M/S BANSAL CONSTRUCTION CO v. UNION OF INDIA

11. He submitted that this Court in Himachal Joint Venture v. Panilpina World Transport (India) (supra), has held that, in a case where a party is successful in establishing the breach then the party who suffered on account of the said breach must be compensated for the business loss it suffered. He also submitted that the learned Tribunal has indeed examined the case in detail before rendering the award and thus, the same ought not to have been interfered by the learned District Judge.

12. According to him, the impugned judgment despite mentioning the judgment passed by this Court in the case of the Simplex Concrete Piles (India) Ltd. v. Union of India: MANU/DE/4538/2010, failed to appreciate and apply the same. In the said case, this Court held that, contractual clauses even if restrictive cannot prevent an arbitrator from awarding damages or losses, that a party is otherwise entitled to. He also submitted that the scope of Section 34 of the Act is limited and that the learned District Judge has re-appreciated the evidence and the terms of the contract between the parties, which is beyond the scope of Section 34 of the Act.

13. According to Mr. Haider, to the best of the knowledge of the appellant, “Special Tender Conditions and Instructions to tenderer” were not part of the arbitral record. Despite this, in paragraph 20 of the impugned judgment, the learned District Judge reproduced a clause of “Special Tender Conditions and Instructions to tenderer” without indicating from where they were taken from. The appellant objected to the filing of new documents in a petition under Section 34 of the Act, as noted by the learned District Judge in paragraph 11 of the impugned judgment. Hence, the learned District Judge went beyond its authority by considering documents that were not part of the arbitral record.

14. He submitted that the learned Tribunal has correctly relied upon Clause 36(2) of the GCC to allow Claim No.4, whereas, the learned District Judge erred in not appreciating the effect of the said clause. He also submitted that, despite the learned District Judge noting the fact that the respondent had failed to provide the required P-Way materials resulting in the delay in executing the work, attributable to the respondent, has erroneously set aside the award on certain claims.

15. He has relied upon the following judgments in support of his submissions: a) Canara Nidhi Limited v. M. Shashikala and Ors., MANU/SC/1304/2019, b) Ssangyong Engineering and Construction Co. Ltd. v. National Highways Authority of India (NHAI): MANU/SC/0705/2019, c) National Highways Authority of India v. M. Hakeem and Ors., MANU/SC/0461/2021, d) Renusagar Power Co. Ltd. v. General Electric Co., MANU/SC/0195/199, e) Venture Global Engineering LLC and Ors. v. Tech Mahindra Ltd. and Ors., MANU/SC/1373/2017 f) Union of India (Ministry of Railways) & Others v. M/s. J. Sons Engineering Corporation Limited & Another, 2015:DHC:3350.

16. He sought prayers as made in the appeal.

SUBMISSIONS OF THE RESPONDENT

17. Ms. Pratima N Lakra, Central Government Standing Counsel would submit that, an appeal under Section 37 of the Act has a very limited scope and this appeal clearly falls outside the purview of Section 37 of the Act.

18. She submitted that this Court in UBV Infrastructure Ltd. v. National Highways Authority of India, 2020:DHC:92-DB, has held that; -

19. She has also relied on the judgment in the case of Indian Oil Corporation Ltd v. Institute of Geo Informatics Pvt Ltd, FAO OS (COMM) 189/2017, wherein this Court has held that; - “Thus a scrutiny conducted under Section 37 of the Act is more in the nature of a judicial review, only to consider as to whether the learned Single Judge, in exercise of the powers under Section 34 of the Act has overlooked any patent error that may have crept in the Award or has taken a glaringly preposterous and legally unsustainable view, which would call for interference.”

