# State of U.P. and Ors. Defendants/ v. M/s Harveer Singh Bulandshahar Plaintiffs

- **Citation:** (2019) 1 ILRA 638
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-07-08
- **Case number:** F.A.F.O. No. 160 of 1996
- **Bench:** Dr. Kaushal Jayendra Thaker
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/state-of-u-p-and-ors-defendants-v-m-s-harveer-singh-bulandshahar-plaintiffs-44532
- **Pages:** 9

## Headnote

A. Arbitration Act, 1940- Section 39-
appealable
orders
-
arbitrator's
appointment
revoked
by
State
but
stayed by the Court below - remained
pending before court below - arbitrator
proceeded to pass an award in favour of
contractor-award made Rule of the Court
under the Act- during pendency of
litigation,
arbitrator
award
and
appointment under challenge- appellants
not satisfied by the arbitrator

Held:-It cannot be said that the order was
passed ex-parte just because the appellant
objected to the appointment of the arbitrator.
The opportunity to hear both the parties were
given before the Arbitrator as well as before
the Court below therefore no interference in
the Rule of the Court has been made by the
Court below and based on the same reasoning
this Court see no reason to interfere. (Para 13)

Chronological list of Cases Cited: -

## Text

638 INDIAN LAW REPORTS ALLAHABAD SERIES
an enclosure to the plaint. It is also true
that appellant did not submit to the
dispute and instead refers to arbitration
clause in written statement and clearly
pleaded that suit is barred and matter is
liable for arbitration.

25. In a Single Judge judgment of this
Court in Alok Nath Chattopadhya Vs. Anil
Narayan Tadvalkar and others, 2011 (2)
ADJ 870, a specific plea was taken in written
statement that subject matter of suit is
covered by arbitration agreement entered
between the parties. Written statement was
filed
on
15.05.2006.
Thereafter
on
09.09.2006
application
was
filed
for
termination of proceedings and reference for
arbitration.
Trial
Court
allowed
the
application, where against review application
was filed, which was also rejected and then
matter came to this Court in writ petition. It
was argued that plea for arbitration ought to
have been raised before filing written
statement. Court referred to plea taken in
written statement that there existed an
arbitration clause and matter is liable to be
referred for arbitration and held that it cannot
be said that defendant has waived its right
and submitted to the substance of dispute and
jurisdiction of Court. Objection raised in
written statement in effect and substance
questioned
jurisdiction
of
Court
and
therefore, application if filed subsequently,
could not have been rejected on the ground
that it was not filed before filing written
statement.

26. In our view, learned Single
Judge has rightly held so, and this is
consistent with the discussion made by us
hereinabove.

27. We therefore, answer Question -
I holding that if agreement containing arbitration
clause is already on record, application under
Section 8(2) of Act, 1996 filed by defendant
cannot be rejected on the ground that it does not
accompany original copy or certified copy of the
agreement.

28. Question - II is also answered by
holding that when objection has been
taken in written statement itself referring
to arbitration clause in the agreement, it
will
mean that defendant has not
submitted to the jurisdiction of Court and
application
filed
subsequently
under
Section 8 cannot be said to be a non
compliance of Section 8(1) of Act, 1996.

29. In the result, judgment in
question passed by learned District Judge,
Kanpur Nagar, in Suit No. 02 of 2016,
cannot be sustained.

30. Appeal is allowed. Judgment
and order dated 07th March, 2017 is
hereby set aside. District Judge is directed
to refer the dispute to arbitration without
any further delay.
----------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 08.07.2019

BEFORE
THE HON'BLE DR. KAUSHAL JAYENDRA
THAKER, J.

F.A.F.O. No. 160 of 1996

State of U.P. and Ors.
 ...Defendants/Appellants
Versus
M/s Harveer Singh Bulandshahar
 ...Plaintiffs-Respondent

Counsel for the Appellants:
Sri S.K. Mehrotra (S.C.)

