1972 (1) TMI 99 - SC - Indian Laws

Disputes arose between the appellant and the respondent firm with reference to the performance of the contract Held that - Mr. V. S. Desai Senior Advocate is appointed Arbitrator by consent of the parties to go into all the questions in this matter and make his awar. The remuneration for the arbitrator would be 5, 000 which will be shared by both the parties equally. The arbitrator will make his award within three months from today

Issues Involved:
1. Validity of the arbitrator's suo motu filing of the Award.
2. Jurisdiction of the Supreme Court to receive the Award.
3. Arbitrator's jurisdiction to award interest from a period prior to the date of the Award or reference.
4. Validity of the refund direction in the Award.

Detailed Analysis:

1. Validity of the Arbitrator's Suo Motu Filing of the Award:
Contention: The appellant argued that the arbitrator had no power to file the Award suo motu under Section 14(2) of the Arbitration Act, 1940, as no party requested it, nor was there a court directive.

Analysis: The Court referred to Section 14(2) and Section 38 of the Act, concluding that there is no prohibition against the arbitrator filing the Award suo motu. The Court cited the Nagpur High Court's decision in *Narayan Bhawu v. Dewajibhawu* (AIR 1945 Nag 117), which supported this interpretation. The Court also noted that the Supreme Court in *Parasramka Commercial Company v. Union of India* ([1970] 2 SCR 136) did not address the validity of a suo motu filing, leaving the question open. The Court affirmed that the arbitrator's suo motu filing was legal since it was done the day after the Award was made, thus no limitation issues arose.

Conclusion: The first contention was rejected, affirming the legality of the arbitrator's suo motu filing.

2. Jurisdiction of the Supreme Court to Receive the Award:
Contention: The appellant contended that the Supreme Court is not the "Court" as defined under Section 2(c) of the Act, and the Award should have been filed in the Court of the Additional District Judge, Mandsaur.

Analysis: The Court examined the context and the specific circumstances of the case, noting that the Supreme Court had retained full control over the arbitration proceedings, as evidenced by its orders and directions. The Court referred to *Ct. A. Ct. Nachiappa Chettiar v. Ct. A. Ct. Subramaniam Chettiar* ([1960] 2 SCR 209), which established that appellate proceedings are a continuation of the suit, thus the Supreme Court retained jurisdiction. The Court concluded that the Supreme Court was the appropriate forum for filing the Award.

Conclusion: The second contention was rejected, affirming the Supreme Court's jurisdiction to receive the Award.

3. Arbitrator's Jurisdiction to Award Interest from a Period Prior to the Date of the Award or Reference:
Contention: The appellant argued that the arbitrator had no jurisdiction to award interest from a period prior to the date of the Award or reference, citing various precedents.

Analysis: The Court reviewed the arbitrator's findings, which included the entitlement to interest from June 7, 1958, the date of final inspection. The Court referred to Section 61 of the Sale of Goods Act, 1930, which allows for the award of interest from the date the price becomes payable. The Court distinguished the current case from those cited by the appellant, noting that in this case, the claim for interest was part of the disputes referred to arbitration. The Court emphasized that the arbitrator had the power to award interest from the date the amount became due, supported by the principle established in *Union of India v. A. L. Rallia Ram* ([1964] 3 SCR 164).

Conclusion: The third contention was rejected, affirming the arbitrator's jurisdiction to award interest from June 7, 1958.

4. Validity of the Refund Direction in the Award:
Contention: The appellant argued that the amount of Rs. 15,414.19 P. directed to be refunded had already been accounted for in the balance price payable.

Analysis: The Court found no evidence to support the appellant's claim that the refund amount had been included in the balance price. The arbitrator's direction for the refund stood as there was no satisfactory proof to the contrary.

Conclusion: The fourth contention was rejected, affirming the validity of the refund direction.

Final Judgment:
The Court dismissed C.M.P. No. 5802 of 1971 filed by the appellant with costs, and allowed C.M.P. No. 5801 of 1971 filed by the respondent-firm with costs. A decree was issued directing the appellant State to pay Rs. 1,79,653.18 P. with 9% per annum simple interest from June 7, 1958, till the date of the decree and thereafter at 6% till the date of payment, and to refund Rs. 15,414.19 P. recovered as excess railway freight.

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