1 2025:CGHC:44813 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR RESERVED ON 6-8-2025 PRONOUNCED ON 3-9-2025 ARBA No. 7 of 2018 1 - P.D.Goyal S/o Late Nandkishore Goyal Aged About 59 Years Occupation- Transport Contractor, R/o Vishrampur, District Surguja (Now District Surajpur), Chhattisgarh. ... Appellant versus 1 - South Eastern Coalfields Limited, Through The Chairman- Cum- Managing Director, Seepat Road, Bilaspur, Chhattisgarh. 2 - The Chief General Manager Hasdeo Area, S E C L, Jhagrakhand, Manendragarh, District Koriya, Chhattisgarh. ... Respondents For appellant : Mr. D. N. Prajapati, Adv. For Respondents : Dr. Sudeep Agrawal, Adv. (Hon’ble Mr. Naresh Kumar Chandravanshi, J) CAV Order 1. Appellant/applicant has preferred this Arbitration Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (henceforth, referred to as ‘Act of 1996’) challenging the order dated 6-1-2018 passed in Civil Suit No. 6A/2015 by the District Judge, Baikunthpur, Distt. Korea (CG), whereby the application/civil suit filed by the appellant/applicant under Digitally signed by AVANISH KUMAR PATHAK Date: 2025.09.03 15:08:56 +0530 2 Section 34 of the Act of 1996, has been dismissed. (hereinafter parties shall be referred to as per their status before the District Judge) 2. Brief facts of the case, as projected by the applicant, are that, he filed an application under Section 11 of the Act of 1996 stating inter alia that, the respondents entrusted him transportation of 6.10 lakh tones coal from South Jheemar/Malga Colliery to Ramnagar/Rajnagar RO New CHP, at the rate of Rs. 14.80/- per tone. Work order was issued on 14-9-1994. Period of contract was 12 months. In the work order, distance from loading point to unloading point was mentioned 8.7 km., but actual distance between said places was 9.5 km instead of 8.7 km. In this regard, many times, applicant raised objections by making written communication to respondents, but they never responded. Since wrong distance was mentioned in the work order, therefore, till completion of work period (12 months), applicant transported only 3,90,412.14 tones coal, as he was compelled to transport aforesaid coal for 600 km more. In the contract period, rate of diesel was increased from Rs. 8.10/- per litre to Rs. 8.17/- per litre from 12.4.1994. Despite specific term in contract to pay increased rate of diesel, respondents did not pay said difference amount. It is further averred that, since respondents closed Ramnagar siding, therefore, applicant was compelled to transport coal to Rajnagar RO New CHP, but unloading facility was not adequate at that place, therefore, it takes too much time to unload the vehicle(s) and get receipt. Upon repeated communication made in this regard, applicant was directed to unload 3 the coal on the ground. Despite that, respondents have illegally imposed penalty of Rs. 51,826/- and deducted it from final bill, for unloading coal on the ground. Because of all aforesaid reasons, applicant could not transport contractual quantity of coal, hence he suffered loss of 10% income in business, as he could not transport 2,19,588 tones coal. Period of agreement was completed on 13-8- 1995, hence as per agreement, amount of final bill was to be paid within 6 months, but they paid amount of final bill on 30-7-1998 i.e. after about 3 years from the date of completion of work period, therefore, applicant has sought 18% interest in the amount of final bill Rs. 1,78,290.28/-. Thus, applicant filed aforesaid application claiming Rs. 6,18,816.64/- in following heads against the respondents :- (a) Penalty amount Rs. 51,826.64. (b) Difference in diesel rates amounting to Rs. 7,000.00. (c) Damages for not transporting coal Rs. 3,24,990.00. (d) Interest for three years Rs 1,35,000.00. (e) Mental agony and loss of business Rs. 1,00,000.00 Total - Rs. 6,18,816.64. 3. The respondents filed their joint reply, in which, they accepted agreement and work order, part of pleading, mentioned by applicant in para 1 to 5 of his application. They further averred that, distance from loading point to unloading point was not 9.5 km., rather, at Rajnagar RO New CHP, 3 bunkers were there and distance of first bunker from the loading point was 8.7 km, where the applicant had unloaded all the coal, which he transported. In subsequent contract, work order was 4 issued for transportation of coal to bunker No. 3 of Rajnagar New CHP, therefore, distance of 9.2 km was mentioned in subsequent tender/work order. Therefore, pleading of applicant that, he covered distance of 600 km. more, is wrong. In said period, neither rate