If contract between parties bar or restricts grant of interest on amount payable - interest award by Arbitrator - not justifiable

Citation

CDJ 2011 MHC 738

Raghavendra construction company vs the general Manager, southern railway

Head Note

Letters Patent - Clause 15 - Arbitration and Conciliation Act - Section 37(1)(b) - Original Side Rules - Order XXXVI Rule 1 - existing Metre Gauge track between Vridhachalam and Ariyalur Stations in Reaches III and IV" was entrusted by the Railways to the Appellant - work was therefore to be completed by 16.6.1997 - Agreement was also entered into on 30.4.1997 - there were number of extensions and the work was extended upto 31.12.1998 - Certain disputes and differences arose and the appellant prayed for arbitration - Arbitral Tribunal partly allowed claims 1 to 8 and the claims 9 and 10 of the 1st respondent were rejected - Railways complied claims 1 to 8 and a total sum of Rs.53,64,716/- was paid to the appellant - award was challenged on the ground that under clause 16(2) of General Conditions of Contract, no interest was payable on the amounts - Court held - learned single Judge held that Clause 16(2) of General Conditions of Contract bars a claim of interest on the amounts payable to the contractor and when there is a bar for claiming interest, it is binding on the parties - learned single Judge rightly set aside the award of interest - appeal dismissed.

Cases Referred:
1. SAYEED AHMED AND COMPANY VS. STATE OF UTTAR PRADESH AND OTHERS, (2009) 12 SCC 26.
2. MADNANI CONSTRUCTION CORPORATION (P) LTD. VS. UNION OF INDIA, (2010) 1 SCC 549.
3. IRRIGATION DEPARTMENT, GOVERNMENT OF ORISSA VS. G.C.ROY ((1992) 1 SCC 508).
4. SREE KAMATCHI AMMAN CONSTRUCTIONS VS. DIVISIONAL RAILWAY MANAGER (WORKS), PALGHAT AND OTHERS, ((2010) 8 SCC 767).
5. Union of India v. Saraswat Trading Agency ((2009) 16 SCC 504).
6. Port of Calcutta Vs. Engineers-De-Space-Age ((1996) 1 SCC 516).

Comparative Citation:
2011 (2) CTC 194