L.N. Mittal, J.@mdashThis is revision petition filed by State of Haryana (in short, the State) under Article 227 of the Constitution of India to assail
judgment dated 27.03.2008 (Annexure II) passed by learned Additional District Judge, Karnal. Respondent No. 1-M/s. Bridge & Roof Company
(India) Limited (A Govt. of India undertaking) (in short, the Company) executed work of the petitioner-State. There was dispute between the
parties. The dispute was referred to respondent No. 2-Arbitrator who gave award dated 26.11.1999 awarding Rs. 61.37 lacs to be paid by
petitioner to respondent No. 1 less Rs. 5.32 lacs awarded to the petitioner.
2. Respondent No. 1 filed application for making the award as rule of the Court under Sections 14 and 17 of the Arbitration Act, 1940 (in short,
the Act) along with interest @ 24% per annum whereas petitioner State filed objections u/s 30 of the Act for setting aside the award. Learned
Additional Civil Judge (Senior Division), Karnal vide judgment dated 01.03.2007 dismissed the objection petition filed by State and allowed the
application made by respondent No. 1 and made the award as rule of the Court.
3. State of Haryana preferred appeal against judgment of the trial Court whereas respondent No. 1 filed cross-objections in the said appeal
claiming future interest on the awarded amount from the date of decree till recovery. Learned Additional District Judge, Karnal vide impugned
judgment dated 27.03.2008 dismissed the appeal as well as the cross-objections. Feeling aggrieved, State has filed this revision petition.
4. Respondent No. 1 has also filed CR No. 2101 of 2010 claiming future interest on the awarded amount @ 24% per annum from the date of
decree till recovery. The said revision petition shall also stand disposed of by this common order.
5. I have heard learned counsel for the parties and perused the case file.
6. Counsel for the petitioner-State contended that the award can be set aside even on merits u/s 30 of the Act. The contention cannot be
accepted. The award can be set aside u/s 30 of the Act on limited grounds i.e. Arbitrator has misconducted himself or the proceedings or the
award has been made after supersession of the arbitration proceedings or after the arbitration proceedings became invalid or the award has been
improperly procured or is otherwise invalid. In the instant case, the petitioner-State filed objections u/s 30 of the Act to challenge the award mainly
on merits. However, arbitration award cannot be challenged on merits. Counsel for petitioner-State relied on judgment of Hon''ble Supreme Court
in case of State of Rajasthan and Another Vs. Ferro Concrete Construction Pvt. Ltd., However, in that case, the award was not set aside on
merits but it was held that if award is passed on ''no evidence'', then it amounts to legal misconduct. In that case, award was passed only on the
basis of claim statement without any evidence. Thus in that case, it was not laid down that Arbitrator''s award can be set aside on merits, rather it
was laid down that passing of award on the basis of ''no evidence'' is misconduct within the meaning of Section 30 of the Act. In the instant case,
however, the award is not passed on ''no evidence''. Consequently the judgment in the case of State of Rajasthan (supra) has no applicability to the
instant case.
7. Both the courts below have discussed in detail the objections raised by the State and have arrived at concurrent finding against the State. There
is no infirmity, much less illegality, perversity or jurisdictional error in impugned judgments of the Courts below in this regard so as to call for
interference by this Court at the instance of State of Haryana by exercising power under Article 227 of the Constitution of India. Accordingly CR
No. 5832 of 2008 filed by the State of Haryana is devoid of merit.
8. Now coming to CR No. 2101 of 2010, counsel for the Company contended that u/s 29 of the Act, Court has discretion to award future interest
from the date of decree of trial Court till recovery and there is no reason to decline the same to the Company. It was pointed out that the trial
Court did not advert to the aforesaid claim of the Company whereas the lower Appellate Court rejected the same without assigning any reason.
9. On the other hand, counsel for State contended that future interest cannot exceed 6% per annum in view of Section 34 of the CPC (in short,
CPC). It was also contended that the lower Appellate Court has exercised its discretion by declining to grant future interest and there is no reason
to interfere with the same.
10. I have carefully considered the rival contentions. u/s 29 of the Act, discretion has been given to the Court to grant future interest from the date
of decree till recovery at such rate as the Court deems reasonable. Thus award of future interest as well as rate thereof has been left to the
discretion of the Court. In the instant case, the trial Court did not adjudicate upon the claim of the Company regarding future interest at all whereas
the lower Appellate Court declined the same without assigning any reason. On the other hand, ordinarily in case of money decree, future interest
should also be awarded unless there is some special or exceptional circumstance to deny the same. In the instant case, there is no special or
exceptional reason or circumstance to deny the relief of future interest to the Company. On the other hand, the Company has been deprived of the
decretal amount and, therefore, should be compensated by awarding future interest also at reasonable rate.
11. As regards rate of interest, Section 34 CPC, which limits the future rate of interest to 6% per annum in the case of non-commercial transaction,
is not applicable to this case because Section 29 of the Act specifically empowers the Court to award future interest at such rate as the Court
deems reasonable, without fixing any lower or upper limit Consequently, future interest has to be awarded at such rate as the Court deems
reasonable, without any fetters of upper or lower limits.
12. In the instant case, keeping in view all the circumstances and also the fact that amount has to be paid by State of Haryana whereas the
Company is Government of India undertaking, I deem it reasonable to award future interest @ 9% per annum on the decretal amount from date of
decree of the trial Court till recovery. It is ordered accordingly. Resultantly CR No. 5832 of 2008 filed by State of Haryana is dismissed whereas
CR No. 2101 of 2010 filed by the Company is allowed to the extent indicated hereinbefore.