STATE OF UTTAR PRADESH Vs. HARI MITTAR

JUDGEMENT

(1.) THE State of U.P. has directed this appeal against the judgment and order dated 27th September, 1983 passed by the learned Civil Judge, Lucknow whereby he rejected the objections of the State of U.P., against the Award dated 2 -2 -1981 published by Sri J.S. Trivedi, the sole Aribitrator, in a dispute between the parties. The dispute between the parties arose out of a contract to supply material. The said material was to be supplied by the respondent to the State of U.P., in Irrigation Department. The dispute was referred to the arbitration of Sri Trivedi by a Bench of this Court to which one of us was a member by an order dated 4th April, 1979 From a perusal of the award which is available on the record or Regular Suit No. 130 of 1981 of the Court below it appears that apart from other items there was dispute between the parties regarding two items. One of the items was a sum of Rs. 51,470/ -. The respondent had claimed this amount as price of Shingles supplied by him to the Irrigation Department. The other item was for a sum of Rs. 37,666 -52p. According to the respondent he was required to pay this amount to the Sales Tax Department, while the liability for payment of this amount was on the Irrigation Department. The Arbitrator by his aforesaid award upheld the respondent's claim in regard to both the items. On the first item, namely on the sum of Rs. 51,470/ - he awarded interest to the respondent at the rate of l0% per annum from 1 -2 -74 till the date of payment or decree whichever was earlier. On the other item, namely a sum of Rs. 37,666 -53 the learned Arbtrator awarded interest at the rate of 20%, per annum from 1 -6 -75 till the date of payment. The Department of Irrigation did not pay the sales -tax directly to that Department. In the present appeal the appellant has assailed the judgment of the Court below only in regard to the interest awarded by the Arbitrator and confirmed by the court below. According to the learned counsel for the State the Arbitrator had no jurisdiction to award the interest which he did and this was an error apparent on the face of the record which could have been corrected by the court below. Learned counsel for the appellant submitted that there was no agreement between the parties for payment of interest at the rate of 10% per annum on the price of the goods and, therefore, interest could not be awarded. Interest on the price of goods may be awarded under agreement and if there is no agreement between the parties it can be awarded under Section 61 of the Sale of Goods Act. The Arbitratrator has not published a reasoned award and it is not possible to ascertain whether he awarded interest on the basis of the agreement or on the basis of Section 61(2) of Sale of Goods Act, 1930. Under sub -section (2) of Section 61 it is competent to award interest from the date of the tender of the goods at such rule as the court thinks fit. Learned counsel for the appellant submitted that this power could be exercised only by the court and not by the Arbitrator. We are unable to accept the submission. While dealing with the claim in arbitration proceedings the arbitrator could apply all the laws which could be applied by a court while dealing with a suit pending before it. In view of the fact that if the award of interest is referable to a statutory provision it cannot be said that the award of interest by the Arbitrator is without jurisdiction. In support of his plea that the interest awarded by the Arbitrator could not be legally awarded, learned counsel for the appellant placed reliance upon Union of India v. A.J. Railia Ram, A.I.R. 1963 S.C. 1635. & Union of India v. Watkins Mayor and Co. : A.I.R. 1966 S.C. 275. In the first mentioned case interest had been awarded by way of damages and this according to their Lordships was unwarranted. Their Lordships in this very case observed "In the absence of any usage or contract express or implied, or of any provision of law as to justify the award of interest -interest cannot be allowed by way of damages caused to the respondent for wrongful detention of their money." From this observation it would appear that their Lordships were of the opinion that the interest could be awarded under a statutory provision. In the present case interest has not been awarded by way of damages and the award of interest is referable to a statutory provision. This authority is, therefore, of no assistance to the learned counsel

(2.) IN the second case, interest was claimed on the amount claimed towards Good own Rent, Chaukidar's Salary, Terminal Tax, Cartage, Unloading charges and Cooliage. In respect of all these items their Lordships held that interest could not be awarded either under Section 1 of the Interest Act or under Section 34 of the Code of Civil Procedure. Of course the items on which interest was claimed in this case were not covered by the Sale of Goods Act. This authority is also of no assistance to the learned counsel.

(3.) NO other point has been urged by the learned counsel for the appellant. The appeal is without merit and is hereby dismissed with costs to the respondent. Interim order, if any, shall stand discharged.