TaxTMI 
TaxTMI 
2024 (9) TMI 1742
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.... affirmed the finding of the Arbitrator and rejected the prayer. However, allowing the appeal, the District Court Order passed by the District Judge in Civil Appeal no.86 of 11.11.2002 dated 04.03.2003 held that the appellant will be entitled to post award interest. By the order impugned before us, the High Court Order dated 14.05.2019 passed by the High Court of Punjab and Haryana in Civil Revision No. 2561 of 2003 allowed the revision and set aside the District Court order while holding that the contract between the parties did not permit grant of post award interest. 2.1 For the reasons to follow, while allowing the appeal we have held that as this is a case arising out of the Arbitration and Conciliation Act, 1996 Hereina....
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....ed the appeal and by Order dated 04.03.2003 directed payment of post award interest at the rate of 18% on the Award amount. The appellant was also directed to approach the trial court for recovery of the same. 7. Being aggrieved, the Telecom Department, the respondent herein, filed a Civil Revision Petition before the High Court which was allowed by the High Court by the order impugned before us. The High Court looked into sub-clause (iv) of Clause 1 of the Contract entered between parties which provides for the scope of the grant of interest on certain payment. The sub clause is as under:- "No interest will be payable on the earnest money or security deposit amount or any amount payable to the contractor under the contract." ....
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.... "31 Form and contents of arbitral award. "... 7(a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. (b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of two per cent, higher than the current rate of interest prevalent on the date of award, from the date of award to the date of payment." ....
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....must be paid against. At this juncture, it is crucial to note that both clauses (a) and (b) are qualified. While, clause (a) is qualified by the arbitration agreement, clause (b) is qualified by the arbitration award. However, the placement of the phrases is crucial to their interpretation. The words, "unless otherwise agreed by the parties" occur at the beginning of clause (a) qualifying the entire provision. However, in clause (b), the words, "unless the award otherwise directs" occur after the words "a sum directed to be paid by an arbitral award shall" and before the words "carry interest at the rate of eighteen per cent". Thereby, those words only qualify the rate of postaward interest. 25. Section 31(7)(a) confers a wide disc....