S. N. Sapra, J.

1. Respondent, Delhi Development Authority, vide its letter dated October 24, 1980 awarded the work for construction of 169 Dwelling Units, at Phase I, Asian Games Village Complex, Siri Fort, New Delhi, to M/s Anant Raj Agencies, the present petitioner, for an amount of Rs. 2,52,05,751 on the terms and conditions, as contained in the Agreement bearing No. 4/agdi/80-81/1/agdv/80-81.

2. The work was to be executed on a crash basis, in view of the impending Asian Games. The work was completed within the stipulated period. During the execution of the work, Delhi Development Authority, to some extent, changed the original specifications, designs and materials.

3. After the completion of the work, various disputes arose between the parties. Under Clause 25, the Agreement provided for settlement of disputes, by arbitration. Petitioner invoked the arbitration for settlement of their claims, against respondent. Vide letter dated July 5, 1982, the Engineering Member of respondent, appointed Shri H. D. Kochhar, Superintending Engineer, as the sole arbitrator, under Clause 25 of the Agreement, and referred the disputes to him.

4. Shri H. D. Kochhar, entered upon reference on January 4, 1983. He conduct the arbitration proceedings, till May 19, 1983.

5. Shri H. D. Kochhar, retired from the services of respondent. In his place. The Engineering Member, Delhi Development Authority, vide memorandum dated June 21, 1983, appointed Shri G. Subramanyam, Superintending Engineer, (Arbitration-1), D. D. A. , on the ground that Shri Kochhar had vacated the office by retirement.

6. Petitioner, being aggrieved by the appointment of the new arbitrator, filed an application, being O. M. P. No. 93 of 1983, under Section 33 of the Arbitration Act, 1940. In the application, petitioner challenged the appointment of the new arbitrator and sought his removal.

7. During the course of proceedings, and with the consent of the parties, vide order dated November 13, 1984 this Court appointed Shri D. P. Goyal, as the sole arbitrator, in place of Shri G. Subramanyam.

8. Mr. Goel entered upon reference on March 29, 1985.

9. Petitioner made the following claims, before the arbitrator :-

Claim No. I : (a) Grit wash plaster 22mm thick with Sona grit. Claim. . . . . . Rs. 21 lacs. (b) Grit wash plaster 22mm thick with yellow chips. Claim. . . . . . Rs. 3 lacs. (c) Forming grooves 15 mm. deep. Rs. 2. 6 lacs. Claim No. II-Pressed steel door frames with 1. 6 mm strip. Claim. . . . . . Rs. 5. 22 lacs. Claim No. Ill-Pressed stell Mullions. Claim. . . . . . Rs. 0. 50 lacs. Claim No. IV-Steel glazed door with standard section Claim. . . . . . Rs. 1. 20 lacs. Claim No. V-Steel glazed window. Claim. . . . . . Rs. 2. 00 lacs. Claim No. VI-Steel louvered doors. Claim. . . . . . Rs. 1. 61 lacs. Claim No. VII-Steel louvered window. Claim. . . . . . Rs. 5. 00 lacs. Claim No, VIII- Pendente life interest.

10. Before the arbitrator, parties adduced evidence. The time for making and publishing the award was extended from time to time, with the written consent of the parties,

11. The arbitrator made and published his award on January 30, 1987.

12. The arbitrator partly allowed claim No. I, for an amount of Rs. 13,33,542. Claims No. II, III, IV, V, VI and VII were also partly allowed.

13. With regard to claim No. VIII, regarding pendente lite interest, the arbitrator awarded interest at the rate of 15 per cent per annum, from January 14, 1983, till the date of payment or decree, whichever was earlier.

14. The arbitrator filed the award in the court. Petitioner has accepted the award. However, respondent has filed objections to the award, under Sections 30 and 33 of the Arbitration Act, 1940.

