AZAD BUILDERS Vs. UNION OF INDIA & ANR.

JUDGEMENT

(1.) The appellant herein is a partnership firm registered under the Partnership Act. It entered into an agreement to execute construction work for the Signal Battalion of the Central Reserve Police Force at Ranchi relating to construction of building, water supply and sanitary instalments. The agreement provided for settlement of disputes by an arbitrator to be appointed by the Chief Engineer (EZ) C.P.W.D. Calcutta. Certain disputes and differences having arisen, the appellant asked for reference of the disputes and differences to an arbitrator. The Chief Engineer (EZ) C.P.W.D. Calcutta appointed Sri. J.P. Singhal of the Ministry of Urban Development. New Delhi as arbitrator and referred the dispute to him for adjudication.

(2.) The arbitrator after hearing the parties made an award on 11th of Nov., 1987. He awarded a sum of Rs. 188239.00 p. plus 10% interest thereon from 4-10-1983 to 9-10-1985 and 5% interest thereon from 10-10-1985 to the dale of payment or decree of court whichever was earlier. The respondent No. 2 informed the appellant by latter dated 10-6-1988 that the respondents had accepted the award of the arbitrator and that payment will be made in accordance therewith after the same was made a rule of the court and a decree passed in terms of the award. Accordingly, the award was submitted to the court by the arbitrator under Sec. 14 of the Arbitration Act for passing a decree in terms of the award. The matter was registered as Title Suit No. 287/87 in die court of the Special Subordinate Judge, Ranchi. Notice thereof was given to the parties. The appellant as well as the respondent made applications to the court for making the award a rule of the court. The learned Government pleader appearing on behalf of the Union of India submitted before the learned Special Subordinate Judge that he had no objection if the award was made a rule of the court. The appellant also prayed that the award be made a rule of the court. The learned Special Subordinate Judge, however, passed the impugned order dated 1-8-1988 holding that the arbitrator had awarded 5% interest from 10-10-1985 to the date of payment or decree of the court whichever is earlier. According to the learned Special Subordinate Judge the arbitrator had no power to award future interest and, therefore, he made the award a rule of the court except that portion which awarded interest @ 5% per annum for the period from 10-10-1985 to the date of payment or decree of the court whichever was earlier. It appears from the award that reference was made to the arbitrator by letter dated 9-10-1985 and he entered upon the reference on 14-9-1987. He passed the award on the 1th of Nov., 1987. Thus the learned Special Subordinate Judge disallowed the pendente lite interest as also interest awarded from the date of the award till the date of payment of decree whichever was earlier.

(3.) It was not disputed before me that after the award was filed in court under Sec. 14 of the Arbitration Act, the parties to the dispute made written applications to the court submitting that the award be made a rule of the court. The parties in their oral submissions also requested the court to make the award a rule of the court. Since the parties were not aggrieved by any part of the award and no objections were filed on behalf of any of the parties, the court ought to have made the award a rule of the court. Assuming that there was some error in the award, if the parties to the disputes did not challenge the correctness of the award and prayed before the court that it ought to be made a rule of the court, the court was not required of its own to modify the award or to make only a part of the award a rule of the court. Only in exceptional circumstances can the court exercise such a jurisdiction not to make the award a rule of the court despite the fact that the parties have not objected to the award being made a rule of the court. Such an exceptional circumstance may arise in a case where the award or any part of it is so opposed to public policy that the court feels compelled not to put its seal of approval to such an award. In money claims, a party may give up a part of his claim even if entitled to it, or may agree to pay an amount which may be time barred or which may not be strictly payable in accordance with law. Such cases are not cases where it can be said that the illegality in the award touches upon any matter opposed to public policy. In the instant case, even if it be assumed that the arbitrator was in error in awarding interest from the date of the reference till the date of the award, since the parties did not object to it, the court was not required to go into that question.