20. She submitted that the Award passed by the learned Tribunal does not fall in the above categories.

21. She submitted that the appellant has also challenged the said judgment on the ground that the court does not have power to reduce the interest as granted by the learned Tribunal. Whereas, the Supreme Court in Executive Engineer (R And B) v. Gokul Chandra Kanungo (Dead), has held that¸ it is a settled position of law that it is the discretion of the Arbitral Tribunal to award interest at a rate that it deems reasonable, and that the Court can exercise power under Article 142 of the Constitution of India to reduce the rate of interest. Further, an Arbitral Tribunal is duty bound to give cogent reasons when it determine the rate of interest as reasonable. It is also required to apply its mind to the facts of the case and decide whether the interest is payable on the whole or any part of the money.

22. She submitted that, similarly, in V[4] Infrastructure Pvt Ltd v. Jindal Biochem Pvt Ltd, 2020:DHC:1866-DB this Court held that, “In our opinion, the award of interest @ 18% p.a. is wholly unjustified and the same shocks our conscience and prompts us to intervene for the reasons discussed hereinafter”. Therefore, the learned District Judge had the power to reduce the interest rate if it deemed fit and the analysis of the learned Tribunal that the 18% interest rate is exorbitant and is untenable in eyes of law and modified the said interest rate to 12%.

23. Ms Lakra submitted that, Clause 63 of the of GCC clearly state that the special conditions of the contract shall be deemed as “Excepted Matters” and decision of the Railway Authority shall be final. She also submitted that ‘Excepted Matters’ shall stand specifically excluded from the purview of arbitration clause. She stated that the appellant had admitted in this appeal that the respondent had duly informed the learned Tribunal about the claims falling in the category of ‘Excepted Matters’ and yet the learned Tribunal erroneously proceeded to award those claims. Therefore, the learned Tribunal erred in granting those claims that fell within the category of ‘Excepted Matter’ and learned District Judge has rightly set aside those claims.

24. She also submitted that the learned Tribunal is bound by the terms & conditions of the contract as well as GCC. Regrettably, the claims granted were beyond the provisions of the GCC & STC of contract.

25. In support of her submission, she has relied upon the judgments viz

(i) DDA v. R. S. Sharma & Co. VII (2008) SLT 306, (ii) New India Civil

26. She sought the dismissal of the appeal.

ANALYSIS AND FINDINGS

27. Having heard the learned counsel for the parties and perused the record, the short issue, which arises for consideration is whether the learned District Judge is justified in setting aside the award passed by the learned Tribunal in respect of Claim Nos.1,4,5,[7] & 8 as well as in modifying the rate of future interest.

28. In so far as the Claim No.1 is concerned, the same was primarily for grant of cost of ₹1,00,000/- in favour of the appellant. The learned Tribunal, while dealing Claim No.1 has granted cost of ₹1,00,000/- for the following reasons:- “Reasons of award: The claimant stated that from the very beginning the progress of the work was effected badly due to non availability of P-way material & site of work. There was mis planning of work, no required material was arranged before the execution of the work nor the work was short closed even after Aden/ Delhi accepted that there is no material and no scope of work left in the section and recommended to fore-close the work. But the respondent have 'adopted' unfair trade practice being a supra position and never close the work. And due to intermittent suspension/ abandonment of the work for a long period, the claimant had faced heavy losses of salaries to the staff etc., They further submitted that contract agreement was signed by both parties considering that both have equal rights but actually while dealing with this particular contract the respondent behaved in biased manner and took totally onesided biased decision to cover up their misdeeds which seemed to be full hatred and with expressing their superior position. The respondent miserably failed to provide essential P.way material & site of work and this is a breach of contract on the part of the respondent which resulted suspension of work for a pretty long period. The delay was totally attributable to the respondent. So they were dragged to the Arbitration forcefully which was not their destiny hence reasons given above are considered and an amount of 100000/- is awarded.”