Counsel for the Respondent:
Sri Anil Tiwari, Sri Sharda Prasad Mishra
1 All. State of U.P. and Ors. Vs. M/s Harveer Singh Bulandshahr
639
A. Arbitration Act, 1940- Section 39-
appealable
orders
-
arbitrator's
appointment
revoked
by
State
but
stayed by the Court below - remained
pending before court below - arbitrator
proceeded to pass an award in favour of
contractor-award made Rule of the Court
under the Act- during pendency of
litigation,
arbitrator
award
and
appointment under challenge- appellants
not satisfied by the arbitrator

Held:-It cannot be said that the order was
passed ex-parte just because the appellant
objected to the appointment of the arbitrator.
The opportunity to hear both the parties were
given before the Arbitrator as well as before
the Court below therefore no interference in
the Rule of the Court has been made by the
Court below and based on the same reasoning
this Court see no reason to interfere. (Para 13)

Chronological list of Cases Cited: -
1. (1997) 1 SCC 469 State of Orrisa Vs. B.N.
Agarwalla.

2. (1989) 1 SCC 411 Puri Construction Pvt.
Limited Vs. Union of India.

3. (2009) 10 SCC 63 Steel Authority of India
Ltd. Vs Gupta Brothers Steel Tubes Ltd.

4. (2010) 11 SCC 296 Sumitomo Heavy
Industries
Ltd.
Vs.
Oil
&
Natural
Gas
Commission of India.

5. 2012 (5) SCC 306 Rastriya Ispat Nigam Ltd.
Vs. M/s Dewan Chand Ram Saran 6. 2011 (5)
SCC 758 J.G. Engineers Pvt. Ltd. Vs. Union
of India &Anr.

7. First Appeal No. 137 of 1992 State of
Gujarat &Anr. Vs Nitin Construction Company
(Hon'ble Gujrat High Court decided on
22.03.2013).

8. 2000 (4) GLR 3652 Oil& Natural Gas
Corporation Limited Vs. Essar Steel Limited

9. 1999 (9) SCC 449 Arosan Enterprises
Limited Vs Union of India
10. 2003 (8) SCC 4 Continental Construction
Limited Vs. State of U.P.

11. AIR 2017AssamState Electricity Board vs.
Buildworth (P) Ltd.

12. 1989 (1) SCC 532 Gujrat Water Supply &
Sewerage Board vs. Unique Erectors (Gujrat)
(P) Ltd.

13. 1992 1 SCC 508 Irrigation Departmnet,
State of Orissa Vs. G.C. Roy

14. AIR 1993 SC 864 Jugal Kishore Prabhatilal
Sharma Vs. Vijayendra Prabhatilal Sharma

15. AIR 1988 SC 873 Smt. Aruna Kumari Vs
Government of Andhra Pradesh

16. First Appeal From Order No. 714 of 2005
State
of
U.P.
and
another
Vs.
J.M.
Construction Company

17. 2003 (8) SCC 154 Bharat Coking Coal Ltd.
Vs. Annapurna Construction

18. 2019 JX (SC) 391 K.Marappan (Dead) Vs.
Supretending Engineer
T.B.P.H.L.C. Circle
Anantapur

19. AIR 2018 SC 3109 Raveechee and Compan
Vs. Union of India

20. (2017) 14 SCC 323 Ambica Construction
Vs. Union of India

21. First Appeal No. 3256 of 2001 Oil and
Natural Gas Corporation Limited vs. Birla
Techneftegas Exploration Limited (Gujrat high
Court) (E-10)

(Delivered by Hon'ble Dr. Kaushal
Jayendra Thaker, J.)

1. Heard Sri S.K. Mehrotra, learned
counsel for State and Sri Anil Tiwari, learned
Advocate assisted by Sri Sharda Prasad
Mishra, learned counsel for respondent.

2. This First Appeal From Order has
been filed under section 39 of Indian
640 INDIAN LAW REPORTS ALLAHABAD SERIES
Arbitration Act, 1940 (hereinafter referred
to 'Act, 1940') by the appellant, being
aggrieved by order dated 1.12.1995
passed by Civil Judge (Senior Division ),
Bulandshahar in Original Suits No. 602 of
1994 and 665 of 1994.

