S.M. Jhunjhunuwala, J.
1. This petition has been filed for pronouncement of Judgment and passing of decree in terms of the Award dated 25th January, 1994 which has been filed in this Court and numbered as 'Award No. 87 of 1994'. The petitioner has also prayed for decree against the respondent for interest on the amount awarded at the rate of 18% per annum from the date of the said Award till payment or realisation.
2. On or about 10th May, 1979, the respondent has invited offers for supply to the respondent of certain ACSR conductors of the specification set out in the schedule to the tender and on the Terms and Conditions mentioned therein. The petitioner had submitted its quotation dated 29th September, 1979 for supply of the said ACSR conductors and Purchase Order dated 4th July, 1980 was placed by the respondent with the petitioner for the supply of 7100 kms of squirrel ACSR conductors and 7100 kms of Weasel ACSR conductors. The petitioner and the respondent had inter-alia agreed to be governed by the Arbitration Clause being Clause 32 of the General Conditions of Contract. Since disputes arose between the petitioner and the respondent arising out of or in connection with the contract entered into by and between them, the same were referred to arbitration as per the arbitration agreement existed between the petitioner and the respondent and an Award dated 25th January, 1994 was made in favour of the petitioner and against the respondent which has been filed in this Court and numbered as 'Award No. 87 of 1994' (for short, 'the said Award.')
3. The respondent had filed an Arbitration Petition No. 69 of 1994 to have the said Award partially set aside. The said petition was dismissed on 8th September, 1994. Being aggrieved by the said Order dated 8th September, 1994 dismissing the said petition, the respondent has preferred an appeal being Appeal No. 884 of 1994 which has been admitted on 9th March, 1995 and is pending. Though the respondent applied to the Division Bench of this Court for interim stay of further proceedings in the said Award, no stay has been granted by the Appellate Court in the said appeal. In view of dismissal of the said petition, the petitioner has filed the present petition for pronouncement of judgment and passing of decree in terms of the said Award and also for decree for interest as aforesaid.
4. The Executive Engineer of the respondent has affirmed affidavit on 22nd November, 1995 which has been filed in reply to the petition. The respondent has objected to pronouncement of judgment and passing of decree in terms of the said Award since the said Appeal filed by the respondent against the order dismissing the said petition of the respondent is admitted and pending. The respondent has also objected to grant of interest to the petitioner on the amount awarded from the date of the said Award till payment or realisation as according to the respondent this Court has no jurisdiction to award such interest.
5. Mr. Chandran, learned Counsel appearing for the respondent has submitted that since the said appeal filed by the respondent against the order dismissing the said petition of the respondent is continuation of the proceedings to have the said Award partially set aside, pending the hearing and final disposal thereof this Court cannot pronounce judgment and pass decree in terms of the said Award. In support of his submission, the learned Counsel has put reliance on the decision of this Court in the case of Walchand Nagar Industries Ltd. v. Nashik Sahakari Sakhar Kharkhana Limited, reported in 1990 Mah. L.J. 1021. In that case, a Notice of Motion was taken out for passing judgment and decree in terms of the award after the petition to set aside the award was dismissed and appeal from the order dismissing the petition was admitted and pending. The learned Single Judge, held that the Court while exercising jurisdiction under section 17 of The Arbitration Act, 1940 is not bound merely on account of the dismissal of application to set aside an award to pass a decree in terms of the award. It was further held that the passing of a decree is not automatic. In the facts of that case, the learned Judge opined that it would not be proper for him to pass a decree in terms of the award during the pendency of the appeal.
Mr. Chandran has further submitted that the decision of the learned Single Judge in the case of Walchand Nagar Industries Limited is binding on this Court and in case this Court is inclined to take a view different than taken by the learned Single Judge in that case, then this Court should make reference to the Larger Bench. The learned Counsel has put reliance on the Judgment of the Supreme Court in the case of Sundarjas Kanyalal Bhathija and others v. The Collector, Thane, Maharashtra and others, reported in : [1990]183ITR130(SC) in support of his submission that in a Multi-Judge Court, the Judges are bound by precedents and procedure and can use their discretion only when there is no declared principle to be found, no rule and no authority.
6. Mr. Dhanuka, the learned Counsel appearing for petitioner, has submitted that on the said petition to set aside the said Award being dismissed, this Court assumed jurisdiction to pass the decree in terms thereof and pendency of the said Appeal filed by the respondent creates no bar in this Court passing the decree in terms of the said Award more particularly when stay of further proceedings in the said Award has been refused by the Appellate Court. In support of his submission, Mr. Dhanuka has put reliance on the Judgement of this Court in the case of Voltas Limited v. Central Stores and others, reported in 1990 Mah.L.J. 559 wherein learned Single Judge of this Court has held that in section 17 of the Arbitration Act, 1940 (for short, 'the Act'), there is nothing either expressly or by implication to justify the view that an appeal against an order refusing to set aside the award would constitute an application to set aside the award. Reliance has also been placed on the judgments of Calcutta High Court and Madras High Court the cases of Scottish Unions and National Insurance Co. v. Smt. Saraswati Sajnani, reported in : AIR1960Cal22 and P.K. Chinnasamy v. Superintending Engineer, Executive Circle, Madurai & another, reported in : AIR1990Mad347 . Mr. Dhanuka has also put reliance on the Judgment of the Division Bench of this Court in the case of Food Corporation of India v. M/s. R.M.Pathare, reported in : (1994)96BOMLR408 . In support of his submission that under section 29 of the Act this Court has the jurisdiction to Award interest from the date of the Award till payment, Mr. Dhanuka has put reliance on the Judgment of the Supreme Court in the case of Gujarat Water Supply & Sewerage Board v. Unique Erectors (Gujarat) (P) Ltd. and another, reported in : [1989]1SCR318 .