15. In the objections, respondent has alleged that in awarding a sum of Rs. 13,33,542, against claim No. I, arbitrator has exceeded his jurisdiction and the same is erroneous on the face of it. The arbitrator has fallen into a grave error, in deciding that for obtaining 15 mm. Deep Groove, by using 15 mm. wooden fillets, the top layer could not be less than the thickness of 18 mm. There is an error of judgment, because, if the thickness of top layer was considered to be 18 mm. , then, the groove, which was being attained by using 15 mm fillet, could not remain for 15 mm. In that case, groove would be 18 mm. , as against 15 mm. From the joint samples, taken by the parties, it was found feasible that 15 mm. top layer could achieve the desired results. It is further alleged that no basis are available in the award, to claim No. I, or the other claims, as to how, the learned Arbitrator has reached to various figures. In fact, the arbitrator has failed to indicate his thought process properly, for calculating the various rates. The arbitrator has failed to give reasons for his award.

16. With regard to Claims No. II, III, IV, V, VI and VII, it is alleged, that the findings are contrary to law and facts of the case, and are based on mis-conception and mis-interpretation of the provisions of Clauses No. 12 and 12a of the agreement, between the parties.

17. According to respondent, the arbitrator has ignored or not considered the entire evidence and documents, as placed on record, by it. The award is illegal and is otherwise invalid.

18. In his reply, petitioner has controverted all the allegations, as made in the objections.

19. The arbitrator is master of law and facts. It is not open to respondent to assail the findings of facts and conclusion of law, as reached by the arbitrator in these proceedings.

20. The claims and disputes, which were involved, were essentially technically in nature. The arbitrator, is a qualified Engineer with vast experience. He held about 21 hearings. The arbitrator has discussed in detail, with both the parties, their detailed analysis, admissibility of various factors/reasonableness of labour/man-hours claimed.

21. On the pleadings of the parties, the following issues were framed :

1. Is the award liable to be set aside for the reasons stated in the objection 2. Relief.

22. Issue No. 1 Learned counsel for parties, agreed that the objections, as well as, reply and the record of the arbitrator be read as evidence, in this case.

23. Shri Harish Malhotra, learned counsel for respondent DDA, in the first place, contends that arbitrator has not given any reasons in support of his findings, as, given in the award. The arbitrator has merely given his conclusions and verdict, without giving any reasons for the same. The arbitrator has not stated, as to how, he has reached the figures, under various claims, which have been awarded by him in favour of petitioner. There is no material on record to support the verdict of the arbitrator. Under the arbitration clause, arbitrator was required to give reasons for his findings and, as, no reasons have been given, so the arbitrator has misconducted himself and the arbitration proceedings. He has placed reliance on the judgment of the Division Bench of this Court, in College of Vocational Studies v. 5. S. Jaitley1.

24. In the next place, Mr. Harish Malhotra, contends that the learned arbitrator, while awarding a sum of Rs. 13,33,542, against claim No. I, has exceeded his jurisdiction. The arbitrator has committed a grave error by deciding, that for obtaining 15 mm. deep groove, by using 15 mm. wooden fillets, the top layer could not be less than the thickness of 18 mm. This error is apparent on the face of the award, because, if the thickness of top layer was considered to be 18 mm. , then the groove, which was being attained by using 15 mm. fillets, could not remain for 15 mm. , and in that event, the groove would be 18 mm. , as against 15 mm. From the joint samples, as taken by the parties, it was found feasible, that 15 mm. top layer could achieve, the desired results.

25. Mr. Malhotra further urges that, even for the sake of argument, it is assumed that the thickness of top layer of grit wash plaster was 18 mm. , then in that eventuality, petitioner was at the most entitled to the rates, of difference of 3 mm. thickness. The amount awarded by the arbitrator, has thus, no nexus with the excessive thickness.

26. The next contention of learned counsel for respondent, is that the arbitrator has mis-interpreted the provisions of Clauses 12 and 12-A of the Agreement, in deciding Claims No. II, III, IV, V, VI and VII. He urges that the arbitrator failed to appreciate that before the clause 12-A could be attracted, the restrictions, as laid down in clauses No. 12 (vi) (a) to (d), were to be crossed collectively, and only, then, the provision of clause 12-A was attracted. As this was not done in this case, so, the benefit of clause 12-A was not available to petitioner. Thus, the arbitrator has mis-conducted in holding that clause 12-A, was attracted. On account of mis-interpretation, Claims No. II to VII, have been wrongly decided.