of diesel was increased nor applicant has ever made any demand on this count from respondents. In fact, since applicant was not having sufficient number of tippers for transportation of coal from South Jheemar / Malga Colliery, he was unable to transport the coal to unloading point, therefore, the bunkers of South Jheemar and Malga had got filled, that is why, production of coal was affected, hence applicant, after lifting coal from bunker, dumped it on the ground. All facilities were provided to the applicant to unload the coal at Rajnagar RO new CHP, but because of less number of Dumpers/Tippers, applicant could not meet out required speed of transportation of coal. Because of this negligence of applicant, penalty was imposed against him. Since the procedure of closure of contract and imposing penalty requires so many formalities to be completed, therefore, delay occurred in payment of final bill amount, which was actually security deposit and the same was paid to him after deduction of penalty amount. Running bills were being paid to the applicant during transportation i.e. prior to payment of final bill amount, as such, as final bill amount, only security deposit amount was refunded to him after deduction of amount of penalty as per term 5.6 of the contract, hence, applicant is not entitled to get any interest on final bill amount. No amount, as has been claimed by the applicant, is payable to him by the respondents, hence, his application is liable to be rejected. 5 4. Since there was an arbitration clause in the agreement entered into between the parties, therefore, matter was referred to the Arbitrator M.A. Ubaid, CMD CCL (Retd.)/Sole Arbitrator, who passed award dated 30-10-2003, whereby he dismissed the application/claim filed by the applicant, holding therein that, the applicant is not entitled to get any amount claimed by him. Applicant filed an application under Section 34 of the Act of 1996 before the Upper District Judge, Manendragarh. After considering the same, it accepted the award of the Arbitrator in toto vide order dated 21-8-2004. 5. Being aggrieved from the order dated 21-8-2004 passed by the Upper District Judge, Manendragarh, applicant preferred Misc. Appeal No. 1293/2004 before the High Court of Chhattisgarh at Bilaspur. Learned Coordinate Bench vide order dated 16-1-2014, set aside the order dated 21-8-2004 and remitted the matter to the Upper District Judge to pass reasoned order after hearing the parties. Thereafter, learned District Judge, Korea (Baikunthpur) restored the application and after hearing both the parties, passed order/judgment dated 7-11-2015, partly allowing the application of applicant and remanded back the matter to the Arbitrator to re-consider the award in respect of ‘distance of road, on which, coal was transported’ and ‘grant of interest on delayed payment of amount of final bill’. This judgment was challenged by respondents by filing Arbitration Appeal No. 23/2016 before the High Court of Chhattisgarh, Bilaspur, in which, vide order dated 28-7-2017, learned Coordinate Bench set aside the order/judgment dated 7-11- 2015 on the ground that, learned District Judge has committed illegality 6 in setting aside the arbitral award and remitting the matter to the arbitration tribunal, as the same is against the provision of Section 34(2) of the Act of 1996. Learned Coordinate Bench remitted the matter to the District Judge, Baikunthpur for consideration afresh in accordance with law. Thereafter, learned District Judge, Baikunthpur District Korea again considered the matter and after providing opportunity of hearing to both the parties, vide impugned judgment dated 6-1-2018 (Annexure A-1) again dismissed the application filed by the applicant. Being aggrieved, the applicant has preferred instant appeal. 6. Learned counsel for the appellant/applicant submits that, actual distance from loading point to unloading point was 9.5 km, but in agreement, it was wrongly mentioned by the respondents as 8.7 km. Because of aforesaid fact, applicant was compelled to cover 600 km more distance. This fact was not revealed on the spot during joint inspection made by both the parties, rather in subsequent contract, respondents themselves mentioned that distance as 9.2 km. He further submitted that during contract period, rate of diesel was increased on 12-4-1995 from Rs. 8.10/- to Rs. 8.17/- and after 3 days from starting of work, respondents closed Ramnagar siding, therefore, applicant suffered huge financial loss on account of covering long distance and price escalation of diesel. Learned counsel