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TMI Blog2022 (10) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... issed on 4th February 2000. Thereafter, he moved an application being MJC No. 36 of 2000 before the High Court for appointment of arbitrator under Section 11 of the 1996 Act which came to be allowed on 15th October 2001. It could thus be seen that for a period of almost ten years, the respondent was again in silent mode - the learned Arbitrator was not justified in awarding interest for the period from 14th February 1990 to 4th February 2000. A party cannot be permitted to derive benefits from its own lapses. The present case is a fit case wherein this Court needs to exercise its powers under Article 142 of the Constitution of India to reduce the rate of interest. Taking into consideration the conduct of the respondent in delaying the proceedings at every stage which led to a long pendency of the dispute, it is opined that, though it will not be in the interest of justice to interfere with the principal award, this is a fit case wherein the interest at all the three stages, that is prereference period, pendente lite and postaward period, requires to be reduced. The respondent would not be entitled to any interest for the period between 30th August 1977 and 25th July 1989 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter filed an application in the disposed of suit before the trial court, praying for appointment of an arbitrator under the provisions of the 1996 Act. The same was rejected by the trial court vide order dated 4th February 2000 for lack of jurisdiction. The respondent thereafter moved an application being MJC No. 36 of 2000 under Section 11 of the 1996 Act before the High Court for appointment of an arbitrator. The learned Single Judge of the High Court, vide order dated 15th October 2001, allowed the said application and appointed Shri S.K. Mohanty, former Judge of the same High Court as the Arbitrator. 5. On 15th March 2002, the respondent filed his claim of Rs.1,45,28,198/under 15 heads of claim and demanded 19.5% interest from 1st April 1976 to 15th March 2002. The learned Arbitrator, vide award dated 24th August 2004, awarded a sum of Rs.9,20,650/in respect of head Nos. 1 to 14. The learned Arbitrator also awarded interest pendente lite with effect from 1st April 1976 to the date of the award at the rate of 18% per annum which came to Rs. 46,90,000/. The learned Arbitrator further directed the future interest to be paid at the rate of 18% per annum on the total of the afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a threeJudges Bench of this Court in the case of Hyder Consulting (UK) Limited v. Governor, State of Orissa Through Chief Engineer (2015) 2 SCC 189 , no interference would be warranted in the present case. 9. Section 31(7)(a) of the 1996 Act reads as under: 31. Form and contents of arbitral award. (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. 10. The provisions of Section 31(7)(a) of the 1996 Act fell for consideration before this Court in many cases including in the cases of Hyder Consulting (UK) Limited (supra) and Delhi Airport Metro Express Private Limited v. Delhi Metro Rail Corporation 2022 SCC OnLine SC 549 . A perusal of clause (a) of subsection (7) of Section 31 of the 1996 Act would reveal that, no doubt, a discretion is vested in the arbitral tribunal to include in the sum for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be dismissed on 4th February 2000. Thereafter, he moved an application being MJC No. 36 of 2000 before the High Court for appointment of arbitrator under Section 11 of the 1996 Act which came to be allowed on 15th October 2001. It could thus be seen that for a period of almost ten years, the respondent was again in silent mode. Had he filed the original agreement immediately after the decree was passed on 14th February 1990, the arbitration proceedings would have commenced and concluded immediately thereafter. As such, the learned Arbitrator was not justified in awarding interest for the period from 14th February 1990 to 4th February 2000. A party cannot be permitted to derive benefits from its own lapses. 14. It is further to be noted that, though after the commencement of the 1996 Act, the respondent could not have moved an application in the disposed suit, he chose to do so and only after dismissal of the said application on the ground of lack of jurisdiction, did he move an application for appointment of an arbitrator under Section 11 of the 1996 Act before the High Court, which was allowed on 15th October 2001. We therefore find that the respondent would not be entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Arbitral Tribunal may award 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 award is made i.e. preaward period. This, however, is subject to the agreement as regards the rate of interest on unpaid sums between the parties. The question as to whether interest would be paid on the whole or part of the amount or whether it should be awarded in the preaward period would depend upon the facts and circumstances of each case. The Arbitral Tribunal in this behalf will have to exercise its discretion as regards (i) at what rate interest should be awarded; (ii) whether interest should be awarded on the whole or part of the award money; and (iii) whether interest should be awarded for the whole or any part of the preaward period. 155. The 1996 Act provides for award of 18% interest. The arbitrator in his wisdom has granted 10% interest both for the principal amount as also for the interim. By reason of the award, interest was awarded on the principal amount. An interest thereon was up to the date of award as also the future i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, we are of the view that the interest awarded by the arbitrator at 18% for the prearbitration period, for the pendente lite period and future interest be reduced to 9%. 20. Noticing the similarity between the aforesaid cases and the present case, we find that the present case is also a fit case wherein this Court needs to exercise its powers under Article 142 of the Constitution of India to reduce the rate of interest. As already discussed hereinabove, taking into consideration the conduct of the respondent in delaying the proceedings at every stage which led to a long pendency of the dispute, we are of the view that, though it will not be in the interest of justice to interfere with the principal award, this is a fit case wherein the interest at all the three stages, that is prereference period, pendente lite and postaward period, requires to be reduced. 21. In the result, we partly allow the appeal and pass the following order: (i) The respondent would not be entitled to any interest for the period between 30th August 1977 and 25th July 1989 and for the period between 14th February 2000 and 15th October 2001; (ii) In respect of the remaining period a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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