HON’BLE SRI JUSTICE K.S. APPA RAO C.R.P.No. 2958 of 2007 Date:26-08-2011 Between: M/s. Durga Constructions rep. by its Managing Partner, Kotappakonda, Narasaraopet, Guntur District. ..….. Petitioner And The State of Andhra Pradesh rep. by Superintending Engineer (R&B), CAD Circle, Court Compound, Secunderabad. ………. Respondents HON’BLE SRI JUSTICE K.S. APPA RAO C.R.P.No. 2958 of 2007 ORDER: Aggrieved by the order dated 11-04-2005 passed in O.S.No.92 of 1996 (Arbitration O.P.No.299 of 1988) on the file of the Additional Senior Civil Judge, Narasaraopet, the present Civil Revision Petition is filed. 2. The appellant herein is the plaintiff-petitioner in O.S.No.92 of 1996. He filed O.P.No.299 of 1988 under Sections 14 and 20 of the Arbitration Act, 1940 (for short ‘the Act’) before the lower Court to direct the third respondent to file the award and connected papers into the Court; and also to make the said award as a rule of law and to pass a decree in terms of the award with subsequent interest. 3. The lower Court, after enquiry, allowed the O.P. and made the award dated 16-09-1988 as rule of law and passed a decree for Rs.2,26,450/- against respondents 1 and 2 with interest @ 6% per annum from the date of filing of the petition till the date of realisation, while observing that the rate of interest @ 18% per annum granted by the Arbitrator is on higher side. Aggrieved thereby, the petitioner therein preferred the present Civil Revision Petition. 4. The leaned counsel appearing for the Revision Petitioner mainly urged that the order of the lower Court is contrary to the provisions of the Arbitration Act, 1940 and the lower Court has no jurisdiction to modify the rate of interest granted by the Arbitrator and in support of the same, he placed reliance on the decision reported in K. VENKATESWARA RAO v. T. SESHACHALAPATHI [1]. He further urged that under Section 29 of the Act, the civil Court has power to grant interest only from the date of decree and prior to the decree, it is the power of the Arbitrator to grant interest. 5. The learned counsel for the respondents, while supporting the order of the lower Court, sought for dismissal of the Civil Revision Petition. 6. Now the point for consideration is whether the order of the lower Court, dated 11-04-2005 is sustainable? 7. As seen from the impugned order, the petitioner filed the O.P. According to him, he was appointed as a Contractor by Respondent Nos.1 and 2 for construction of a road from Gollapadu to Uppalapadu under the agreement dated 15-03-1982. There was a dispute with regard to the execution of the work and therefore, the matter was referred to the third respondent for arbitration and the third respondent passed an award dated 17-08- 1988 partly allowing some of the claims made by the petitioner. Thereafter, the petitioner approached the lower Court by filing O.P.No.299 of 1988 seeking the reliefs as stated above. The lower Court, while agreeing with the finding of the Arbitrator while passing the award, reduced the rate of interest. 8. As per Section 29 of the Act, the lower Court is empowered to grant interest only from the date of decree and it is not competent to reduce the rate of interest awarded by the Arbitrator. In the present case on hand, the lower Court, while confirming the award, reduced the rate of interest from 18% to 6% per annum, which is contrary to Section 29 of the Act. In the decision reported in K. VENKATESWARA RAO’s case, a Division bench of this Court held that under Section 29 of the Arbitration Act, 1940, the Civil Court is not competent to reduce the rate of interest awarded by the Arbitrators as part of the award, and the Court is competent to modify interest awarded by Arbitrators only from the date of decree. 9. In view of the settled legal position, it is clear that unless the award is set aside by the lower Court, passing of any orders contrary to the award much less the rate of interest does not arise. Thus, the finding of the lower Court reducing the rate of interest from 18% to 6% per annum is not sustainable, and the same is liable to be set aside. 10. In the result, the Civil Revision Petition is allowed. The order of the lower Court to the extent of reducing the rate of interest from 18% to 6% per annum from the date of petition till the date of decree is set aside. The petitioner is entitled to the decree amount with interest @ 18% per annum, as awarded by the Arbitrator, from the date of petition till the date of decree, and thereafter @ 6% per annum till the date of realisation as awarded by the lower Court. No costs. _______________ K.S. APPA RAO, J Date: 26-08-2011 YCR [1] 1998 (2) ALT 392 (DB)