TaxTMI 
TaxTMI 
2018 (7) TMI 2320
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.... High Court dated 23.07.2015 in F.A. No. 189 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, sta....
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....ch the Arbitrators had awarded Rs. 44,92,800/- as 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 Cou....
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....nt' bills. Provide also that in case of defaulting contractor 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....
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....rest would arise upon the ascertainment of the damages in the course of the lis. Such damages 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 p....
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....CC 516] and Madnani Construction Corporation Pvt. Ltd. v. Union of India and Ors. [(2010) 1 SCC 549] 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 ....
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.... aspects referred to in the decisions of this Court, it would be for the Division Bench to consider the case on merits. 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 Benc....