27. Mr. Manmohan Sarin, learned counsel for petitioner, has contended that almost identical objections, filed by the Delhi Development Authority, concerning the award, made by the same arbitrator, in respect of similar work and similar items of claims, arising in the construction of dwelling units at the Asian Games Village Complex, have been dismissed by this Court, vide judgment dated February 15, 1988, in suit No. 486-A of 1987, titled M/s Krishna Construction Co. v. Delhi Development Authority. 2

28. Mr. Manmohan Sarin, further urges that the arbitrator has given reasons and disclosed the basis of arriving at the amount, in his award. The quantities of work executed were admitted. The rates claimed, and the rates paid by respondent, supported with analysis of rates, were available on the record. The rates, awarded thus, are easily derivable by deciding the admitted quantities of work, executed with the awarded amount. Even otherwise, the award of the arbitrator, in respect of claim No. 1, is just reasonable.

29. With regard to Claims No. II to VII, Mr. Sarin, argued that the interpretation, as given by the learned Arbitrator, in respect of clauses 12 and 12-A, finds support from the judgment of the Supreme Court, in Civil Appeal No. 206 of 1961, Union of India v. Khetra Mohan Banerjee,3 and suit Nos. 110-A/85 and lll-A/85, Mjs Sanyukta Nirmata v. Delhi Development Authority and another decided en May 16, 1986.

30. The scope and extent of examination, by the Courts, of the award made by an arbitrator, has been laid down in various decisions. As held, by the Division Bench of this Court in College of Vocational Studies (supra), there are limits for judicial review ability and the Courts exercise limited jurisdiction in the proceedings, for setting aside an award. The Courts do not exercise appellate jurisdiction over the verdict of on arbitrator and, as such, cannot go into the merits of the case, nor the Courts can reappraise and re-examine the evidence, led before the arbitrator. The Courts, also, cannot look into the insufficiency of the evidence, led before the arbitrator.

31. Where, under an agreement, the arbitrator is required to give reasons for his award, he is not under an obligation to give a detailed judgment or detailed reasons. By reason, it means, that the award should be speaking award. In such cases, what is expected from the arbitrator is, that he should indicate his mind, whereby, it can be ascertained, as to how, he has arrived at a particular conclusion. In case of reasoned award, the arbitrator is required to indicate the trend of his thought process, but not his mental meanderings. When the finding of the arbitrator is based on no evidence, then certainly, the Courts can go into such finding and set aside the same, as the award being perverse one. In other words, the Courts can set aside the award, only if, it is apparent on the face of the award, that there is no evidence to support the conclusions, or if, the award is based upon any legal proposition, which is erroneous. The arbitrator is entitled to decide rightly or wrongly, but if, an error of law appears on the face of the award, then the Courts can interfere into the same.

32. However, it is not for the Courts to see the reasonableness of the reasons, given by the arbitrator or insufficiency of the reasons. Sufficiency of the reasons depends upon the facts and circumstances of each case. Reasons are the links on the material, documentary or oral evidence, adduced before the arbitrator, on which certain inferences are drawn and conclusions are made. There must be some rational nexus between the two, indicated in the award.

33. As held by the Supreme Court in Gujarat Water Supply and Sewerage Board v. Unique Erectors (Gujarat) (P) Ltd. , and anuthar,5 award should be read reasonably, as a whole to find out the implication and the meaning thereof. Short intelligible indications of the grounds should be discernible, to find out the mind of the arbitrator for his action, even if, it be enjoined that in all cases of award by an arbitrator, reasons have to be stated. Reasons should not only be intelligible, but should also deal either expressly or imnliedly with the substantial points, that had been raised.

34. In Hindustan Tea Co. v. M/s. K. Shashikant and Co. and another6 the Supreme Court held :

"the award is reasoned one. The objections which have been raised against the award are such that they cannot indeed be taken into consideration within the limited ambit of challenge admissible under the scheme of the Arbitration Act. Under the law, the Arbitrator is made the final arbiter of the" dispute between the parties. The award is not open to challenge on the ground that the Arbitrator has reached a wrong conclusion or has failed to appreciate facts. Strong reliance was placed by the appellants learned counsel on an old Madras decision in Yogambal Boyee Ammani Ammal v. Naida Filial Markayar. 1 In our view, on the facts of this case challenge to the award is not permissible by taking the stand that the Arbitrator acted contrary to the provisions of Section 70 of the Contract Act. In these premises the objections filed to the award have to be rejected. We direct the award to be made a rule of the Court. The parties shall bear their own costs throughout".