3. The parties are referred to as
State/Appellant and Contractor/Respondent.

4. Facts of the present case are that
dispute arose between the contractor and the
State, namely the appellant and one Harish
Chandra was appointed as an arbitrator and
his appointment was sought to be revoked by
the State which was stayed by the Court
below and which was pending before this
Court. The arbitrator gave his award
accepting the demands raised by the
contractor. The said arbitral award was
sought to be made the Rule of the Court
under the Act, 1940 which was opposed by
the appellant herein. The Court below
accepted the award rejected the objection
raised by the appellant herein. The claimant's
claims came to be allowed. Full opportunity
was given to the appellant both by Arbitrator
and Court below.

5. The judgment of the Court below
is brought into challenge by the appellant.
During the pendency of this litigation the
ground that Harish Chandra could not
have acted as an arbitrator was given up.
Harish Chandra was permitted to act as an
arbitrator vide order dated 18.1.1994.
Against the said order appeal was
preferred before this Court and also a writ
was also preferred by State which
culminated into orders being passed
against the State. The arbitrator thereafter
had passed the orders.

6. The arbitrator's award was
assailed by the State before the concerned
Court which has held against the State
and upheld the award and made it Rule of
the Court. .

7. Detailed claim petition was filed by
the claimants before the arbitrator appointed
by the State from the panel it has suggested.
However, they were not satisfied with the
arbitrator and litigation as herein above
mentioned
continued.
The
State
filed
objection No. 30/33 of the Act, 1940
challenging the award of the arbitrator dated
27.7.1994 before the Court of concerned
jurisdiction. However the said objection have
been rejected. It is submitted by counsel for
appellant that the arbitrator and learned Judge
did not consider the contract in its proper
prospective and have committed mistake
which is an error apparent on the face of the
record calling for interference by this Court.
The appellant has challenged the same before
this Court.

8. While going through the record
the principles enunciated for either
interference or modifying the award are
embodied which will have to be analyzed
and looked into.

9. The principles for interfering in
arbitral proceedings are time and again
enunciated by the High Court and the
Hon'bel Supreme Court. Recently in First
Appeal From Order No. 714 of 2005
(State of U.P. and others Versus J.M.
Construction Company) and in First
Appeal From Order No.1237 of 2000 (
Harindra Singh Versus Union of India and
another ) decided on 8.7.2019. The facts
as shown above have been properly
appreciated by the arbitrator and also the
Court below and, therefore, unless the
contours of interference are proved by the
appellant, this Court would be loathe in
interfering in the arbitration matter.
1 All. State of U.P. and Ors. Vs. M/s Harveer Singh Bulandshahr
641

10. Learned counsel for the
respondent has relied on the judgments of
Supreme Court in State of Orissa Versus
B.N. Agarwalla, (1997) 1 SCC 469 and
Puri Construction Pvt. Limited Versus
Union of India for the purposes of
pendente life and interest.

Judgments on Arbitration Act,
1940

11. (I) Steel Authority of India Ltd
Vs. Gupta Brothers Steel Tubes Ltd.
(2009) 10 SCC 63 .

"...... The courts below have
currently held that the arbitrator has gone
into the issues of facts thoroughly, applied
his mind to the pleadings, evidence before
him and the terms of the contract and then
passed duly considered award and no
ground for setting aside the award within
the four corners of Section 30 has been
made out......... In what we have already
discussed above, the view of the arbitrator
in this regard is a possible view.
Consequently, appeal has no merit and
costs."

(ii)
Sumitomo
Heavy
Industries Ltd Vs. Oil & Natural Gas
Commission of India (2010) 11 SCC
296

".... award was not only a
plausible one but a well reasoned award.
In the circumstance the interference by
the High Court was not called for. In that
view of the matter we allow this appeal
and set aside the judgment of the learned
Single Judge, as well as that of the
Division Bench...."

(ii) Rashtriya Ispat Nigam
Ltd. Vs. M/s Dewan Chand Ram Saran
reported as 2012 (5) SCC 306

".... There was no reason for the
High Court to interfere in the view taken
by the arbitrator which was based, in any
case on a possible interpretation of clause
9.3. The learned single Judge as well as
the Division Bench clearly erred in
interfering with the award rendered by the
arbitrator. Both those judgments will,
therefore,
have
to
be
set-aside.
Accordingly, the appeal is allowed and
the impugned judgments of the learned
Single Judge as well as of the Division
Bench, are hereby set aside...."