further submits that, since no facility was provided by respondents for unloading coal at Rajnagar siding, therefore, the Tippers could not unload the coal for hours, hence applicant could not transport required quantity of coal as per the 7 agreement within the stipulated period, and therefore, he suffered 10% loss of his income because of non-transportation of 2,19,588 tonnes coal. Learned counsel also submits that, applicant and his witness have proved aforesaid fact and they have also proved that, amount of final bill was paid after 3 years of closing of contract period, which was against the terms of agreement. Despite that, those evidence have been dis-regarded not only by the Sole Arbitrator, but also by the District Judge. Learned counsel further submits that, the Arbitrator is entitled to grant interest on the amount of delayed payment, but the Arbitrator and the District Judge have not granted interest only because, there was no term in the agreement for grant of interest on delayed payment of amount. Whereas, interest can be granted by the Arbitrator, even in absence of specific terms in the contract in this regard. To buttress his contention, learned counsel for the applicant relied on the cases of Bhagawati Oxygen Ltd. Vs. Hindustan Copper Ltd. [(2005) 6 SCC 462] and Sayeed Ahmed & Company Vs. State of UP and others [2009) 12 SCC 26]. Lastly, he prays that, instant appeal may be allowed and respondents may be directed to pay the amount claimed by the applicant. 7. Per contra, learned counsel appearing for the respondents would submit that, there is concurrent finding of the learned Sole Arbitrator and learned District Judge vide impugned orders/judgments. Learned District Judge has dealt with each and every aspect of the claim made by the applicant after appreciating evidence and relevant terms of agreement. No specific ground has been raised by the applicant to 8 bring his case within the provisions contemplated under Section 34 of the Act of 1996, rather, the appeal has been filed only on the basis of vague and baseless grounds. He further submits that, in the agreement, there was no specific term with regard to payment of interest on delayed payment of amount and the Arbitrator cannot go beyond the terms of agreement, hence, applicant is not entitled for grant of any interest claimed by him. In this regard, he relied on the case of MD, Army Welfare Housing Organisation Vs. Sumangal Services (P) Ltd. [(2004) 9 SCC 619]. Hence, he prays that, the instant arbitration appeal is liable to be rejected. 8. I have heard learned counsel for the parties and perused the material available on records of the case. 9. Perusal of the award dated 30-10-2003 passed by the Sole Arbitrator shows that, to decide the matter, he framed following issues :- “(i) Whether Applicant's contention that the distance of transportation of coal has been 9.5 kms approx as against 8.7 Km as mentioned by Non Applicant ? (ii) Whether the claimant is entitled for the refund of the amount of penalty deducted by Non Applicant ? (iii) Whether Applicant is entitled for damages for non- transport of coal as claimed to the extent of Rs. 3,24,990/-or any other amount? (iv) Whether Applicant is entitled for interest for late payment 9 of final bill? If yes to what extent? (v) Whether Applicant is entitled for compensation for alleged mental harassment ? If yes to what extent? (vi) Whether Applicant is entitled for the escalation in price of diesel? If yes to what extent?” 10. The Arbitrator and learned District Judge, both have recorded negative findings in respect of aforesaid issues and dismissed claim of appellant/applicant, which has been put to challenge before this Court by filing instant arbitration appeal. Issue No. 1 11. First issue to be considered is as to whether the distance of transportation of coal was 9.5 km approximately as against 8.7 km. ? In this regard, as per deposition of Narendra Singh (AW 2) and Sandeepan Majumdar (NAW 2), Sr. Survey Officer, SECL, Hasdev, there were two routes to go from loading point to unloading point, one was going from Weigh Bridge to “C” Sector Junction via railway overbridge and other diverting from “C” Sector Junction and going directly to Rajnagar CHP. It is found from the evidence that, second route diverting from “C” Sector Junction and going directly to Rajnagar CHP was shorter i.e. 8.7 km then the second route. Even in the measurement made by the Commissioner in presence of both the parties and their counsel also, it was found that second route is shorter then first route. In the bid document, opportunity