Section 17 of the Act reads as under:
'Judgment in terms of award--Where the Court sees no cause to remit the award or any of the matters referred to arbitration for re-consideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the award.'
Section 17 provides for Judgment in terms of award. It speaks of two situations in which the Court is to proceed to pass Judgment in terms of an award, firstly, where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award after the time for making an application to set aside the award has expired, and secondly, where an application to set aside an award having been made after the same is refused. It is upon these remedies being exhausted that the Court shall proceed to pronounce judgment according to the award and upon the judgment so-pronounced, a decree follows. Under section 17, the Court is not called upon to wait and find out whether its order refusing to remit or set aside the award has become final and unassailable in the sense that the time for appeal is expired or that the appeal if filed is dismissed in order to assume jurisdiction to proceed to pronounce judgment in accordance with the award. The mere fact that an appeal from the order refusing to set aside an award is pending which may affect the validity of such award is no ground for the Court not proceeding to pronounce judgment and pass decree in terms of such award. Having regard to section 41 of the Act, provisions of Order XLI, Rule 5 of the Code of Civil Procedure, 1908 which expressly lays down that an appeal shall not operate as a stay, apply to appeals from orders permissible under the Act.
7. In the case of Scottish Union and National Insurance Co., (supra), the Calcutta High Court has in terms held that under section 17 of the Act, the Court is either to remit or set aside the award and in case where the Court finds no reasons to do either, to pas a judgment in terms of the award and the Court is not called upon to wait and find out whether the order refunding to remit or set aside the award has become final and unassailable. It is further held by the Calcutta High Court that the Court dealing with the award is not required to look beyond itself and proceed to deal with the matter on the footing that so far as it is concerned there is an Order of refusal irrespective of the fact that the appeal might be taken or has been taken against the Order or that the Order passed by the Court might be set aside. In the case of P.K. Chinnasamy (supra), the Madras High Court has held that once there is a refusal to set aside the award, then the implications of section 17 of the Act come into play and there is no other alternative for the Court, except to pronounce a judgment as per the terms of the award which shall be followed by a decree. I am in agreement with the proposition of law on the subject correctly set out by the Calcutta High Court and Madras High Court in these cases. In the case of Voltas Ltd. (supra), learned Single Judge of our Court has rightly held that section 17 of the Act has put two constraints on the Court and once those constraints are removed, the Court is free to pronounce judgment according to the award. It is further held that there is nothing in the section, either expressly or by implication, to justify the view that an appeal against an order refusing to set aside the award would constitute an application to set aside the award and once the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award or after the application for setting aside the award has been refused, no impediment remains in the way to pass a decree in terms of the award.
8. Section 44 of the Act empowers the High Courts to frame rules consistent with the Act on the matters enumerated therein. In exercise of the powers vested under section 44, this Court has framed rules titled as 'Rules Under the Arbitration Act, 1940' (for short, 'the said Rules') which are contained in Chapter XLI of the Rules of this Court as applicable as its Original Side. The said Rules are statutory having force of law. Sub-clause (5) of Rule 787 of the said Rules as amended vests discretion in the Judge disposing of the petition to set aside or remit the award to pass a judgment and decree in terms of the award immediately on delivery of his judgment refusing to set aside or remit the award or on such date as he deems fit thereafter without requiring any written application from any of the parties interested in enforcing the award. In the case of Food Corporation of India v. R.M. Pathare, (supra), the Division Bench of our Court has also accordingly interpreted the said Rule. The judgment of the Division Bench is binding on me.
9. It is an admitted position that the said Arbitration Petition No. 69 of 1994 filed by the respondent to have the said Award partially set aside has been dismissed. In view of dismissal of the said petition, this Court has assumed the jurisdiction to pronounce judgment and pass decree in terms of the said Award. It is correct that in the case of Walchandnagar Industries Limited (supra), learned Single Judge of our Court has dismissed plaintiffs' Notice of Motion taken out for decree in terms of the award when the appeal preferred from the order dismissing the petition to set aside the award was admitted and pending. In the order dismissing the Notice of Motion, learned Judge has observed as under:
'In my judgment, it would not be proper to pass a decree in terms of the award during the pendency of the said appeal.'
