Atul Kumar Jain, J.This Civil Misc. Appeal has been filed by the appellants under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act of 1996) against the order dated 26.05.2010 in Arbitration Case No. 57/2009 passed by Additional District Judge, Jhalawar whereby objections filed by the appellants U/s. 34 of the Act of 1996 were rejected.
2. I have heard both the parties and perused the record of the case. I have also gone through the relevant rulings brought to my knowledge. It has been argued by the appellant that award dated 03.02.2009 was passed by a Retired Judge of this court, who was the sole arbitrator appointed by this court. Dispute was concerning the work of construction of approach road to Chuleriya and gross drainage work amounting to Rs. 36,35,064.91. After hearing both sides the arbitrator passed an award in favour of the respondent to the tune of Rs. 19,64,310.00/- with interest @ 9% per annum with effect from 01.02.2009 while deciding all the issues in favour of the respondents.
3. Objections filed by the appellants were dismissed by D.J. Jhalawar by the impugned order 26.05.2010.
4. It has been argued by the appellants that the other party was fully paid the remuneration as per measurement taken and recorded in the Measurement Book and accordingly the payments were made and the same were accepted by the claimant. It has been argued by the appellants that in the circumstances, question of payment of any interest does not arise. It has further been argued by the appellants that the Contractor was asked a number of times to maintain pro rata progress and to execute the work accordingly as per terms and conditions of the Contract. It was further argued that once the claimant has accepted final payment without challenge within a period of 30 days from the date of acceptance of the payment of the final bill, in terms of Clause 7A of the contract, he is not entitled to the benefit of Clause 45 of the Contract.
5. Appellants rely upon the following rulings of the Apex Court:--
"Civil Appeal No. 3415/2007 Oil and Natural Gas Corporation Ltd. v. Western Geco International Ltd. Decided on 04.09.2014- In this case it was held by the Apex Court that an award against the fundamental policy of Indian Law will be bad. It was further explained that if the award affects the rights of a citizen then the arbitrator should adopt a judicial approach in the matter. Judicial approach ensures that the authority acts bonafide and deals with subject in a fair, reasonable and objective manner and that its decision is not actuated by any extraneous consideration. If the arbitrator does not apply his mind then the award will be bad. It was further held by the Apex Court that a decision which is perverse or so irrational that no reasonable person would have arrived at the same, will not be sustained in a court of law. In the circumstances of the case the award was modified by the Apex Court and the interest amount payable to the respondents was reduced to some extent.
2. Union of India (UOI) Vs. Concrete Products and Const. Co. Etc., AIR 2014 SC 1914 : (2014) AIRSCW 1690 : (2014) 5 JT 164 : (2014) 3 SCALE 372 : (2014) 4 SCC 416 -In this case it was held that Section 31(7) of the Act of 1996 uses the words "unless otherwise agreed by the parties" and thus it categorically clarifies that the arbitrator is bound by the terms of the contract insofar as the award of interest from the date of cause of action to the date of award. Where the parties had agreed that no interest shall be payable, the Arbitral Tribunal cannot award interest between the date when the cause of action arose to the date of award. Hence arbitrator could not have awarded any interest from the date when the recovery was due till the award was made.
On the other hand respondent relies upon the following rulings-
"(1) Continental Construction Ltd. Vs. State of U.P., (2003) 3 ARBLR 320 : (2004) 97 CLT 273 : (2003) 2 JT 410 Supp : (2003) 8 SCALE 14 : (2003) 8 SCC 4 : (2003) 48 SCL 312 : (2003) 3 SCR 1002 Supp .- In this case it was held that even if the award is a non-speaking one, the jurisdiction of the court U/s. 30 of the Arbitration Act, 1940 will be very limited and it can interfere only when the arbitrator has misconducted himself or there exists an error apparent on the face of the record or when the umpire acted arbitrarily, irrationally, capriciously or in conscious disregard of the contract.
(2) State of Rajasthan Vs. Puri Construction Co. Ltd. and Another, (1995) 1 ARBLR 1 : (1994) 6 JT 412 : (1994) 4 SCALE 419 : (1994) 6 SCC 485 : (1994) 3 SCR 616 Supp : (1995) 1 UJ 179 .--In this case it was held that the arbitrator is a judge by the choice of the parties and he may be having no legal background and so the award passed by him can be challenged only on the limited grounds mentioned in the Act of 1996. Award of the Arbitrator cannot be challenged on the ground that an alternative view of law is possible. It was further held in this case that if the arbitration agreement does not prohibit and if a party makes a claim for interest, the arbitrator will certainly have the power to award interest pendente lite for doing complete justice between the parties, arbitrator have been given the power to award interest if the circumstances demand.
3. Indu Engineering and Textiles Ltd. Vs. Delhi Development Authority, AIR 2001 SC 2668 : (2001) 2 ARBLR 486 : (2001) 3 CompLJ 325 : (2001) 5 JT 404 : (2001) 4 SCALE 323 : (2001) 4 SCALE 317 : (2001) 5 SCC 691 : (2001) 3 SCR 916 : (2001) AIRSCW 2524 : (2001) 5 Supreme 111 - In this case it was held that unless view of the arbitrator is vitiated by a manifest error on the face of the award or is wholly improbable or perverse, it will be not open to court to interfere.
4. Durga Charan Rautray Vs. State of Orissa and Another, (2011) 12 JT 275 : (2011) 2 SCALE 316 : (2012) AIRSCW 87 : (2011) 7 Supreme 495 .- In this case it was held that the appellant cannot be deprived from seeking redressal by way of arbitration, merely because he had received payments after the preparation of the final bill, without raising any objections. Only because the respondent has accepted the final bill, the same would not mean that he was not entitled to raise any claim. It is not the case of appellant that while accepting the final bill, the respondent had unequivocally stated that he would not raise any further claim. In absence of such declaration, the respondent cannot be held to be estopped or precluded from raising any claim."
6. The ruling of Durga Charan (supra) of the Apex Court is perfectly applicable to the case pending before us. In the contract there was no clause prohibiting the contractor from claiming interest and so the award of interest as per circumstances of the case was perfectly within the powers of the arbitrator. Acceptance of the final payment under protest (U.P.) by the claimant will also not debar the claimant from putting his claim before the arbitrator. Impugned Award does not appear in any way to be against the public policy of India. Award appears to be passed bonafide by the arbitrator who was appointed by the choice of the parties. Such an award cannot be and could not have been interfered by the court below as well as by this court and hence the impugned order dated 26.05.2010 by which District Judge, Jhalawar has dismissed the objections filed by the State of Rajasthan does not deserve to be interfered with in this Civil Misc. Appeal.
7. Thus the appeal filed by the State of Rajasthan and Others is devoid of any force and hence dismissed. Stay Petition also stands disposed of accordingly.
Copy of the order be sent to the court below along with the record of the case.