(iii) Reported as 2011 (5) SCC
758, in the case of J.G. Engineers Pvt.
Ltd. Vs./ Union of India &Anr.

(iv) First Appeal No.137 of
1992,
in
the
case
of
State
of
Gujarat&Anr. Vs. Nitin Construction
Company, judgment dated 22.03.2013 of
the Hon'ble High Court of Gujarat.

(v) First Appeal No.3688 of
2012, in the case of State of Gujarat Vs.
Vijay
Mistri
Construction&Anr.,
judgment dated 22.03.2013 of the Hon'ble
High Court of Gujarat.

(vi) Reported as 2000 (4) GLR
3652 in the case of Oil & Natural Gas
Corporation Limited V/s. Essar Steel
Limited, (Paragraph-8).

(vii) Reported in 1999(9)SCC
449, Arosan Enterprises Limited V/s.
Union of India &Anr.

(vii) Reported in 2003 (8) SCC
4, Continental Construction Limited
V/s.
State
of
U.P.,
Assam
State
Electricity Board V. Buildworth (P)
Ltd., AIR 2017 ,Gujarat Water Supply
& Sewerage Board V. Unique Erectors
(Gujarat) (P) Ltd., 1989 (1) SCC 532:
Irrigation Department, State Of Orissa
V. G.C. Roy, 1992 1 SCC 508 : Jugal
Kishore
Prabhatilal
Sharma
V.
Vijayendra Prabhatilal Sharma, AIR
1993 SC 864 and Smt. Aruna Kumari
V. Government Of Andhra Pradesh,
AIR 1988 SC 873.
642 INDIAN LAW REPORTS ALLAHABAD SERIES

12. This Court in First Appeal
From Order No. 714 of 2005 ( State of
U.P.
and
another
Versus
J.M.
Construction Company) decided on
11.4.2019 has summarized the principles
for deciding matters under the Arbitration
Act, 1940 & 1996 wherein in paragraph
no.24 & 25 it is observed as follows :

"24. In Rajasthan State Road
Transport Corporation ( supra),

the learned counsel for the
respondent-Company submitted that in
fact there was no material on which the
finding was recorded by the Arbitrator. In
support thereof, learned counsel invited
our attention to a decision of this Court in
the case of K.P. Poulose v. State of
Kerala &Anr., reported in [1975] 2 SCC
236 wherein it was held that the award
can be set aside on the ground of
misconduct if relevant documents are not
considered by the Arbitrator. Therefore,
we asked learned counsel for the
appellant- Corporation to substantiate the
finding recorded by the arbitrator that it
is based on the material on record. In
pursuance to the direction given by this
Court,
learned
counsel
for
the
Corporation
filed
an
affidavit
on
12.7.2006
and
submitted
that
the
document
wherein
the
details
on
divisionwise average kilometer of new
tyres and retreaded tyres along with
average
short-fall
in
guaranteed
kilometers for the various periods was on
record of arbitrator and same was
produced before us. The details were
given of all the Divisions i.e. Bharatpur,
Jaipur, Sikar, Kota, Ajmer, Bikaner,
Jodhpur and Udaipur. In all these eight
divisions for the various period i.e. from
June 1991 to February, 1994 the details
have been given to substantiate the
allegations that what was the average
mileage of the new tyre and what was the
average mileage given by the retreaded
tyres and on that basis, the short-fall was
given and accordingly, the amount of loss
was worked out. These details which were
placed before us formed part of the
record
before
the
arbitrator.
The
arbitrator in his detailed award has
recorded his finding on the basis of the
average performance of new vehicle tyres
with that of the retreaded tyres of the
Company and on that basis he has worked
out the assessment in paragraph 17 of the
award. Paragraph 17 of the award reads
as follows :

"The RSRTC has compared the
performance of retreaded tyres with the
performance of new tyres in each
division. In each division, as mentioned
earlier, the road conditions, the vehicles
used, the weather conditions, the general
driving skills of the drivers and the level
of maintenance and upkeep of vehicles
were similar for the new tyres as well as
retreaded tyres. The retreaded tyres
should have given a kilometerage of
46,000 or 95 % of the life of new tyres.
Therefore,
the
assessment
of
the
performance done by the RSRTC is
strictly in conformity with the provisions
of
clause
5
of
the
agreement.
Notwithstanding the acceptance by the
respondent of an error of judgment in
guaranteeing 46,000 kms for a retreaded
tyre, from the Statements enclosed by the
claimant with its letters mentioned in para
5 of this order, it is clear that the
retreaded tyres performance fell short of
the guaranteed level. I, therefore, find
claim of the RSRTC to be fully justified."

