GOVERNMENT OF MAHARASHTRA IRRIGATION DEPARTMENT REPRESENTED BY THE EXECUTIVE ENGINEER KHADAKWASLA HEAD WORKS DIVISION SINCHAN BHAVAN BARNEY ROAD PUNE Vs. ATUR INDIA PRIVATE LIMITED

JUDGEMENT

(1.) This First Appeal filed by the Government of Maharashtra under Section 39 of Arbitration Act,1940 challenges the Judgment and Order dated 24.4.1992 passed by the Civil Judge, Senior Division, Pune passing a decree in respect of the Award of the Arbitrators appointed to resolve the disputes between the Appellants and the Respondent. The Award directed the Appellants to pay an amount of Rs.210.68 lakhs which included interest for the pre-reference period. Before the Civil Judge, the Appellants did not challenge this liability to pay the principal amount and restricted their challenge mainly to the grant of interest for the pre-reference period and other charges and interest thereupon.

(2.) The main question that needs to be considered in this Appeal is whether the Arbitrators as well as the learned Civil Judge were right in granting interest for the pre-reference period. Thus, only those facts which are relevant for the purpose of deciding the above question are encapsulated as under :

(3.) The Respondents-Plaintiffs were engaged in construction work of civil nature. The Respondents entered into a contract with the Irrigation Department of the Appellants for construction of Veer Baji Pasalkar Dam at village Varasgaon Taluka Velhe, District Pune. A work order in favour of the Respondents was issued on 6.10.1976. Dispute arose regarding payment to the Respondents and said dispute was referred for Arbitration to a panel of Arbitrators constituted by Government Resolution dated 10.4.1989.