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TMI Blog2023 (8) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... any direction towards the rate of interest. Therefore, there is little to no reason, for the High Court to have interfered with the arbitrator s finding on interest accrued and payable. Unlike in the case of the old Act, the court is powerless to modify the award and can only set aside partially, or wholly, an award on a finding that the conditions spelt out under Section 34 of the 1996 Act have been established. The limited and extremely circumscribed jurisdiction of the court under Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality, i.e., that illegality must go to the root of the matter and cannot be of a trivial nature ; and that the tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground . The impugned judgment warrants interference and is hereby set aside to the extent of modification of rate of interest for past, pendente lite and future interest. The 18% per annum rate of interest, as awarded by the arbitrator on 21.01.1999 (in Claim No. 9) is reinstated. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 5 SCR 152 , M/s Raveechee Co. v. Union of India [2018] 5 SCR 138 and Ambica Construction v. Union of India (2017) 14 SCC 323 while deciding this question of pendente lite interest; it was held that the bar to award interest on the amounts payable under the contract would not be sufficient to deny the payment of interest pendente lite. The High Court proceeded to reduce the rate of interest from 18% (as ordered by the arbitrator), to 9% per annum. The remaining amount was directed to be deposited by the appellants as expeditiously as possible, with the interest accrued, not later than 12 weeks from the date of the judgment. On other grounds, it was held that there was no scope for interference in the arbitral award. Contentions of parties 5. The ground pressed by the appellant in the present proceedings, relates to the modification of the rate of interest (relating to award in Claim No. 9), and the scope of this appeal is limited to this question. 6. Mrs. Neeraj Singh, counsel appearing on behalf of the appellant, submitted that their claim was in fact for 24% pendente lite interest, and the arbitrator had already reduced it to the 18% granted. Pointing to pre- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation of Greater Mumbai and Anr v. Pratibha Industries Ltd. Ors. [2018] 14 SCR 1143 to stress on the scope of the inherent powers of the High Court as a constitutional court; Oriental Structural Engineers Pvt. Ltd. v. State of Kerala [2021] 4 SCR 137 wherein the contract did not stipulate a rate of interest, and 18% awarded by the tribunal was held to be excessive and therefore, reduced to 8% simple interest by this court; and similarly Post Graduate Institute of Medical Education and Research, Chandigarh v. Kalsi Construction Company (2019) 8 SCC 726 wherein this court reduced the rate of interest from 18% awarded by the tribunal, to 9% simple interest, despite 18% having been the agreed upon rate of interest, given that the award was passed roughly 20 years prior. Analysis and conclusion 11. Section 31(7)(b) of the 1996 Act, was amended by Act 3 of 2016, w.e.f. 23.10.2015. The pre-amended provision, empowers the arbitrator to award both pre-award and post-award interest, and specifies that the awarded sum would carry an interest of 18% per annum, unless provided otherwise, from the date of award till the date of payment. The pre-amended section, as it st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court and the District Judge were not justified in reducing the rate of interest by following the U.P. Amendment Act. 13. In the present case, given that the arbitration commenced in 1997, i.e., after the Act of 1996 came into force on 22.08.1996, the arbitrator, and the award passed by them, would be subject to this statute. Under the enactment, i.e. Section 31(7), the statutory rate of interest itself is contemplated at 18% per annum. Of course, this is in the event the award does not contain any direction towards the rate of interest. Therefore, there is little to no reason, for the High Court to have interfered with the arbitrator s finding on interest accrued and payable. Unlike in the case of the old Act, the court is powerless to modify the award and can only set aside partially, or wholly, an award on a finding that the conditions spelt out under Section 34 of the 1996 Act have been established. The scope of interference by the court, is well defined and delineated [refer to Associate Builders v. Delhi Development Authority [2014] 13 SCR 895 , Ssangyong Engineering Construction Co. Ltd v. National Highways Authority of India (NHAI) [2019] 7 SCR 522 and Delhi Airpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended without affecting such decision; or (c) where the award contains a clerical mistake or an error arising from an accidental slip or omission. which enabled the court to modify an award. However, that power has been consciously omitted by Parliament, while enacting the Act of 1996. This means that the Parliamentary intent was to exclude power to modify an award, in any manner, to the court. This position has been iterated decisively by this court in Project Director, National Highways No. 45E and 220 National Highways Authority of India v M. Hakeem [2021] 5 SCR 368 : 42. It can therefore be said that this question has now been settled finally by at least 3 decisions [McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] , [Kinnari Mullick v. Ghanshyam Das Damani, (2018) 11 SCC 328 : (2018) 5 SCC (Civ) 106] , [Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies (P) Ltd., (2021) 7 SCC 657] of this Court. Even otherwise, to state that the judicial trend appears to favour an interpretation that would read into Section 34 a power to modify, revise or vary the award would be to ignore the previous law contained in the 1940 Act; as also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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