35. Similar grounds of challenge were raised by respondent, in its objections, under Sections 30 and 33 of the Arbitration Act, 1940, against the award, made by the same arbitrator, in respect of claims, identical in nature, to the present claims, in suit No. 486-A of 1987 M/s. Krishna Construction Co. v. DDA.

36. All these contentions were repelled by this court, vide judgment dated February 15, 1988, and the award was made a Rule of the court.

Claim No. I

37. This claim deals with an item for grit wash plaster. Clause 10. 6 of the Agreement (schedule of quantity), reads as under :

"22 mm. thick grit washed plaster with an underlayer of 12 mm. thick plaster 1 : 5 (1 cement : 5 coarse sand and top layer of 10 mm. thick cement concrete 1:1:3 (1 cement : 1 coarse sand : 3 stone grit upto 10 mm nominal size), finally washed with wire brushes. "

38. During execution of the work, it is admitted that the aforesaid item, as provided in the original agreement, was found unworkable, on the specifications and, as such, was not acted upon. Respondent, after a lot of experimentation, arrived at an item, which was found feasible to execute and was acceptable to it. The arbitrator has observed that in new experimentation, it is most appropriate to record joint observations, to exactly assess the quantity of material, required, labour deployed/costs, in case of specialised labour, but such record of joint observation, was not produced. Petitioner claimed that joint observations were made and the record was with the respondent. It has been proved before the arbitrator that 15 mm. deep grooves, using 15 mm. deep kail wood fillets, was required. The arbitrator held that the item has numerous components of extra and additional work. The thickness of the samples, taken jointly at site, was recorded and was found, that the same was varying from 15. 5 mm. to 19mm. It was also established that thickness of 18mm. of top layer was appropriate for 15 mm. deep fillets, which have to run over the protrusion and tolerable unevennesses of the under layer. However, petitioner failed to establish the use of sona grit on record. Thus, not only, the arbitrator has given reasons for his findings against claim No. 1, but there was sufficient material before him, to arrive at the conclusion. As observed above, this court is not sitting in appeal, over an award of the arbitrator. Thus, the finding of the arbitrator is bassed on evidence and full reasons have been given for the same. There is no error, apparent on the face of the award.

39. Claim No. II It is not in dispute, that the original Agreement provided for door and window frames of teakwood, which were later, and during the execution of the contract, substituted by respondent to pressed steel frames, made of only 16 mm thick sheet. The masonry work had already in progress and drawing for frames were handed over on January 16, 1981, and thereafter, preparation of samples, their approval and manufacture, naturally had taken time. The learned arbitrator thus decided, that the rate for door frames, was at first derivable, under clause 12 (iv) from DSR item of pressed steel door frames with 279 mm girth etc. For the value of the work done for pressed steel frames, beyond Rs. 10,21,579 the market rates as per the provisions of clause 12a was admissible.

40. Claim No. Ill Similarly, the arbitrator held that the rate of the item was derivable on DSR basis, as per clause 12 (iv) of the Agreement. Claims IV, V, VI and VII

(41) THE arbitrator considered four sub-clauses 12 (vi) (a) to (d), and held that clause 12-A, was applicable, as soon as, any of the four restrictions are met with. According to him, each of the sub-clauses, are independent and applicable individually, for attracting clause 12-A. He rightly held that the provisions of clause 12-A become applicable to these claims.

(42) THE arbitrator has given reasons for deciding all these claims, and is based on evidence. There is no mis-conduct on the part of the arbitrator. There is no error, apparent on the face of the award.

(43) CLAIM No VIII The learned arbitrator, has awarded interest at the rate of 15 per cent per annum, from January 14, 1983, till the date of payment or decree, whichever is earlier. In other words, the interest has been awarded from the date, Shri Kochhar had entered upon reference.

