ARJANDAS NARAINDAS ADNANI Vs. NARSINGDAS NARAINDAS ADNANI

JUDGEMENT

(1.) THE sole controversy in these appeals is whether Court can award interest under section 29 of the Arbitration Act from the "date of the award" or it can be awarded only from the "date of the decree". According to the appellant, in view of the clear language of section 29 of the Arbitration Act, 1940, interest can be awarded by the Court only from the date of the decree and not from the date of the award. Reliance is placed in support of this contention on the decision of the Supreme Court in (Union of India v. Jain Associates) 1994 (4) S. C. C. 665. This contention of the appellant is vehemently opposed by the learned Counsel for the respondents who submits that the power of the Court under section 29 of the Arbitration Act is wide enough to enable it to grant interest even from the date of the award. Reliance is placed in support of this contention on the decisions of the Supreme Court in (Gujarat Water Supply and Sewerage Board v. Unique Erectors (Gujarat) (P) Ltd.) A. I. R. 1989 S. C. 973 and (Hindustan Construction Company Ltd v. State of Jammu and Kashmir) A. I. R. 1992 S. C. 2192. So far as the latest decision of the Supreme Court in Union of India v. Jain Associates (supra) is concerned, the learned Counsel for the respondents submits that the same is contrary to and inconsistent with the above decisions of the Supreme Court and, therefore, a decision per incuriam and hence the ratio thereof should not be followed by this Court.

(2.) BEFORE dealing with the rival submissions of the counsel for the parties in regard to the scope and ambit of the powers of the Court in the matter of grant of interest under section 29 of the Arbitration Act, it may be expedient to set out briefly the material facts of the case and some of the relevant dates. The dispute between the parties was referred to arbitration on 17th September, 1973 and the award was made on 15th March, 1979. The award was thereafter filed in the Court. Petition filed by respondent Nos. 1 and 2 for setting aside certain portions of the award was dismissed by the learned Single Judge by his order dated 20th/21st April, 1983. Appeal against the same was also dismissed by a Division Bench of this Court on 10th November, 1987. The matter was thereafter taken to the Supreme Court. The Supreme Court modified the award. In the meantime respondent No. 1 took out a notice of motion before the learned Single Judge claiming decree in terms of the award. The learned Single Judge, by his judgment and order dated 9th March, 1995, made the notice of motion absolute and passed decree in terms of the award, as modified by this Court as well as the Supreme Court, with interest at the rate of 12% per annum from the date of the award till realisation. It is the latter part of the above order by which interest has been awarded by the Court from the "date of the award" which has been challenged by the appellants in these appeals on the ground that under section 29 of the Arbitration Act interest can be awarded by the Court only from the date of the award.

(3.) WE have given our careful consideration to the rival submissions of the counsel for the parties. The sole question that arises for determination is whether interest can be awarded by the Court on the principal sum adjudged by an award from "the date of the award" or it can be granted only from the "date of the decree". The answer to this question would depend on the true and correct interpretation of section 29 of the Arbitration Act which provides for award of interest. Section 29 reads as follows :