25. This is the finding of fact
given by the arbitrator. As against this,
learned Single Judge as mentioned above,
has held that there was no assessment in
each division in similar conditions.
1 All. State of U.P. and Ors. Vs. M/s Harveer Singh Bulandshahr
643
Therefore, the learned Single Judge set
aside the award but it is not factually
correct. As mentioned above, there was a
comparative assessment given by the
Corporation and that was part of the
record before the arbitrator and on that
basis the finding of fact was recorded by
the arbitrator. Learned counsel for the
respondents strenuously urged before us
that the performance of new tyres and of
retreaded tyres on roads like Jaipur-Delhi
would be better as against the road of
Jaipur-Lalsot. Therefore, there was no
assessment of performance of the new
tyres
vis-a-vis
the
retreaded
tyres
supplied by the Company in similar
conditions. In fact, an average has to be
taken of each division. It is not necessary
that in each of the divisions of the
Corporation, the road conditions will be
similar. Once the company has entered
into an agreement knowing fully well the
conditions obtaining in the State of
Rajasthan that all the routes in the State
are not the roads of Class `A' category
but there are roads of Class `A', Class `B'
and Class `C' categories also. Therefore,
the average performance has been
recorded taking into consideration this
aspect. It is unlikely that all over the State
of Rajasthan the road condition like
Jaipur-Delhi will be available for all
other divisions. Therefore, in all the
divisions the average performance has
been taken into consideration. The
assessment has been based on average of
similar conditions of the roads i.e. the
good quality as well as the poor quality.
Therefore, average performance of the
new tyres with the retreaded tyres has to
be taken on the basis of roads available in
Rajasthan. The average running of the
new tyres on these road conditions with
that of the retreaded tyres was to be
compared to find out whether the
performance of retreaded tyres was up to
95% average or not. After assessing the
comparative
assessment
and
going
through the materials on record the
arbitrator has recorded his finding. It was
for the company if they wanted more
information or wanted to allege that the
road conditions are not similar or that the
performance of the tyres which were fitted
in the rear axle or on the front axle would
not be the same, all these details if it
wanted, it could have obtained from the
Corporation but they did not do so and
only at this stage the company wants to
bring
this
factual
controversy
that
retreaded tyres were not used in similar
conditions. This argument at this belated
stage cannot be accepted as all the
materials have been considered by the
arbitrator
and
after
taking
into
consideration the average of each tyre in
each region of the corporation has
worked out that the performance of the
retreaded tyres was not to the extent of
95%. This was a finding of fact recorded
by the arbitrator and the same was made
rule of the court by the District Judge. But
the learned Single Judge erroneously took
upon himself to sit as a court of appeal
and disturbed this finding of fact. In our
opinion, the view taken by the learned
Single Judge of the High Court cannot be
sustained."

13. Therefore in light of decisions of
the Apex Court and the discussion the
scope of interference with the findings of
Arbitrator as confirmed by the District
Judge,
on
the
basis
of
principles
enunciated by Apex Court goes to show
that the dispute will have to be decided.
The objections were not accepted as they
did not fall within the purview of the
objections which could be raised under
the Act and the judgment of this High
644 INDIAN LAW REPORTS ALLAHABAD SERIES
Court and the Apex Court was relied by
the learned Judge. The Arbitrator gave all
his reasons for allowing the claim of the
present respondent. Just because the name
of the arbitrator was revoked by the
appellant is judgment could not be
assailed under the said fact. Section 34
and 41 of the Specific Relief Act. And
therefore the said Act did not apply. The
arbitrator was under a duty to decide the
lis. The appellants though objected to the
appointment of the said arbitrator. The
said objection was not considered by this
Court also in first appeal from order
preferred before this Court. Hence, the
said submission has been rightly rejected
by the Court below. Even on merits it
cannot be said that it is an ex-parte award
as they were fully represented and the
appellants avail the opportunity of placing
their objections both before the Arbitrator
as well as the Court below and, therefore,
also no interference can be made in the
Rule of the Code made by the Court
below and the reasoning given would not
permit this Court to interfere with the
findings in view of the decision in case of
Bharat
Coking
Coal
Ltd
Vs.
Annapurna Construction reported in
2003 (8) SCC 154.

