A.P. State Trading
Corp. Ltd. Vs. M/S G.V.Malla Reddy & Co. [2010] INSC 805 (27 September
2010)
Judgment
CIVIL APPELLATE
JURISDICTION CIVIL APPEAL NOS. 8317-8318 OF 2010 [Arising out of SLP(C)
No.16599-16600/2010 A.P. STATE TRADING CORPORATION LTD. .......APPELLANT Versus
O R D E R
Mr. M. Vijaya
Bhaskar, learned counsel appears on caveat for the respondent.
1.
Leave
granted.
Heard.
2.
The
arbitrator made an award dated 6.7.1991 allowing claims 1 to 8, 11 and 12
(Note: claims 1,2 and 5 were allowed only in part) and disallowing claims 9, 13
to 20 of the respondent. The arbitrator also granted interest from 10.3.1989 to
6.1.1990 and from the date of award to date of decree at 18% per annum. On the
award being challenged, the Civil Court, by judgment dated 19.2.2001 set aside
the award on claims 5, 6 and 8. The Civil Court limited the interest awarded
(for the periods 10.3.1989 to 6.1.1990 and from date of awarded to date of
decree) only in regard to amounts awarded under claims 1 to 4 and 7 and made
the award a rule of the Court with further interest at 18% per annum from the
date of decree to date of payment on the amounts allowed under claims 1 to 4
and 7. Both respondent and the appellant challenged the decision of the Civil
Court. The High Court, by impugned order dated 30.12.2009, dismissed the appeal
and revision filed by the appellant.
It allowed the appeal
and revision filed by the respondent in part and held that the respondent is
entitled to interest from the date of reference to date of award. In other
words, in view of the judgment of the High Court, the interest is payable
pendente lite and in future at 18% per annum. The said judgment is challenged
in these appeals by special leave.
3.
The
award of the Arbitrator is governed by the Arbitration Act, 1940. This court
has been consistently taking a view that in the absence of any specific
contract in regard to rate of interest, pendente lite and future interest
should not normally exceed 9% per Construction Pvt. Ltd., (2009) 12 SCC 1]
4.
In
view of the above, the appeals are allowed in part and the interest awarded is
reduced from 18% to 9% per annum. In all other respects, the judgment of the
Civil Court as modified by the High Court is upheld.
......................J.(
R.V. RAVEENDRAN )
.....................J.
New
Delhi
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