// 1 //

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 8460 / 2022     

(@SLP (C) No.32002 OF 2018)

Indian Railway     …Appellant(s)

Construction Company Limited 

Versus

M/s National Buildings  …Respondent(s)

Construction Corporation Limited 

J U D G M E N T

M. R. Shah, J.

1.Feeling aggrieved and dissatisfied with the impugned

judgment and order dated 14.08.2018 passed by the

High Court of Delhi at New Delhi in FAO(OS) No.112

of 2018 by which the High Court has partly allowed

the   said  appeal,  the  Indian Railway  Construction 2023 INSC 248

// 2 //

Company   Limited   (hereinafter   referred   to   as

“IRCON”) has preferred the present appeal. 

2.The brief facts leading to filing of the present appeal

in nut­shell are as under: 

2.1That, an Agreement was entered into between IRCON

and   the   respondent   –   M/s.   National   Buildings

Construction   Corporation   Limited   (hereinafter

referred to as “NBCC”), whereby the respondent was

awarded the work of construction of Railway Station

cum Commercial Complex at Vashi, Navi Mumbai at

a cost of Rs.3042.91 lakh, to be constructed within a

period of 30 months from 05.04.1990. NBCC failed

to   complete   the   work   in   time.   Thereafter,   the

supplementary   agreements   were   entered   into

between the parties. As the provision for grant of

advances had exhausted, NBCC approached IRCON

with modified programme for completion of works

and sought for additional financial aid on certain

terms and conditions. IRCON in consultation with

// 3 //

CIDCO, agreed to grant advance as a special case

against   Bank   Guarantee.   Accordingly,   a

supplementary   Agreement   dated   17.12.1991   was

entered into between the parties providing for special

advance   of   an   amount   of   Rs.   68   lakhs   bearing

interest at the rate of 18% per annum on furnishing

of Bank Guarantee. In terms of the supplementary

Agreement dated 17.12.1991, a special advance of

Rs.68 lakhs was also given to NBCC. As there was

delay   in   the   work   of   NBCC   and   the   work   was

practically   abandoned   and   came   to   a   standstill,

IRCON served on NBCC a notice dated 21.02.1994

terminating the contract relying upon Clause 60.1 of

the Agreement. 

2.2That,   thereafter,   after   some   litigation   before   the

Delhi High Court, the NBCC invoked the arbitration

clause. The Arbitral Tribunal was constituted. The

Arbitral   Tribunal   passed   the   award   dated

04.11.2011. That the Arbitral Tribunal rejected the

// 4 //

NBCC’s claim for refund of two security deposits i.e.

Claim Nos.33 and 34. While holding so, the Arbitral

Tribunal held that though termination with reference

to Clause 60.1 was bad in law, but justified the

termination   with   reference   to   Clause   17.4   of   the

Contract   and   consequently   rejected   the   NBCC’s

claim for refund of two security deposits i.e. claim

Nos.33 and  34.  The  Arbitral  Tribunal  also partly

allowed  Counter   Claim  No.3  in  favour  of   IRCON.

Counter Claim No.3 was relatable to the counter

claim   of   IRCON   for   a   total   of   Rs.3,65,38,806/­

towards interest on various advances given to NBCC,

more   particularly,   with   regard   to   two   specific

advances being (1) Special Advance and (2) Advance

against hypothecation of equipment. 

2.3Feeling aggrieved and dissatisfied with the award

passed by the learned Arbitral Tribunal and insofar

as relating to Claim Nos.33 and 34 and the Counter

Claim No.3 which were in favor of IRCON, the NBCC

// 5 //

approached the High Court by filing an application

under Section 34 of the Arbitration and Conciliation

Act,   1996   (hereinafter   referred   to   as   “Arbitration

Act”).   The   application   under   Section   34   of   the

Arbitration Act was confined to the aforesaid three

claims   /   counter   claims   respectively   viz.   Claim

Nos.33 and 34 and Counter Claim No.3 only. 

2.4By the judgment and order dated 03.03.2017, the

learned Single Judge of the High Court set aside the

rejection by the learned Arbitral Tribunal of Claim

Nos.33 and 34 of NBCC to the extent it concerned

the   return   of   security   deposit   amounts   i.e.