14. Recently, the Apex Court in
K.Marappan
(Dead)
Versus
Superintending Engineer T.B.P.H.L.C.
Circle Anantapur, 2019 JX(SC) 391 and
in Raveechee and Company Versus
Union of India, AIR 2018 SC 3109 has
interpreted the role of the Courts while
hearing matters under the arbitration Act
.The judgments go to show that pendente
lite interest will depend upon several
factors such as ; phraseology used in the
agreement
clauses
conferring
power
relating to arbitration, nature of claim and
dispute referred to arbitrator, and on what
items power to award interest has been
taken away and for which period. The
Court observed:

"34. Thus our answer to the
reference is that if contract expressly bars
award of interest pendente lite, the same
cannot be awarded by the Arbitrator. And
that the bar to award interest on delayed
payment by itself will not be readily
inferred as express bar to award interest
pendente lite by the Arbitral Tribunal, as
ouster of power of the arbitrator has to be
considered on various relevant aspects
referred to in the decisions of this Court ,
it would be for the Division Bench to
consider the case on merits."

15. Further, Gujrat High Court
considered an identical clause in the
contract
in
the
case
of
Ambica
Constructions v. Union of India,(2017)
14 SCC 323, wherein it observed that the
Clause of the GCC did not bar the
arbitrator from awarding interest pendente
lite and affirmed the award passed by the
arbitrator. The three Judge Bench of this
Court held that the contention raised by
the Union of India based on the Clause of
the GCC that the arbitrator could not
award interest pendente lite was not a
valid contention and the arbitrator was
completely justified in granting interest
pendente lite. Relying on the three Judge
Bench judgment in Union of India v.
Ambica Construction (supra) and in
Irrigation Deptt., State of Orissa (supra),
this Court held that the bar to award
interest on the amounts payable under the
contract would not be sufficient to deny
the payment of interest pendente lite.

16. Thus when a dispute is referred
to for adjudication to an arbitrator, a term
of such a nature as contained in the
1 All. State of U.P. and Ors. Vs. M/s Harveer Singh Bulandshahr
645
Clause 16(3) of GCC, that is binding on
the parties cannot be extended to bind an
Arbitrator. The Arbitrator has the power
to award interest pendente lite where
justified. We, therefore, set aside the
judgment of the High Court and restore
the award passed by the Arbitral Tribunal
in respect of Claim No. 12."

17. While going through the record
and the award it appears that while
considering the claim of the contractor,
the arbitrator has considered each and
every aspect of the claim made by both
the parties and has considered each and
every item and the arbitral award reflects
on the merits of each claim which the
arbitrator has considered and it can be
culled out from the arbitral award as well
as the subsequent yellow cover that it was
either purposefully withheld by the
officers of respondents and or were not
submitted to the court below. It is in the
written submissions accepted by the
Union of India and it has been submitted
as follows:

"It is also most respectfully
submitted that the second sealed cover
envelope which probably contains the
proceedings during arbitration was not
summoned by the court below, so it can
not be produced and when this Hon'ble
Court has summoned, it was produced
by the officials. It is also submitted that
reasons can not be written separately it
should contain in the award itself,
therefore non-production of second seal
cover
envelope
which
contains
proceedings has got no nexus."

