed before the Court of the Principal Sub Judge, Trivandrum. The appellant filed a petition before the Court below for passing a decree in terms of the Award with interest at 12% per annum from 10.7.1986 (the date of award) till the date of decree and further interest at 12% per annum on items (a) and (b) from the date of decree till the date of realisation. The interest at 12% per annum was sought for on the ground that the transaction between the parties were commercial in nature.

(3.) On a consideration of the contentions of the parties, the learned Sub Judge upheld the Award in respect of items (a) and (b), but modified the award in respect of item (c) by totally disallowing the interest awarded by the Arbitrator on items (a) and (b) from the date of award till the date of decree. The court below granted future interest only at the rate of 6% per annum as against the claim of 12% from the date of decree till the date of realisation.