29. The learned District Judge disagreed with the said finding of the learned Tribunal by stating in paragraph no.26, as under:- “26.Although, the Arbitrator has awarded Rs.1,00,000/- to the respondent holding that the respondent was forced to seek arbitration because of inability of the petitioner to take a rational and practical decision but the award of said sum is against clause 17-A and 61 (3) of GCC, which clearly provide that if the progress of work has been delayed by the act of Railways, it will grant the extension to the contractor and no compensation shall be payable to the contractor and the contractor shall have no claim to any payment of compensation or otherwise, howsoever, on account of any profit and advantage, which he might have derived from the execution of work. In the instant case, all the extensions were granted under clause 17 A of GCC 1999 without any penalty and without PVC, which were duly accepted by the respondent / contractor. Clause 64 (6) of GCC 1999, which forms part of the contract also provides that cost of the arbitration shall be borne by the respective parties, which includes the fee of the Arbitrator. So, in view of specific bar under clause 64 (6) of GCC 1999, the respondent is not entitled to cost / compensation of Rs.1,00,000/- as awarded under claim no.1.”

30. The conclusion drawn by the learned Tribunal for granting ₹1,00,000/- is primarily on the ground that the appellant was forced to seek arbitration because of the inability of the respondent to provide P-way material, which delayed the execution of the contract. In fact, this resulted in the suspension of work for a long period. Whereas, the reasoning given by the learned District Judge is primarily that, in terms of Clauses 17A and 61(3) of the GCC, even if the progress of the work has been delayed by the acts of the respondent/Railway, the Engineer will grant extension of the contract and no other compensation shall be payable to the contractor. Also, the contractor shall not claim any payment of compensation or otherwise. The learned District Judge has also referred to the Clause 64(6) of the GCC, which according to the Court, forms part of the contract and also provides that the cost of arbitration shall be borne by the respective parties. The cost shall include the fee of the arbitrator.

31. In substance, the conclusion drawn by the learned District Judge was in view of the specific bar under Clause 64(6) of the GCC, the appellant /contractor is not entitled to the cost/compensation of ₹1,00,000/- as granted under the Claim no.1.

32. We are of the view that the learned District Judge is justified in holding so, in view of Clause 64(6) of the GCC, which is reproduced as under:- “Clause 64.6: The cost of arbitration shall be borne by the respective parties. The cost shall inter alia include fee of the arbitrator (s) as per the rates fixed by the Railway Administration from time to time.”

33. Suffice to state when the contractual clause states that the cost of the arbitration shall be borne by the respective parties, which inter alia, include the fee of the learned Tribunal, the learned Tribunal could not have awarded the same contrary to the said provision.

34. In this regard, we may refer to the recent judgment of the Supreme Court in the case of Union of India & Ors. v. Larsen & Tubro Limited (L&T); 2026 INSC 203 wherein though the Supreme Court was considering an issue whether the pre-award or pendente interest could have been granted as compensation when a contract expressly prohibits payment of such interest, the Court has held as under:-

35. The only submission of Mr. Haider in respect of this clause is that the interpretation of terms of contract lies within the domain of the learned Tribunal and as such, the learned District Judge could not have interfered with the same. This submission of Mr. Haider is not appealing to us, as it is a settled position of law that, when it is clearly stipulated in the contract that the parties shall bear the cost of the arbitration, granting of cost as compensation is clearly impermissible. Hence, the challenge to Claim No.1 is rejected.

