1 14.arbp-671-11 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION jmi ARBITRATION PETITION NO. 671 OF 2011. Union of India. ..Petitioners. vs. M/s. Mahadev Construction Company. ..Respondents. .... Mr. T.J. Pandian, for Petitioners. Mr. Rajnish Shrivastava, for Respondents. .... CORAM : S.J. KATHAWALLA, J. DATE : 29TH SEPTEMBER 2011. P.C. : The Petitioners Union of India through its Chief Engineer (Const), Central Railway, and represented by Deputy Chief Engineer (Const), Central Railway has filed the above Petition under section 34 of the Arbitration and Conciliation Act, 1996, impugning the Award dated 12th April 2010 passed by the Arbitral Tribunal. 2. The Petitioners have challenged the said Award on the ground that the Arbitral Tribunal has wrongly awarded a sum of Rs. 3,82,369.35 paise towards claim no. 11 of the Respondents which pertains to payment of interest. It is the case of the Petitioners’ that the Award passed by the Learned Arbitrator is opposed to the contractual provisions. 3. As regards granting interest by the Learned Arbitrator (Claim No. 11), Mr. Pandian has drawn my attention to clause 16(3) of the 2 14.arbp-671-11 terms and conditions of the Contract governing the parties and has submitted that the said clause bars payment of interest. Clause 16(3) is reproduced hereunder :- “16 (3). No interest will be payable upon the Earnest Money and Security Deposit or amounts payable to the Contractor under the Contract, but Government securities deposited in terms of Sub-Clause (1) of this clause will be payable with interest accrued thereon.” 4. Mr. Pandian has submitted that the Arbitral Tribunal has granted an aggregate amount of Rs.3,82,369.35 paise to the Respondents towards interest. He has further submitted that the Learned Arbitrator has granted the said interest amount in violation of the above clause 16(3) of the general conditions of the Contract which bars payment of interest by the Petitioners. The very same clause which was earlier clause 16(2) had come up for consideration before the Hon’ble Supreme Court in the case of Sree Kamatchi Amman Constructions vs. The Divisional Railway Manager (Works), Palghat & Ors., reported in 2010(6) Supreme Today 702, wherein the Hon’ble Supreme Court has in paragraph 6 of its Judgment held that the Arbitrator can award interest for the pre- reference period and future period only if there was no express bar in the contract regarding award of interest. 5. The learned Advocate appearing for the Petitioners candidly submits that in view of Clause 6.3 and further in view of the decision of the Hon’ble Supreme Court in the case of Sree Kamatchi Amman Constructions (supra), he cannot insist that the Respondent is entitled to receive interest as awarded by the learned Arbitrator. 6. In view thereof, the Petition is allowed in terms of prayer 3 14.arbp-671-11 clause (a) and the Arbitration Petition is accordingly disposed of. [ S.J. KATHAWALLA, J. ]