was given to 10 the bidders to inspect the work site and applicant himself has admitted in his cross-examination that, in tender form, he had mentioned 8.7 km. distance. This issue has also been considered by learned District Judge in detail in para 16 to 24 of the impugned judgment mentioning relevant clause of bid document/agreement. On due consideration of evidence available on record, I do not find any infirmity in the concurrent finding of the Arbitrator as well as the District Judge in holding that, despite shorter route, if the applicant transported coal from longer route, hence, only because of that, contention of the applicant is not acceptable that in bid document/agreement, distance of loading point to unloading point was wrongly mentioned as 8.7 km against 9.5 km. ISSUES No. 2 AND 3 12. As per Clause 5.7 of the work order dated 14-9-1994, applicant had to transport 1450 tones coal per day, failing which penalty was to be imposed as per terms of the tender document i.e. 20% of the transportation cost of the short fall quantity. The period of agreement was 14.8.1994 to 13-8-1995 i.e. one year. Applicant had to transport 6.10 lakh tones coal from South Jheemar/Malga Colliery to Ramnagar siding /Rajnagar RO new CHP siding, but during the period of agreement, he only transported 3,90,412.14 tones coal. 13. To achieve the target, applicant ought to have engaged sufficient number of trucks/tippers. He himself has admitted that, he had received letters from SECL management to engage more number of 11 dumpers. As per evidence of applicant P.D. Goyal (A.W. 1) and Sandeepan Majumdar (NAW 2), since applicant could not have transported sufficient quantity of coal, therefore, he had dumped huge quantity of coal on the ground. Applicant himself has admitted in his cross-examination that, he had 7 vehicles of his own and he had also engaged rented vehicles, but he has not stated in his statement as to how many vehicles were engaged by him on rent, rather, in his cross- examination, he has stated that he could not recollect that on 3-8-1995 only 5 tippers were engaged by him for transportation of coal. Though he has stated that, because of closing of Ramnagar siding, there were huge rush of vehicles at Rajnagar siding because vehicles bringing coal from other mines also used to come there for dumping coal. Hence, much time was being lost for getting receipt and unloading the vehicles. But this statement has been very well rebuted by Dhaneshwar Prasad (NAW 1) and Sandeepan Majumdar (NAW 2). Both these issues have also been dealt by the District Judge in the impugned order in the light of relevant clauses of the agreement. Since, applicant could not complete contractual work within stipulated period, rather he dumped the coal on the ground, which was being transported by SECL from other vehicles, which has also been acepted by the applicant in his deposition, hence, imposing penalty against the applicant is found to be in accordance with the provisions of bid document/agreement. And since, applicant himself was responsible for non-fulfillment of the terms of work contract, therefore, because of non-transportation of 2,19,588 tones coal, if he suffered loss of business then the respondents cannot be held responsible. 12 ISSUES No. 5 AND 6 14. As per clause 5.4 of work order, the rate of transportation was revisable whenever there was increase or decrease of diesel price during contract period. Applicant has deposed that, during contract period, rate of diesel was increased from Rs. 8.10/- to Rs. 8.17/-, but as per respondents, he has never claimed that price escalation of diesel during contract period. To substantiate aforesaid fact, applicant has filed certificate issued by ‘Kirodimal Petrol Pump’ but that is not a valid document to prove the price hike of diesel and he himself has admitted in his cross-examiantion that, he has not obtained any certificate issued by the Food Department to prove hike of rate of diesel, who is competent authority to certify aforesaid fact. Therefore, it is found that, the Sole Arbitrator as well as the District Judge have not committed any mistake in not allowing aforesaid claim of applicant. 