36. In so far as the conclusion drawn by the learned District Judge in respect of Claim No.4 is concerned, the same is towards ‘expenditure incurred on maintaining the staff, T & P machinery etc. during the prolongation of the contract on account of the inability of the department to provide P-way material.’ The reasons given by the learned Tribunal can be summed up as under: - “Reasons of award: The work was allotted to the claimant on 09.08.2004 but the work was suspended/abandoned for a pretty long period due to reasons totally attributable to the respondent. The respondent failed to provide required P.Way material and site of work. As such, in face of principles of equality and justice the claimant is entitled for recoupment of the extra expenditure incurred by them for overhead charges ie by salaries to staff and other overhead charges during the abandoned/suspension of contract. As explained above this is a breach of contract on the part of the respondent, as it would have been the case had the claimant delayed the work for such long period of time for reasons attributable to the claimant. Therefore without providing details of loss on account extra expenditure incurred by salaries to staff and other overhead charges and other resources, the claimant is entitled for compensation. There is nothing in the excepted matters which may come in the way of adjudication of the claim for salary and wages of the staff & machinery as claimed by the claimant during the suspension period. The excepted clauses 36 (1) and 61 (3) are not applicable to the instant dispute, because the suspension of contract exceeded 14 days for which clause 36(2) & clause 36(3) of GCC are applicable. The contract under question remained suspended for a long time. As such contractor under clause 36(3) of GCC could have elected to treat the suspension as an abandonment of the contract by the Railway. It is not in dispute that the respondent has extended time of completion for the reason attributable to the Railway Department. The respondent never imposed the condition that the claimant would not be entitled for the losses that they may suffer on account of abandonment/suspension of the work of the contract. It is also not disputed that during the extended period claimant deployed staff and machinery at site. With the strength of above averments, the claimant deserves to be compensated for the recoupment of the salary/wages paid to the employees deputed by the claimant & machinery deployed and had remained unutilised during the period of suspension /abandonment. After hearing the arguments of both claimant & respondent and going through the documents produced before me, the claim is partly allowed as the respondents failed to provide the requisite P. Way materials to the claimant in time and there was delay on account of the respondent in this respect. The claimant had executed the work in time as per the availability of material and had to incur additional expenditure due to suspension of work for a long time. In view of this work was suspended/abandoned for a very long period from 03.02.2005 (initial date of completion) to 03.08.2011 (as reported by respondent vide letter dated 03.08.2011 that 41% work since have been completed & recommended for closure of work on administrative grounds). in view of above, it has been tentatively quantified as a Lamp sum amount of Rs. 9000/per month as recoupment for the damages of the salary/wages paid to the employees deputed by the claimant is considered an adequate compensation which comes to Rs.702000/- and therefore, Rs.702,000/- is awarded against this claim.”

37. The learned District Judge, on the above finding as held that: -

38. It may be stated here that the plea that the claim is ‘Excepted Matters’, (under Clause 63 of the GCC) and hence, shall not be arbitrable was also urged before the learned Tribunal. The learned Tribunal overlooking the said objection has allowed the claim in favour of the respondent by awarding the sum of ₹7,02,000/-. The plea of Mr.Haider is also that the learned District Judge could not have rejected the claim, as awarded by the learned Tribunal, for the reason stated by us, that such a conclusion is beyond the scope of the judicial review under Section 34 of the Act.

39. We must state here that Clause 63 of the GCC had come up for interpretation in the case of M/s. J. Sons Engineering Corporation Limited & Another (supra) which judgment has been relied upon by Mr. Haider, wherein one of us (V. Kameswar Rao, J) has held as under:-

40. The above clearly reveals that the plea of ‘Excepted Matters’ shall be sustainable only if the decision is taken by the Railways in respect of those matters. The necessary corollary is that, in the absence of a decision by Railways, Clause 63 of the GCC, would not be applicable. Nothing has been placed before us that the Railways had taken a decision in respect of the claims, which became the subject matter of the arbitration. If the same had been rejected by the Railways, to that extent, they having attained finality, were not arbitrable in view of the Clause 63 of the GCC. It is not such a position here as no decision has been taken by the Railways. In any case, the Supreme Court in respect of ‘Excepted Matters’ has held that, even if certain matters are excluded from arbitration, they could not be excluded from judicial review as vacuum of remedy is oppose to rule of law.

41. Having noted the aforesaid position, we now proceed to decide whether the claim as granted by the learned Tribunal, has been rightly rejected by the learned District Judge.

