FAO No. 3686 of 2009 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH -- FAO No. 3686 of 2009 (O&M) Date of decision: November 05 , 2009 Union of India ........ Appellant Versus M/s Gupta Electric Company and another .......Respondent(s) Coram: Hon'ble Ms Justice Nirmaljit Kaur -.- Present: Mr. Nitin Kumar, Advocate for the appellant -.- 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not? 3. Whether the judgment should be reported in the Digest? Nirmaljit Kaur, J. This is an appeal against the order dated 18.12.2008 passed by the Additional District Judge, Ambala, dismissing the petition filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996 (in short the 1996 Act) for setting aside the award dated 31.01.2008 qua awarding of the interest. While challenging the aforesaid order, the only ground raised by the learned for the appellant is that the award of interest on final bill is totally illegal and illogical. The Arbitrator under Claim 8(c ) has allowed interest at FAO No. 3686 of 2009 2 the rate of 12% from 10.12.1997 and in claim No. B-7 allowed interest on Rs.54,133/- at 12% from 27.09.1999 and claim C-3 awarded interest on Rs.9944/- at 12% from 28.09.1999 and thereafter the Arbitrator allowed interest at the rate of 12% on the total claim amount after three months from the date of receipt of the award. It is apparent as also from the ground of appeal that the appellant has accepted the rest of the award given by the Arbitrator and the challenge in the present appeal is only to the extent of the interest awarded. I find no merit in the arguments raised by the learned counsel for the appellant. Section 31 (7) (a) and (b) of the Arbitration and Conciliation Act, 1996, read as under:- “7(a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. (b) A sum directed to be paid by an arbitral award shall,unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the award to the date of payment.” It is, therefore, apparent that it is well settled by various judgements of the Apex Court that the award of interest is the discretion of the Court. It is also well settled that like the grant of interest, rate of interest is also the discretion of the Court and in the absence of any agreement between the the parties, the court does not interfere unless the same is bad in law. FAO No. 3686 of 2009 3 Learned counsel for the appellant has not pointed out as to how the rate of interest is arbitrary and the same is beyond the agreement or is not in accordance with Section 31 (7) (a) and (b), referred to above. The Hon'ble Apex Court in the case of 'M/s Manalal Prabhudayal v. Oriental Insurance Co. Ltd., 2006(4) R.C.R. (Civil) 234,, while allowing the appeal, set aside the order of the High Court reducing the rate of interest from September 19, 1995 till the award and till the amount is paid/deposited in the Court from 12% to 6% per anum and held that the award passed by the Arbitrator granting interest at the rate of 12% per annum all throughout, that is, for pre-reference period, pendente lite and post award period, was correct. No other ground was raised No merit. Dismissed. . (Nirmaljit Kaur) Judge November 05, 2009 mohan