15. Perusal of evidence available on record, which has been duly considered by the Sole Arbitrator and also by the District Judge, shows that, because of his own failure, applicant could not complete the work contract within the stipulated period. Hence, he is not entitled to get any compensation on the count of mental agony. ISSUE NO. 4 16. Though, Sandeep Majumdar (NAW 2) has stated that, on account of final bill, nothing was outstanding to be paid to the applicant, as during the period of agreement, all the running bills were paid to the applicant and the only outstanding amount to be paid to him after 13 completion of contractual period, was amount of security deposit, which was refunded after deduction of penalty, but this statement is not found to be correct, because, as per final bill, after deduction of penalty amount i.e. Rs. 51,836/-, final amount Rs. 1,78,290.28/- was outstanding against the final bill, which was paid to the applicant by respondents on 26-6-1998, whereas as per agreement and statement of applicant, final bill had to be paid within 6 months from the date of completion of work period i.e. 13-8-1995 which was paid to the applicant after more than 2½ years from the date of completion of work period. 17. Learned Sole Arbitrator and learned District Judge have declined to grant claim of interest made by the applicant on the ground that, there was no term of grant of interest in the agreement, therefore, the applicant is not entitled to get interest on delayed payment, but it is not found to be in consonance with the provisions of Section 31(7) of the Act of 1996, which reads thus :- “31. Form and contents of arbitral award - xxx xxx xxx (7)(a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which 14 the cause of action arose and the date on which the award is made. [(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of two per cent higher than the current rate of interest prevalent on the date of award, from the date of award to the date of payment. Explanation.—The expression “current rate of interest” shall have the same meaning as assigned to it under clause (b) of Section 2 of the Interest Act, 1978 (14 of 1978).] [(8) The costs of an arbitration shall be fixed by the arbitral tribunal in accordance with Section 31-A.]” 18. Though, in the agreement executed between the parties, there was no specific term for grant of interest in delayed payment, but there is also no specific term that, interest would not be payable in delayed payment. Therefore, in the light of provision of section 31(7) of the Act of 1996, even in lack of specific terms in the agreement, interest can be granted in delayed payment. 19. Recently, Hon’ble Supreme Court in the case of Ferro Concrete Construction (India) Vs. State of Rajasthan (2025 SCC OnLine SC 708) while considering the issue as to whether, the contractual clause, that bars the appellant/contractor from claiming any interest on any 15 payment, arrears or balance, due to it, amounts to express bar on the Arbitrator’s power to grant pendente lite interest as per the law under Arbitration Act, 1940, has held that, contractual bar on payment of interest on any arrears or balance does not prevent an Arbitrator from awarding pendente lite interest with the arbitral award, unless expressly stated in the contract. Relevant para(s) of the aforesaid judgment are quoted as under :- “8. The position of law on the grant of interest under the 1940 Act and the 1996 Act is well-settled. The constitution bench decisions of this Court in GC Roy [Secretary, Irrigation Department, Government of Orissa v. G.C. Roy, (1992) 1 SCC 508] and NC Budharaj [Dhenkanal Minor Irrigation Division v. NC Budharaj (2001) 2 SCC 721]. recognised the arbitrator’s power to grant pre- reference, pendente lite, and post-award interest on an arbitral award made under the 1940 Act unless there is a contractual bar. The question that falls for our consideration is whether the contractual bar in the present case prohibits the arbitrator from granting pendente lite interest, which necessarily entails an interpretation of the clause. 9. This Court has, on multiple occasions, noted that a contractual clause which bars the payment of interest is interpreted differently under the 1940 Act and the 1996 Act. In fact, while deciding cases under the 1996 Act, this Court has been slow to rely on the principles laid down under the 1940 Act, considering the legislative incorporation of the arbitrator's power to grant interest through Section 31(7) of the 1996 Act. The difference in the interpretative approach has been expounded by this Court in Reliance Cellulose (supra) as follows: “24. A conspectus of the decisions that have been referred to above would show that under the 1940 Act, an arbitrator has power to grant pre-reference interest under the Interest Act, 1978 as well as pendente lite and future interest. However, he is constricted only by the fact that 16 an agreement between the parties may contain an express