State of Orissa Vs. Shri B.K. Routray
EmailAppeal: Civil Appeal No. 2934 of 1985
(From the Judgment and Order dated 21.9.84 of the Orissa High Court in M.A. No. 193 of 1984)
(From the Judgment and Order dated 21.9.84 of the Orissa High Court in M.A. No. 193 of 1984)
Petitioner: State of Orissa
Respondent: Shri B.K. Routray
Apeal: Civil Appeal No. 2934 of 1985
(From the Judgment and Order dated 21.9.84 of the Orissa High Court in M.A. No. 193 of 1984)
(From the Judgment and Order dated 21.9.84 of the Orissa High Court in M.A. No. 193 of 1984)
Judges: SUJATA V. MANOHAR & R.C. LAHOTI, JJ.
Date of Judgment: Dec 01, 1999
Appearances:
Raj Kumar Mehta, Advocate for the Appellant.
P.N. Misra, Senior Advocate, (T.K. Pradhan) Advocate for R.P. Wadhwani, Advocate with him for the Respondent.
P.N. Misra, Senior Advocate, (T.K. Pradhan) Advocate for R.P. Wadhwani, Advocate with him for the Respondent.
Head Note:
ARBITRATION LAWS
Arbitration Act, 1940
Sections 14,17 with Interest Act, 1978 Section 6(2) Award of interest for pre-reference period – Said period from 31.3.77 to 20.3.80 – Interest Act coming in force during pendency of refer-ence – Award made on 12.10.82 – If interest for pre-reference period could be awarded. Held that in view of Section 6(2) of Interest Act,1978, interest could not be awarded for pre-refer-ence period, as it does not apply to pending proceedings. Case law discussed.(Paras 4,5)
Arbitration Act, 1940
Sections 14,17 with Interest Act, 1978 Section 6(2) Award of interest for pre-reference period – Said period from 31.3.77 to 20.3.80 – Interest Act coming in force during pendency of refer-ence – Award made on 12.10.82 – If interest for pre-reference period could be awarded. Held that in view of Section 6(2) of Interest Act,1978, interest could not be awarded for pre-refer-ence period, as it does not apply to pending proceedings. Case law discussed.(Paras 4,5)
Cases Reffered:
1. State of Orissa v. B.N. Agarwalla
2. Executive Engineer (Irrigation) v. Abhaduta Jena
3. State of Orissa v. Niranian Swain
2. Executive Engineer (Irrigation) v. Abhaduta Jena
3. State of Orissa v. Niranian Swain
JUDGEMENT:
ORDER
1. The only question which has been raised in this appeal pertains to the award of interest by the Arbitrator for the pre-reference period. The pre-reference period, in the present case, is from 31.3.1977 to 20.3.1980. This entire period is prior to coming into force of the Interest Act, 1978. The Interest Act, 1978 came into force during the pendency of the reference and the award is made on 12.10.1982 when the Interest Act, 1978 was in force.
2. The short question is whether the Arbitrator in 1982, could have awarded interest for the pre-reference period in view of the provisions of the Interest Act, 1978, although the entire pre-reference period is prior to the coming into force of the Inter-est Act, 1978.
3. In this connection, our attention has been drawn to the decision of this Court in State of Orissa v. B.N. Agarwalla re-ported in JT 1997(2) SC 51. In paragraph 18, this Court has held that interest cannot be given for the period prior to the coming into force of the Interest Act, 1978. This Court has also held that the decision in the case of Executive Engineer (Irrigation) v. Abhaduta Jena reported in JT 1997 (4) SC 8 has not been over-ruled in so far as it deals with interest for the pre-reference period. This Court has upheld the view taken in Abhaduta Jena’s case to the effect that in respect of pre-reference period, interest cannot be awarded in respect of the period not covered by the Interest Act, 1978. Our attention was also drawn to a decision in the case of State of Orissa v. Niranian Swain report-ed in JT 1989 (3) SC 366 where also this Court said that where reference to arbitration was made prior to the commencement of the Interest Act, 1978, Arbitrator is not empowered to grant interest for the period upto the date of submission of claim to arbitration.
4. In this connection, we would also like to refer to Section 6(2) of the Interest Act, 1978 which provides as follows:
Section 6(1)………………lm4
Section 6(2) : The provision of this Act shall not apply to any suit or other legal proceeding pending at the commencement of this Act and the provision of the corresponding law appli-cable immediately before such commencement shall, notwith-standing the repeal of such law by sub-section(1), continue to apply to such suit or other legal proceeding.
5. This section also clearly provides that the provision of the Interest Act, 1978 shall not apply to any legal proceeding pend-ing at the commencement of the said act. Since the definition of “Court” under Section 2(a) includes a Tribunal or Arbitrator, the proceedings before the Arbitrator would also be covered by the expression “legal proceedings” in Section 6(2). Therefore inter-est Act, 1978 not apply to pending arbitration proceedings.
6. In the premises, the present appeal is allowed and the award of interest for the pre-reference period, namely, 31.3.1977 to 20.3.1980 is disallowed. The award and the degree are modified accordingly to this effect.
1. The only question which has been raised in this appeal pertains to the award of interest by the Arbitrator for the pre-reference period. The pre-reference period, in the present case, is from 31.3.1977 to 20.3.1980. This entire period is prior to coming into force of the Interest Act, 1978. The Interest Act, 1978 came into force during the pendency of the reference and the award is made on 12.10.1982 when the Interest Act, 1978 was in force.
2. The short question is whether the Arbitrator in 1982, could have awarded interest for the pre-reference period in view of the provisions of the Interest Act, 1978, although the entire pre-reference period is prior to the coming into force of the Inter-est Act, 1978.
3. In this connection, our attention has been drawn to the decision of this Court in State of Orissa v. B.N. Agarwalla re-ported in JT 1997(2) SC 51. In paragraph 18, this Court has held that interest cannot be given for the period prior to the coming into force of the Interest Act, 1978. This Court has also held that the decision in the case of Executive Engineer (Irrigation) v. Abhaduta Jena reported in JT 1997 (4) SC 8 has not been over-ruled in so far as it deals with interest for the pre-reference period. This Court has upheld the view taken in Abhaduta Jena’s case to the effect that in respect of pre-reference period, interest cannot be awarded in respect of the period not covered by the Interest Act, 1978. Our attention was also drawn to a decision in the case of State of Orissa v. Niranian Swain report-ed in JT 1989 (3) SC 366 where also this Court said that where reference to arbitration was made prior to the commencement of the Interest Act, 1978, Arbitrator is not empowered to grant interest for the period upto the date of submission of claim to arbitration.
4. In this connection, we would also like to refer to Section 6(2) of the Interest Act, 1978 which provides as follows:
Section 6(1)………………lm4
Section 6(2) : The provision of this Act shall not apply to any suit or other legal proceeding pending at the commencement of this Act and the provision of the corresponding law appli-cable immediately before such commencement shall, notwith-standing the repeal of such law by sub-section(1), continue to apply to such suit or other legal proceeding.
5. This section also clearly provides that the provision of the Interest Act, 1978 shall not apply to any legal proceeding pend-ing at the commencement of the said act. Since the definition of “Court” under Section 2(a) includes a Tribunal or Arbitrator, the proceedings before the Arbitrator would also be covered by the expression “legal proceedings” in Section 6(2). Therefore inter-est Act, 1978 not apply to pending arbitration proceedings.
6. In the premises, the present appeal is allowed and the award of interest for the pre-reference period, namely, 31.3.1977 to 20.3.1980 is disallowed. The award and the degree are modified accordingly to this effect.
