IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA R.F.A. No: 237 of 2001 Date of decision: 19.9.2008 State of H.P. .. Appellant Versus Jagdish Chand Gupta .. Respondent Coram: The Hon’ble Mr. Justice R. B. Misra, Judge Whether approved for reporting?1 For the appellant : Mr. P.K.Sharma, Additional Advocate General For the respondent: Mr. Ramakant Sharma, Advocate ___________________________________________________________ R.B.Misra, J.(Oral) The present Regular First Appeal has been preferred by the appellant under Section 37 of the Arbitration and Conciliation Act, 1996 (in short called `Arbitration Act’) against the judgment and decree dated 20.11.2000, passed by learned District Judge, Chamba Division, Chamba in Civil Miscellaneous Application No. 203 of 1997 preferred under Section 34 of `Arbitration Act’ whereby learned District Judge while adjudicating such application for setting aside the award, has dismissed the same and while upholding the award of Arbitrator has given a direction to make the payment as per award. 2. In order to adjudicate the present appeal, it is necessary to go into the background of the case. The respondent 1 Whether reporter of local papers is allowed to see the judgment? No. 2 was allocated the work of construction/extension of 6 Nos. of bridges on various khuds/nallahs falling on Pathankot-Banikhet road Km.59/0 to 73/0 between Banikhad to Banikhet and for that purpose agreement No.1 for the year 1986-87 was entered into. In terms of the agreement and in consonance to the claims and counter claims of the parties, arbitration award was passed by the Arbitrator by recording reasons vide order dated 29th March, 1997 whereby an amount of Rs. 2,55,327/- was directed to be paid to the claimant with interest as mentioned against claim Nos. 3 and 8. 3. Being aggrieved, the appellant had preferred an application under Section 34 of the Arbitration Act for setting aside the award which was dismissed on 20.11.2000. The present appeal has been preferred mainly on two grounds. Firstly that the Arbitrator entered upon reference on 15.3.1995 i.e. before, the Arbitration and Conciliation Act, 1996 came into force and the award was finalized in view of the `Arbitration Act’ prevailing at present, whereas the arbitration was to be adjudicated upon in view of the provisions of earlier `Arbitration Act’. The appellant has secondly questioned genuinity of the payment of interest and the date of interest from which the claim has to be made, if at all the arbitration amount has to be paid to the claimant. 4. On the basis of the material on record, learned District Judge while adjudicating the application under Section 3 34 of the `Arbitration Act’ has framed the following three issues:- 1. Whether award dated 29.3.1997 passed by the Arbitrator is liable to be set aside, as alleged ? If so, its effect ? OPO 2. Whether this Court has no jurisdiction as alleged? If so, its effect ? OPR 3. Relief 5. In respect of issue No.1, it may be seen that Clause 65 of the agreement between the parties has specified as below:- “Subject as aforesaid the provisions of the Arbitration Act, 1940, or any statutory modification or reenactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause.” 6. It is apparent that the above clause provides that the reference to the arbitration has to be made to the person appointed by the Chief Engineer, Himachal Pradesh (Public Works Department) and in view of the above terms of agreement, it could safely be inferred that both the parties have consented that arbitration has to be adjudicated and award has to be passed in view of the prevailing provisions of the `Arbitration Act’. 7. The final bill is said to have been prepared on 25.12.1993 and since the payment was not made in due time, therefore, the amount of interest at the rate of 10% was liable to be claimed by the claimant on the amount awarded. Learned 4 District Judge has noted the contentions of the present appellant that the Arbitrator has no jurisdiction to indicate about the payment of interest. However, learned District Judge, after referring and relying upon the decision of Hon’ble Supreme Court in State of U.P. Vs. Harish Chandra and Co. [1999 (1) SCC 63] as well as Himachal Pradesh State Electricity Board Vs. R.J. Shah and Co. [1999 (4) SCC 214] has rightly indicated that the arbitrator while finalizing the arbitration award could not be restrained to indicate about the payment of interest. For convenience, the relevant paragraph is extracted as below:- “So far as this point is concerned, we may note a decision of a three Judge Bench of this Court in State of Orissa Vs. V.N.Agarwalla which has clearly ruled in the light of the earlier Constitution Bench judgment of this Court in Sec. Irrigation Department, Government of Orissa Vs. G.C.Roy, that the claim for interest even for the pre-reference period was also within the power and authority of the arbitrator after the Interest Act, 1978. It is also not in dispute between the parties that in the present cases, the cause of action for references arose after the coming into force of the Interest Act, 1978. Consequently, it cannot be effectively urged by this learned Senior Counsel for the appellant-State that the arbitrator had no power to grant such preference period interest. The first point is, therefore, answered in the affirmative.” 6. In respect of the calculation, mode and modality arriving at, the findings of finalization of `Award’ and for by the Arbitrator, the contentions of the appellant was rightly not 5 interfered with by learned District Judge in view of the verdict of Hon’ble Supreme Court in Harish Chand case (supra) as well as in view of the decision of Hon’ble Supreme Court in Municipal Corporation of Delhi Vs. M/s Jagan Nath Ashok Kumar and another (AIR 1987 SC 2316).In my respectful consideration, the Arbitrator is the authority who is sole judge in respect of quality and quantity of the claim on the basis of the material on record and evidences adduced by the parties. The arbitration award cannot be interfered with merely on the ground that a different conclusion or finding could have been arrived at. The award has been passed with reasons elaborated by the Arbitrator. Therefore, the reasons recorded are sufficient for finalization of the award and reasons recorded by the Arbitrator in the present case are in consonance to the verdict of the Supreme Court provided in different judgments in Indian Oil Corporation Ltd. Vs. Indian Carbon Ltd. (AIR 1998 SC 1340), Food Corporation of India Vs. Joginderpal Mohinderpal and another (AIR 1989 SC 1263), Puri Construction Pvt. Ltd. Vs. Union of India (AIR 1989 SC 777) and M/s Sudershan Trading Co. Vs. Govt. of Kerala (AIR 1989 SC 890). 7. After hearing learned counsel for the parties and on perusal of the impugned judgment, I am of the considered view that the Arbitrator had passed the arbitration award in consonance to the terms and conditions and has recorded 6 sufficient reasons and has not adjudicated anything beyond the scope of the Arbitration clause. Therefore, I am of the considered view that learned District Judge has rightly rejected the application/objection preferred by the appellant under Section 34 of the `Arbitration Act’. Therefore, I do not find any merit in the present appeal which is accordingly dismissed. The arbitration amount, as awarded by the Arbitrator, has to be disbursed to the claimant alongwith interest in accordance to the award. September 19, 2008(K) ( R. B. Misra ), J.