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Union of India v. District Judge, Jhansi & others. - WRIT - A No. 43114 of 2000 [2005] RD-AH 7970 (21 December 2005)


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Union of India            v.      District Judge, Jhansi and others.

Hon'ble D.P. Singh, J.

  Heard learned counsel for the parties.

This petition is directed against orders dated10.1.1995 and 5.7.1999 whereby an arbitration award has been made Rule of the Court and appeal against it has been dismissed.

The petitioner and the contesting respondents entered into an agreement dated 2.8.1985 for raising certain constructions between 19th August, 1985 to 30th July, 1987. Due to a tornado certain constructions already made were damaged and certain dimensions of roads and windows were changed which resulted in a dispute between the parties. Since there was an arbitration clause in the agreement, it was referred to the sole Arbitrator, the Commander Works Engineer, Bhopal. After granting opportunity to the parties he rendered a non speaking award on 20th June, 1991 accepting the claims of the contesting respondents and awarded 10% interest thereon. The award was made rule of the court and the appeal against the said order has also been dismissed.

Learned counsel for the petitioner has firstly urged that the arbitrator went beyond his jurisdiction in determining the damages as there was no such stipulation in the contract itself. As noted hereinabove, it is a non speaking award and the petitioners have not even filed a copy of the agreement containing the arbitration clause. The arbitrator has categorically stated that he has considered and examined the pleadings and documents filed by the parties, thus, this court would not be justified in interfering with it when even the agreement has not been filed. A three Judges Bench of the Apex Court in the case of D.D. Sharma Vs. Union of India [2004 (5) SCC 325] has held in paragraph no. 24 that:-

"..........interpretation of a contract is a matter for the arbitrator to determine, even if it gives rise to determination of a question of law."

It went on to hold in paragraph 28 that:-

"..........the award being not a speaking one, the averments made therein should be accepted at their face value unless contrary is proved by the party questioning the validity of the award."

Thus, this argument of learned counsel for the petitioner cannot be sustained.

He has then urged that the arbitrator could not have awarded more than 6% interest in view of paragraph 7A of the first schedule of the Arbitration Act, 1940 as introduced by Section 24 of U.P. Civil Laws (Reforms and Amendment) Act 1976. He has relied upon a Division Bench judgment of this Court in the case of Union of India Vs. Channa Bros. Company [2000 (4) AWC 2907]. However, the aforesaid Division Bench judgment has been specifically overruled on an appeal by the apex court in M/s Channa Bros. Vs. Union of India [2002 (2) JT 643]. The apex court in the case of Vidyawati Construction Company Vs. Union of India (Civil Appeal No. 2337 of 1999 decided on 27.11.2001) has held that the expression "with further interest not exceeding 6% per annum" is confined to the period from the date of the award to the date of payment and not interest pendentelite and prior to the commencement of arbitration proceedings. Thus, this argument also cannot be accepted.

No other point has been raised.

For the reasons given above, this is not a fit case for interference under Article 226 of the Constitution of India. Rejected.  

D/- December,        2005



Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites


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