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PETITIONER: JUGAL KISHORE PRABHATILAL SHARMA AND ORS.

       Vs.

RESPONDENT: VIJAYENDRA PRABHATILAL SHARMA AND ANR.

DATE OF JUDGMENT22/10/1992

BENCH: [S. RANGANATHAN, V. RAMASWAMI AND B.P. JEEVAN REDDY, JJ.]

ACT: Indian Artibitration Act, 1949: Section 14,  22, 23,  29, 30, 39 and 41-Reference of dispute to arbitration by Court in a suit pending-Arbitrator has all power Court has in deciding issues in the suit. Interest  pendente   lite-Can  be  awarded  where  Agreement envisages payment. Interest of pre-reference period-Partnership firm-Dissolved- Dispute relating  to valuation of assets of firm-Dissolution deed  envisaging   grant  of  Interest  only  from  date  of valuation of  assets-Reference  of  dispute  to  arbitration prior to  Interest Act,  1978-Award  of  interest  for  per- reference period-Held not justified. Award relating to valuation of land of dissolved partnership firm-Report  of  Government  recognised  valuer  and  expert valuer-Consideration  of   by  arbitrator-Arbitrator-Whether entitled  to  accept  report  without  examining  valuer  as witness. Arbitrator-Misconduct of-Shifting  of venue  of arbitration- Denying opportunity to witness to give evidence. Onus of  proof-Onus of  proving  truth  of  entries  in  the accounts. Constitution of India 1950: Articles 134  and 136-Arbitration award-No interference with finding of  arbitrator on questions of fact-Not the province of the  Court to  delve into details, examine genuineness or correctness of  items and  whether they  be accepted or not- Arbitrator free  to go  into the whole question and give his award.

HEADNOTE: A business  family consisting of a father and four sons carried on  business. Dispute arose in this family regarding the division  of the business. P.P., the father, J.P., V.P., JUDGMENT: Engineers. It  has tow  factories, the  latter at Maneja and the former  at Pratapnagar.  The dispute  between two  group P.P. &  J.P on  the one  hand, and B.P. & G.P. on the other, was in  regard to  the equal  division  of  the  assets  and liabilities for the two businesses o the retirement of P.P & J.P.  from  the  firm  as  per  the  terms  of  a  "deed  of dissolution" dated  31.12.1979 executed  by and  between the partners. This dispute  was the  subject matter  of  three  civil suits. When one of the two interim order passed therein came up before this Court, this Court suggested that the disputes be settled  by arbitration. This suggestion was accepted and

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the parties  agreed that  the "subject  matter of  the three suits as  well as disputes relating to the dissolution deed" be referred  to arbitration.  The arbitrator  was a  retired Judge of  the High  Court. The  arbitrators changed  several times and  eventually a  retired Chief  Justice of  the High Court completed  the arbitration,  and made two awards: one, an interim  award dated  22.2.91 and  the other,  the  final award dated 18.7.91. In the  appeal and  interlocutory applications  to this Court, P.P.  and J.P. sought to have the award made the rule of Court  except on two or three issues, while V.P. and G.P. sought to have the awards set aside in material respect, but were agreed  that the  Pratapnagar factory  should be  taken over by the former and the Maneja factory by the latter. On the  question as  to how  far the  aforesaid  awards 2should be made a rule of Court, the issues involved were: 1.  Valuation  by  the  arbitrator  of  the  land,  raw material and semi finished goods at the two factories. 2. Interpretation  by the arbitrator of the term of the deed of  dissolution as  to which of the parties should bear certain outstanding liabilities. 3. Findings  of the arbitrator in regard to allegations of falsification  of accounts  and payments  to traders  and depositors; 4. Arithmetical  errors that have crept into the award; and 5. The liability to pay interest. Disposing of the appeal and interlocutory applications, this Court, HELD :  RANGANATHAN AND  V.  RAMASWAMY,  JJ.  (PER  RAN GANATHAN, J.) 1.   VALUATION (i) The  deed of dissolution itself stipulated that the assets should be got valued by a Government approved valuer. A perusal  of the  award shows,  that, though the arbitrator made reference  to the  report of  Patel -  the "Government" valuer -  and its  objectively, he  has indicated sufficient grounds for  fixing the values in the manner he has done. He rejected the  instances of  sale cited by the applicants. So far as  Jaiswal -  expert witness  - was concerned, he found that there  was not much difference between the "base" value for lands  in the  locality suggested  by Patel  (Rs.25) and Jaiswal (Rs.  30). He found that the ground given by Jaiswal for additions  thereto were  not tenable  and as between the base value of Rs. 25 and Rs. 30, he had accepted the former. He has  also given  reasons for preferring Patel’s valuation of Rs.  4.50 in preference of Jaiswal’s valuation of Rs.2 in respect of  the Maneja  lands. The  arbitrator has,  in  the circumstances, acted  on proper material in fixing the value of the  lands at Pratapnagar as well as Maneja and his award in this respect has to be upheld. [128-E-H, 129-H] (ii) The shifting of the venue to Baroda was acquiesced in by  both parties  and there is a record by the arbitrator to this  effect. So far as the request for the oral evidence is concerned  it was  made at  a  belated  stage  after  the parties has  agreed to  have day  to day  proceedings and to avoid adjournment to enable V.P. to appeal and depose cannot be characterised as misconduct. [129-C-D] (iii) The mere fact that J.P. relied upon the valuation given in  Exhibit 71/2  for purpose of seeking an injunction from alienating  any of  the goods  cannot be  taken  as  an admission on  his part as to their value. The arbitrator was free to  go  into  the  whole  question  and  determine  the valuation independently. [130-G-H]