Rs.5,57,486/­ + Rs.60,85,840/­ by observing and

concluding   that   once   the   Arbitral   Tribunal   found

that the termination with regard to Clause 60.1 was

not   justified,   it   was   not   open   for   the   Arbitral

Tribunal   thereafter   to   consider   the   termination

under Clause 17.4 justifying forfeiture of the security

deposits. The learned Single Judge of the High Court

// 6 //

also   set   aside   the   award   passed   by   the   learned

Arbitral   Tribunal   on   Counter   Claim   No.3   by

observing that there is no clause in the contract in

particular   awarding   18%   interest   per   annum   on

special advance. 

2.5The   judgment   and   order   passed   by   the   learned

Single Judge was the subject matter of appeal under

Section 37 of the Arbitration Act before the Division

Bench of the High Court. 

2.6By the impugned judgment and order, the Division

Bench of the High Court has partly allowed the said

appeal under Section 37 of the Arbitration Act to the

extent upholding the award passed by the learned

Arbitral Tribunal insofar as awarding the interest on

special   advance   is   concerned.   The   rest   of   the

judgment and order passed by the learned Single

Judge has been affirmed / confirmed by the Division

Bench of the High Court. 

// 7 //

2.7Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the Division Bench of

the High Court, IRCON has preferred the present

appeal. 

3.Shri R.S. Hegde, learned counsel has appeared on

behalf of the appellant – IRCON   and Shri Arvind

Minocha, learned Senior Advocate has appeared on

behalf of the respondent – NBCC. 

4.Shri   R.S.   Hegde,   learned   counsel   appearing   on

behalf of the appellant has vehemently submitted

that   on   appreciation   of   entire   evidence   and   the

material   on   record   as   the   learned   Tribunal   has

observed and held that the IRCON was justified in

rescinding the contract due to abandonment of work

by NBCC and when the said finding attained the

finality,   the   IRCON   was   justified   in  forfeiting   the

security deposits. It is submitted that as such the

High   Court   has   taken   too   technical   view.   It   is

// 8 //

submitted   that   as   such   both,   Clause   17.4   and

Clause 60.1 are required to be read together. It is

submitted that the main aspect which is required to

be   considered   is   whether   the   NBCC   failed   to

complete the work as per the contract and whether

the   NBCC   abandoned   the   work   and   thereafter,

having   satisfied   that   even   during   the   extended

period, the NBCC was not able to complete the work,

the contract was rightly rescinded and therefore, the

security deposits were liable to be forfeited. 

4.1It   is   submitted   that   therefore   both,   the   learned

Single Judge (in application under Section 34 of the

Arbitration Act) and the Division Bench of the High

Court have materially erred in upsetting / quashing

and setting aside the award passed by the learned

Arbitral Tribunal rejecting the Claim Nos.33 and 34. 

4.2It is submitted that both, the learned Single Judge

as well as the Division Bench of the High Court have

// 9 //

materially  erred  in not  appreciating  the fact  that

once the termination is justifiable with reference to

the terms of the contract and even if a wrong clause

is mentioned in the letter terminating the contract,

the power to terminate the contract cannot be said

to be illegal, more particularly, when the power is

traceable to the specific terms of the contract, i.e.,

Clause 17.4. 

4.3Now, so far as the Counter Claim No.3 is concerned,

it is submitted that as such the Division Bench of

the High Court has set aside the award of interest on

the   amount   advanced   against   hypothecation   of

equipments, on the ground that there is no such

provision   of   award   of   interest   in   the   contract   /

supplementary   Agreements.   It   is   submitted   that

however, the Division Bench of the High Court has

not properly appreciated the fact that there is no bar

to award interest  on  the  amount  advanced. It is

submitted that the Arbitrator has power to award

// 10 //

interest pendente lite unless specifically barred from

awarding it. Reliance is placed on the decision of this

Court in the case of Raveechee and Company Vs.

Union of India reported in (2018) 7 SCC 664.

Making above submissions, it is prayed to allow

the present appeal and restore the award passed by

the Arbitral Tribunal. 

5.Learned senior counsel, Mr. Minocha appearing on

behalf of the respondent – NBCC while supporting

the impugned judgment and order passed by the

High Court has vehemently submitted that in the

present case admittedly the IRCON invoked Clause

60.1 and rescinded the contract. It is submitted that

even the learned Arbitral Tribunal also observed and

held that the IRCON was not justified in rescinding

the contract under Clause 60.1. It is submitted that

however, thereafter the Arbitral Tribunal justified the

termination   of   the   contract   under   Clause   17.4,

// 11 //

which as rightly held by the learned Single Judge /

Division Bench was not permissible. 