42. Suffice to state that Clause 17A and 61(3) of the GCC being relevant, are reproduced as under: - “17–A Extension of Time in Contracts: Subject to any requirement in the contract as to completion of any portion or portions of the works before completion of the whole, the Contractor shall fully and finally complete the whole of the works comprised in the contract (with such modifications as may be directed under conditions of this contract) by the date entered in the contract or extended date in terms of the following clauses:

(i) Extension due to Modification: If any modifications have been ordered which in the opinion of the Engineer have materially increased the magnitude of the work, then such extension of the contracted date of completion may be granted as shall appear to the Engineer to be reasonable in the circumstances, provided moreover that the Contractor shall be responsible for requesting such extension of the date as may be considered necessary as soon as the cause thereof shall arise and in any case not less than one month before the expiry of the date fixed for completion of the works.

(ii) Extension for Delay not due to Railway or Contractor: If in the opinion of the Engineer, the progress of work has any time been delayed by any act or neglect of Railway's employees or by other Contractor employed by the Railway under Sub-Clause (4) of Clause 20 of these Conditions or in executing the work not forming part of the contract but on which Contractor's performance necessarily depends or by reason of proceeding taken or threatened by or dispute with adjoining or to neighbouring owners or public authority arising otherwise through the Contractor's own default etc. or by the delay authorized by the Engineer pending arbitration or in consequences of the Contractor not having received in due time necessary instructions from the Railway for which he shall have specially applied in writing to the Engineer or his authorized representative then upon happening of any such event causing delay, the Contractor shall immediately give notice thereof in writing to the Engineer within 15 days of such happening, but shall nevertheless make constantly his best endeavours to bring down or make good the delay and shall do all that may be reasonably required of him to the satisfaction of the Engineer to proceed with the works. The Contractor may also indicate the period for which the work is likely to be delayed and shall be bound to ask for necessary extension of time. The Engineer on receipt of such request from the Contractor shall consider the same and shall grant such extension of time as in his opinion is reasonable having regard to the nature and period of delay and the type and quantum of work affected thereby. No other compensation shall be payable for works so carried forward to the extended period of time; the same rates, terms and conditions of contract being applicable as if such extended period of time was originally provided in the original contract itself.

(iii) Extension for Delay due to Railways: In the event of any failure or delay by the Railway to hand over the Contractor possession of the lands necessary for the execution of the works or to give the necessary notice to commence the works or to provide the necessary drawings or instructions or any other delay caused by the Railway due to any other cause whatsoever, then such failure or delay shall in no way affect or vitiate the contract or alter the character thereof or entitle the Contractor to damages or compensation therefor, but in any such case, the Railway may grant such extension or extensions of the completion date as may be considered reasonable. xxx xxx xxx xxx Clause 61 (3): The contractor shall have no claim to any payment of compensation or otherwise, howsoever on account of any profit or advantage, which he might have derived from the execution of the work in full but which he did not derive in consequence of determination of contract.”

43. The above clearly provides that, if the progress of the work has been delayed by the act of the Railways, the engineer will grant extension to the contractor, and no compensation shall be payable to the contractor. The contractor shall have no right to claim any payment of compensation or otherwise, on account of any profit or advantage, which he might have derived from the execution of the work. There is no dispute that, extensions of the work were granted, but because of the Clause 17A of the GCC, the same was without any penalty or without any price variation, which extensions were duly accepted by the appellant.

44. It may also be necessary to refer to Clause 33 of the Special Tender Conditions of Instructions to Tenderer/s, which has a bearing on the issue, as under:- “Clause 33: No claim for idle labour and / or idle machinery etc or any account will be entertained. Similarly, no claim shall be entertained for business loss or any such loss.”

45. A plain reading of the above clauses would clearly reveal that, even if the progress of work was delayed by the act of the Railways, the appellant is only entitled to extension of contract, but no compensation shall be payable to the appellant, which also includes the claim for idle labour and / or idle machinery or on any account. The learned Tribunal has not considered the above Clause while allowing the said claim. To that extent, the finding is perverse. If the above clauses, bar the grant of cost on account of idle labour and/ or idle machinery, the learned Tribunal could not have granted the claim contrary to the contract.

