IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL. A.O. NO. 426 of 2006 State of Uttaranchal through Assistant Engineer, M.E.S. Div-I, Dehradun .. Appellant. Vs. Dharamveer Singh Bedi .. Respondent. Mr. P.C. Bisht, Standing Counsel for the appellant. Mr. Ramji Srivastava, Advocate for the respondent. Dated: April 16th , 2008 Hon’ble B.C. Kandpal, J. This appeal, under Section 39 of the Arbitration Act, 1940, has been preferred against the judgment and decree dated 19-4-2006, passed by Additional District Judge/F.T.C. VI, Dehradun in Civil Suit No. 243 of 2001, whereby the objection filed by the appellant U/S 30/33 of the Indian Arbitration Act, have been rejected and the award dated 20-7-2000 has been made Rule of the Court. 2- Brief facts giving rise to this appeal are that contract No. 7/A.A./79-80 was executed between the State of Uttaranchal and the respondent Dharamveer Bedi for transportation of departmental goods from Harrawala, Dehradun to Dakpathar Store. There arose dispute between the parties and Sri M.P. Bhartari, Superintending Engineer, Y.C.C. Dehradun was appointed sole Arbitrator to settle the dispute and give award. The Arbitrator after hearing parties and considering the material available on record, gave his award dated 20-7-2000. 3- The Award was filed before the II Addl. Civil Judge (S.D.), Dehradun, for making the same Rule of the Court and Civil Suit No.243/2001 was instituted there. Notices were issued to the parties. The State has filed objection against the award and the same was numbered as Misc. Case No. 111 of 2000. The State raised objection against the award on the ground that the signatures of the contractor on the agreement were not obtained under duress and compulsion. It also alleged that the contractor did not carry out the work in accordance with the terms of the agreement therefore the contract was rescinded. The recovery of Rs. 25,347-10 was made due to wharfage and demurrage, and the said amount was paid to Railway Department and recovery of Rs. 447-50 is still balance. It was also alleged that the Arbitrator has arrived at the conclusion on wrong facts and he misconducted himself by allowing the claims. Objection was also raised with regard to rate of interest and it was alleged that the contractor was entitled to get interest @ 6% per annum instead of 9%. 4- On the other hand the contractor/respondent also filed objection and alleged that the Department has illegally and wrongfully imposed wharfage, demurrage and crane charges. The Contractor in his petition had demanded reasonable amount from the department but the arbitrator has denied the same in the award. The Contractor also alleged that the Arbitrator has given a lawful award based on material on record. 4- The matter was heard by Additional District Judge/F.T.C., VI, Dehradun and vide impugned judgment and decree dated 19-4-2006 rejected the objection of the State and made the impugned award Rule of the Court. 5- Feeling aggrieved, the State has come up in appeal before this Court. 6- Heard learned counsel for the parties and perused the record. 7- Learned Standing Counsel appearing on behalf of the State has argued that the learned Addl. District Judge has committed manifest error of law in not appreciating the merits of the objection filed U/S 30/33 of the Arbitrator Act, in which the misconduct of the Arbitrator was specifically pleaded. He also submitted that the award of Rs. 20545/- by arbitrator towards the loss of profit was not contemplated by any provision of the contract and as such the same was not sustainable under law. Learned Standing Counsel also alleged that the Arbitrator has also awarded interest at a high rate, which is against the provisions of Arbitration Act and the same should be reduced. 8- On the other hand learned counsel for the Contractor/Respondent refuted the contentions of the learned Standing Counsel and alleged that the Arbitrator has recorded a categorical finding after considering the material on record and this Court cannot sit over the award as an appellate court in order to assess and examine the evidence on record. 9- In order to appreciate the arguments advanced by the learned counsel for the parties, I have gone through the impugned award dated 20-7-2000. The Contractor has claimed Rs. 3,24,436/- before the Arbitrator and the Arbitrator has awarded in all a sum of Rs. 1,32,059/-. The learned Arbitrator has recorded a finding that the Department has wrongly rescinded the contract therefore the security of the contractor pledged in favour of the Department to the tune of Rs. 40,740/- and Rs. 6,260/- in the shape of F.D.R. is liable to be refunded to him. 10- In the awarded amount, a sum of Rs. 20,545/- has been allowed towards loss of profit due to rescinding the contract. The Arbitrator has given the reasoning that the contract was rescinded by the department on invalid grounds, therefore, loss of profit of 15% of the remaining amount of work of Rs. 1,36,968/-, i.e. Rs. 20,545/- has been awarded. The allegation of the contractor was that the copy of agreement was not provided to the contractor by the Department, in spite of repeated demands and the same was made available to him after a gap of about three months and the department failed to cooperate and deliberately allowed the contract to frustrate. The order to finalize the agreement at preliminary stage was made to cause wrongful loss to the contractor. In the above facts and circumstances of the case the Arbitrator has rightly awarded the sum for loss of profit due to finalization of the agreement at a preliminary stage. Therefore, the submission of the learned Standing Counsel on this point has no substance. 11- So far as the submission of learned Standing Counsel pertaining to interest is concerned, the same has force. The Arbitrator has awarded interest @ 9% per annum from the date of award till the date of decree or the date of actual payment, whichever is earlier. The learned Civil Judge has modified the award on interest part up to the extent that the interest shall be payable @6% per annum from the date of award till the date of decree and @ 9% per annum from the date of decree till the date of actual payment. In my opinion the interest should be awarded at a flat rate of 6% per annum from the date of award till the date of final payment. 12- For the above discussion, the impugned award is liable to be modified on the point of interest only. 13- Accordingly the appeal is partly allowed. The impugned award dated 20-7-2000 is modified upto the extent that the interest payable on awarded sum shall be @ 6% per annum from the date of award till the date of final payment instead of 9% per annum as has been awarded by the Arbitrator and modified by learned Civil Judge vide impugned judgment and decree dated 19-4- 2006. The other part of impugned award as well as impugned judgment and decree passed by Additional District Judge/F.T.C. VI, Dehradun, stands confirmed. (B.C. Kandpal, J.) SP