5.1It   is   submitted   that   the   finding   recorded   by   the

learned Arbitral Tribunal that the contract could not

have been rescinded under Clause 60.1 had attained

the finality. It is submitted that therefore the learned

Arbitral Tribunal was not justified in rejecting the

claim  Nos.33  and  34  which has   rightly  been set

aside by the learned Single Judge and the Division

Bench, which are not required to be interfered with

by this Court in exercise of limited jurisdiction under

Article 136 of the Constitution of India. 

5.2It is further submitted by learned Counsel appearing

on behalf of the respondent – NBCC that in absence

of   any   specific   provision   in   the   contract   /

supplementary   Agreements   on   interest   on   the

amount   advanced   against   hypothecation   of

equipments, the Division Bench of the High Court

// 12 //

has rightly set aside the same. 

Making   above   submissions,   it   is   prayed   to

dismiss the present appeal. 

6.We have heard learned Counsel appearing for the

respective parties at length. 

7.As observed hereinabove, challenge to the award by

the   learned   Arbitral   Tribunal   before   the   learned

Single   Judge   and   now   before   this   Court   is   with

respect to Claim Nos.33 and 34 and Counter Claim

No.3 (Partly). 

7.1The   learned   Arbitral   Tribunal   rejected   the   Claim

Nos.33 and 34 which were with respect to forfeiture

of the security deposits on termination / rescind of

the contract. The Counter Claim No.3 of the IRCON

was  for  a  total   sum  of  Rs.3,65,38,806/­  towards

interest on various advances given to NBCC, more

particularly,  with  regard  to two  specific advances

being (1) Special Advance and (2)  Advance against

// 13 //

hypothecation   of   equipment.   The   learned   Arbitral

Tribunal   allowed   the   Counter   Claim   No.3   and

awarded interest at the rate of 18% per annum in

favour   of   the   IRCON   being   interest   on   special

advance   and   advances   against   hypothecation   of

equipments. The Division Bench of the High Court

has   partly   allowed   the   appeal   and   allowed   the

interest in favour of IRCON at the rate of 18% so far

as special advance is concerned. 

7.2While   considering   the   findings   recorded   by   the

learned Arbitral Tribunal and while appreciating the

submissions made by the learned counsel appearing

on behalf of the respective parties, relevant clauses

of   the   Agreement,   more   particularly,   Clause

Nos.17.4, 59.1, 60.1 are required to be referred to,

which are as under: 

“TIME TO BE OR THE ESSENCE OF THE

CONTRACT:

17.4The time for completion of the works

by the date or extended date fixed for

// 14 //

completion   shall   be   deemed   to   be   the

essence   of   the   contract   and   if   the

contractor   shall   fail   to   complete   the

works   within   the   time   prescribe   the

Company IRCON shall, if satisfied that

the   works   can   be   completed   by   the

contractor within a reasonably short time

thereafter be entitled without prejudice to

any other right or remedy available on

that   behalf   to   recover   by   way   of

ascertained   liquidated   damages   a   sum

equivalent to one per cent of the contract

value of the works for each week or part

of week the contractor is in default and

allow   the   contractor   such   further

extension of time as the Project Manager

may decide. If the Company (IRCON) is

not   satisfied   that   the   works   can   be

completed by the contractor and in the

event   of   failure   on   the   part   of   the

contractor to complete the works within

the further extension of time allowed as

aforesaid the Company (IRCON) shall be

entitled, without prejudice to any other

right or remedy available in that behalf,

to   appropriate   the   contractor’s   security

deposit and rescind the contract, whether

or not actual damage is caused by such

default. 

RIGHT   OF   COMPANY   (IRCON)   TO

DETERMINE CONTRACT:

59.1The   Company   (IRCON)   shall   be

entitled to determine and terminate the

contract   at   any   time   should   in   the

Company’s   (IRCON)   opinion,   the

cessation   of   work   become   necessary

// 15 //

owing to paucity of funds or from any

cause   whatsoever,   in   which   case   the

value of approved materials at site and of

work done to date by the contractor will

be paid for in full at the rates specified in

the contract. Notice in writing from the

Company (IRCON) of such determination

and   the   reason   therefore   shall   be

conclusive evidence thereof. 

