Law:

Section:

ORDER Lalit Mohan Sharma, J. 1. This appeal by the State of Orissa against the judgment of the High Court arises out of a proceeding for making an award of an arbitrator the rule of the court. The respondent was allotted by the State certain contract work for execution and a dispute arose between the parties, the appellant denying the claim of the contractor to me tune of Rs. 6,33,424/-. The mailer was referred to the arbitration of a sole arbitrator, who made a non-speaking award for a sum of Rs. 4,45,448.66 paise in favour of the respondent. The award indicated that out of the aforesaid amount, the contract was held entitled to a sum of Rs. 2,50,487.25 paise towards his claim for the work executed, and to the remaining sum of Rs. 1,94,961.41 paise as interest from 01.06.1975 to 25.11.1981. It was also directed that on the failure of the payment of the amount within a period of two months, the respondent would get future interest at the rate of 12% per annum on Rs. 2,50,487.25 paise. 2. In reply to the respondent's prayer for making the award a rule of the court, the State of Orissa raised several pleas in de defence. The award was challenged as not being supported by the materials produced by the parties before the arbitrator but, this ground was correctly rejected both by the trial court as well as the High Court, and need not detain us any further. Another objection taken by the appellant is to the non-speaking nature of the award. This point has now been settled against the appellant by a bench of five learned Judges of this Court and does not survive any more. The main dispute which, however, remains to be decided relates to the grant of interest. 3. The learned Counsel for the appellant has relied upon the decision in Executive Engineer (Irrigation), Balimela and Ors. v. Abhaduta Jena and Ors. (1988) I SCC 418; and several other cases in which this decision has been followed. As in the reported case, the reference in the present case also was made before coming into force of the Interest Act, 1978. It was contended before us that the question relating to payment of interest was not referred to the arbitrator at all, and he illegally allowed interest on…

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