(44) MR. Harish Malhotra, contends that the arbitrator has exceeded his jurisdiction in awarding the pendente life interest. Neither there was any agreement for payment of interest, nor the arbitrator was a court, having power to award interest. According to him, the arbitrator can award pendente lite interest only, in a case, where the reference is made by the court in a suit. Reference by the court is different from reference in suit. Though, reference in suit is a reference by the court, but, the reference by the court, may not, necessarily be a reference in suit by the court to arbitrator. As, reference in the present case, is not in suit, to the arbitrator, so, no pendente life interest could be awarded by the arbitrator.

(45) HE has placed reliance upon the judgments in Executive Engineer, Irrigation, Galimala and others v. Abhaduta Jena9 and Union of India v. Globe Trading Corp. 9

(46) MR. Sarin, contends that the reference of disputes to arbitrator, was made by the High Court, in O. M. P. No. 93 of 1983, vide judment dated November 13, 1984, so, the reference was made by the court. Hence, the arbitrator was vested with the same powers, as that of the court, to award pendente lite interest. Reference in suit, according to him, means reference made with the intervention of the court.

(47) HE has placed reliance upon the judgmens in Firm Madanlal Roshan Lal Mahajan v. Hukam Chand Mills Ltd. 10 The State of Madhya Pradesh v. M/s. Saith and Skelton (P) Ltd. andothers, Executive Engineer, Irrigation, Galimala and others v. Abnaduta Jena, (supra) and Uttam Singh Duggal and Co. v. U. O. I. and others12.

(48) FOR considering the question of interest, the period can be conveniently divided into two (1) from the date of reference to the making of award and (2) from the date of award, till payment or the decree, whichever is earlier.

(49) FIRST, I will deal with the question of pendents lite interest, from January 14, 1983, to January 30, 1987. In other words, the period, when the first arbitrator had entered upon reference and when the award was made and published.

(50) IN State of Madhya Pradesh (supra), disputes arose between the parties. The firm appointed Shri T. R. Sharma, as its nominee arbitrator. The Director General of Disposal and Supplies, on behalf of State of Madhya Pradesh, appointed first, Shri G. S. Gaitonde, as arbitrator, but, when he resigned, appointed Shri R. R. Desai, as an arbitrator. The two arbitrators appointed one Shri R. C. Soni, as an Umpire. The arbitrators dis-agreed in their views, resulting in the matter, being referred to the Umpire. Appellant filed an application under Section 5 of the Arbitration Act, 1940, thereby challenging the appointment of Shri T. R. Sharma and R. R. Desai. When the matter was pending before the Supreme Court, and with the consent of the parties, Shri V. S. Desai, Senior Advocate, was appointed as the arbitrator, by the Supreme Court. In his award, the arbitrator awarded interest, at the rate of 9 per cent per annum, on the balance amount, from the date, on which the final inspection of the pen stocks took place. The Supreme Court held :

"from the decision in (1967) 1 SCR 105 [LQ/SC/1966/150] =- (AIR 1967 SC 1030 [LQ/SC/1966/150] ) it is clear that if all the disputes are referred for arbitration, the arbitrator has power to award interest pendente lite i. e. , during the pendency of the arbitration proceedings.

(51) IN the case before us there is no controversy that all the disputes including a claim for payment of the amount with interest was referred to the arbitrator. The arbitrator, as pointed out earlier, found that the firm was entitled to the payment as price in the sum of Rs. 1,79,653. 18 p. The arbitrator has further found that this amount became payable as balance price for the goods supplied by the firm on June 7, 1958, on which date the final inspection took place. If that is so, Section 61 of the Sale of Goods Act, 1930 squarely applies and it saves the right of the seller (In this case the firm) to recover interest, where by law interest is recoverable. "

(52) IN Executive Engineer, Irrigation, Galimala and others, (supra), the Supreme Court was considering the question of award of interest by an arbitrator, to whom a reference was made without intervention of the Court. After discussing the various decisions, their Lordships held :