DETERMINATION OF CONTRACT OWING

TO DEFAULT OF CONTRACTOR:

60.1If the contractor should:­ 

i.become bankrupt or insolvent or

ii.make   an   arrangement   with   or

assignment in favour of his creditors, or

agree   to   carry   out   the   contract   under

committee of Inspection of his creditors,

or

iii.Being a company or corporation, go

into liquidation (other than a voluntary

liquidation   for   the   purpose   of

amalgamation or reconstruction), or 

iv.have an execution levied on his good

or property on the works, or 

v.assign   the   contract   or   any   part

thereof   otherwise   than   as   provided   in

Clause 7 of these conditions, or

vi.abandon the contract, or

vii.persistently   disregard   the

// 16 //

instructions of the Project Manager, or

contravene any provision of the contract,

or

viii.fail   to   adhere   to   the   agreed

programme of work by a margin of 10% of

the stipulated period, or

ix.fail to remove materials from the site

or to pull down and replace work after

receiving from the Project Manager notice

to the effect that the said materials or

works have been condemned or rejected

under conditions, or 

x.fail   to   take   steps   to   employ

competent or additional staff and labour

as required under these conditions, or 

xi.fail to afford the Project Manager or

Project   Manager’s   representative   proper

facilities for inspecting the works or any

part   thereof   as   required   under   these

conditions, or 

xii.promise,   offer   or   give   any   bribe,

commission,   gift   or   advantages   either

himself or through his partner, agent or

servant   to   any   officer   of   employee   of

IRCON or to any person on his or on the

behalf in relation to the execution of this

or any other contract with IRCON.

Then and in any of the said cases, the

Project   Manager   on   behalf   of   the

Company   (IRCON)   may   serve   the

contractor with a notice in writing to that

effect   and   if   the   contractor   does   not

// 17 //

within 7 days after the delivery to him of

such   notice   proceed   to   make   good   his

default in so far as the same is capable of

being  made  and  carry  on  the  work  or

comply with such directions as aforesaid

to the entire satisfaction of the Project

Manager the Company (IRCON) shall be

entitled after giving 48 hours notice in

writing   under   the   hand   of   the   Project

Manager (to remove the contractor from

the whole or any portion or portions as

may be specified in such notice) of the

works   without   thereby   avoiding   the

contract or releasing the contractor from

any of his obligations or liabilities under

the contract and adopt any or several of

the following courses. 

a)to rescind the contract, of which

rescission   notice   in   writing   to

the contractor under the hand

of the Project Manager shall be

conclusive   evidence,   in   which

case the security deposit of the

contractor shall stand forfeited

to the Company IRCON without

prejudice   to   the   Company’s

(IRCON)   right   to   recover   from

the   contractor   any   amount   by

which the cost of competing the

works by any other agency shall

exceed   the   value   of   the

contractor.

b)to carry out the works or any

part thereof, by the employment

of   the   required   labour   and

materials,   the   costs   of   which

// 18 //

shall  include lead, lift,  freight,

supervision   and   all   incidental

charges   and   to   debit   the

contractor with such costs, the

amount of which as certified by

the   Project   Manager   shall   be

final   and   binding   upon   the

contractor,   and   to   credit   the

contractor with the value of the

works done as if the works had

been   carried   out   by   the

contractor   under   the   terms   of

the contract. And the certificate

of Project Manager in respect of

the amount to be credited to the

contractor   shall   be   final   and

binding upon the contractor;

c)to   measure   up   the   work

executed by the contractor and

to   get   the   remaining   work

completed by another contractor

at the risk and expense of the

contractor   in   all   respects   in

which   case   any   expenses   that

may be incurred in excess of the

sum   which   would   have   been

paid   to   the   contractor   if   the

works had been carried out by

him   under   the   terms   of   the

contract, the amount of which

excess as certified by the Project

Manager   shall   be   final   and

binding upon contractor shall be

borne   and   paid   by   the

contractor and may be deducted

from any moneys due to him by

the Company (IRCON) under the

// 19 //

contractor or otherwise or from

his   security   deposit.   Provided

always that in any case in which

any   of   the   powers   conferred

upon   the   Company   (IRCON)

hereof   shall   have   become

exercisable and the same shall

not   be   exercised,   the   non­

exercise   thereof   shall   not

constitute a waiver of any of the

conditions   hereof   and   such

powers shall notwithstanding be

exercisable in the event of any

future   case   of   default   by   the

contractor for which his liability

for past and future shall remain

unaffected.” 

