1 IN THE HIGH COURT OF BOMBAY AT GOA FIRST APPEAL NO.209 OF 2006 AND CROSS-OBJECTION NO.18 OF 2007 FIRST APPEAL NO.209 OF 2006 State of Goa, represented by Executive Engineer, Works Division VI, Public Works Department, Fatorda, Margao-Goa. …. Appellant V/s 1. N.S. Quirtani, (since deceased) represented by respondents no.2,3 & 4. P.O. Box 284, Margao-Goa. 2. Kala Narayan Kirtany, major of age, widow, 3. Priya N. Kirtany, major in age, 4. Pradnya N. Kirtany, all r/o. Aquem, Margao, Goa. …. Respondents Shri Guru Shirodkar, Government Advocate for the Appellant. Shri C. Mascarenhas, Advocate for the Respondents. AND CROSS-OBJECTION NO.18 OF 2007 N.S. Quirtani, (now deceased) by his LR's 1. Kala Narayan Kirtany, major of age, housewife; 2. Priya N. Kirtany, 2 major of age, 3. Pradnya N. Kirtany, Major of age, All residents of Aquem, Margao, Goa. …. Appellants V/s State of Goa, represented by Executive Engineer, Works Division VI, Public Works Department, Fatorda, Margao-Goa. …. Respondent Shri C. Mascarenhas, Advocate for the Appellants. Shri Guru Shirodkar, Government Advocate for the Respondents. CORAM : F.M. REIS, J. DATE : 22nd NOVEMBER, 2011 JUDGMENT : Heard Shri Guru Shirodkar, learned Government Advocate for the Appellant and Shri C. Mascarenhas, learned Counsel appearing for the respondents. 2. The above appeal challenges the judgment passed by the learned Additional District Judge, South Goa at Margao in Arbitration Suit No.2 of 2005 whereby the objections raised by both the parties in respect of the award of the Arbitrator dated 11/10/1994 came to be disposed of whereby the objections raised 3 by the respondents came to be rejected and the objections raised by the appellant were partly allowed in respect of the interest part only. The learned Judge held that the respondents were entitled for simple interest at the rate of 10% p.a. from 12/11/1981 till the actual date of payment. 3. Shri Guru Shirodkar, learned Government Advocate appearing for the appellant has assailed the impugned judgment and pointed that the learned Judge has failed to give findings to the effect that the transaction between the parties was a commercial transaction which would entitle the respondents for interest at the rate of 10% p.a. Learned Counsel further pointed out that the Arbitrator had awarded interest of 15% p.a. which came to be reduced at 10% p.a. by the learned Judge which according to the learned Counsel was on the higher side, considering that the Arbitrator came to the conclusion that the delay in completing the work was on account of the appellant as well as the respondents. Learned Counsel further pointed out that considering the facts and circumstances of the case, the Arbitrator ought to have awarded interest at the rate of 6% p.a. 4 4. On the other hand, Shri C. Mascarenhas, learned Counsel appearing for the respondents has disputed the contentions of the learned Government advocate and pointed out that the learned Judge has rightly exercised its discretion in awarding interest at the rate of 10% p.a. and, as such, the question of any reduction on such count does not arise at all. Learned Counsel further pointed out that once the Arbitrator has come to the conclusion that the respondents are entitled for a specific amount non payment of said amount itself entitles the respondents to claim interest from the appellant. Learned Counsel, as such, submits that as far as the appeal preferred by the appellant is concerned there is no merit in the said appeal and, accordingly, the same deserves to be rejected. In support of his submissions, learned Counsel relied upon the judgment of this Court passed in First Appeal No.109/2005 dated 20/10/2005 in the case of State of Goa V/s. Preeti Engineering services. 5. Shri Mascarenhas, learned Counsel appearing for the respondents pointed out that the respondents have also filed cross- objections in respect of the part of the objections raised by the respondents which came to be rejected. Learned Counsel further 5 pointed out that in the original claim the respondents had claimed a sum of Rs.1,50,000/- nevertheless during the course of the proceedings before the Arbitrator, the respondents have learnt that on such count the respondents were entitled for an excess amount aggregating a sum of Rs.4,50,000/-. Learned Counsel further pointed out that the appellant was refused the said amount on the ground that such claim was not put forward by the respondents at the time of the original claim put forward by the respondents. The learned Counsel further pointed out that the reasons given by the Arbitrator are totally misconceived and, as such, the Arbitrator should be directed to consider enhanced amount claimed by the respondents in respect of claim no.1. Learned Counsel further points out that the learned Judge while considering the objections has erroneously come to the conclusion that by such claim the respondents are enlarging their claim. Learned Counsel, as such, submits that to that extent the objections raised by the respondents ought to have been allowed. Another grievance raised by the learned Counsel appearing for the respondents is with regard to the claim no.6 put forward by the respondents in respect of the compensation on account of delay in completing the work. Learned Counsel has pointed out that the Arbitrator has not at all 6 considered the said aspect while passing the award and, as such, to that extent, the arbitration award deserves to be set aside. Learned Counsel, as such, submits that the appeal deserves to be rejected and the cross-objections be allowed. 6. Having heard the learned Counsel and on perusal of the record, the following point for determination arises in the present appeal: POINT FOR DETERMINATION Whether the learned Judge was justified to fix the rate of interest at the rate of 10% p.a. 7. Considering the judgment passed by this Court in the case of State of Goa V/s. Preeti Engineering services (supra) I find that the appellant is not at all justified to raise the contention before this Court with regard to the rate of interest. This Court while passing the said judgment has deprecated the conduct of the Government to file appeal on such count being unnecessarily delaying the implementation of the arbitration. In any event, considering the lending rate of interest prevailing in the Nationalized Bank, I find that the interest awarded by the learned Judge at the rate of 10% cannot be said to be exorbitant. Once the discretion exercised by 7 the learned Judge cannot be said to be arbitrary no interference is called for with regard to the interest awarded by the learned judge in the impugned judgment. The point for determination is answered accordingly. 8. With regard to the contention of the learned Counsel for the respondent there is no dispute that at the time when the original claim was put forward by the respondents the amount claimed on account of claim no.1 was Rs.1,50,000/-. The arbitration proceedings were initiated in respect of the dispute which started in the year 1989. There is no dispute that the said claim was with regard to the work executed by the respondents for the appellant which was completed in the year 1979. Apart from that, at the time when the statement of claim was put forward by the respondents in the year 1992, the amount in respect of claim mo.1 was restricted to a sum of Rs.1,50,000/-. It is the contention of the learned Counsel appearing for the respondents that thereafter during the course of arbitration proceedings respondents had enlarged their claim in respect of claim no.1. Once it is not disputed that the work was completed in the year 1979 the question of making any enlargement much after the year 1993 which otherwise has not 8 been substantiated does not arise at all. As such, learned Judge was justified to come to the conclusion that by taking such a claim the respondents were enlarging their claim which they were not entitled in law. As such, I find no infirmity in the impugned Judgment on that count. With regard to the claim no.6, the learned Judge rightly considered that while deciding claim no.4 the arbitrator has come to the conclusion that both the parties were responsible for such delay. Once such finding arrived by the Arbitrator has not been assailed, I find that the question of claiming any compensation on account of delay would not arise. Once both the parties were held to be responsible for the delay the question of respondents claiming any amount on account of such delay would not arise. Hence I find no merit in the cross-objections filed by the respondents. The point for determination is answered accordingly. 9. In view of the above, I find no merit in the above appeal as well as the cross-objections. Hence, the appeal as well as the cross-objections stand dismissed with no order as to costs. F.M. REIS, J. NH/-