bar to the award of pre-reference and/or pendente lite interest. Since interest is compensatory in nature and is parasitic upon a principal sum not having been paid in time, this Court has frowned upon clauses that bar the payment of interest. It has therefore evolved the test of strict construction of such clauses, and has gone on to state that unless there is a clear and express bar to the payment of interest that can be awarded by an arbitrator, clauses which do not refer to claims before the arbitrators or disputes between parties and clearly bar payment of interest, cannot stand in the way of an arbitrator awarding pre-reference or pendente lite interest. Thus, when one contrasts a clause such as the clause in Second Ambica Construction case with the clause in Tehri Hydro Development Corpn. Ltd., it becomes clear that unless a contractor agrees that no claim for interest will either be entertained or payable by the other party owing to dispute, difference, or misunderstandings between the parties or in respect of delay on the part of the engineer or in any other respect whatsoever, leading the Court to find an express bar against payment of interest, a clause which merely states that no interest will be payable upon amounts payable to the contractor under the contract would not be sufficient to bar an arbitrator from awarding pendente lite interest under the 1940 Act. As has been held in First Ambica Construction case, the grant of pendente lite interest depends upon the phraseology used in the agreement, clauses conferring power relating to arbitration, the nature of claim and dispute referred to the arbitrator, and on what items the power to award interest has been taken away and for which period. We hasten to add that the position as has been explained in some of the judgments above under Section 31(7) of the 1996 Act, is wholly different, inasmuch as Section 31(7) of the 1996 Act sanctifies agreements between the parties and states that the moment the agreement says otherwise, no interest becomes 17 payable right from the date of the cause of action until the award is delivered. (emphasis supplied) 10. The difference in the interpretative approach can be stated as follows. Under the 1940 Act, a stricter approach is followed that requires a clear and express clause against the payment of interest in case of difference, dispute, or misunderstanding, in case of delay of payment, or any other case whatsoever, to constitute a bar on the arbitrator from granting interest. A clause that only provides that interest shall not be granted on amounts payable under the contract would not be sufficient. On the other hand, under the 1996 Act wherein Section 31(7)(a) sanctifies party autonomy, interest is not payable the moment the contract provides otherwise. This distinction has been reiterated by us in a recent decision in Pam Developments [(2024) 10 SCC 715], which summarised the position of law as follows: “23. The power of the arbitrator to grant pre- reference interest, pendente lite interest, and post-award interest under Section 31(7) of the Act is fairly well-settled. The judicial determinations also highlight the difference in the position of law under the Arbitration Act, 1940. The following propositions can be summarised from a survey of these cases: 23.1. Under the Arbitration Act, 1940, there was no specific provision that empowered an arbitrator to grant interest. However, through judicial pronouncements, this Court has affirmed the power of the arbitrator to grant pre-reference, pendente lite, and post-award interest on the rationale that a person who has been deprived of the use of money to which he is legitimately entitled has a right to be compensated for the same. When the agreement does not prohibit the grant of interest and a party claims interest, it is presumed that interest is an implied term of the agreement, and therefore, the arbitrator has the power to decide the same. 18 23.2. Under the 1940 Act, this Court has adopted a strict construction of contractual clauses that prohibit the grant of interest and has held that the arbitrator has the power to award interest unless there is an express, specific provision that excludes the jurisdiction of the arbitrator. 23.3. Under the 1996 Act, the power of the arbitrator to grant interest is governed by the statutory provision in Section 31(7). This provision has two parts. Under clause (a), the arbitrator can award interest for the period between the date of cause of action to the date of the award, unless otherwise agreed by the parties. Clause (b) provides that unless the award directs otherwise, the sum directed to be paid by an arbitral award shall carry interest @ 2% higher than the current rate of interest, from the date of the award to the date of payment. 