18. The only aspect which requires
further consideration is whether the interest
has been properly granted or not and what
should be the rate of interest. The powers of
interference of Courts in grant of interest in
arbitral matter came up before the Division
Bench of Gujarat High Court of which the
undersigned was a presiding Judge in First
Appeal No. 3256 of 2001 (OIL and
Natural Gas Corporation Limited Versus
Birla Techneftegas Exploration Limited
decided on 7.4.2016 by the High Court of
Gujarat wherein the following observations
are relevant and are extracted herein below:-

"........28. Therefore in light of
decisions of the Apex Court and the
discussion
hereinabove,
the
scope
of
interference with the findings of Arbitrators
and confirmed by the District Judge, on the
basis of principles, we are not inclined to
interfere with the findings, as settled in view of
decision in case of Bharat Coking Coal Ltd
Vs. Annapurna Construction reported in 2003
(8) SCC 154.

29. The award so far as interest
is concerned, reads as follows:

"With regard to contention (a)
above, it is contended by the respondent that
increase in HSD is not by operation of law
but on account of the administrative orders
and, therefore, the claim is not maintainable
under Article 23.1 which deals only with
variation in operating costs on account of
change in or enactment of law in India or
interpretation of existing law in India after
the date of opening of price bid. To examine
this contention it is essential to refer to the
provisions of Essential Commodities Act,
1955. Section 2 of this Act in subsection (a)
defines "Essential Commodity". In sub
clause (viii) of clause (a) of section 2,
petroleum and petroleum products have also
been included as "Essential Commodities
Act, Central Government has power to
regulate and control the prices at which an
essential commodity may be bought or sold.
Therefore, increase in prices of HSD being a
petroleum product is pursuant to the exercise
646 INDIAN LAW REPORTS ALLAHABAD SERIES
of powers given to the Central Government
under
Section
3
of
the
Essential
Commodities Act and is therefore, on
account of a change in law."

The Tribunal has relied on the
decisions of the Privy Counsel and Apex
Court and also relied upon the affidavit of
appellant filed before the Tribunal before the
Award passed.

The awarding of interest cannot be
said to be in any manner, warranting any
interference, however, the factum of interest, in
our view may be considered, which in our view
is on higher side looking to prevalent practice at
the relevant time. The quantum of interest, if
reduced to 9% from 15%, the same would meet
with ends of justice. As a result thereof, we
modified the same and factum of interest is
ordered to be reduced from 15% to 9%. The rest
of the award is not interfered in any manner."

19. While going through the record,
it is clear that grounds of appeal were
against the continuation of the arbitrator
and his removal was stayed and he was
authorized to give the arbitral award.
Arbitral award cannot be said to be exparte award. The objection was also heard
by the learned Judge. The judgment and
decree cannot be said to be such which
would permit this Court to allow the
appeal. It cannot be said that the arbitrator
misdirected and misconducted himself
and, therefore, also the judgment of Court
below cannot be interfered with in view
of the the settled legal position. The only
interference which can be shown is quo
the interest and interest shall be at 9% and
not 12%.

20. In the final analysis, this appeal is
partly allowed. As far as the rate of interest is
concerned, the arbitral award and the order of
the Court below shall stand modified to the
extent that the rate of interest shall be 9% and
not 12% as ordered by arbitrator confirm by
the Court below. The stay shall stands
vacated. If the amount is yet not deposited or
partly deposited the said shall recalculated and
be deposited within 12 weeks from today
before the Court below.

21. The record and proceedings be
sent back to the Tribunal.
---------
APPELLATEJURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 16.07.2019

BEFORE
THE HON'BLE DR. KAUSHAL JAYENDRA
THAKER, J.

First Appeal From Order No.47 of 2003

The Oriental Insurance Company Ltd.
 ...Appellant
Versus
Shamshad Ali &Ors. ...Respondents

Counsel for the Appellant:
Sri V.C.Dixit

Counsel for the Respondents:
Sri Nigamendra Shukla, Sri Amresh Sinha.

A.
Contributory
Negligence
-
negligent act must contribute to the
negligence- head on collision - both
drivers equally negligent.

B. Driving license- no produced by any
drivers- first liability of the Insurance
Company- money can be recovered from
the owner- finding upturned.
Chronological List of Cases Cited: -

1.Civil Appeal No. 5906 of 2008 Pawan
Kumar and Anr. Vs. M/s Harikrishan Dass
Mohan Lal & Ors (SC)

2.First Appeal From Order No. 1818 of
2012 Bajaj Allianz General Insurance Co.
Ltd. Vs. Smt. Renu Singh and Ors.