HC and SC on Claim for Interest Pendente lite >

INDIAN CORPORATE LAW: Supreme Court on Arbitrator's Powers ...

SC on...

In Consumer court > PLEAS put up (Excerpt):

24.    .....the Hon’ble State Commission of Maharastra in the leading decided case G.Swaminathan Vs Shivam Co-operative Housing Society Ltd., reported in 1983 (2) Bom.C.R. 552 As has been held in that case, a person who had paid advance or deposit to the promoter is entitled for payment of interest; besides holding further that, on those facts, had also a charge over the flat till the promoter discharged his lawful liability owed to the depositor.

25. ..... a recently reported judgment of the Hon’ble Apex Court of India in the case of Union of India Vs Krafters Engineering, in any view of the matter, the referred recent judgment, as also the earlier precedents, in particular the judgment rendered in the case of Government of Orissa Vs G.C.Roy being one of ther precedents cited therein,  conclusively support the Respondent’s impugned claim.

26. ....that was a case where the power of an arbitrator to award interest prente lite was questioned. The Court has held that, the function of award of interest is to compensate a party for deprivation of money to which the claimant was entitled during the pendency of the litigation.  The Hon’ble Court has held that, where agreement between the parties does not prohibit grant of interest and where the party claims interest and that dispute (along with refund claim for principal amount or independently) has referred to the arbitrator he shall have power to award interest pendentlite, this is for the reason that, in any such case it must be presumed that, the interest was implied by the term of the agreement between the parties.  Therefore, when the parties referred all their disputes  or refer the dispute as to interest as such to the arbitrator he shall have power to award interest.  Therefore, it is crystal clear from the foresaid authoritative judgment rendered by the Hon’ble Apex Court that, the Consumer Forum has inherent power/ vested jurisdiction to award interest inspite of absence of contract between the parties. The said judgment is squarely applicable to the case in hand.

27.     Besides, as noted therein, though arbitrator is a creature of the contract between two parties, the ruling is to the effect that, his power to award compensatory interest is not validly or judiciously questionable. That being so, it is urged that, all the more reason why the power of the Forum, which in fact, is very much a creature of the law/statutory authority, cannot be rightly questioned or be made an issue.