46. Hence, the challenge to the conclusion drawn by the learned District Judge in respect of Claim No. 4 is liable to be rejected, as the learned Tribunal in view of clear bar under the contract, could not have granted the claim. As such, the conclusion drawn by the District Judge is covered by the ratio of the judgment of the Supreme Court in the case of Larsen & Tubro Limited (supra).

47. In so far as the Claim No.5 is concerned, it is for the interest on payment held up of ₹2,92,000/- due to not sanctioning corrigendum / addendum and holding of ₹1,00,000/- on account of security money for 47.[5] months, which has been awarded by the learned Tribunal with simple interest @ 12% pa and quantified as ₹3,35,160/-.

48. The learned Tribunal has given the following reasoning for awarding this sum:- “Reasons of award: The Respondent had to make all payments due in time as per the contract agreement le by the time of expiry of six months from date of completion of work which has been considered as 30.09.2017. It is prime obligation of respondent but the respondent failed to do the payment in time. It is a breach of contract part of respondent. As such pre interest up to the declaration of award is awarded of final bill after six months of completion i.e. Rs 366596/. Therefore, interest on payments held up due to not sanctioning of final corrigendum/addendum for period of 10 year 5 months w.e.f. 01.04.2008 to 30.08.2018 a simple interest @12% PA is considered, which comes to Rs.458245/- but Rs.335160/ is awarded against this claim”

49. The learned District Judge has given following reasoning in respect of claim no.5, to set aside the award of this claim by the learned Tribunal:-

50. While granting the amount under Claim No.5, the learned Tribunal has also granted interest for the period from 01.04.2008 and 30.08.2018; whereas the date of the award is 26.09.2018. In that sense, the Tribunal has granted pre arbitration as well as pendente interest. The Clause 64(5) of the GCC, which state, ‘where the arbitral award is for the payment of money, no interest shall be payable on whole or any part of the money for any period till the date on which, the award is made’, clearly bars the grant of interest on whole or any part of the money for any period till the date on which, the award is made. This Clause specifically deals with the grant of interest by the learned Tribunal till the date of award. The payment of interest is the discretion of the learned Tribunal, but is only payable for the period post award.

51. The Supreme Court in the case of Garg Builders v. Bharat Heavy Electricals Limited, 2021 INSC 606, has held as under:-

11. It is clear from the above provision that if the contract prohibits pre-reference and pendente lite interest, the arbitrator cannot award interest for the said period. In the present case, clause barring interest is very clear and categorical. It uses the expression “any moneys due to the contractor” by the employer which includes the amount awarded by the arbitrator.

12. In Sayeed Ahmed and Company v. State of Uttar Pradesh & Ors.(2009) 12 SCC 26 this Court has held that a provision has been made under Section 31(7)(a) of the 1996 Act in relation to the power of the arbitrator to award interest. As per this section, if the contract bars payment of interest, the arbitrator cannot award interest from the date of cause of action till the date of award.

13. In Sree Kamatchi Amman Constructions v. Divisional Railway Manager (Works), Palghat & Ors.(2010) 8 SCC 767 it was held by this Court that where the parties had agreed that the interest shall not be payable, the Arbitral Tribunal cannot award interest between the date on which the cause of action arose to the date of the award.

14. Bharat Heavy Electricals Limited v. Globe Hi-Fabs Limited (2015) 5 SCC 718 is an identical case where this Court has held as under:

15. In Sri Chittaranjan Maity v. Union of India (2017) 9 SCC 611 it was categorically held that if a contract prohibits award of interest for pre-award period, the arbitrator cannot award interest for the said period.

16. Therefore, if the contract contains a specific clause which expressly bars payment of interest, then it is not open for the arbitrator to grant pendente lite interest. The judgment on which reliance was placed by the learned counsel for the appellant in Ambica Construction (supra) has no application to the instant case because Ambica Construction was decided under the Arbitration Act 1940 whereas the instant case falls under the 1996 Act. This has been clarified in Sri Chittaranjan Maity (supra) as under:

17. The decision in Raveechee and Company (supra) relied on by the learned counsel for the appellant is again under the Arbitration Act 1940 which has no application to the facts of the present case.