 Considering   the   material   on   record   and   on

appreciation   of   evidence,   the   learned   Arbitral

Tribunal though observed that the IRCON was not

justified   in   rescinding   the   contract   under   Clause

60.1, rescinding of the contract / termination of the

contract   was   justified   under   Clause   17.4,   and

thereby has rejected the Claim Nos.33 and 34 of the

NBCC which were with respect to forfeiture of the

security deposits. The learned Single Judge as well

as the Division Bench of the High Court have set

// 20 //

aside   the   award   passed   by   the   learned   Arbitral

Tribunal rejecting Claim Nos.33 and 34 inter alia on

the ground that once the Arbitral Tribunal gave the

finding that the IRCON was not justified in invoking

Clause   60.1,   thereafter   it   was   not   open   for   the

Arbitral Tribunal to take the help of Clause 17.4 and

therefore,   the   learned   Arbitral   Tribunal   was   not

justified  in  rejecting   Claim  Nos.33  and   34   which

were with respect to forfeiture of security deposits,

which could have been under Clause 17.4. 

However, it is required to be noted that as such

the   finding   recorded   by   the   Arbitral   Tribunal   on

applicability of Clause 17.4 and/or rescinding of the

contract under Clause 17.4 has not been set aside

either by the learned Single Judge or by the Division

Bench of the High Court and therefore, the findings

recorded   by   the   learned   Arbitral   Tribunal   on

applicability of Clause 17.4 has attained the finality.

The learned Arbitral Tribunal as such was absolutely

// 21 //

justified in considering whether IRCON was justified

in   rescinding   the   contract,   may   be   either   under

Clause 60.1 or under Clause 17.4. Even otherwise,

from the material on record and even the notice

dated 21.02.1994 and the subsequent notice dated

07.03.1994, we are satisfied that the IRCON was

satisfied that the work could not be completed by the

contractor   even   within   further   extension   of   time.

Clause 17.4 provides that if the company (IRCON) is

not satisfied that the works can be completed by the

contractor and in the event of failure on the part of

the contractor to complete the works within further

extension   of   time   allowed,   the   IRCON   shall   be

entitled,   without   prejudice   to   any   other   right   or

remedy available in that behalf, to appropriate the

contractor’s   security   deposits   and   rescind   the

contract, whether or not actual damage is caused by

such default. Even Clause 60.1 also provides for

determination   of   contract   owing   to   default   of

// 22 //

contractor. It provides that if the contractor should

abandon the contract, or persistently disregard the

instructions of the Project Manager or contravene

any provisions of the contract…. then the Project

Manager on behalf of the Company may serve the

contractor with a notice in writing to that effect and

if the contractor does not within 7 days after the

delivery to him of such notice proceed to make good

his default in so far as the same is capable of being

made good and carry on the work or comply with

such directions as aforesaid to the entire satisfaction

of the Project Manager, the Company (IRCON) shall

be entitled after giving 48 hours notice in writing

under the hand of the Project Manager (to remove

the   contractor   from   the   whole   or   any   portion   or

portions as may be specified in such notice) of the

works   without   thereby   avoiding   the   contract   or

releasing the contractor from any of his obligations

or liabilities. It further provides that in such a case

// 23 //

the Project Manager on behalf of the IRCON shall be

entitled to rescind the contract, in which case the

security   deposit   shall   stand   forfeited   to   IRCON

without prejudice to IRCON’s right to recover from

the   contractor  any  amount   by  which  the  cost  of

completing   the   works   by   any   other   agency   shall

exceed the value of the contractor. 

7.3Thus, both, under Clause 17.4 and 60.1, on failure

of the contractor to complete the work, the IRCON is

justified in rescinding the contract and forfeit the

security   deposit.   At   the   cost   of   repetition   it   is

observed   that   the   learned   Arbitral   Tribunal   on

appreciation   of   entire   evidence   on   record,   had

specifically   observed   that   the   contractor   failed   to

complete   the   work   even   within   the   stipulated

extended period of time and even abandoned the

work   and   therefore,   the   IRCON   was   justified   in

rescinding the contract. The said finding as observed

hereinabove   has   attained   finality.   Therefore,   the

// 24 //

IRCON   was   absolutely   justified   in   forfeiting   the

security deposits and therefore, the learned Arbitral

Tribunal was absolutely justified in rejecting Claim

Nos.33 and 34, which were with respect to forfeiture

of security deposits by the IRCON. Both, the learned

Single Judge as well as Division Bench of the High

Court have seriously erred in setting aside the award

passed   by   the   learned   Arbitral   Tribunal   rejecting

Claim Nos.33 and 34. We are of the opinion that the

learned   Single   Judge,   therefore,   exceeded   in   its

jurisdiction under Section 34 of the Arbitration Act

quashing and setting aside the well­reasoned award

passed by the learned Arbitral Tribunal on rejecting

Claim Nos.33 and 34, which the Division Bench of

the High Court has wrongly affirmed. 

