Arbitration and Conciliation Act, 1996:
s. 31(7)(a) – Power of arbitrator to award pendente-lite interest – Arbitral Tribunal while allowing the claims, also granted pendentelite interest – Objection to award of interest in view of clauses 50 and 51 of General Conditions of Contract which barred grant of interest – Single Judge of High Court quashed the award limited to the interest – Order of Single Judge affirmed by Division Bench of High Court – On appeal, held: As the clauses 50 and 51 of General Conditions of Contract put a bar on arbitral Tribunal to award interest, arbitral Tribunal did not have jurisdiction to do so.
Doctrines/Principles:
Principle of ejusdem generis – Applicability of – Discussed – The principle is not applicable in the present case – Interpretation of Statutes – Rules of Interpretation.
Dismissing the appeal, the Court
HELD: 1.1 Right from the stage of arbitration proceedings till the High Court, clauses 50 and 51 of General Conditions of Contract (GCC) are interpreted to hold that they put bar on the arbitral tribunal to award interest. Even the majority award of the arbitral tribunal recognised this. Notwithstanding the same, it awarded the interest by relying upon *Board of Trustees for the Port of Calcutta case. In case clauses 50 and 51 of GCC put a bar on the arbitral tribunal to award interest, the arbitral tribunal did not have any jurisdiction to do so. The High Court, both Single Bench as well as Division Bench, rightly noted that the aforesaid judgment was under the 1940 Act and the legal position in this behalf have taken a paradigm shift which position is clarified in **Sayeed Ahmed and Company case. This rationale given by the High Court is in tune with the legal position which stands crystallised by catena of judgments. [Para 16][55-C-E]
1.2 The judgment in #Harish Chandra case is under the 1940 Act. This judgment is explained and distinguished in **Sayeed Ahmed and Company case. The judgment in Sayeed Ahmed and Company distinguishing the restrictive wording in #Harish Chandra case has been consistently followed by this Court in number of cases thereafter. In this scenario, when it is found that #Harish Chandra case which is of the vintage of 1940 Act and is distinguished in **Sayeed Ahmed and Company case coupled with the fact that the ratio of **Sayeed Ahmed and Company case has been consistently followed, there is no reason to deviate from the construction to Clauses 50 and 51 of the GCC given by the arbitral tribunal in the first instance as well as the High Court. [Paras 19 and 20][56-C-D, 57-H, 58-A-B] Secretary, Irrigation Department, Government of Orissa & Ors. v. G.C. Roy (1992) 1 SCC 508: [1991] 3 Suppl. SCR 417 – followed.
Tehri Hydro Development Corporation (THDC) Limited & Anr. v. Jai Prakash Associates Limited (2012) 12 SCC 10 : [2012] 8 SCR 813 ; **Sayeed Ahmed and Company v. State of Uttar Pradesh & Ors. (2009) 12 SCC 26 : [2009] 10 SCR 841 ; Sree Kamatchi Amman Constructions v. Divisional Railway Manager (Works), Palghat & Ors. (2010) 8 SCC 767 : [ 2010] 10 SCR
487 ; Union of India v. Bright Power Projects (India) Private Limited (2015) 9 SCC 695: [2015] 6 SCR
488 ; Sri Chittaranjan Maity v. Union of India (2017)
9 SCC 611 : [2017] 11 SCR 722; Reliance Cellulose Products Limited v. Oil and Natural Gas Corporation Limited (2018) 9 SCC 266 : [2018] 6 SCR 618 – relied on.
*Board of Trustees for the Port of Calcutta v. Engineers De-Space-Age (1996) 1 SCC 516 : [1995] 6 Suppl. SCR 327 – distinguished.
#State of Uttar Pradesh v. Harish Chandra and Company (1999) 1 SCC 63 : [1998] 2 Suppl. SCR 660 – stood distinguished.
2. The principle of ejusdem generis is not applicable in the present case. The rule of ejusdem generis would be applied only if there is distinct genus or a category, which is lacking in the instant case. This rule is applicable when particular words pertaining to a clause, category or genus are followed by general words. In such a situation, the general words are construed as limited to things of same kind as those specified. In that sense, this rule reflects an attempt ‘to reconcile incompatibility between the specific and general words in view of the other rules of interpretation that all words in a statute are given effect if possible, that a statute is to be construed as a whole and that no words in a statute were presumed to be superfluous’. [Para 21][58 C, E-F]
Lokmat Newspapers Pvt. Ltd. v. Shankarprasad (1999)
6 SCC 275 : [1999] 3 SCR 907; Bharat Heavy
Electricals Limited v. Globe Hi-Fabs Limited (2015) 5 SCC 718 – relied on.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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