UNION OF INDIA Vs. VIRANI CONSTRUCTION

JUDGEMENT

(1.) UNION of India, through General manager, appellant has filed this appeal under Section 39 of the Arbitration Act, 1940 against the judgment, award and decree dated 18/2/1993 passed by the learned City Civil Court, Ahmedabad in misc. Civil Application No. 883 of 1988 and Misc. Civil Application No. 957 of 1988. By the impugned judgment, the learned Judge was pleased to dismiss the misc. Civil Application No. 957 of 1988 and as regards Misc. Civil Application no. 833 of 1988, the learned Judge has held that the award filed by the arbitrator, subject to the modification stated in the Judgment, is ordered to be made Rule of the Court. Railways shall pay to the contractor a sum of rs. 50,679/- with interest on Rs. 33,390/-at the rate of 9% per annum from 27/5/ 1988 till the date of payment. The parties shall bear their own costs.

(2.) THE learned Trial Judge has observed that the Arbitrator has erred in awarding Rs. 1921/- as interest in the final bill amount although the said claim was not referred to him in the terms of: reference. The said contentions appears to be well-founded, but as the award of the said amount is severable, the said amount can be deleted from the final amount awarded. Thus, the result is that under the award, the contractor will be entitled to total amount of Rs. 50,679/ -. However, the amount awarded on claim no. 1 and 2 comes to Rs. 33,390/-, and rest of the amount is the amount of interest. The said amount of Rs. 33,390/- shall carry further interest at the rate of 9% from the date of award till the date of payment. The learned Judge has further observed that in view of the above discussion, the challenge to the validity of the Award fails and the Award has to be made rule of the Court subject to the modification as stated above.

(3.) THE facts giving rise to the petition are as under: