Hon'ble Judges/Coram:
Ranjan Gogoi, Arun Mishra and Prafulla C. Pant

JUDGMENT

Arun Mishra, J.

1. The issue involved in the reference is in regard to the power of the Arbitrator to award pendente lite interest when contract contains bar for grant of interest in a case covered by the Arbitration Act, 1940 (hereinafter referred to as "the Act"). A Division Bench of this Court had doubted the correctness of the decisions in Board of Trustees for the Port of Calcutta v. Engineers-De-Space-Age MANU/SC/0735/1996 : (1996) 1 SCC 516; and Madnani Construction Corporation (P) Ltd. v. Union of India and Ors. MANU/SC/1869/2009 : (2010) 1 SCC 549. In view of the decision of the Constitution Bench judgment in Secretary, Irrigation Department, Government of Orissa and Ors. v. G.C. Roy MANU/SC/0142/1992 : (1992) 1 SCC 508 and Executive Engineer, Dhenkanal Minor Irrigation Division, Orissa and Ors. v. N.C. Budharaj (D) by L.Rs. and Ors. MANU/SC/0016/2001 : (2001) 2 SCC 721 which held that the Arbitrator had the jurisdiction and authority to award interest for pre-reference period, pendente lite and future period if there was no express bar in the contract regarding award of interest. A doubt was expressed about the correctness of the decision in Engineers-De-Space Age (supra) in Sayeed Ahmed and Co. v. State of U.P. and Ors. MANU/SC/1159/2009 : (2009) 12 SCC 26 and Sree Kamatchi Amman Constructions v. Divisional Railway Manager (Works), Palghat and Ors. MANU/SC/0625/2010 : (2010) 8 SCC 767. Hence the matter had been referred to a larger Bench for decision.

2. The case has a chequered history. The tender of M/s. Ambica Construction for fabrication of tie bars from M.S. Flats in CST-9 sleepers was accepted on 8.9.1989. Final agreement was executed on 30.11.1989. The work was completed on 21.11.1990. With respect to payments, certain differences and disputes arose between the parties. Thus M/s. Ambica Construction prayed for appointment of an Arbitrator. On 5.3.1991 as the Petitioner M/s. Ambica Construction was in serious financial difficulties, it accepted the amount in full and final settlement. Later on, the Union of India informed the Petitioner on 11.3.1991 that the matter was under consideration. However the Arbitrator was not appointed. An application Under Section 20 of the Act was filed before the High Court of Calcutta for referring the case to arbitration. On 2.6.1992 the High Court directed to file the arbitration agreement in the court and appointed two Arbitrators in terms of the arbitration clause. Said Arbitrators failed to publish the award and as such an application was filed for revocation of the authority........