In the facts of that case, the learned Judge noticing that appeal against the order refusing to set aside the award was pending, further observed:-
'It would be inappropriate to pass a decree in terms of the award.'
It may, however, be mentioned here that in an earlier matter, the learned Judge himself had passed the decree in terms of the award when the appeal from order dismissing the petition to set aside the award was pending in this Court. This was so done on 5th June, 1990 in Notice of Motion No. 2534 of 1989 in Award No. 3 of 1989. While distinguishing facts of the case in Walchandnagar Industries Limited decided on 29th June, 1990 from those in the said Notice of Motion No. 2534 of 1989, the learned Judge has observed as under:
'In regard to my order dated 5th June, 1990 in Notice of Motion No. 2534 of 1989 in Award No. 3 of 1989 the same was passed on the facts and circumstances which were peculiar to that case. The same does not lay down any proposition of law that the plaintiff is entitled to a decree in all cases even though an appeal is pending. The Defendants in that case had applied to the Appeal Court for stay. The stay was granted on condition of deposit. The Defendants did not comply with the conditions but carried the matter to the Supreme Court and the same was dismissed. They moved the Appeal Court for clarification and the Appeal Court specifically clarified that if there was no deposit there will be no stay. It was in the peculiar circumstances of that case that I passed a decree in terms of the award.'
In relation to his decision on the said Notice of Motion No. 2534 of 1989, the Learned Judge held that:
'The said case does not lay down a proposition of law that despite pendency of an appeal, the plaintiffs in all cases will be entitled to a decree in terms of the award.'
10. It is correct that the judicial decorum and legal propriety demand that where a Single Judge or a Division Bench does not agree with the decision of a Bench of co-ordinate jurisdiction, the matter should be referred to a larger Bench. However, to constitute a binding precedent, the judgment must lay down a proposition of law. In my view, the order dismissing the Notice of Motion for decree in terms of the award in the case of Walchandnagar Industries Limited, does not lay down a proposition of law as it is not stated therein that wherever an appeal from order refusing to set aside or remit an award is pending, the Court shall not proceed to pronounce judgment and pass decree in terms of such award despite no stay of further proceedings being granted by the Appellate Court. The learned Judge has, in that case, merely observed that it would be inappropriate to pass a decree in terms of the award when the appeal from order refusing to set aside the award was admitted and pending. In this view of the matter, the learned Counsel for the respondent is not right in his submission that the decision in the case of Walchandnagar Industries Limited is a binding precedent on this Court. Even if the decision in Walchandnagar Industries Limited had the effect of a binding precedent, since the law on the subject has significantly changed thereafter with amendment of the said Rules and introduction the Rule 787(5) therein and the Judgment of the Division Bench of this Court in the case of Food Corporation of India v. R.M. Pathare, which is binding precedent on this Court, the decision in the case of Walchandnagar Industries Limited is no more binding on this Court and as such, it is not necessary to make reference to a larger Bench more particularly when in the Appeal preferred by the respondent, the respondent did take out a Notice of Motion for grant of stay of further proceedings in the said Award which was withdrawn resulting into no stay being granted by the Appellate Court.
11. Section 29 of the Act provides that where and in so far as an award is for the payment of money the Court may in the decree order interest, from the date of the decree at such rate as the Court deems reasonable, to be paid on the principal sum of as adjudged by the award and confirmed by the decree. The said Award is for the payment of money. In the case of Gujarat Water Supply & Sewerage Board v. Unique Erectors (Gujarat) P. Limited and another, reported in : [1989]1SCR318 , the Supreme Court while considering the provisions of section 29 of the Act, has held that the principles of section 34 of the Code of Civil Procedure, 1908 are applicable to proceedings before the arbitrator though section as such may not apply. It is further held that apart from the arbitrator, the Court has power in the proceedings under the Act to grant interest from the date of the Award to the date of the decree or realisation, whichever is earlier. In this view of the matter, I find no substance in the submission made on behalf of the respondent that this Court has no jurisdiction to award interest to the petitioner from the date of the said Award. However, the petitioner is not entitled to further interest from the date of the said Award on the sum of Rs. 34,05,516.33 since the said amount includes interest aggregating to Rs. 13,47,814.91 calculated upto the date of the said Award. The petitioner shall be entitled to further interest from the date of the said Award till payment and/or realisation, whichever is earlier, at the rate of 18% per annum, being the reasonable rate of interest, on the principal amount adjudged viz. Rs. 20,58,201.43 (Rs. 34,05,516.33 less Rs. 13,47,814.91).
12. In the result, the petition is made absolute in terms of prayers (a) and (b) thereof and Judgment is pronounced and decree passed in terms of the Award dated 25th January, 1994 which has been filed in this Court and numbered as 'Award No. 87 of 1994'. The respondent is further ordered and decreed to pay to the petitioner further interest on the principal sum of Rs. 20,58,201.42 at the rate of 18% per annum from the date of the said Award till payment or realisation, whichever is earlier.
13. In the facts of the case, there shall however, be no order as to costs of the petition.
14. Issuance of certified copy of the minutes of the order is expedited.