A.M. Bhattacharjee, Actg. C.J.

1. The arbitrator, while making his award in respect of the several disputes between the parties referred to him for arbitration declined to award any pendente lite interest on the ground that no dispute relating to any claim for interest was referred to him for arbitration. On appeal, however, the learned District Judge, without deciding as to whether any claim for interest was at all referred to arbitration, held that "it was within the jurisdiction of the arbitrator to award interest pendente lite and remitted the issue relating" to interest to the arbitrator for reconsideration and "for giving his decision on merits". The arbitrator, on reconsideration of the matter as directed by the learned District Judge, awarded pendente lite interest, and the award thereafter having been filed in the Court of the District Judge, the appellant Union of India filed an application for setting aside the award. The learned District Judge, having found no merit in the application filed by the Union of India, rejected the same and confirmed the award. The Union of India has now preferred. this appeal against, the order of the District Judge refusing to set aside the award.

2. Mr. A. Deb. the learned. Standing Counsel appearing for the appellant Union of India, has assailed the order of the District Judge mainly on two grounds. He has urged, firstly, that the learned Judge was entirely wrong in remitting the issue relating to interest to the arbitrator for reconsideration as no question relating to interest was referred to arbitration and, secondly, that irrespective of the legality or otherwise of the order of remittal the award of pendente lite interest by the arbitrator after remittal and the confirmation thereof by the District Judge were vitiated by error apparent. Mr. Deb has Pointed out that the Union of India could not under the, law prefer any appeal against the order of the District Judge remitting the issue relating to interest as no appeal lies against an order passed u/s 16 of the Arbitration Act remitting or refusing to remit an award or any matter referred to arbitration.

3. A bare perusal of Section 39 of the Arbitration Act providing that appeals would lie only from the orders listed in Sub-section (1) thereof "and from no others" would clearly show that no appeals is provided against any order remitting or refusing to remit an award or any matter referred to arbitration though the reasons behind the same is though the reasons behind the same is not that clear. When a court modifies an award u/s 15(a) by striking out a part of it arbitration and can be separated without affecting the other part of the award made upon matters not referred to an appeal is provided u/s 39(1)(iii) against such order modification is entitled to urge in appeal and to satisfy the appellate Court that the part excluded or struck out was therefore wrongly excluded. But when a Court remits the award to the arbitrator under Clause (a) or (b) or (c) of Section 16 or remits under first part of Clause (a); not the award in its entirety, but any matter referred to arbitration but left undetermined by the arbitrator, any party aggrieved by such remittal has been deprived of any opportunity to go in appeal and to satisfy the appellate Court that such remittal of the entire, award or of any matter as aforesaid was wrong, as neither the award was indefinite nor Patently illegal nor it determined extraneous matters not separable from the award without affecting the same nor left undetermined any matter referred, to arbitration. The reasoning advanced in a number of decisions in justification of this denial of right of appeal is that after remittal the award would in due course have to be resubmitted in court and the party, if still aggrieved, may apply for its setting aside, on the ground that the earlier order of remittal leading to the reconsidered award was bad. This is indeed a very queer way of providing remedy in a law which was designedly framed with the avowed purpose and the proclaimed objective to provide "simple speedy and cheap remedy" be cause, even if the parties or the arbitrators are fully convinced that the remittal was bad in law they must still have to participate in the reconsideration and remaking of the awards with full know ledge that the award. when resubmitted, would be liable to be set aside because of the illegal order of remittal and the entire post-remittal arbitration proceedings would thus become exercise in futility.

4. Mr. Deb has relied on the decision of the Supreme Court in Iftikhar Ahmed and Others Vs. Syed Meharban Ali and Others, which, according to Mr. Deb must be taken to have settled the law on the point to the effect that no appeal being available against an order of, remittal u/s 16, the same can be challenged in appeal against the order confirming the award made after such remittal. The decision, no doubt, supports that view but it may however, be noted that the Supreme Court. while holding (at p. 752) that "no appeal u/s 39 of the Arbitration Act lay from an order remitting an award to an arbitrator u/s 16 of the Arbitration Act, did not consider the question as to whether, when on an application for setting aside an award, the Court, while refusing to set aside the same, remits the same to the arbitrator for, reconsideration or remits only part of it which is separable from the rest, the order, though of remittal in form, may in effect, amount to refusal to set aside the award within the meaning of Section 39(1)(iv), whereunder an appeal lies from an order refusing to set aside the award. There appears to be some difference of opinion on this point some High Courts for example the Nagpur High Court in Jayantilal v. Surendra AIR 1956 Nag 245 , holding in favour of appeal. while some other High Courts for example, the Allahabad High Court in the State of U.P. Vs. Reishma Devi and Others, , holding to the contrary. The decisions of the Supreme Court in The Upper Ganges Valley Electricity Supply Company Ltd. Vs. The U.P. Electricity Board, and Mattapalli Chelamayya and Another Vs. Mattapalli Venkataratnam and Another, are considered to be authorities for the view that an award may be partly accepted and partly set aside and/or remitted, though in the Upper Ganges Valleys case (supra), the Supreme Court in view of the long time already spent and the long delay likely to be caused by an order of remittal itself amended the award without ordering remittal. But this Question does not arise for consideration in this case and, therefore does not require to be pursued.

