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Non-Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL      APPEAL      NO.     6262      OF     2012   @     Special     Leave     Petition     (C)     No.24337     of     2009   

NAND CONTR. & ENGR. THR G.D. AHUJA … Appellant(s)

Versus

NORTHERN COAL FIELDS LTD.          … Respondent(s)

WITH

CIVIL      APPEAL      NO.     6263      OF     2012   @     Special     Leave     Petition     (C)     No.31125     of     2009   

CIVIL      APPEAL      NO.     6265      OF     2012   @     Special     Leave     Petition     (C)     No.10681     of     2011      

CIVIL      APPEAL      NO.      6264      OF     2012   @     Special     Leave     Petition     (C)     No.32878     of     2009   

And      CIVIL      APPEAL      NO.      6266      OF     2012   

@     Special     Leave     Petition     (C)     No.18183     of     2009     

J     U     D     G     M     E     N     T   

K.S.     Radhakrishnan,     J.  

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1. Leave granted.

2. We may take up Civil Appeal arising out of Special Leave  

Petition (C) No.24337 of 2009 as a lead case which arises out of a  

common judgment dated 14.11.2007 of the High Court of Madhya  

Pradesh at Jabalpur.  In the first three appeals, we are concerned  

with the claim on interest alone and, in the other two appeals, the  

question involved is with regard to the claim for interest, water  

charges and the cost of plaster of paris.

3. The appellant was awarded the work relating to the  

construction of residential and non-residential building at Central  

Excavation Training Institute (CETI) vide work order dated  

25.2.1987 for an amount of Rs.68,91,589/-.  Appellant submits  

that for want of final drawings and delay in the supply of cement  

and other construction materials, including supply of water, the  

work was delayed, but completed on 1.4.1989 and handed over the  

buildings to the respondent.  There was delay on the part of the  

respondents in preparing and sanctioning the final bills which gave  

rise to various disputes and ultimately the matter was referred to a  

sole arbitrator.  The arbitrator passed an award dated 30.10.1999

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on the claims made by the appellant including claims for water  

charges and plaster of paris.  So far as the claim for interest is  

concerned, the arbitrator awarded simple interest @ 15% per  

annum from six months of the date of completion i.e. 1.4.1989 on  

all the amounts awarded till the date of payment.  Further, it was  

also ordered that in case the payment was delayed beyond three  

months of the date of the award, interest be paid @ 18% per annum  

from the date of payment.  No payment was made within three  

months from the date of the award.  Hence, according to the  

appellants, as per the award he was entitled for 15% interest from  

six months of the date of completion i.e. 1.4.1989 on the amounts  

awarded by the Arbitrator till the date of payment.  

4. Award passed by the Arbitrator was challenged by the  

respondent before the First Additional District Judge, Sidhi who did  

not upset the award on merits, but modified the interest awarded  

by the Arbitrator and substituted with 12% per annum simple  

interest from the date of the award i.e. 31.10.1999 till the date of  

payment.  Aggrieved by the said order, appeals were preferred by  

the appellant before the High Court.  The High Court disposed of all

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the appeals, reducing the interest to 10% per annum.  The High  

Court has also set aside the award on the claim for water charges  

and plaster of paris.  Being aggrieved by the judgment, as already  

stated, these appeals have been preferred by the appellant.

5. We have heard Shri Rohit Arya and Shri Mahabir Singh,  

learned senior counsel, appearing for the appellant and  

respondents, respectively.   Mr. Rohit Arya, learned senior counsel  

submitted that that the High Court as well as the District Court  

were not justified in interfering with the well considered award  

passed by the Arbitrator.  Learned senior counsel submitted that  

the reasons stated by the High Court are incorrect and contrary to  

the terms of contract as well as documents produced before the  

arbitrator.  Learned senior counsel submitted that the Arbitrator  

was justified in allowing the claim of water charges to the tune of  

Rs.1,68,890.25.   Reference was also made to clauses 5(a) and (b) of  

General Conditions applicable to the contract and submitted that it  

is the responsibility of the respondents to supply the water at their  

costs.   Learned senior counsel also submitted the claim for plaster

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of paris which was rightly allowed by the arbitrator and there was  

no reason to interfere with the same.    

6. Shri Mahabir Singh, learned senior counsel appearing for the  

respondents, on the other hand, submitted that there is no reason  

to interfere with the judgment of the High Court which has rightly  

rejected the claims on water charges and plaster of paris and also  

reduced the rate of interest.  Further, no question of law arises for  

consideration in these appeals.   

7. We are of the view that the dispute between the parties lies in  

a narrow compass.  We find that the arbitrator has awarded simple  

interest @ 15% per annum from six months of the date of  

completion i.e. 1.4.1989 on the amounts awarded till the date of  

payment.  The High Court thought it fit to reduce the rate of  

interest to 10% per annum, which we find no reason to disturb.  

The period for which the Arbitrator has awarded the interest will  

remain the same.  The appellant, therefore, would be entitled to get  

interest at the rate of 10% per annum from 1.4.1989 till the date of  

payment.

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8. We are of the view that the High Court was not justified in  

interfering with the amount awarded in respect of the water charges  

which comes to Rs.1,68,890.25.  Going by the general terms and  

conditions of the contract, in our view, the department was bound  

to supply water, so found by the arbitrator, in our view, rightly.  

Therefore, that part of the award of the Arbitrator, with regard to  

the water charges, is upheld.  However, the High Court, in our view,  

rightly denied the claim with regard to plaster of paris, therefore,  

not interfered with.    Appeals are disposed of accordingly, subject  

to the above modification of the judgment of the High Court.  

However, there will be no order as to costs.

                …....................................J

      (K.S. Radhakrishnan)

…....................................J    (Dipak Misra)

New Delhi, September  4,  2012