Case: Hyder Consulting (UK) Ltd Vs. Governor, State of Orissa thr. Chief Engineer

The present appeals have been preferred assailing the judgment and order dated 28th July, 2010, passed by the High Court of Orissa at Cuttack in W.P.(C)of 2009, W.P.(C)of 2009 and W.P.(C)of 2009. The High Court in the concluding paragraph has directedview of the above, the impugned order dated 19.2.2009 and the order of attachment dated 26.3.2008 are quashed. The executing Court is directed to calculate the amount payable under the award as indicated above, keeping in view the principles laid down by the apex Court in S.L. Arora (supra) and determine as to whether any further amount is payable to the opposite party. In case any amount is found to have been paid in excess to the opposite party, theis entitled to refund of the same.It is apt to state here that the High Court has placed reliance on the decision rendered in State of Haryana andv. S.L. Arora and Company (2010) 3 SCC 690.

Reasoning:
It is, therefore, obvious that what carries(b) of the Act is the "sum directed to be paid by an arbitral award" and not any other amount much less by or under the name "interest". In such situation, it cannot be said that what is being grantedSection 31(7)(b) of the Act is "interest on interest". Interest under(b) is granted on the "sum" directed to be paid by an arbitral award wherein the "sum" is nothing more than what is arrived at under, in my view, the expression "grant of interest on interest" while exercising the powerSection 31(7) of the Act does not arise and, therefore, the Arbitral Tribunal is well empowered to grant interest even in the absence of clause in the contract for grant of interest.Thus, Sapre, J., has concurred with Bobde, J. This being the position, it can be stated with certitude that decision in S.L. Arora (supra) does not lay down the law correctly. Hence, the computation of the amount has to be done by the executing court on the basis of principle stated in M/s. Hyder Consulting (UK) Ltd. (supra).In view of the aforesaid, the judgment rendered by the High Court is modified to the extent indicatedThe appeals are, accordingly, disposed of. There shall be no order as to41 ofarising out of S.L.P.(C)The present appeal is preferred against the judgment and order dated 23rd February, 2012, passed by the Division Bench of the High Court of Delhi, in6 of 2008, wherein it has been heldl for thecannot dispute before us that the settled legal position which now prevails, is that, compound interest under the said Act cannot be granted in view of the judgment in State of Haryana Ors.v. S.L. Arora and Company (2010) 3 SCC 690. The result is that this amount is notare thus of the considered view that the appeal is an academic exercise, as theis not entitled to the compound interest on the short ground that such compound interest would not be payable in the short ground that such compound interest would not be payable in the absence of any provision for such interest in the contract in view of the judgment in S.L. Arora and Company (supra). We are thus not called upon to go into the reasoning of the learned Single Judge.Recently, the decision in S.L. Arora (supra) has been overruled by majority view in M/s. Hyder Consulting (UK) Ltd. v. Governor, State of Orissa (2015) 2 SCC 189. In view of the aforesaid, the interest component payable to theshall be computed in accordance with law laid down in M/s. Hyder Consulting (UK) Ltd. (supra) not in accordance with S.L. Arora (supra) as that has been declared not good law.In the result, the conclusions by the learned Single Judge that has been affirmed by the Division Bench are set aside. It is open to theto seek execution as per the law pronounced by this Court.The appeal is, accordingly, allowed.s we find the learned Arbitrator, while dealing with the interest component, has directed as, in order to settle the dispute between the parties regarding the basic loss suffered by the5 lacs with interest at the rate of 16% with quarterly rest from the date of cause of action i.e., the date ofl date of award and further at the rate of 18% with quarterly rest from the date of award till its final payment by the0 lacs as suggested by the Desert Development Agencies committee, and also dismiss the claim of theThe aforesaid direction is in consonance with the recent pronouncement in M/s. Hyder Consulting (UK) Ltd. (supra). The High Court has modified the said rate of interest by stating, inter alia,g that the arbitrator has the power to award interest on both thethe same has to be reasonable. The arbitrator, as indicated above, has awarded interest @ 16% with quarterly rest from the date of cause of action i.e.the date of allotment of work till the date of award and further at the rate of 18% with quarterly rest from the date of award till its final payment, which in my view, is excessive bothI accordingly modify the award to the extent that theshall be entitled to simple interest @ 15% from the date of cause of action till the date of award and simple interest @ 18% from the date of award till its final payment. The said interest is awarded keeping in view the provisions of Section 31 of the Act of 1997.t this juncture, we may repeat at the cost of repetition that the rate of interest granted by the Arbitrator is in consonance with M/s. Hyder Consulting (UK) Ltd. (supra) and hence, there was no justification on the part of the High Court hearing the appeal and it should not have modified the interest component applying equitable principle.On a perusal of the impugned order, it appears that the High Court has only addressed itself to the grant of interest. The Arbitrator, as he find, had passed the award relating to interest component in the followingArbitrator further makes an award that the award amount ofll carry interest @ 18% per annum from the date of award till the date of payment in accordance with Section 31.7(b) of the Arbitration & Conciliation Act,High Court has opinedis contended that the sum ofso includes the amount of interest and therefore, further interest could not have beenl for thehowever, has not been able to show as to how the amount of interest awarded on the awarded amount isom the date of award till the date of payment is contrary to the provisions of SectionThe aforesaid direction given by the High Court is in tune with the recent majority view in M/s. Hyder Consulting (UK) Ltd. (supra) and, therefore, we do not find any flaw with the same. Resultantly, the appeals, being devoid of merit, stand dismissed. There shall be no order as to44 of 2015 @ S.L.P.(C)The question that emanates for consideration in this appeal relates to grant of interest. The High Court has allowed the objection by the State of Punjab on the basis of the pronouncement in S.L. Arora (supra). The said judgment has been overruled by the majority view in M/s. Hyder Consulting (UK) Ltd. (supra).