HIND BUILDERS ETC. versus UNION OF INDIA AND VICE-VERSA

Citation: [1990] 2 S.C.R. 638 · Decided: 24-04-1990 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 5 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
HIND BUILDERS ETC. 
v. 
UNION OF INDIA AND VICE-VERSA 
APRIL 24, 1990 
[S. RANGANATHAN AND A.M. AHMADI, JJ.) 
Arbitration: A ward-Error on the face of the award-Clause in 
the contract open to two equally plausible interpretations-Legitimate 
for Arbitrators to accept one or the other of the available interpretations 
and even if the court may think that the other view is preferrable, the 
C court will not and should not interfere. 
Award-Error on the face of award-Annexure setting out the 
award as against various items of claim-Mere fact that statement of 
claim refers to various items in the schedule to the contract does not 
result in the contract itself being incorporated in the award-No error 
D can be found in the award. 
IE 
Pendente Lite Interest: Power of Arbitrator-Not entitled to 
grant pendente lite interest unless reference is made in the course of a 
suit-Same powers to grant interest pendente lite as the courts when 
matter is referred by the Court. 
Certain disputes having arisen between the Union of India and tbe 
Contractors in respect of the Contract awarded to the letter for the 
execution of certain civil works pertaining to the Metro Railway Project 
iu Calcutta, the same were referred for decision to two Arbitrators 
appointed by the High Court of Calcutta. The Contractors filed their 
f 
itemised claim before the Arbitrators for a total sum ofRs.2,05.67.554. 
The Arbitrators awarded a sum of Rs.57,47 ,198 to the contractors in_ 
full and final settlement of all their claims which included a sum of 
Rs.6, 76,540 as interest vide item (1). They directed that the award shall 
be complied with within sixty days of its publication failing which sim-
ple interest @ 11 percent per annum shall accrue thereon (excluding 
(; interest amount of Rs.6,76,540) till the date of payment or decree upon 
award which ever is earlier. On an application being made to the High 
Court for making the Award a rule of the Court, the learned single 
judge confirmed the award except that the principal sum awarded was 
reduced by Rs.5.20.000 with the direction that the amount so awarded 
will carry interest @ l l % per annum from the date of reference till the 
H date of the award. 
638 
--
HIND BUILDERS v. U.0.1. 
639 
The l."nion of India preferred an appeal to the Division Bench. 
which reduced the amount awarded under item (c)(xii) from 
-
. Rs.23,96,000 to Rs.2,39,000. Thus the principal amount to be awarded 
to the contractors was finally put at Rs.30, 70, 798 and this amount was 
directed to carry interest @ 11 % per annum from the date of the refer-
ence till the date of the award. 
Aggrieved by the order of the Division Bench reducing the 
"'--·· amount awarded under item (c)(xii) from Rs.23,96,000 to 2,39,600 the 
...,,-
contractors preferred an appeal to this Court. The Union of Indian on 
the other hand preferred a cross-appeal praying (i) that interest should 
___,-> not be payable on the amount of Rs.30, 70, 798 fixed by the High Court but 
only on Rs.23,94,258 left after deducting therefrom the amount of 
Rs.6, 76,540 awarded by the Arbitrators in respect of itein No. (LJ and 
(ii) that. though the arbitrators had also awarded interest on the princi-
"'T-· - pal sum till the date of payment or decree on award in case payment was 
not done within sixty days of the publication of the award. the 
contractors should be held entitled to interest upto the date of the award 
only and not beyond it because both the learned single judge and the 
Division Bench have held so and the contractors have preferred no 
appeal therefrom. 
Taking up the contractor's appeal first, this Court carrie to the 
conclusion that the Division Bench had exceeded its jurisdiction in 
interfering with this part of the award and restored the amount 
awarded by the arbitrators under item (c)(xii). 
Dealing with the appeal of the Union oflndia this Court ruled that 
there was really no dispute left about Union of India's first contention 
as to what was the correct amount on which interest was payable to the 
-;..- - contractors after its findings in the contractor's appeal and placed the 
figure at Rs.45.50.658. 
Dealing with the second contention as to what was the period with 
reference to which interest would be payable to the contractors on the 
above amount it was noticed that the arbitrators had allowed interest 
from 5. J0.82 (date of termination of contract) to 26.3.84 (date of 
award) ·under item (L) and had also allowed in

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