TMI Blog2009 (10) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... DEEPAK VERMA, J. - Leave granted. 2. This appeal arises out of order and judgment dated 15.5.2007 passed by learned Single Judge of High Court of Judicature for Rajasthan, Jaipur Bench, in SB Civil Miscellaneous Appeal No. 1631/2006, whereby and whereunder the appeal preferred by appellant herein under section 39 of the Arbitration Act, 1940 (hereinafter shall be referred to as 'the Act') has been dismissed, which arose out of die orders dated 13.09.2005 and 26.11.2005 passed by District Judge, Jaipur, in Arbitration Case No. 143/1998 and Misc. Arbitration Application No. 443/2005 respectively. 3. Thumb nail sketch of the facts of the case is as under:- 4. Respondent/State of Rajasthan had issued notice inviting tender on 03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l amount awarded by the arbitrators. 11. Since, while passing the said impugned order no direction was made by the learned District Judge to make the said award a rule of the court and the pendente lite and future interest awarded by the arbitrators were disallowed, thus, an application for review was filed by the appellant. The same came to be heard and disposed of on 26.11.2005. The award was made rule of the court and appellant was awarded only simple interest at the rate of 9% per annum from the date of decree of the award. It is against the aforesaid two orders and judgments passed by learned District Judge, appellant was constrained to carry the matter further before the learned Single Judge by filing miscellaneous appeal as men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of payment stands settled by a judgment of this court in the case of Hindustan Construction Co. Ltd. v State of Jatmnu Kashmir reported in (1992) 4 SCC 217. The aforesaid question has been dealt with by this Court in para-5 of the said judgment reproduced hereinbelow: "5. The question of interest can be easily disposed of as it is covered by recent decisions of this court. It is sufficient to refer to the latest decision of a five judge bench of this court in Secretary, Irrigation Department, Govt, of Orissa v G.C. Roy (1992) 1 SCC 508.: JT (1991) 6 SC 309. Though the said decision deals with the power of the arbitrator to award interest pendente lite, the principle of the decision makes it clear that the arbitrator is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to payment of interest. The arbitrator awarded interest to BOL at the universal rate of eighteen per cent for all the three stages, pre-reference period, pendente lite and post-award period. It is not disputed that in the arbitration agreement there is no provision for payment of interest. The learned Single Judge as well as the Division Bench was right in observing that the arbitrator, in the facts and circumstances, could have awarded interest. The arbitrator had granted interest at the rate of eighteen per cent on the ground of loan so advanced by HCL to BOL at that rate. 37. Now section 34 of the Code of Civil Procedure has no application to arbitration proceedings since the arbitrator cannot be said to be a 'court' within the meani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it such grant. In other words, we are dealing with a case where the agreement is silent as to award of interest. On a conspectus of aforementioned decisions, the following principles emerge: (i)A person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This basic consideration is as valid for the period the dispute is pending before the arbitrator as it is for the period prior to the arbitrator entering upon the reference. This is the principle of section 34, Civil Procedure Code, and there is no reason or principle to hold otherwise in the case of arbitrator, (ii)An arbitrator is an alternative for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said judgment were not intended to lay down any such absolute or universal rule as they appear to, on first impression. Until Executive Engineer (Irrigatien) v Abhaduta Jena case (1988) 1 SCC 418 almost all the courts in the country had upheld the power of the arbitrator to award interest pendente lite. Continuity and certainty is a highly desirable feature of law. (v)Interest pendente lite is not a matter of substantive law, like interest for the period anterior to reference (pre-reference period). For doing complete justice between the parties, such power has always been inferred." 18. In the light of the aforesaid judgments of this court we have no hesitation to hold that impugned orders passed by learned District Judge as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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