LexEXECUTIVE ENGINEER, DHANKANAL MINOR IRRIGATION DIVISION, ORISSA versus N.C. BUDHIRAJ (DEAD) BY LRS. ETC.
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A
EXECUTIVE ENGINEER, DHANKANAL MINOR IRRIGATION
B
c
DIVISION, ORISSA
v.
N.C. BUDHIRAJ (DEAD) BY LRS. ETC.
OCTOBER 29, 1999
[S.P. KURDUKAR, M. JAGANNADHA RAO AND
U.C. BANERJEE, JJ.]
Arbitration Act, I 940:
Arbitrator-Power to award interest under the Interest Act, 1839 for
the pre-reference period-Matter referred to larger Bench-Interest Act, 1839.
State of Orissa v. G.C. Roy, (1992) 1 SCC 508; Executive Engineer
(Irrigation) Balimela & Ors. v. Abhaduta Jena & Ors .. (1988) I SCC 418;
D State of Orissa v. B.N. Agarwal/a, (1997) 2 SCC 469; Bengal Nagpur Railway
Co. v. Ruttanji Ranji, 65 IA 66; Seth Thawardas Pherumal v. UO!, [1955) 2
SCR 48; UOI. v. A.L. Rallia Ram, (1964) 3 SCR 164; UOJ v. Watkins Mayor &
Co., AIR (1966) SC 275; U.0.1. v. West Punjab Factories Ltd, (1966) 1 SCR
580; Jugo/ Kishore Prabhatila/ Sharma & Ors. v. Vijayendra Prabhatilal
E Sharma & Anr., (1993) 1 SCC 114; Mis. Ashok Construction Company v.
F
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Union of India, [ 1971) 3 SCC 66; State of Madhya Pradesh v. Mis. Saith &
Skelton (P) Ltd, (1972) 1 SCC 702; Union of India v. Bungo Steel Furniture
Pvt. Ltd .. (1967) 1 SCR 324 and Firm Madan/a/ Roshan/a/ Mahajan v.
Hukumchand Mills Ltd., AIR (1967) SC 1030, referred to.
Edwards v. G.W R/y. Co .. (1851) 138 ER 603; Chandris v. lsbrandsten-
Mo/ler Co. Inc., (1951) 1 KB 240; President of India v. La Pintado Cia
Navegacion SA, [1984) 2 All England Report 773 and Panchaud v. Pagnan,
(1974) I Lloyd's Law Report 394, referred to.
Russell on the law of Arbitration page 324, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3586 of
1984 Etc.
From the Judgment and Order dated 15.5.82 of the Orissa High Court
H in Misc. A.No. 254 of 1981.
230
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XEN. MINOR IRRIGATION DIVISION v. N.C. BUDHIRAJ
231
Raj Kumar Mehta, Ms. Mana Chakraborty and Ms. M. Sarada for the A
Appellant.
A.B. Diwan, A.K. Panda, G.L. Sanghi, Vinoo Bhagat, S. Misra, R.P.
Wadhwani and R.S. Jena for the Respondents.
The following Order of the Court was delivered :
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In this batch of civil appeals the principal question that arises for
consideration is as to whether the Arbitrator has got jurisdiction to award
interest for the pre-reference period in cases which arose prior to
commencement of the Interest Act, 1978. The Interest Act, 1978 came into
force w.e.f. 19.8.1981. Before enforcement of this, the Interest Act, 1839 was C
holding the field. Under the impugned judgment, the High Court has awarded
interest for the pre-reference period and this is how the State of Orissa has
tiled all these appeals.
Mr. Raj Kumar Mehta, learned Advocate appearing in support of these
appeals urged that the question of payment of interest for the pre-reference D
, period is no more resintergra as the said question has been answered in the
negative by this Court in catena of judgments. However, Mr. Anil Diwan,
the learned Senior Counsel appearing for the respondents, urged that in view
of judgment of this Court in State of Orissa v. G.C. Roy, [1992) I S.C.C. 508,
the judgment in Executive Engineer {Irrigation) Balime/a & Ors. v. Abhaduta
Jena & Ors., [1988) l SCC 418, and State ofOrissa v. B.N. Agarwal/a, [1997) E
2 SCC 469, require reconsideration. Some English decisions as well as
decisions of this Court were also relied upon.
Mr. Mehta drew our attention to various judgment of this Court
including the Privy Council to support his submission. A strong reliance
has been placed by him on two decisions rendered by the three-Judge Bench, F
(1) Executive Engineer {Irrigation) Ba/ime/a & Ors. v. Abhaduta Jena & Ors.,
[1988) I SCC 418, (2) State of Orissa v. G.C. Roy, [1992) l SCC 508 and
State of Orissa v. B.N. Agarwal/a, [1997) 2 SCC 469. He also drew our
attention to the following decisions and urged that cases governed by the
Interest Act, I 839 the arbitrator has no jurisdiction to award pre-reference
interest in the absence of any custom or usage of trade having the force of G
law or any other provision of substantive law entitling the claimant to
recover interest.
I. Bengal Nagpur Railway Co., 65 IA 66.
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Seth Thawardas Pherumal v. UOI. [1955) 2 SCR 48.
H
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SUPREME COURT REPORTS [1999] SUPP. 4 S.C.R.
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3. UOI v. A.L. Rallia Ram, (1964] 3 SCR 164.
4.
UOI v. Watkins Mayor & Co., AIR (1966) SC 275.
5. UOI v. West Punjab Factories Ltd, [1966] I SCR 580.
In Executive Engineer v. Abhaduta Jena & Ors., the 3-Judge Bench
B has held that the Arbitrator has no jurisdicExcerpt shown. Read the full judgment & AI analysis in Lexace.