5. Accepting, therefore, the contention of the learned Standing Counsel that the appellant Union of India is entitled to urge in this appeal that the order of remittal leading to the second award was illegal let me consider whether the impugned order of remittal suffered from any such illegality or invalidity which would vitiate all the sub sequent proceedings leading to the fresh award for interest.

6. The claim for interest formed Issue No. 28 before the arbitrator and his finding thereon, which has also been quoted by the District Judge in his order of remittal consists of a single sentence, namely, "the claimant is not entitled to interest as the same has not been referred to the arbitrator by the Chief Engineer," The learned District Judge has not disputed or disagreed with this finding and has nowhere held that the claim for interest wais referred to the arbitrator. But the learned Judge observed that if the arbitrator could decide some other issues, though not referred to nothing should have prevented him from considering this Issue No. 28 also, even if the same was not referred to for arbitration, I am afraid that the learned District Judge went entirely wrong under an erroneous impression of the nature of an arbitration proceeding. It is the reference alone which confers jurisdiction on the arbitrator to decide the disputes and the jurisdiction cannot but remain confined to the disputes referred to in such a reference. An arbitrator derives his powers from the reference which furnishes the source of his jurisdiction and prescribes the limits of his authority. As observed by the Privy Council in AIR 1923 66 (Privy Council) . "whether the arbitrator acts within his jurisdiction or not depends solely upon the clause of reference". The arbitrator in his original award before remittal held the claim for interest pendente lite to be outside the reference, the learned District Judge also has not found such claim to be covered by the reference and the order of reference dt. 12-4-71 also clearly shows that, while listing as many as eleven specific items of claim preferred, by the respondent, it does not include any claim for interest. It is, therefore, difficult to understand as to how the learned Judge, far from realizing that determination of ultra reference claims would rather have been ultra virus, could observe that the arbitrator should, have determined such claim, even though beyond reference simply because the arbitrator decided some other extra-reference claims also, and could remit the same to the arbitrator for re-consideration. The learned Judge failed" to appreciate that u/s 16(i)(a) of the Arbitration Act" any matter left under the mined by the arbitrator can be remitted to him by the Court for reconsideration only when such matter was "referred to arbitration". When an arbitration determines "any matter not referred to arbitration", such determination, if separable from the rest without affecting the determination on the "matters referred" is to be excluded by modifying and correcting the award u/s 15 but when such determination "on any matter not referred to arbitration" cannot be separated from the rest, "without affecting the determination on the "matters referred", the entire award is to be remitted u/s 16. If the claim for interest in this case was not referred to arbitration and was, not covered by the reference, refusal to determine such claim was obviously a proper exercise of jurisdiction by the arbitrator and I am afraid that it is the learned Judge who exercised his jurisdiction illegally and with material irregularity in remitting such claim to the arbitrator for reconsideration, Such a wrong order of remittal cannot but vitiate the second award which is the product of such illegal remittal. It would be trite to say that an award or any part of it can stand only when the matter determined is covered by the reference and the proposition "no reference no award has never been and can never be disputed. If the claim for interest was not covered by the reference to the arbitrator, the award of interest by the arbitrator cannot but fail as being ultra virus the reference and thus without jurisdiction and the illegality cannot stand cured simply because the arbitrator was directed by the Court to consider such ultra-reference matter by an order of remittal to that effect. The Court obviously cannot unilaterally enlarge the reference by including therein matters not referred to arbitration and remit such matters for reconsideration and any award made on such ultra-reference matter even though made in compliance with an order of remittal by a Court, would be invalid within the meaning of the expression "is otherwise invalid in Section 30(c). Arbitration Act, The sharp difference of opinion as to the connotation and amplitude of the expression "is otherwise invalid". generated by the decision of the Privy Council in Chabha Lal v. Kallu Lal AIR 1946 PC 721 . has now been set at rest by the Supreme Court in The Union of India (UOI) Vs. Shri Om Prakash, , where it has been ruled that the expression "otherwise invalid" is wide enough to include all forms of illegality or invalidity, and. therefore. absence of reference or the invalidity thereof or the invalidity of the order of remittal. would also be included within that expression.

