Neutral Citation No. - 2025:AHC:54696-DB Chief Justice's Court Case :- APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 DEFECTIVE No. - 109 of 2025 Appellant :- State of UP and 4 others Respondent :- Sri Jawahar Lal (Contractor) Counsel for Appellant :- Tej Bhanu Pandey Hon'ble Arun Bhansali,Chief Justice Hon'ble Kshitij Shailendra,J. 1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') is directed against the order dated 28.10.2024 passed by the Commercial Court, Prayagraj whereby the application filed by the appellants under Section 34 of the Act against the award dated 01.07.2020 has been partly allowed. 2. The appeal is barred by 73 days. An application under Section 5 of the Limitation Act has been filed seeking condonation of delay. 3. We have heard learned counsel for the appellants on merits of the appeal under Section 37 of the Act before issuing notice on Section 5 of the Limitation Act to the respondent. The claim was made by the respondent in relation to the amount being outstanding pertaining to Magh Mela 2010-11. When the amount was not paid, the Arbitrator was appointed by this Court under Section 11 of the Act. Before the Arbitrator qua the claim made response was filed inter alia admitting the claim made by the respondent to the tune of Rs. 5,79,744/- and it was claimed that the amount was being demanded from the State, however, the same has not been received and as soon as the same would be received, the payment would be made. The Arbitrator after hearing the parties, by the award impugned, awarded an amount of Rs. 5,79,744/- as admitted by the appellants and litigation cost of Rs. 50,000/- and ordered for payment of interest at the rate of 12% per annum from 26.02.2011 and in case the same was not paid within a period of two months, it was ordered to make payment at the rate of 18% per annum. 4. Aggrieved of the award, application under Section 34 of the Act was filed. The Commercial Court, after hearing the parties, on the limited grounds pertaining to the award of litigation cost and interest, set aside the award of litigation cost and upheld the payment of interest relying on judgment in Delhi Airport Metro Express Pvt. Ltd. Vs. Delhi Metro Rail Corporation: (2022) 1 SCC 131, with reference to provisions of Section 31(7) of the Act. 5. Feeling aggrieved, the present appeal has been filed. 6. Learned counsel for the appellants on merits made submissions that the Arbitrator was not justified in awarding the interest. Submissions were made that the interest awarded is excessive, inasmuch as the same initially has been awarded at the rate of 12% and in case payment was not made within a period of two months, the same has been ordered to be paid along with interest at the rate of 18%, which is not justified and, therefore, the award impugned to the extent of order for payment of interest, deserves to be interfered with. 7. We have considered the submissions made by learned counsel for the appellants and have perused the material available on record. 8. Admittedly, the work was executed by the respondent by April, 2010 and he was entitled to the payment in April, 2011 itself. The amount was not paid and the respondent was forced to seek appointment of Arbitrator by filing application before this Court under Section 11 of the Act. Once the Arbitrator was appointed, claim was filed wherein the outstanding amount was admitted and a specific plea was taken that the amount as and when received from the State would be paid. Once the Arbitrator passed the award in the year 2020, the same was also questioned under Section 34 and now once application under Section 34 has been rejected, the present appeal under Section 37 has been filed. 9. Learned counsel for the appellants could not point out any restriction in the agreement regarding payment of interest and, therefore, legally there is no restriction on the Arbitrator in awarding interest depending on the circumstances of the case. The award of interest as ordered by the Arbitrator, in the circumstances of the case wherein for no valid reason for over 15 years the admitted payment due has not been made, cannot be faulted. 10. There is no substance in the appeal to the extent the same has been challenged by the appellant. The same is, therefore, dismissed. Order Date :- 15.4.2025 RK/AKShukla (Kshitij Shailendra, J) (Arun Bhansali, CJ) Digitally signed by :- RAJESH KUMAR High Court of Judicature at Allahabad