STATE OF HARYANA Vs. GOEL PROJECTS PVT. LTD

JUDGEMENT

(1.) THIS revision petition has been filed by the State of Haryana against the order passed by the District Judge, Hissar directing the payment with interest at the rate of 18% on the awarded amount from the date of award till payment.

(2.) THE arbitrator had passed an award for a sum of Rs. 6,28,807/- (Rs. Six lacs, twenty eight thousand, eight hundred and seven only) in favour of M/s. Goel Projects Pvt. Ltd. on 27.6.2002. The execution application was filed in January, 2003 as the State of Haryana failed to make the payment. The decree- holder claimed interest at the rate of 18% p.a. from the date of award till realisation, in terms of Section 31(7)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act).

(3.) IN view of the above provisions and by relying upon the judgment of Himachal Pradesh High Court, reported in M/s. Kataria Builders v. State of H.P., 2004(2) SLJ 1077, learned Court directed the payment of interest at the rate of 18% p.a. This order has been challenged by the State of Haryana on the plea that once the arbitrator did not award interest from the date of award, it was not open to the executing Court to grant interest at the rate of 18%. The reading of provision of Section 31(7)(b) of the Act shows that in absence of any directions in the award to the contrary, the awarded amount is to carry interest at the rate of 18% p.a. from the date of award till the date of payment. The provision of Section 31(7)(b) of the Act has been interpreted by the Himachal Pradesh High Court in the case of M/s. Kataria Builders v. State of H.P. to the following effect :- "4. Sub-section (7) of Section 31 of the Act provides for the interest on the payment of Arbitral award for the payment of money. Sub-section (7) of Section 31 is reproduced for convenience. :