7. Mr. N.B. Kharga the learned Advocate appearing for the respondent, has urged that even if the question of interest was not specifically referred to in the reference to arbitration it was obviously an implied term of reference to decide all the disputes referred to according to law and to award all reliefs available under the law and that as under the law pendente lite interest can legally be awarded the Arbitrator, while making his award at the first instance, failed to exercise his jurisdiction to award interest under the erroneous impression that he could not do so as the same was not specifically referred to him by the order of reference. Mr. Kharga has submit led that if the arbitrator in his discretion declined to award interest on the ground that on the merits it was not a fit case in which interest was to be awarded, it would have been a different matter. But the arbitrator having refused to award interest on the erroneous assumption that in the absence of the claim for interest having been specifically referred to him by the order of reference he had no jurisdiction to consider and determine the claim there was an error apparent on the face of the award, as under the law reference to decide disputes according to law would by obvious implication include the power to grant all reliefs awardable under the law including the payment of interest pendente lite. According to Mr. Kharga therefore, the refusal of interest by the Arbitrator in the original award on the erroneous assumption that he could not consider the question of payment of interest pendente lite in the absence of specific reference to that effect in the order of reference, was to that extent, an error apparent on the face of the award within the meaning of Section 16(1)(c) and the question of interest was therefore, rightly remitted by the Court u/s 16 and the post-remittal award of interest being perfectly permissible under the law the District Judge was also right in rejecting the application of the appellant Union of India to set aside that award. This argument of Mr. Kharga, therefore, raises the question as to whether, even though any claim for interest pendente lite has not been specifically referred to arbitration by the order of reference. the arbitrator still has jurisdiction to award such interest as a part of his obligation to decide the disputes referred to him in accordance with the existing law and to award all reliefs available under the law.

8. It is not possible to accept the broad proposition that as an arbitrator can be entrusted with the power to deter-mine all disputes of a civil nature, he must have while determining such disputes, all the powers of the Civil Court under the Civil P.C. including the power to award interest u/s 34 of the Code For in that case it would not have been necessary to confer on arbitrators specifically by Section 12 of thethe power to administer oath to the parties and witnesses or to correct in an award any clerical mistake or error arising from any accidental slip or omission or by Clause 2 of the First Schedule to the. The power to award costs. Mr. Dab has very emphatically relied on the decision of the Supreme Court in Seth Thawardas Pherumal Vs. The Union of India (UOI), and has urged that under the law as enunciated therein, the arbitrator cannot award any interest for any post reference period. Mr. Kharga on the other hand has relied on the later decisions of the Supreme Court in Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, in Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., in Ashok Construction Co. v. Union of India 1971-3 SCC 06 and in State of Madhya Pradesh Vs. Saith and Skelton (P) Ltd., and has contended that the power of the arbitrator to award interest pendente lite must now be taken to be settled beyond doubt. All the judgments noted hereinabove are rendered by Benches of coordinate jurisdiction the Benches in all the cases being constituted by three Judges and if they have laid down contrary propositions of law. I would have to face the most embarrassing and uncomfortable situation which a High Court Judge has to face when confronted with contrary decisions of the Supreme Court rendered by Benches of equal strength, to decide as to which one I am bound or entitled to follow. As has been pointed out by this Court in Gopal Chandra Kalay v. State of Sikkim 1981 Lab IC 422 at pp. 423, 425 when faced with contrary decisions of the Supreme Court the first course to be adopted by the High Court is to note which one of them is decided by a larger Bench and to govern itself by such larger Bench decision if there be any. But when such contrary decisions of the Supreme Court emanate from Benches of equal strength the courses to be adopted by the High Courts are firstly, to try to reconcile and to explain those contrary decisions by assuming that they applied and were meant to apply to different sets of circumstances. This is in fact a, course which was recommended by our ancient Sages-- "Sruthirdwaidha Smritirdwaidha Sthalabhede Prakalpate" in case there be two contrary precepts of the Sruties or of the Smritis. different cases are to be as-famed for their application. As the ancient Sage Jaimini said, contradictions or inconsistencies are not to be readily assumed as they may very often be not real but only apparent resulting from the application of the very same principle to different sets of facts "Prayoge Hi Virodha Syat". But when such contrary decisions of co-ordinate Benches cannot be reconciled or explained in the manner as aforesaid. The High Court is not necessarily obliged to follow the one which is later in point of time. but may follow the one which in its view is better in point of law. This again is a course which is in perfect consonance with what Sage Narada declared -- "Dharmashastra Virodhe Tu Yuktayukta Vidhih Smrita" that is when the Dharmashastras or Law Codes of equal authority conflict with one another the reasonable one is to be preferred and followed Jagannatha Shetty. J. speaking for the minority in the Karnataka Full Bench decision in Govindanaik G. Kalaghatigi Vs. West Patent Press Co. Ltd. and Another, referred to by this Court in Gopal Chandra Kalay 1981 Lab IC 422 (Sikkim) (supra), advised such a course. It appears that in a later Full Bench decision of the Punjab & Haryana High Court in Indo Swiss Time Limited Vs. Umrao and Others, Saiadhawalia, C.J., with the concurrence of the other two learned Judges has also recommended such a course. Needless to say that it would be highly embarrassing for the High Court to declare one out of two or more decisions of the Supreme Court to be more reasonable implying thereby that the other or the others is or are less reasonable. But if such a task falls upon the High Court because of irreconcilable contrary decisions of the Supreme Court, the task, however uncomfortable, has got to be performed.

