TMI Blog2008 (2) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... award, the appellant filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 before a Single Judge of this Court who has dismissed the same by his order dated 20th August, 2007. The learned Single Judge was of the opinion that the arbitrator had given cogent reasons for making an interim award in favor of the respondent. He repelled the contention urged on behalf of the appellant that the provisions of Order 12 Rule 6 of the CPC were not applicable and declared that the arbitrator was competent to make an interim award on the admissions of the parties contained either in the pleadings or in the correspondence exchanged between the parties. The Court relied upon two letters, one dated 17th May, 2001 and the other dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to contend that the tribunal may, at any time during the arbitral proceedings, make an interim arbitral award. He submitted that the arbitrator had, in the instant case, correctly appraised the material on record including the pleadings of the parties and the correspondence which contained a clear acknowledgement of the liability of the appellant to the tune of Rs. 7.69 Crores after giving adjustment of the payments made and even the set off claimed by it. The fact that the respondent had made a counter claim could not Therefore, argued the learned Counsel, make any difference insofar as the power of the arbitrator to make an interim award was concerned. Relying upon the decision of a Division Bench of this Court in Cofex Exports Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompetent. In fairness to Mr. Jaitley, we must record that he did not question the jurisdiction of the arbitrator to make an interim award as was, it appears, sought to be done before the learned Single Judge at some stage. 6. What then remains to be examined is whether the pendency of a counter claim made by the appellant before the arbitrator was sufficient to disentitle the respondent Prasar Bharti from claiming even the admitted amount due from the appellant by way of an interim award in its favor. According to Mr. Jaitley, since the claim made by the respondent and the counter claim of the appellant were eventually to result in a net amount which one or the other party would be required to pay, the payment of any amount which the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the claim of the defendant. Not only court fee is payable on the counter claim but the counter claim remains unaffected by the withdrawal of the original suit evidently on the principle that the counter claim is a suit in itself. So also the court has always the power to direct a set off or counter claim being tried separately from the original suit. Such being the legal nature and character of a counter claim, its pendency does not denude the arbitrator of the power to make an interim award in the original suit/claim if such an interim award is otherwise justified. What is significant is that the legality of an interim award may be tested by reference to the material on which it is based rather than the areas of dispute that may stil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . By that logic even if we assume that the Prasar Bharti was to fail in substantiating its further claims which are disputed and the appellant were to succeed wholly in the counter claim that it has made, all that it would result in is an award in favor of the appellant. There is, Therefore, no inherent illegality or perversity in the making of the interim award by the arbitrator so as to call for interference by this Court under Section 34 of the Act. 9. As regards the question whether the amount of Rs. 7.69 Crores was admittedly payable to the respondent Mr. Jaitley did not make any attempt to assail that finding and in our opinion rightly so. The arbitrator has, on the basis of the pleadings of the parties and the correspondences exch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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