Contractual bar on interest limits arbitral power to grant pendente lite interest under the 1996 Act.

An advocate has implied authority to conduct a matter and may limit the grounds pressed before the court; if a party accepted that representation, it cannot later revive abandoned grounds in appeal on the complaint that counsel lacked authority. Under the Arbitration and Conciliation Act, 1996, pendente lite interest remains subject to party agreement under Section 31(7)(a). Where the contract bars interest, the arbitrator has no power to award it, and earlier reasoning under the Arbitration Act, 1940 cannot be carried forward to override that contractual prohibition. The award of pendente lite interest was therefore set aside, while post-award interest was left intact.

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Issues: (i) whether grounds not pressed before the Single Bench could be revived in appeal on the plea that counsel lacked authority to confine the challenge; (ii) whether, under the Arbitration and Conciliation Act, 1996, pendente lite interest could be awarded when the contract barred payment of interest, and whether the award of such interest was liable to be set aside.

Issue (i): whether grounds not pressed before the Single Bench could be revived in appeal on the plea that counsel lacked authority to confine the challenge

Analysis: An advocate engaged by a litigant has implied authority to conduct the matter and may choose to urge some grounds while not urging others. Once the litigant does not dispute the advocate's authority to represent it, the party cannot later assail the court's acceptance of the limited challenge. If the party believed counsel had acted contrary to instructions, the proper course was to move the court below, not to raise the point for the first time in appeal.

Conclusion: The limited challenge before the Single Bench was accepted, and the appellant could not revive the abandoned grounds in appeal.

Issue (ii): whether, under the Arbitration and Conciliation Act, 1996, pendente lite interest could be awarded when the contract barred payment of interest, and whether the award of such interest was liable to be set aside

Analysis: Section 31(7)(a) of the Arbitration and Conciliation Act, 1996 makes pendente lite interest subject to the agreement between the parties. The rule in the earlier decision concerning the Arbitration Act, 1940, that a general bar on interest would not by itself exclude the arbitrator's power, could not be imported into the 1996 Act. In light of the later Supreme Court decision, an arbitrator under the 1996 Act has no power to grant pendente lite interest where the contractual clause prohibits it, even if the clause does not expressly refer to the arbitrator's authority.

Conclusion: The award of pendente lite interest was rightly held unsustainable and was set aside, while post-award interest was left undisturbed.

Final Conclusion: The appeal succeeded only to the extent of setting aside pendente lite interest under the arbitral award, and the remainder of the order was maintained.

Ratio Decidendi: Under the Arbitration and Conciliation Act, 1996, the arbitrator's power to grant pendente lite interest is subject to the parties' agreement, and a contractual prohibition on such interest excludes that power.

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