9. In Seth Thawardas Pherumal Vs. The Union of India (UOI), Vivian Bose, J. sneaking for a three-Judge Bench, observed (at p. 478) that "even if it be assumed that an arbitrator is Court...(a fact that by no means appears to be the case", still interest could not be awarded by the arbitrator unless four conditions were satisfied namely. "(1) there must be a debt or a sum certain. (2) it must be payable at a certain time or otherwise (3), these debts or sums must be payable by virtue of some written contract at a certain time and (4) there must have been a demand in writing stating that interest will he demanded from the date of the demand". After pointing out that none of these conditions were satisfied in that case to justify the award of interest by the arbitrator Bose, J. proceeded to consider the question as to whether award of at least pendente lite interest could be justified under the provisions or on the analogy of Section 34 Civil P.C. and observed that Section 34 does not apply because an arbitrator is not a Court within the meaning of the Code nor does the Code apply to arbitrators, and, but for Section 34, even a Court would not have the power to five interest after the suit". it appears from paras 4 and 30 of the judgment in Seth Thawardas Pherumal Vs. The Union of India (UOI), , that the dispute in that case consisted of 17 heads of claims and claim No. 17 was a claim for interest and the statement in paragraph 4 to the effect that "the dispute that was referred to the arbitrator consisted of 17 heads of claims, but only three of them are contested here, namely, items 5, 8, and 17, is likely to give rise to the impression that the claim for interest, be in No. 17, was also referred to the arbitrator. It further appears from paragraph 2 of the judgment that the reference to the Arbitrator was made on 21-1-49 and the award was made on 8-5-49 and para 30 shows that the claim for interest was for the period from January 1948, when according to the claimant his dues ought to have been paid. UP to April 1949 and, therefore, the claim for interest covered both the pre-reference period as well as the period during which the arbitration was pending. Mr. Deb has accordingly urged that when after holding generally that interest in that case could not be awarded under the general provision of law relating to interest, the Supreme Court further proceeded to hold that interest could not be paid for the post reference or the pendente lite period also, and when it is apparent from paragraphs 2, 4 and 30 of the Judgment that the claim for the post reference pendente lite interest was also referred to this decision in Thawardas Pherumal (supra) has got to be accepted as an authority for the proposition that award of post reference pendente lite interest is beyond the jurisdiction of the arbitrator.

10. It is true that Gajendragadkar. J. (as his Lordship then was), speaking for a three-Judge Bench in Ct. A. Ct. Nachiappa Chettiar and Others Vs. Ct. A. Ct. Subramaniam Chettiar, as well as in Satinder Singh and Others Vs. Amrao Singh and Others, observed that the Bench in Seth Thawardas Pherumal Vs. The Union of India (UOI), cannot be taken to have ruled that no interest, whether for the pre-reference period or pendente lite can be awarded by the arbitrator in any case, It is also true that in Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, another three Judge Bench, speaking through Bachawat, J., distinguished (at p. 1032) the decision in Thawardas Pherumal (supra) as being "silent on the question whether the arbitrator can award interest during the pendency of arbitration proceedings if the claim regarding interest is refer red to arbitration" and upheld the award of pendente lite interest as in that ease. "all the disputes in the suit were referred to the arbitrator for his decision" and "one of the disputes in the suit was whether the respondent was entitled to pendente lite interest" and as the decision in Thawardas Pherumal (supra) was held not to have ruled out payment of interest by the arbitrator in such a case. The decision of the Sum-erne Court in Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., is vet another three Judge Bench decision, delivered about a month after the decision in Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, , where Ramaswami J, speaking for the Bench, distinguished the decision in Thawardas Pherumai (supra) as not dealing "with the question whether the arbitrator can award interest subsequent to the passing of the award, if the claim regarding interest was referred to arbitration" and as in that case "all the disputes in the suit, including the question of interest, were referred to the arbitrator for decision", the award of interest on the amount of the award from the date of the award till the date of the decree was upheld. Though" the decision in Bungo Steel Furniture (supra) is therefore, not a direct authority for the award of pendente lite interest, as the question in issue there was the legality of post-award interest, it was nevertheless observed, therein that if the claim for interest was covered by the reference to the arbitrator, award of interest by the arbitrator on the principles of Section 34 Civil P.C. which authorized payment of pendente lite as well as post decree interest, would be justified. The decision of the Supreme Court in State of Madhya Pradesh Vs. Saith and Skelton (P) Ltd., is yet another three-Judge Bench decision where Vaidialingam, J., speaking for the Bench, and agreeing with and relying on Madanlal Roshanlal (supra), held that the decision in Thawardas Pherumal (supra) was not an authority "on the question whether an arbitrator can award interest during the pendency of the arbitration proceedings. If all the disputes in the suit, including the claim for interest, were referred for arbitration." and that from the decision in Madanlal Roshanlal (supra) "it is clear that if ail the disputes are referred for arbitration, the arbitrator has power to award interest pendente lite i.e. during the pendency of the arbitration proceedings". The decision of the Supreme Court in Ashok Construction Company Vs. Union of India (UOI), is yet another three Judge Bench decision where Shah, J., speaking for the Bench has without any reference whatsoever to any earlier decision on the point, observed that the arbitrator in that case was competent to decide the claim for interest made by the appellant on the amount withheld after the due date and that "the terms of arbitration agreement did not exclude the jurisdiction, of the arbitrator to entertain a claim for interest, on the amount due under the contract." It appears that in that case all disputes relating to "payment under the terms of contract" were referred to and that included the claim for interest also. This decision if I may say so with respect, does not "declare" or enunciate or even discuss any point of law which can properly be pressed into service in deciding the question arising before me in this case.

