THE HONOURABLE SMT. JUSTICE T. MEENA KUMARI AND THE HONOURABLE SRI JUSTICE G. V. SEETHAPATHY CRP.NO. 2 5 3 7 OF 2003 AND CMA.NO. 1 8 2 5 OF 2003 COMMON JUDGMENT : {Per the Hon’ble Sri Justice G.V. Seethapathy}. As common questions of fact and law are involved in both the matters, they were heard together and are being disposed of by this common judgment. 2. CRP.No.2537 of 2003 is filed by the State of Andhra Pradesh, represented by its Superintending Engineer, Telugu Ganga Project Circle, Srikalahasti, against the judgment and decree dated 21-10-2002 passed in OS.No. 9 of 1995 by the learned Senior Civil Judge, Gudur, directing the Defendant No.1 to pay to the plaintiff Rs.10,833/- under claim No.2 andRs.1,04,939/- under claim No. 3 with interest thereon @ 18% p.a. from the date of filing the suit till realization. The award of the Arbitrator in OP.No.11 of 1992 dated 15-11-1994 with regard to the dismissal of Claims 1 and 2 were confirmed. 3. CMA.No. 1825 of 2003 is filed by the State of Andhra Pradesh, represented by its Superintending Engineer, Telugu Ganga Project Circle, Srikalahasti, against the judgment and decree dated 21-10-2002 passed in OS.No. 10 of 1995 by the learned Senior Civil Judge, Gudur, wherein the suit filed by the plaintiff was dismissed confirming the award passed by the Arbitrator dated 15-11-1994. 4. Both the matters are filed by the State of Andhra Pradesh, aggrieved by the impugned judgment wherein OS.No. 9 of 1995 filed by the respondent herein was decreed in part in terms of the Award dated 15-11-1994 upholding the Claim Nos. 2 and 3 as per the Award and confirming the findings of the Arbitrator rejecting the Claim Nos. 1 and 4 in OS.No. 10 of 1995 filed by the State for setting aside the award was dismissed. 5. Heard the learned Government Pleader for Arbitration as well as the learned counsel for the appellant and the learned counsel for the respondent. Perused the records. 6. The tender of the contractor for the work relating to the construction of aqueduct to carry water of K.P. Canal as part of Telugu Ganga Project across Venkatagiri river at 46.990 KM was accepted and an agreement was executed on 18-04-1987. The work must be completed within 21 months from the date of handing over the site i.e., on or before 04-02- 1989. The site was handed over to the contractor on 04-05- 1987. The contractor completed the erection of pier and earthwork excavation. The Government finally decided to close the contract on 26-02-1990. In view of the disputes between the parties Arbitrator was appointed in OP.No. 11 of 1992 on the file of the Court of Subordinate Judge, Gudur, by an order dated 18-4-1994. Before the Arbitrator, the contractor made four claims, the total amount of which was Rs.6,14,323-99 paise. The Arbitrator allowed the Claim Nos. 2 and 3 for an amount of Rs.10,833/- being interest @ 18% per annum on the retained amounts from 25-3-1989 to 08-01-1992 and Claim No.3 the interest awarded in a sum of Rs.1,04,939/- @ 18% per annum on the value of the work executed and interest on E.M.D. and F.S.D. from 04-2- 1989 to 15-07-1991. Thus the total amount awarded by the Arbitrator came to Rs. 1,15,772-00. The Arbitrator awarded Rs.12,000/- and Rs.6000/- towards traveling and award making charges . The contractor filed OS.No. 9 of 1995 for making the Award as Rule of Court. The learned Senior Civil Judge upheld the Award in respect of claim Nos. 2 and 3 and also confirmed the findings of the Arbitrator in respect of the rejected claims 1 and 4. The learned Senior Civil Judge awarded interest @ 18% per annum from the date of the suit till realization. In the present proceedings it is mainly contended that the award of interest @ 18% per annum from the date of the suit till realization is very exorbitant. 7. The learned Government Pleader for Arbitration representing the State relied on a decision in KRISHNA BHAGYA JALA NIGAM LIMITED V/s. G. HARISH CHANDRA REDDY AND ANR [1], wherein the Hon’ble Supreme Court observed that: After economic reforms in our country, the interest regime has changed and the rates have substantially reduced and, therefore, we are of the view that the interest awarded by the arbitrator at 18% for pre-arbitration period, for the pendente lite period and future interest be reduced to 9%. 8. In view of the principles laid down in the above decision, wherein it was held that grant of interest pendente lite at 9% was considered reasonable and in fact rate of interest is reduced to 9% for the pre-arbitration period. Pendente lite period and future period, it is considered that in the present case also the rate of interest from the date of the suit till realization is liable to be reduced to 9% and the same is accordingly reduced to 9%. 9. Subject to the above modification, the Civil Revision Petition and Civil Miscellaneous Appeal are accordingly disposed of. No costs. _____________________________ JUSTICE T. MEENA KUMARI _____________________________ JUSTICE G. V. SEETHAPATHY 07-08-2009. I s L [1] ) (2007) 2 SCC – 720