7.4Under the circumstances, the impugned judgment

and order passed by the learned Single Judge as well

as the Division Bench of the High Court quashing

and setting aside the award passed by the learned

// 25 //

Arbitral   Tribunal   rejecting   Claim   Nos.33   and   34

deserve to be quashed and set aside and the award

passed   by   the   learned   Arbitral   Tribunal   rejecting

Claim Nos.33 and 34 is required to be restored and

upheld. 

7.5Now, so far as the quashing and setting aside the

award   passed   by   the   Arbitral   Tribunal   awarding

interest @ 18% on advance for the hypothecation of

equipment, by the learned Single Judge confirmed

by the Division Bench is concerned, at the outset, it

is required to be noted that the Division Bench of the

High   Court   has   upheld   the   order   passed   by   the

learned Single Judge quashing and setting aside the

interest awarded by the learned Arbitral Tribunal on

advance for the hypothecation of equipment on the

ground   that   there   is   no   such   stipulation   in   the

agreement / contract.  However, the High Court has

not   at   all   considered   Section   31(7)(a)   of   the

Arbitration Act, which permits the arbitrator that

// 26 //

unless otherwise agreed by the parties, where and in

so far as an arbitral award is for the payment of

money, the Arbitral Tribunal may include in the sum

for which the award is made interest, at such rate as

it deems reasonable, for the whole or any part of the

period between the date on which the cause of action

arose and the date on which the award is made.

Thus,   unless   there   is   a   specific   bar   under   the

contract,   it   is   always   open   for   the   arbitrator   /

Arbitral   Tribunal   to   award   pendente   lite   interest.

Identical  question  came  to be  considered  by this

Court   in   the   case   of  Raveechee   and   Company

(supra).     In the said decision, it is observed and

held by this Court that an arbitrator has the power

to   award   interest   unless   specifically   barred   from

awarding it and the bar must be clear and specific.

In the said decision, it is observed and held that the

liability to pay interest pendente lite arises because

the claimant has been found entitled to the same

// 27 //

and had been kept out from those dues due to the

pendency of the arbitration, i.e., pendente lite.

Applying the law laid down by this Court in the

aforesaid decision to the facts of the case on hand,

once it was found that the advance amount was paid

for hypothecation of equipment and thereafter when

the   Arbitral   Tribunal   awarded   the   interest   on

advance for hypothecation of equipment, the same

was not required to be interfered with by the learned

Single Judge in exercise of the powers under Section

34 of the Arbitration Act and even by the Division

Bench of the High Court while exercising the powers

under Section 37 of the Arbitration Act.  However, at

the same time to award the interest @ 18% can be

said   to   be   on   a   higher   side.     In   the   facts   and

circumstances of the case, if the interest is awarded

@   12%   on   advance   for   the   hypothecation   of

equipment, the same can be said to be reasonable

interest.  

// 28 //

8.In   view   of   the   above   and   for   the   reasons   stated

above,   present   appeal   succeeds.     The   impugned

judgment and order passed by the learned Single

Judge as well as the Division Bench of the High

Court quashing and setting aside the award passed

by the Arbitral Tribunal rejecting Claim Nos. 33 and

34 are hereby quashed and set aside and the award

passed by the Arbitral Tribunal rejecting the claim

Nos. 33 and 34 is hereby restored.  The impugned

judgment and order passed by the Division Bench of

the High Court in confirming the judgment and order

passed   by   the   learned   Single   Judge   insofar   as

quashing and setting aside the award passed by the

Arbitral Tribunal awarding the interest @ 18% on the

advance   for   hypothecation   of   equipment   is

concerned,   the   same   is   hereby   quashed   and   set

aside and the award passed by the Arbitral Tribunal

awarding the interest on advance for hypothecation

of equipment is hereby restored, however, with a

// 29 //

modification that there shall be paid an interest @

12% pendente lite on advance for hypothecation of

equipment instead of 18% as awarded by the Arbitral

Tribunal.  

Present   appeal   is   accordingly   allowed   to   the

aforesaid   extent.     However,   in   the   facts   and

circumstances of the case, there shall be no order as

to costs. 

………………………………… J.

            (M. R. SHAH)

………………………………… J.

  (M.M. SUNDRESH)

New Delhi, 

March 17, 2023.