11. As already noted, a reference to para 2, 4 and 30, of the judgment in Seth Thawardas Pherumal Vs. The Union of India (UOI), is likely to give rise to the impression that the claim for interest, which was numbered before the Arbitrator as Claim No. 17 was also referred to the arbitrator and if that was so it may be difficult to understand as to how the said decision in Thawardas Pherumal (supra) could he distinguished by the Supreme Court in Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, or in Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., or in State of Madhya Pradesh Vs. Saith and Skelton (P) Ltd., as to be silent and as no authority on the question as to whether an arbitrator can or cannot award interest pendente lite if the claim for interest is also referred to him.

12. However, from the judgment of the High Court in The Union of India (UOI) Vs. Premchand Satram Das and Another, which was appealed against in the Supreme Court in Seth Thawardas Pherumal Vs. The Union of India (UOI), , it appears, (vide, para 17 at p. 204) that the claim No. 17 relating to interest was preferred before the arbitrator for the first time during the progress of the arbitration proceeding" and that the High Court observed that "in the circumstances, it cannot be said that the claim for interest was one of the matters referred to arbitration" and that "the arbitrator, therefore...had no jurisdiction to entertain this claim and the award to this respect must accordingly be set aside". Now if the claim for interest being Claim No. 17 was not, as held by the High Court, referred to the arbitrator, then it is not difficult to understand the observations of the Supreme Court in later decisions in Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, or in Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., or in State of Madhya Pradesh Vs. Saith and Skelton (P) Ltd., to the effect that the decision in Thawardas Pherumal (supra) is not to be accepted as an authority on the question as to whether an arbitrator can award interest, whether pre-reference or pendente lite, when the claim for interest was also referred to arbitration. But in that case, i.e. if the claim for interest is to be taken not to have been referred to the arbitrator in Thawardas Pherumal (supra), it may however be difficult to understand as to why the Supreme Court instead of disallowing the claim for interest on the ground of its being outside the reference, as was done by the High Court in the judgment under appeal The Union of India (UOI) Vs. Premchand Satram Das and Another, para 17, disallowed it only on the ground of not being available under the general law relating to interest and Section 34 of Civil P.C. Be that as it may as noted hereinbefore, according to this Court in Gopal Chandra Kolav 1981 Lab IC 422 (supra) and the later Full Bench decision of the Punjab & Haryana High Court in Indo Swiss Time Limited Vs. Umrao and Others, , when there are contrary decisions of the Supreme Court rendered by Benches of equal strength, the High Court, in theory being bound by each one is, in effect bound by none and is not necessarily obliged to follow the one later in point of time, but may follow the one which according to it is better in point of law. But when the later decision even though appearing to be contrary to the earlier one has distinguished the earlier decision on certain grounds both the decisions would bind the Subordinate Courts and the earlier decision would continue to govern all matters decided therein subject to the distinctions made in the later decision. For, once an earlier decision of the Supreme Court is distinguished in a later decision as not covering a point of law decided by the later decision, the decisions must then be regarded not to have declared contrary propositions even though the High Court may not be able to clearly apprehend the grounds of distinction.

13. That being so, since the earlier three Judge Bench decision of the Supreme Court in Seth Thawardas Pherumal Vs. The Union of India (UOI), , ruling out award of pendente lite interest by the arbitrator, has not been (and cannot properly be) dissented from in later three Judge Bench decisions in Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, , in Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., and in State of Madhya Pradesh Vs. Saith and Skelton (P) Ltd., but has only been distinguished as being "silent on" and as "not dealing" with the question whether the arbitrator can award interest during the pendency of arbitration proceedings, if the claim regarding interest is referred to arbitration". and as in all these three later cases "all the disputes" along with the claim for interest, were Specifically referred to arbitration, and award of pendente lite interest was held to be justified as the claim therefore was referred to arbitration, the earlier decision in Seth Thawardas Pherumal Vs. The Union of India (UOI), must still be regarded as the binding authority ruling out the payment of interest pendente lite if a claim for such interest was not covered by the reference to the arbitrator and the later decisions in Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, in Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., and in State of Madhya Pradesh Vs. Saith and Skelton (P) Ltd., are to be treated as authorities for payment of pendente lite interest by the arbitrator, if a claim to that effect was included within the reference to the arbitrator.

