LexSECRETARY TO THE GOVT. OF ORISSA & ANR. versus SARBESWAR ROUT
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SECRETARY TO THE GOVT. OF ORISSA & ANR.
v.
SARBESWAR ROUT
OCTOBER 4, 1989
[LAUT MOHAN SHARMA, M.N. VENKATACHALIAH
AND KULDIP SINGH, JJ.]
Arbitration Act, 1940--Sections 30, 33 & 39--Arbitrator-Power
to grant interest prior to the proceeding-Proceedings held to com-
mence when arbitrator indicates willingness to act.
The Respondent executed certain works under a written agree-
ment with the appellant and a dispute arose thereunder which was
referred to arbitration. The arbitrator made an award which was filed
in Court. The appellant raised several objections which were all over-
ruled by the Trial Court, and the award was made a rule of the Court.
D The appellant thereupon appealed to the High Court under section 39 of
the Arbitration Act which was rejected. Hence this appeal by the
appellant.
The Court did not find any substance in the objections raised by
the appellant except the one taken by him regarding the power of the
E arbitrator to grant interest. Therefore the question that arosi for
determination by the Court was whether the arbitrator was competent
to award interest and if so in respect of which period, and further in the
circumstances of the case, from which date the proceedings before the
Arbitrator should be deemed to have commenced.
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Partly allowinng the appeal_o.nthat question, this Court,
HELD: Since the reference in this case was made in March 1982,
no objection can be taken to that part of the award whereby the respon-
dent has been allowed the claim ofuiterest for the earlier perlod. [368F]
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See: Executive Engineer (Irrigation) Ba/imela and Ors. v. Al>ha-
duta Jena and Others, [1988] l SCC 418 and Seth Thawardas Pherumal
v. The Union of India, [1955] 2 SCR 48.
The arbitrator in the present case was appointed on 16.3.1982.
· He after being informed about his appointment, directed the parties to
Ii submit their statements of claim by the 20th April, 1982. The actual
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SECY., GOVT. OF ORISSA v. S. ROUT (SHARMA, J.J
367
date when this order was made is not known. [369E]
So for as an action in a Court of law is concerned, it must be held
that it commences on the filing of a proper claim in accordance with the
presecribed procedure before the authority empowered to receive the
same. No reason is seen to apply a different approach in the case of
arbitration proceedings. As soon as the arbitrator indicates bis willing-
ness to act as such, the proceeding must"!' held to commence. [370A~C]
The arbitrator in the present case, by directing on 20.4.82 the
parties to file their statements of claim, clearly indicated that he
accepted the· offer to arbitrate. The proceeding must, therefore, be
deemed to have been instituted not later than this date. I370D]
The award so far as it allowed interest for the period after 20.4.82
is without jurisdiction and must be excluded. The appeal is accordingly
allowed in part. [370E]
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Gujarat Water Supply and Sewerage Board v. Unique Erectors
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(Gujarat;" {P) Lt£ &-:.for., [Fis9r-1 sec. 532; fOssifoglu v.
Coumaniaros, it941] i KB396 and Hari Shankar Lal v. Shambhunath
Prasad & Ors., [i962] 2 SCR 720, referred to.
CIVIL APPELLATE JURISDfCTION: Civil Appeal No. 2472
of 1989.
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From the Judgment and Order dated 23.4.1987 of the Orissa
High Court in M.A. No. 332 of 1984.
A.K. Panda for the Appellant.
R.K. Sahoo for the Respondent.
The Judgment of the Court was delivered by
SHARMA, J. This appeal by special leave by the State of Orissa
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-is directed against the judgment of the Orissa High Court rejecting its
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appeal under s. 39 of the Arbitration Act. The respondent executed
c_ertain w_ork under a written agreement with the_ appellant and a dis-
pute arose thereunder which was referred to arbitration. The Arbitra-
tion made an award which was filed in <;:gurt. On service of notice the
apellant raised several objections which tb_e t_r!~ court overruled. The
award w~s made a rule of the court. After unsuccessfully movin_g_ the
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SUPREME COURT REPORTS
[1989] Supp. 1 S.C.R.
High Court in appeal, the appellant has approached this Court.
Except for the objection taken by the appellant on the question
of the power of the Arbitrator to grant interest, we do not find any
merit in the other points decided by the impugned judgment. The
decision of the High Court is therefore affirmed on all the other
points.
3. So far the question- relating to interest is' concerned, it has
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