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Report No. 76

4.15. History of the law in India.-

For the first time, a provision as to interest on awards was made by enacting section 29 in the Arbitration Act, 1940. In the original Bill1 clause 30, which dealt with interest on awards, had been drafted on the lines similar to section 11 of the English Act of 1934, that is to say it provided for interest on awards as from the date of the award. Section 11 of the English Act of 1934 read as follows:

"11. A sum directed to be paid by an award shall, unless the award otherwise directs, carry interest, as from the date of the award and at the same rate as judgement debt."

But when the Bill was referred to the Select Committee, the Select Committee suggested a deliberate change and a departure from the English law. The recommendation of the Select Committee on this aspect of the matter runs as follows:-

"Clause 29 (clause 30 in the Bill as introduced).

Instead of fixing by the Act the rate of interest which an award shall bear and enacting that interest shall run from the date of the award, we have provided in accordance with the analogous provision in the Code of Civil Procedure that the court may fix the rate of interest, but we have made the date from which the interest shall run the date of the decree."

The recommendation of the Select Committee was accepted. Accordingly, section 29, as enacted, operates only from the date of the decree.

1. L.A. Bill No. 34 of 1939.

Arbitration Act, 1940 Back

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