14. Mr. Kharga and Mr. Deb, to (sic) of whom I am grateful for assisting (sic) with admirable industry have draw my attention to several decisions of the different High Courts where the point under consideration and the Supreme Court decisions noted above have been considered. In Umraosingh v. State of Madhya Pradesh AIR 1975 MP 126 a Division Bench of the Madhya Pradesh High Court construed the decisions of the Supreme Court noted above in the manner in which I have construed them hereinabove. The Division Bench has observed (at pp. 130. 134) that "the position therefore, is that if there is a dispute as to interest which is referred, to arbitration or if all matters in difference are referred to arbitration the arbitrator may award interest on principles analogous to Section 34 of the Code but "if the reference does not include a dispute as to interest or if it is not be widely worded as to include all matters of difference it appears that Thawardas Pheumals case will still prevail.... In Union of India (UOI) Vs. M.L. Dalmiya and Co. Ltd., a Division Bench of the Calcutta High Court has relying inter alia on the Supreme Court decisions in Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., and State of Madhya Pradesh Vs. Saith and Skelton (P) Ltd., held "that interest pendente lite if any payable to the contractor was an item of reference to the arbitrator who accordingly had the jurisdiction to award interest from the date of reference". In Union of India v. D.P. Wadia and Sons AIR 1977 Bom 10 [LQ/BomHC/1976/159] a Division Bench of the Bombay High Court has pointed out (at pp. 13, 18) that "the disputes and differences relating to interest were thus enumerated and set out in the correspondence and were referred amongst other disputes and differences to the arbitration" "that the claim as to interest was one of the claims and was in point of fact referred to arbitration" and rejected "the contention of the learned Counsel for the Union of India that the dispute as to interest was not referred to the arbitrator" and was "satisfied that the disputes as to the claim for interest was referred to the arbitrator" and on this finding that the claim for interest was referred to arbitration Up held the award of interest, relying inter alia on Bunco Steel Furniture (supra) Saith & Skele(sic) (supra) and other decisions. In (sic) v. Pacific Procon Ltd. AIR 1977 (sic) 24 a Division Bench of the Kerala High Court was "not prepared to hold that the question of interest was outside the scope of submission" and held (at p. 25) that the question of interest was "a question expressly referred to the Arbitrators for their decision" and accordingly, relying inter alia on Bungo Steel Furniture (supra) and Saith & Skeleton (supra), has observed that if the submission includes expressly or impliedly the question of interest as well...the arbitrators would be competent to decide that question and award interest and that "when the question of interest is expressly and specifically raised and Submitted for arbitration, there can be no doubt that the arbitrators would be competent to decide the question and award interest. It is true that the Division Bench observed further that "in whether cases" meaning thereby in cases where the question of interest is not referred for arbitration, expressly or by implication, the rule is that the arbitrator may award interest by virtue of his implied authority to follow the ordinary ales of law and for this the Division Bench relied on Russell on Arbitration (17th Edn p. 256) and also on some observations of the Supreme Court in Bungo Steel Furniture (supra). A part from the fact that these observations by the Kerala Division Bench was obviously obiter in view of its finding that the question of interest was expressly referred to arbitration. I would have occasion to point out hereinafter as to how far if at all, such implied power if it exists, can be invoked in view of the Supreme Court decision in Seth Thawardas Pherumal Vs. The Union of India (UOI), . In Executive Engineer Vs. Sankar Maharana, a single Judge decision of the Orissa High Court award of interest by the arbitrator was upheld riving on an earlier Bench decision of that Court in State of Orissa v. Govinda 1971 37 CLT 937 . It appears from the extract quoted from the latter in Executive Engineer Vs. Sankar Maharana, , that "the dispute included a specific reference to the award of interest". But the further observations therein that "it is now well settled by a series of Supreme Court decisions that unless there is a specific clause in the agreement prohibiting award of interest the arbitrator has jurisdiction to award interest from the due date of payment till the date of the award", which have been consistently repeated by that Court in a series of decisions in among others Executive Engineer, Rural Engineering Organisation, Khurda Vs. D.N. Senapati and Another, State of Orissa Vs. Gokulachandra Kanungo, Secretary, Works Department, Govt. of Orissa and Others Vs. Ghanashyam Sahu, State of Orissa Vs. J.N. Choudhury, should not and cannot be understood to mean that the arbitrator is entailed to award interest in all cases, whether or not the question of interest is referred to him expressly or by necessary imDlication, wherever the relevant arbitration agreement does not specifically prohibit such award. In all these Orissa decisions, the question of interest was referred to the arbitrator either specifically or as a part of the general reference of all disputes and differences between parties arising out of the contract in question. And in all the Supreme Court decisions, which have been relied on in these Orissa decisions and which have been discussed by me hereinbefore, namely the decisions in Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, in Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., or in State of Madhya Pradesh Vs. Saith and Skelton (P) Ltd., , the question of interest was expressly referred to was covered by the all embracing reference by clear implication. That being so, what was and could have been meant by the observation to the effect that "it is now well-settled by a series of Supreme Court decisions that unless there is a specific clause in the agreement prohibiting award of interest, the arbitrator has jurisdiction to award interest from the due date of the payment till the date of award." was that if the reference to the arbitrator comprehends the question of interest the arbitrator shall have jurisdiction to award such interest, unless the Arbitration Agreement forbids such award.

