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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL  No(s). 7148  OF 2019 (Arising out of SLP(C) No(s).20159 OF 2019)

POST GRADUATE INSTITUTE OF  MEDICAL EDUCATION AND RESEARCH CHANDIGARH   Appellant(s)

                               VERSUS

M/S KALSI CONSTRUCTION COMPANY                     Respondent(s)

                          J U D G M E N T

R. BANUMATHI, J:

Leave granted.

(2) This  appeal  arises  out  of  the  impugned  judgment  and  order

dated 10.05.2019 passed by the High Court of Punjab and Haryana at

Chandigarh in FAO No.4045 of 2003 in and by which the High Court

has  dismissed  the  appeal  of  the  appellant  herein  filed  under

Section 37 of the Arbitration and Conciliation Act and affirmed the

Award passed by the Arbitrator including with regard to the rate of

interest awarded by the arbitrator at the rate of 18% per annum.

(3) The respondent-M/s. Kalsi Construction Company was allotted a

contract for construction of Advanced Pediatrics Centre of the Post

Graduate Institute of Medical Research and Education.  Regarding

the completion of the work, dispute arose between the parties which

was referred to arbitration.  Learned Arbitrator by the Award dated

31.12.1999 awarded an amount of Rs.1,17,00,000/- (Rupees one crore

seventeen  lakhs)  against  claim  of  Rs.10,63,00,000/-  (Rupees  ten

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crore sixty three lakhs) made by the respondent-Company.  After

referring to Section 31(7) of the Arbitration and Conciliation Act

which vests authority to award the interest, learned Arbitrator

awarded interest at the rate of 18% per annum.  Challenging the

award,  the  appeal  preferred  by  the  appellant-Institution  under

Section 34 of the said Act came to be dismissed which was affirmed

by the High Court by the impugned judgment in the appeal preferred

by the appellant under Section 37 of the said Act.

(4) We have heard Mr. Sudarshan Rajan, learned counsel appearing

for  the  appellanat-Institution  and  also  Mr.  Naresh  Markanda,

learned senior counsel appearing for the respondent-Company.

(5) Mr.  Sudarshan  Rajan,  learned  counsel  appearing  for  the

appellant-Institution,  on  instruction,  has  submitted  that  the

appellant-Institution is not pressing other grounds enumerated in

the grounds of the appeal and is only praying for reduction of rate

of interest.

(6) Mr. Naresh Markanda, learned senior counsel appearing for the

respondent-Company,  has  submitted  that  so  far  as  the  rate  of

interest, the respondent is leaving that aspect to the discretion

of  this  Court  for  considering  the  rate  of  interest.   However,

learned Senior counsel submitted that it should be a reasonable

rate  of  interest  since  the  award  was  passed  in  1999  and  the

respondent is yet to be paid the award amount.

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(7) In  the  absence  of  agreement  to  the  contrary  between  the

parties, Section 31(7)(a) of the said Act confers jurisdiction upon

the Arbitral Tribunal to award interest unless otherwise agreed by

the  parties  at  such  rate  as  the  Arbitral  Tribunal  considers

reasonable, on the whole or any part of the money, for the whole or

any part of the period between the date on which the cause of

action arises and the date on which the award is made.  In the

present case, the parties have agreed for the rate of interest at

18% per annum.  However, since the award is of the year 1999 and

considering the facts that the learned Senior counsel had left the

matter to the discretion of the court.  Considering the facts and

circumstances of the case, in our view in exercise of the power

under Article 142 of the Constitution of India, the interest at the

rate of 18% awarded by the Arbitral Tribunal is to be reduced.

(8) Considering the fact that the contract relates to construction

of Advanced Pediatrics Centre of the Post Graduate Institute of

Medical Research and Education, Chandigarh and also other facts and

circumstances of the case, in exercise of our power under Article

142  of  the  Constitution  of  India,  the  orders  of  the  learned

Arbitrator as affirmed by the High Court so far as the rate of

interest is concerned is modified and the same is reduced from 18%

to 10% per annum simple interest.  The award amount along with the

accrued interest at the rate of 10% per annum simple interest shall

be payable to the respondent-Company within eight weeks from today

failing which the entire award amount will carry interest at the

rate of 18% as awarded by the Tribunal.

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(9) The appeal is accordingly disposed of with no order as to

costs.

..........................J.                 (R. BANUMATHI)

..........................J.         (A.S. BOPANNA)

NEW DELHI, SEPTEMBER 2, 2019.