23.4. The wording of Section 31(7)(a) marks a departure from the Arbitration Act, 1940 in two ways : first, it does not make an explicit distinction between pre-reference and pendente lite interest as both of them are provided for under this sub-section; second, it sanctifies party autonomy and restricts the power to grant pre- reference and pendente lite interest the moment the agreement bars payment of interest, even if it is not a specific bar against the arbitrator. 23.5. The power of the arbitrator to award pre- reference and pendente lite interest is not restricted when the agreement is silent on whether interest can be awarded or does not contain a specific term that prohibits the same. 23.6. While pendente lite interest is a matter of procedural law, pre-reference interest is governed by substantive law. Therefore, the grant of pre-reference interest cannot be sourced solely in Section 31(7)(a) (which is a procedural law), but must be based on an agreement between the parties (express or implied), statutory provision (such as Section 3 of the 19 Interest Act, 1978), or proof of mercantile usage.” (emphasis supplied) 11. At this stage, we find it necessary to deal with Ms. Pathak's submission that Reliance Cellulose (supra) relies on Engineers-De-Space-Age [(1996) 1 SCC 516], which was later read down and clarified by a 3-judge bench in the First Ambica case. Upon reading Reliance Cellulose (supra), it is clear that this Court undertook a comprehensive survey of the case-law on the issue of payment of interest on arbitral awards, including a detailed discussion of the First Ambica case12, before formulating the legal position extracted hereinabove. 12. In the First Ambica case (supra), the issue before this Court was whether Engineers-De-Space-Age (supra) and Madnani Construction [(2010) 1 SCC 549] were correctly decided. After taking note of the interpretation of various contractual clauses barring payment of interest in this Court's decisions under the 1940 Act and the 1996 Act, it summarised their rulings as follows: “28. It is apparent from various decisions referred to above that in G.C. Roy the Constitution Bench of this Court has laid down that where the agreement expressly provides that no interest pendente lite shall be payable on amount due, the arbitrator has no power to award interest. In N.C. Budharaj a Constitution Bench has observed that in case there is nothing in the arbitration agreement to exclude jurisdiction of the arbitrator to entertaining claim for interest, the jurisdiction of the arbitrator to consider and award interest in respect to all periods is subject to Section 29 of the Act. In Hindustan Construction Co. Ltd. this Court has followed the decision in G.C. Roy and laid down that on the basis of principles of Section 34 the arbitrator would have the power to award pendente lite interest also. In B.N. Agarwalla, this Court has again followed G.C. Roy and Hindustan Construction Co. Ltd. with respect to the power of the arbitrator to award pendente lite interest and it was held that the arbitrator has the power 20 to award interest. In Harish Chandra this Court interpreted Clause 1.9 which provided that no claim for interest or damages will be entertained by the Government in respect to any monies or balances which may be lying with the Government. It was held that there was no provision which could be culled out against the contractor not to claim interest by way of damages before the arbitrator on the relevant items placed for adjudication. In Ferro Concrete Construction (P) Ltd. this Court considered Clause 4 containing a stipulation that no interest was payable on amount withheld under the agreement. It was held that Clause 4, which dealt with rates, material and workmanship, did not bar award of interest by the arbitrator on claims of the contractor made in the said case. In Sayeed Ahmed this Court has emphasised that award of interest would depend upon nature of the clause in the agreement. In Bright Power Projects (India) (P) Ltd. this Court has considered the expression “unless otherwise agreed by parties” employed in Section 31(7)(a) of the 1996 Act and laid down that in case contract bars claim of interest the contractor could not have claimed interest. The provision of Section 31(7)(a) of the 1996 Act is binding upon the arbitrator. In Sree Kamatchi Amman Constructions similar view has been taken.” The Court then took note of the doubts expressed regarding the correctness of Engineers-De-Space-Age [(2010 1 SCC 549)] and Madnani Construction (supra) in Sayeed Ahmed (supra) and Tehri Hydro Development Corpn. Ltd. v. Jai Prakash Associates Ltd.