15. The Punjab & Haryana Full Bench decision in State of Punjab Vs. Ajit Singh and Others, has, been concerned with the sole question as to grant of "future interest on the amount awarded till the date of its realisation" and while answering the question in the affirmative the Full Bench has observed that "if not the provisions in any case the principle underlying Section 34 of the CPC is at once and equally attracted in the case of proceedings before an arbitrator". These observations have Rot to be read in their proper context and cannot be read to mean that an arbitrator can always invoke Section 34 of Civil P.C. and award interest pendente lite or otherwise even without the Question of interest being covered by the reference to him because no such question arose for consideration before the Full Bench and also because in the decisions of the Supreme Court in Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, and in Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., which have been relied on by the Full Bench for the proposition quoted above, the question of interest. as point out hereinbefore was referred to the arbitrator.

16. In the Division Bench decision of the Delhi High Court in Krishan Kumar Madhok v. Union of India AIR 1982 Delhi 3321 it also appears (at p. 334), that out of the disputes referred to the arbitrator, "one of the disputes so referred to him is whether the contractor is entitled to pendente lite interest" and relying on Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, . Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., and State of Madhya Pradesh Vs. Saith and Skelton (P) Ltd., , it has been hold that in such a case, not only the arbitrator can award interest but even "the rate at which he has awarded interest is not to be inter fered with unless such rate is patently unreasonable. The Division Bench, however; has observed further that the view of Bose. J., in the earlier decision in Seth Thawardas Pherumal Vs. The Union of India (UOI), to the effect that "an arbitrator is not a Court and; therefore Section 34, Civil P.C., does not apply to him" has not ,been accented by the later decisions of the Supreme Court in the three cases noted above But with great respect to the learned Judges. I would venture to think that it would not be correct to read those Supreme Court demons as not accepting the earlier view in Thawardas Pherumal (supra).

17. As I have pointed out in some details hereinbefore if two or more decisions of the Supreme Court, appear to have declared the laws on" a point differently and the decisions are rendered by Benches of equal strength and coordinate jurisdiction, the High Court must endeavour to reconcile them as far as possible and it is only when no re-conciliation is at all possible, the High Court may proceed to follow that one which it can understand better and not necessarily the one which is later in point of time. As already noted, the award of pendente lite interest or the post reference period was clearly ruled to be unlawful by Bose J. in Seth Thawardas Pherumal Vs. The Union of India (UOI), on the ground that Section 34 does not apply because an arbitrator is not a Court within the meaning of the Code nor does the Code apply to arbitrators and but for Section 34 even a Court would not have the power to give interest after suit", If the view in this three-Judge Bench decision in Thawardas Pherumal (supra) was departed from in any of the decisions by Benches of equal strength. Whether by express reference of by enunciation of an obviously contrary view it would have been necessary for the High Court to make a choice as to which of them it would follow. But in all the three later decisions in Firm Madanlal Roshanlal Mahajan Vs. Hukumchand Mills Ltd., Indore, . Union of India (UOI) Vs. Bungo Steel Furniture Pvt. Ltd., and State of Madhya Pradesh Vs. Saith and Skelton (P) Ltd., , the view in Thawardas Pherumal (supra) has been clearly and expressly distinguished on the ground that in that case neither the question of interest, pendente lite or otherwise was referred to the arbitrator nor there was any general and all comprehensive reference of all the disputes and differences between the parties arising from the contract in question, which could cover within its sweep the question of interest also and none of the later decisions declared, even if they could, that Thawar das Pherumal (supra) declared wrong law and that interest pendente lite could be awarded under the law under or on the analogy of provisions of Section 34 Civil P.C. even if the question of interest was not covered by the reference. That being the position, the High Courts must and cannot but continue to be "governed by Thawardas Pherumal (supra) on all points covered therein except to the extent it has been distinguished in the later decisions and would have to govern themselves by the later decisions only when a case at hand would come within and satisfy the points of distinction made in the later cases about Thawardas Pherumal (supra). In other words if in a case at hand, it is found that the question of interest was not referred to the arbitrator either specifically or as a part of a general all comprehensive reference of "all the disputes and differences" between the parties under a contract, Thawardas Pherumal (supra) would still govern the High Courts and rule out payment of interest. But if and when such a question would be found to have been referred to arbitration, the later decisions would govern and would justify payment of interest. I have found nothing in any of these Supreme Court decisions referred to by the Delhi Division Bench or referred to by me hereinbefore, which can suggest that these later decisions regarded the view in Thawardas Pherumal (supra) to be erroneous in not allowing interest pendente lite, when such a question was not referred to the arbitrator either specifically or as a part of any all comprehensive general reference of "all the disputes and differences" arising under a contract. And as I read them, the later decisions are authorities for the proposition that if the question of interest is referred to the arbitrator specifically or as forming part of a general all-comprehensive reference of all the disputes between the parties arising under the contract, the arbitrator gets the jurisdiction to award interest and may, in exercise of such jurisdiction award interest on the principles analogous to Section 34. Civil P.C. I am inclined to think that because of this position in law, whereunder interest cannot be awarded unless the dispute relating to interest is also covered by the reference to the arbitrator, a new paragraph being No. 7A, has been inserted in the First Schedule to the Arbitration Act, 1976, by the Uttar Pradesh Civil Laws (Reforms and Amendment) Act of 1976, expressly providing for payment of pendente lite interest as an implied condition, of an Arbitration Agreement u/s 3 of the. And I do not think the Uttar Pradesh Legislature Would have taken this step as late as in 1976 if it found that as a result of the Supreme Court decision in Madanlal Roshsnlal (supra) and Bungo Steel Furniture (supra), rendered in 1966 and in Saith & Skeleton (supra), rendered in 1972, it was settled that arbitrator could award interest in all cases, whether or not any claim therefore was covered by reference. It may also be noted that the Law Commission of India in its 76th Report on Arbitration Act, 1940 submitted in November 1978 has also found the law on the point to be almost similar to what I have pointed out hereinbefore and has observed (at page 34. para 4.28) as hereunder

