RISHI DEV BATRA Vs. UNION OF INDIA

JUDGEMENT

(1.) The award of interest for the pre-reference period having been set aside by the Subordinate Judge, Bhubaneswar in O. S. No. 227 of 1990, the plaintiff-contractor has filed this appeal under S. 39(1)(iii) of the Arbitration Act, 1940.

(2.) The facts giving rise to this appeal are that the appellant, a building contractor, entered into an agreement No. 77/EE/BCD/ 77-78 with the Union of India through the Executive Engineer, C. P. W. D., Central Division, Bhubaneswar for construction of operational wall of Civil Aerodrome, Bhubaneswar. Dispute having arisen between the parties, the matter was to the Arbitrator for arbitration in terms of cl. 25 of the agreement. According to the term of the agreement, Chief (Eastern , Zone), C. P. W. D, had initially appointed Shri N. Krishna Murthy as the sole Arbitrator on 4-11-1981 to resolve the dispute between the parties. Due to various reasons, Arbitrators were changed from time to time and ultimately Shri C. Vaswani was appointed as the Arbitrator on 19-2-1990 who entered upon the reference on 28-2-1990. The Arbitrator considered 12 claims raised by the appellant and 4 counter-claims raised by the respondent. On 26-6-1990, an award was passed, the operative part whereof reads as under :

(3.) The learned counsel for the appellant contends that the finding that the appellant is not entitled to interest for the pre-reference period for want of notice, is not proper and needs to be set aside. It is submitted that having accepted the fact that interest was claimed in the letters addressed to the Department, the learned Subordinate Judge erred in not treating them as notice and accordingly deleting the award of interest for the pre-reference period from the award. It is also submitted that S. 3(b) of the Interest Act, 1978 does not provide for any specific format of notice or the manner in which it is to be served. Hence, the letters laying a claim for interest ought to have been treated as notice in terms of S. 3(b) of the Interest Act, 1978. It is further submitted that as no specific ground challenging the grant of interest was taken by the respondent/Union of India, the said ground could not be considered by the court.