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TMI Blog2018 (7) TMI 2320X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2005 and the final judgment and order dated 5.11.2015 in MCA No. 3178 of 2015 in F.A. No. 189 of 2005. The High Court partly allowed the appeal of the Respondent-Union of India and quashed Order of the Arbitrators and set aside the amount awarded by them in respect of Claim No. 12. The Arbitrators, under Claim No. 12 awarded interest pendente lite at 12% on the award of Rs. 30 lacs excluding security deposits amounting to Rs. 44,92,800/- per annum from 26.09.1988 to 22.03.2001. Further, the High Court dismissed the review application filed by the Appellant. 3. The Appellant - M/s. Raveechee and Co. and the Respondent-Union of India entered into a contract dated 02.06.1981 for quarrying, stacking and loading stone ballast, broken stone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest pendente lite. The Arbitrators awarded amounts in favour of the Appellant as follows: Claim No. 1 - Rs. 12 lacs, Claim No. 3 - Rs. 8 lacs and Claim No. 5 - Rs. 10 lacs and interest on the total amount of damages (i.e. Rs. 12 lacs + Rs. 8 lacs + Rs. 10 lacs = Rs. 30 lacs) excluding the amount of security deposits. Thus, interest on Rs. 30 lacs from 26.09.1988 to 23.03.2001 at 12 % amounting to Rs. 44,92,800/-. 6. The Appellant, aggrieved by the High Court's judgment and order dated 23.07.2015 filed a review application before the High Court. The High Court dismissed the review application vide judgment and order dated 05.11.2015. The present SLPs are filed against the High Court judgments and orders dated 23.07.2015 & 05.11.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Railway may retain any amount due for payment to the contractor on the pending 'on account bills' so that the amounts so retained may not exceed 10% of the total value of the contract. 16(3): No interest will be payable upon the earnest money and the security deposit or amounts payable to the Contractor under the Contract, but Government Securities deposited in terms of sub Clause (1) of this Clause will be payable with interest accrued thereon. 10. On behalf of the Union of India, it is contended that the Arbitrators by reason of Clause 16(3) could not have awarded interest pendente lite. This contention is incorrect. Ex facie the Clause does not deal with interest pendente lite. In terms, the Clause only bars interest upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ages could attract interest pendente lite for the period from the commencement of the arbitration to the award. Thus, the liability for interest pendente lite does not arise from any term of the contract, or during the terms of the contract, but in the course of determination by the Arbitrators of the losses or damages that are due to the claimant. Specifically, the liability to pay interest pendente lite arises because the claimant has been found entitled to the damages and has been kept out from those dues due to the pendency of the arbitration i.e. pendente lite. 12. We are, therefore, of the view that the Arbitrators rightly awarded interest pendente lite for the period from 26.09.1988 to 23.03.2001 which is the date of the award, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] held that according to the view taken in the case of Irrigation Deptt., State of Orissa (supra), the arbitrator does have the power to award interest pendente lite. The Court observed that it essentially depends upon the ouster in each clause, which means that unless there is an express bar that provides that the arbitrator cannot award interest pendente lite, the grant of interest pendente lite will predominantly be based on the arbitrator's discretion to award the same. 15. In Sayeed Ahmed & Co. v. State of Uttar Pradesh and Ors. [(2009) 12 SCC 26], this Court referred to the decision in Superintending Engineer and Ors. v. B. Subba Reddy [(1999) 4 SCC 423] and observed thus: 11. Two more decisions dealing with cases arising under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 17. Further, this Court considered an identical Clause in the contract in the case of Ambica Constructions v. Union of India [(2017) 14 SCC 323], wherein it observed that the Clause of the GCC did not bar the arbitrator from awarding interest pendente lite and affirmed the award passed by the arbitrator. The three Judge Bench of this Court held that the contention raised by the Union of India based on the Clause of the GCC that the arbitrator could not award interest pendente lite was not a valid contention and the arbitrator was completely justified in granting interest pendente lite. Relying on the three Judge Bench judgment in Union of India v. Ambica Construction (supra) and in Irrigation Deptt., State of Orissa (supra), this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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