IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CASE NO.: F.A.O. 2193 of 2008 DATE OF DECISION : July 20,2009 State of Haryana .......Appellant versus M/s Informatics Computer Systems ......Respondent CORAM : HON'BLE MS. JUSTICE NIRMALJIT KAUR PRESENT: Mr. Navneet Singh, A.A.G., Haryana for the appellant-State. Mr. Lalit Thakur, Advocate for the respondent. NIRMALJIT KAUR, J. The facts, in brief, are that two agreements were executed between the appellant-State of Haryana and respondent on 16-06-1995 for providing computer education to the students in selected senior Secondary Schools in Haryana. As per the terms and condition of the first agreement, respondent was required to provide Computer Education in 29 schools, while as per second agreement, respondent was to provide Computer Education in other 10 schools. On a dispute having arisen, the respondent invoked arbitration clause and due to non appointment of the arbitrator, he approached the Court of Civil Judge (Senior Division), Chandigarh under Section 8 read with Section 11 of the Arbitration Act, 1996. The Civil Court, vide its judgment dated 10-01-2002, F.A.O. 2193 of 2008 -2- allowed the petition of the respondent and appointed Sole Arbitrator to decide the dispute between the parties. The arbitrator passed award granting a sum of Rs.6,87,236/- along with interest @ 21% p.a. in favour of the respondent herein. The State filed petition against the award and the learned Additional District Judge, Chandigarh partly accepted the application of the appellant-State. The Additional District Judge, Chandigarh modified the order of the Arbitrator and ordered that the respondent-claimant will be entitled to recover a sum of Rs.6,87,236/- as awarded by the arbitrator together with interest at the rate of 12% w.e.f. 23-07-1999 till its realisation along with costs and other directions given by the arbitrator qua the Bank guarantee are upheld. While challenging the order dated 19-04-2007 passed by Additional District Judge, Chandigarh, the solitary contention raised by learned counsel for the appellant was with respect to the rate of interest. He submitted that the Appellate Court failed to take cognizance of the provisions of Section 31 of the Arbitration Act, that the interest awarded to the respondent was not in accordance with the spirit of the aforesaid provisions of the Section. In support of the claim, objector relied upon the law, laid down by this Court in Union of India vs. G.G. Satya Narain 2003 (2) Arbitration L.R. 391 (A.P.) and Megorment Internal Anand vs. Buran Standard Company Ltd. and others 2006(2) ARB L.R. 498 (S.C.). Having heard learned counsel for the parties, I do no find any F.A.O. 2193 of 2008 -3- ground to interfere in the well reasoned order dated 19-04-2007 passed by Additional District Judge, Chandigarh, modifying the award, whereby, the interest has been reduced from 21% to 12%. In fact, the Court of Additional District Judge, Chandigarh, relied on the judgment of Hon'ble the Apex Court, titled as Gautam Constructions and Fisheries Ltd. vs. National Bank for Agriculture and Rural Development 2000 (6) S.C.C. 519 and Om Parkash Gita Devi and Co. vs. Food Corporation of India 2001(2) Raj. 559 (SC) and came to the conclusion that 12% interest p.a. was the reasonable amount and reduced it from 21% to 12%. No case has been made out to reduce the rate of interest any further. The appeal is, accordingly dismissed, being devoid of merits. (NIRMALJIT KAUR) JUDGE July 20, 2009 gurpreet Whether to be referred to the Reporter : Yes / No