"the question of award of interest by an arbitrator was considered in the remaining cases to which we have referred earlier. Nachiappa Chettiar v. Subramaniam Chettiar (supra), Satinder Singh v. Vmrao Singh (supra). Firm Madanlal Roshanlal Mahajan v. Hukamchand Mills Ltd. (supra), Union of India v. S. Bungo Steel Furniture Private Limited (supra), Ashok Construction Company v. Union of India (supra) and State of Madhya Pradesh v. Mjs. Saith and Skelton Private Limited (supra) were all cases in which the reference to arbitration was made by the Court, of all the disputes in the suit. It was held that the arbitrator must be assumed in those circumstances to have the same power to award interest as the Court. It was on that basis that the award of pendente lite interest was made on the principle of Section 34, Civil Procedure Code in Nachiappa Chettiar v. Subramaniam Chettiar (supra), Firm Madanlal Roshanlal Mahajan v. Hukamchand Mills Limited (supra). Union of India v. Bungo Steel Furniture Private Limited (supra) and Skelton Private Limited (supra). . . . . . "

It was further held :". . . . . . . . . The case certainly supports him and in the cases to which the 1978 Interest Act applies the award of interest prior to the proceeding is not open to question. In regaid to perdente life interest, that is, interest from the date of reference to the dale of the award, the claimants would not be entitled to the same for the simple reason that the arbitrator is not a Court within the meaning of Section 34 of the Civil Procedure Code, nor were the references to arbitration made in the course of suits. In the remaining cases which arose before the commencement of the Interest Act, 1978, the respondents are not entitled to claim interest either before the commencement of the proceedings are during the pendency of the arbitration. They are not entitled to claim interest for the period prior to the commencement of the arbitration proceedings for the reason that the Interest Act, 1839 does not apply to their cases and there is no agreement to pay interest or any usage of trade having the force of law or any other provision of law under which the claimants were entitled to recover interest. They are not entitled to claim pendente life interest as the arbitrator is not a Court nor were the references to arbitration made in suits. One of the submissions made on behalf of the respondents was that in every case, all disputes were referred to arbitration and the jurisdiction of the arbitrator to award interest under certain circumstances was undeniable. The award not being a speaking award, it was not permissible to speculate on the reasons for the award of interest and the Court was not entitled to go behind the award and disallow the interest. It is difficult to agree with this submission. The arbitrator is bound to make his award in accordance with law. If the arbitrator could not possibly have awarded interest on any permissible ground because such ground did not exist, it would be open to the Court to set aside the award relating to the award of interest on the ground of an error apparent on the record. On the other hand, if there was the slightest possibility of the entitlement of the claimant to interest on one or other of the legally permissible grounds, it may not be open to the Court to go behind the award and decide whether the award of interest was justifiable. We do not want to enter into a discussion on the legality or propriety of a non-speaking award as we understand the question is now awaiting the decision of a Seven Judge Bench. In the light of what we have said above, Civil Appeals Nos. 120 and 121 of 1981 are dismissed. Civil Appeals Nos. 6019-22 of 1983 and Civil Appeal No. 2257 of 1984 are allowed to this extent that interest during the pendency of the arbitration proceedings is disallowed and the rest of the civil appeals are allowed to the extent that both interest prior to the proceedings and interest during the pendency of the proceedings are disallowed. There will be no order as to costs. Special Leave Petition 8640/81 is disposed of on the same lines. "

(53) IN Union of India v. Globe Trading Corp. (supra), relying upon the judgment in Executive Engineer, Irrigation (supra), D. P. Wadhwa, J. has held : interest pendente lite on the analogy of the provisions of Section 34 of the Code. If, however, reference is in suit, as provided in Chapter IV of the Arbitration Act, the arbitrator will have power to award interest pendente Ute like a court under Section 34 of the Code. "

(54) IN Uttam Singh Duggal and Co. (supra), the facts were that initially one Mr. Narang, had been appointed as a sole arbitrator, in terms of the arbitration clause. However, he resigned. There-after, Shri Krishnamurthy and then Shri Ch. Prabhakar Rao was appointed as the sole arbitrator. The Contractor was not satisfied with the appointment of Ch. Prabhakar Rao, as the arbitrator. He moved an application for his removal in the High Court of Delhi. The petition was allowed and by order dated April 10, 1985, Shri Rao was removed as the arbitrator and in his place, Shri J. P. Singhal, was appointed as the sole arbitrator. The arbitrator awarded interest, including the pendente life and future. Relying upon the judgment in The State of Madhya Pradesh (supra), C. L. Chaudhry, J. held :