(i) When a claim for interest during the pendency of the arbitration is specifically referred to the arbitrator he can award such interest just as a Court could do so u/s 34 of the Civil P.C. 1908.

(ii) Where a claim for interest during such pendency is not specifically referred to the arbitrator the arbitrator, has no power to award interest.

And the Law Commission has accordingly recommended insertion of a new section being 13A to provide for payment of pendente lite as well as pre-reference and post award interest, by incorporating therein provisions analogous to those of Section 34 Civil P.C. and Para 7A inserted in the First Schedule of the Arbitration Act by the aforesaid Uttar Pradesh Act of 1976.

18. It may be that it would be, more reasonable if the arbitrator, on a reference of disputes and differences to him for arbitration, has also, the power to award interest for the period during the pendency of the arbitration proceeding whether or not the question of interest, is also covered by the reference. If the decision in Seth Thawardas Pherumal Vs. The Union of India (UOI), and the later decisions of the Supreme Court referred to hereinabove laid down contrary propositions the former prohibiting and the latter permitting award of "interest whether or not the question of interest was referred for arbitration, it could have, been open to me to follow the later decisions and to uphold the award of interest by the arbitrator in this case. But, as already noted, the decision in Thawardas Pherumal (supra) and the later decisions noted hereinbefore do not lay down contrary, propositions and the later decisions have, in, fact., without depending from, the view in Thawardas Pherumal (supra), explained and distinguished the same Under such circumstances, as already noted. I am obliged to be governed by Thawardas Pherumal (supra), if in the case before me I do not find that any question of interest pendente lite or, otherwise, was referred to arbitration, either specifically or as a part of a general all comprehensive inference of "all the disputes and differences between the parties arising from the contract in question.

19. I, however, find that in the case at hand no claim for any interest pendente lite or otherwise, was referred to the arbitrator. As already noted at the outset, the arbitrator in fact, refused interest at the first instance before remittal on this very ground, namely, no claim for interest was referred to him by the order of reference. The learned District Judge, as also noted at the outset, could not find any such claim for interest to have been referred to the arbitrator, expressly or by implication. Mr. N.B. Kharga, the learned Advocate for the respondent, has also frankly conceded the absence of any specific reference in respect of the claim for interest in the original order of reference. The order of reference also clearly shows that there was no general and all comprehensive reference of all the disputes and differences between the parties arising out of the contract, but that only eleven specific items of claims preferred by the respondent were referred to the arbitrator and none of these items contains any reference to any interest. In paragraph 33 of the application filed by the respondent in the Court of the learned District Judge praying for remittal of the Issue No. 28 being the issue relating to interest it has also been stated that "the question of interest pendente lite is a part of the relief to be granted by the arbitrator and not a matter of dispute or claim to be referred by the appointing authority". The arbitrator in this case, therefore, had no jurisdiction to award interest and. as already noted, though, he rightly refused interest at the first instance on the ground of such claim being outside and beyond the scope of reference, the wrong order of remittal of the learned District Judge directing him to consider the question of interest led him to make the impugned award.

20. The appeal is therefore, allowed and the impugned award of interest and the order of the learned District Judge making the same a rule of the Court are set aside As the post remittal award of interest and everything thereafter including this appeal were due to the wrong order of remittal by the Court below. I make no order as to costs as actus curiae neminem gravabit.