[(2012) 12 SCC 10], on the ground that they allow the arbitrator to grant interest by ignoring an express bar in the contract. In order to resolve the discordant note, this Court in the First Ambica case (supra) held as follows: “32. In para 4 in Engineers-De-Space-Age this Court has observed that bar under the contract will not be applicable to the arbitrator cannot be said to be observation of general application. In our opinion, it would depend upon the stipulation 21 in the contract in each case whether the power of the arbitrator to grant pendente lite interest is expressly taken away. If answer is “yes” then the arbitrator would have no power to award pendente lite interest. 33. The decision in Madnani Construction Corpn. has followed the decision in Engineers-De- Space-Age. The same is also required to be diluted to the extent that express stipulation under contract may debar the arbitrator from awarding interest pendente lite. Grant of pendente lite interest may 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. 34. Thus, our answer to the reference is that if the contract expressly bars the award of interest pendente lite, the same cannot be awarded by the arbitrator. We also make it clear 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.” (emphasis supplied) 13. From the above extracted paragraphs, the decision of the 3-judge bench in the First Ambica case (supra) can be stated as follows. The arbitrator's power to grant interest would depend on the contractual clause in each case, and whether it expressly takes away the arbitrator's power to grant pendente lite interest. This would have to be determined based on the phraseology of the agreement, clauses conferring powers relating to arbitration, the nature of claim and dispute referred to the arbitrator, and on what items the power to award interest is contractually barred 22 and for which period. Further, a bar on award of interest for delayed payment would not be readily inferred as an express bar to the award of pendente lite interest by the arbitrator.” 20. Reverting to the facts of instant case, though there is no specific term with regard to grant of interest in delayed payment, but despite specific stipulation in the agreement, as stated by the applicant and not controverted by the respondents, amount of final bill should have been paid within 6 months from the date of completion of period of agreement and the term of agreement was completed on 13-9-1995, but amount of final bill i.e. Rs. 1,78,290.28/-, was paid to the applicant on 26-6-1998. Thus, respondents unlawfully retained aforesaid amount and deprived the applicant from using the same for more than 2 ½ years. Therefore, in view of provision of Section 31(7) of the Act of 1996 and the law laid down by Hon’ble Apex Court in above referred cases, learned Sole Arbitrator as well as learned District Judge erred in law in not granting interest to the applicant on delayed payment of final bill amount of Rs. 1,78,290.28/-. Hence, it is held that, the applicant is entitled to get interest at the rate of 12% per annum from the date of filing of application under Section 11 of the Act of 1996 i.e. 12-1-1999 till actual payment of outstanding bill amount along with interest. 21. The applicant has not filed any document with regard to cost incurred by him in respect of payment of Arbitrator’s fee, hence he is not entitled to get any amount towards cost of arbitration or Arbitrator’s fee. 22. In view of above, instant Arbitration Appeal is partly allowed. Impugned order dated 6-1-2018 passed in Civil Suit No. 6A/2015 by 23 the District Judge, Baikunthpur, Distt. Korea (CG), is set aside only to the extent indicated herein above i.e. only upto the grant of interest on delayed payment of final bill. 23. Accordingly, the appellant/applicant is held entitled for interest at the rate of 12% per annum from the date of filing of application under Section 11 of the Act of 1996 i.e. 12-1-1999 till actual payment of final bill amount of Rs. 1,78,290.28/- along with interest at the rate of 12%, till actual realization of the amount of interest. Rest of the claim(s) made by the appellant/applicant are rejected by this Court also. 24. Pending interlocutory application(s), if any, stands disposed of. Sd/- (Naresh Kumar Chandravanshi) Judge Pathak