INDIAN INSTITUTE OF TECHNOLOGY MUMBAI Vs. CREATIVE CONSTRUCTION

JUDGEMENT

(1.) Since common questions of law and facts arise in both these appeals, they were heard together and are being disposed of by this common judgment.

(2.) Both these appeals arise from the judgment dated 2nd November, 1998, passed by the learned Single Judge in Arbitration Petition No. 14 of 1987. By the impugned judgment the learned Single Judge has allowed the Arbitration Petition which was filed by The Indian Institute of Technology, who are appellants in the appeal No. 109 of 1999, (hereinafter called "the appellants") - M/s Creative construction, are the appellants in Appeal No. 349 of 1999 (hereinafter called "the respondents"). The learned Single Judge has reduced the rate of interest to 7% per annum from 18% per annum which was granted in the award dated 27th august, 1996 passed by the learned arbitrator.

(3.) The challenge to the impugned order by the appellants is on the ground that the learned Single Judge failed to take note of the fact that the respondents had failed to place on record any evidence to substantiate their contention that there was payment of sales tax in excess of 4% and that therefore the amount claimed by them which was in terms of the agreement between the parties. Reference is made to a clause of the contract between the parties which provided that "maharashtra Government Works Contract Sales Tax in excess of 4% as applicable to this contract, will be reimbursed to the contractor against production of necessary proof of payment for the same. Any reduction in the rate of Maharashtra Government Sales Tax on Works Contract below 4% will be adjusted (recovered) from the bills of the contractors". The appeal by the respondents is on the ground that the agreement between the parties do not prohibit grant of interest at the rate over and above the rate specified under the agreement and considering the provision of law in section 34 of the Code of Civil procedure, the learned arbitrator had ample discretion to award interest over and above 7% and therefore the learned Single Judge could not have modified the award by reducing the interest of 18% to 7%. Reliance is sought to be placed on behalf of the respondents in the decision in the matter of Board of Trustees for the Port of Calcutta vs. Engineers-De-Space-Age, reported in 1996 (1) SCC 516 and in Rajasthan State Mines and Minerals Ltd. vs. Eastern Engineering enterprises and anr. , reported in (1999) 9 SCC 283. Attention has also been drawn to the decision in the matter of M/s Arosan Enterprises Ltd. vs. Union of india and anr. , reported in AIR 1999 SC 3804, while contending that the learned single Judge could not have reappreciated the evidence while dealing with the petition for modification of the award. So also reference was made to the decision in the matter of State of U. P. vs. Harish Chandra and Co. , reported in (1999) 1 SCC 63.