18. Having regard to the above, we are of the view that the High Court was justified in rejecting the claim of the appellant seeking pendente lite interest on the award amount.” (emphasis supplied)

52. Even in the recent judgment of the Supreme Court in the case of Larsen & Tubro Limited (supra), the Court has dealt with the same position of law, which we have reproduced in paragraph no.34 above.

53. The Supreme Court in the case of Union of India v. Bright Power Projects (India) (P) Limited, (2015) 9 SCC 695, has similarly held as under:-

54. Hence, the challenge to the order of the learned District Judge on Claim No.5, is clearly unsustainable and is rejected.

55. In so far as the order on Claim No.7 is concerned, the same is setting aside the Claim of grant of 10% loss of profit on the remaining value of the work left over work, i.e., on ₹10,84,080/- not executed due reasons attributable to the Railways.

56. Suffice to state that the learned Tribunal has awarded ₹1,08,408/-. The learned District Judge has set aside the award on the ground that it is “Excepted Matter”. The reasoning by us with regard to the Claim No.4 wherein we have held that the Clause 63 of the GCC, which related to “Excepted Matter” shall not be applicable as no decision was taken by the Railways, [In M/s. J. Sons Engineering Corporation Limited & Another (supra)]. Even assuming for a moment that the Claim is arbitrable, Clause 61(3) of the GCC, which has already been reproduced above, clearly stipulates that the contractor shall have no claim on any payment or compensation or otherwise, howsoever, on account of any profit or advantage, which he might have derived from the execution of the work in full, but which he did not derive in consequence of the determination of the contract, will be a bar for the learned Tribunal to grant the same. The conclusion drawn by the learned District Judge is justified, and hence, the challenge to the order of the learned District Judge on Claim No.7, is rejected.

57. In so far as the Claim No.8 is concerned, the same is relatable to interest @ 24% PA and @ 12% PA on the amount awarded against Claim No.4. The learned Tribunal has granted ₹5,96,700/- by giving the following reasoning:- “Reasons of award: After hearing the arguments of both claimant and respondent and going through the documents provided before the tribunal, the arbitrator is of the opinion that simple interest @ 12% per annum becomes due to the claimant from the date 03.08.2011 (when the respondent reported that 41% work has been completed and recommended for foreclosure of work) to 30.08.2018. Hence, simple interest @ 12% p.a. on Rs. 702000/- ie the amount of claim no.4, which becomes to Rs.596700/-is genuine and considered. Hence the amount of Rs.5,96,700/is awarded against this claim.”

58. The learned District Judge has set aside the same, while giving following reasoning:-

59. We agree with the said conclusion of the learned District Judge, moreso, in view of our finding with regard to Claim No.5 above, as the interest has been granted for the period 03.08.2011 to 30.08.2018, for the same reason as stated by us, in paragraph 50 above, while dealing with the Claim No.5, in as much as, the learned Tribunal could not have granted prearbitration and pendente interest in view of the express bar in the contract.

60. Mr.Haider, has relied upon the decisions in the case of Larsen Air Conditioning and Refrigeration Company (Supra); Himachal Joint Venture (Supra); Simplex Concrete Piles (India) Ltd. (Supra); Canara Nidhi Limited (Supra); Ssangyong Engineering and Construction Co. Ltd. (Supra); Venture Global Engineering LLC and Ors. (Supra); Renusagar Power Co. Ltd. (Supra) and M/s Pradeep Vinod Construction Co. (Supra) in support of his contentions. Most of the decisions are on the scope of the judicial review in a challenge to the arbitral award under Section 34 of the Act. We are of the view that these decisions have no applicability in the facts and in view of our findings above.

61. In view of aforesaid discussion, present appeal being devoid of merits, is liable to be dismissed. It is ordered so. The pending application is also dismissed.

V. KAMESWAR RAO, J

MANMEET PRITAM SINGH ARORA, J JULY 15, 2026 rt