Law: Arbitration Act (X of 1940)

Section: 29 , 3

Arbitration Act (X of 1940)-- ---S.29---Indian Interest Act, 1978, S.3---Past interest---Award---Arbitration proceedings---Direction by arbitrator to parties to file their statements of claim--Arbitration proceedings could be said to have commenced on date of such direction---Grant of past interest for period beyond such date is improper. An action in a Court of law commences on the filing of a proper claim in accordance with the prescribed procedure before the authority empowered to receive the same. If a plaint, drawn up in accordance with the prescribed law, is filed before a Civil Court, the suit must be deemed to have been instituted on that date, and not on a later date when the Court takes up the plaint and applies its mind. Ordinarily the plaint is examined by the stamp reporter of the Court who scrutinises whether proper court-fee has been paid or not, and then makes a report. The Court generally takes up the plaint only later. Similar is the position with respect to other applications and memoranda of appeals. It must, therefore, be held that the proceeding is instituted when the claimant files his claim. In arbitration proceeding as soon as the arbitrator indicates his willingness to act as such, the proceeding must be held to have commenced. Therefore, the arbitrator in the instant case, by directing the parties to-file their statements of claim, could be said to have clearly indicated that he accepted the offer to arbitrate. The proceedings must, therefore be deemed to have been instituted not later than the date of passing such orders. Therefore the award so far it allowed interest for the period after the date of passing of said order was without jurisdiction and must be excluded. AIR 1988 SC 1520 and :AIR 1989 SC 973, distinguished. AIR 1962 SC 78; AIR 1955 SC 468 and (1941) 1 KB 396 ref. JUDGMENT SHARMA, J.--This appeal by special leave by the State of Orissa is directed against the judgment of the Orissa High Court rejecting its appeal under section 39 of the Arbitration Act. The respondent executed certain work under a written agreement with the appellant and a dispute arose thereunder which was referred to arbitration. The arbitrator made an…