"the facts of this case are quite identical with the facts of the case of State of Madhya Pradesh (supra). So following the dictum of the Supreme Court in the case of Executive Engineers (Irrigation) (supra), I have no hesitation in holding that the reference in this case to the arbitration was made through the Court. As such the arbitrator had the power to award pendente lite interest. In this connection reference is also made to another decision of the Supreme Court in Madan Lal Roshanlal Mahajan v. Hukamchand Mills Ltd. (supra), wherein it was held that the arbitrator could award pendente lite interest. "

(55) ON a casual reading, there appears a conflict between the aforesaid two judgments, i. e. Union of India v. Globe Trading Corp. and Uttam Singh Duggal and Co. But, on deeper examination, there remains no doubt, that the facts in Union of India v. Globe Trading Corp. and in Uttam Singh Duggal and Co. were not identical. The facts of the case of State of Madhya Pradesh (supra), were identical with the facts of the case Uttam Singh Duggal and Co. (supra).

(56) SIMILARLY, the facts of this case, are quite identical with those of the case of State of Madhya Pradesh (supra). In Executive Engineer, Irrigation (supra), the Supreme Court considered and discussed the case of State of Madhya Pradesh (supra), and observed that in this case the reference to arbitration, was made by the Court, of all the disputes, in the suit.

(57) SO, relying upon the judgment in Uttam Singh Duggal and Company (supra), and following the dictum of the Supreme Court, in the case of State of Madhya Pradesh (supra), I hold that not only the reference in the present case, to the sole arbitrator, was made through the Court, but the arbitrator was also appointed by the Court. As such, the arbitrator was fully competent and has the jurisdiction to award pendente lite interest.

(58) WITH regard to the future interest, from the date of award, till the passing of decree or the payment, whichever is earlier, this proposition of law, stands concluded by the Supreme Court in Gujarat Water Supply and Bewerage Board v. Unique Erectors (Gujarat) (P) Ltd. , and another (supra), whereby it was held :

"having regard to the position in law emerging from the decision of this Court in Executive Engineer (Irrigation) Galimala (supra) and Section 29 of the Arbitration Act, 1940 and Section 34 of the Code of Civil Procedure, we would modify the grant of interest in this case. The arbitrator has directed interest to be paid at 17% per annum from 6-8-1981 upto the date of decree viz. , 17-6-1986. Since in this case, the reference to arbitration was made, after the commencement of the (Interest Act, 1978), the arbitrator under Section 3 (l) (a) of the said Act was entitled to award interest from 6-8-1981 till 21-8-1984 in view of this Courts decision in Abhaduta Jenas case, (supra). In the light of the same decision, he could not have awarded interest for the period from 22-8-1984 till the date of the publication of the award viz. 19-7-1985. So far as interest for the period from the date of the award (19-7-1985) till the date of the decree is concerned, the question was not specifically considered in Abhaduta Jenas case (supra) but special leave had been refused against the order insofar as it allowed interest for this period. We think interest should be allowed for this period, on the principle that this Court can, once proceedings under Sections 15 to 17 are initiated, grant interest pending the litigation before it, i. e. from the date of the award to the date of the decree. It may be doubtful whether this can be done in cases arising before the Interest Act, 1978 in view of the restricted scope of Section 29 of the Arbitration Act. But there can be no doubt about the courts power to grant this interest in cases governed by the Interest Act, 1978 as Section 3 (l) (a) which was applied by Abhaduta Jena to arbitrators will equally apply to enable this Court to do this in these proceedings. "

(59) THUS, I exercise my power, under Section 3 (l) (a) of the Interest Act, 1978, read with Section 29 of the Arbitration Act, 1940, and direct that the principal amount shall carry interest, at the same rate, till the date of actual payment.

(60) ISSUE No. 1 is thus, decided against respondent. Under the circumstances, the objections filed by respondent, are hereby dismissed. The award dated January 30, 1987, is made a Rule of the Court and decree, in terms of the award, is passed. Award shall form part of the decree.