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(iv) It is not the province of this Court to delve into the details and examine whether the opponent’s objections in various items  thereof and  their genuineness or correctness should have been accepted or not. [129-F] (v) The  arbitrator has pointed out that, so far as the items in  possession of  the objectors  are concerned, there was no  rate mentioned in Ex.576 and the figure of Rs.14 per kg. was agreed to by both parties. Again, so far as the lead in possession of the applicants is concerned, the applicants themselves has  valued it  at Rs. 8 per kg. There is nothing to indicate the nature of the material in question and there is no  explanation as  to why  the applicants  who placed no value on  the same  item in  the possession of the objectors valued the  lead in  their  possession  at  Rs.8.  In  these circumstance there  is  no  reason  to  interfere  with  the arbitrator’s conclusions on these issues.[131-F] 2. INTERPRETATION (i) The  dissolution deed  dated December  31, 1979, is described as  a "deed  of retirement  from partnership". The deed is  a carefully  thought out  document with its clauses set out  in a logical sequence, only, not apparently being a deed drafted  by lawyers, its language in some places is not very felicitous.  The grievance  related to  four  items  of apportionment - [131-B-C] (i) Bank liabilities; (ii) Gratuity, bonus, P.L.. and medical facilities; (iii) Liability  of advance  against the order received from the Department of Atomic Energy; and [131-G-H] (iv) Excise liability. [132-A] The last item was not pressed. (ii) Clause  (11) of  the deed  of dissolution  is very clear that  the responsibility  of paying  the dues  of  the Central Bank  is undertaken  by the objectors merely because the liability  of the said Bank is larger than the liability to the  Bank of  Maharashtra, the  objector cannot ask for a contribution of the excess from the applicants. A perusal of the various  clause of  the deed  of dissolution  shows that various  assets  and  liabilities  of  the  firm  have  been apportioned between  the two  groups of partners Clause (14) deals with Bank accounts. [134-F-G] (iii) The  terms of the dissolution deed are very clear and the  arbitrator was  right in  saying that  the terms of clause (14) clearly govern the issue. [135-D] (iv) If  Clause 22  is read as a general clause, clause (14), being a specific clause in respect of Bank debts, will certainly  override   clause  (22).   That  apart,   if  the conclusion of  arbitrator is  consistent  to  upholding  the conclusion  of   the  arbitrator,   though  on  a  different reasoning. [135-F] (v) The  parties have  agreed under  clause (17), that, except for  gratuity, all  other payments to workers will be borne by  the respective parties. This is a specific kind of liability  towards  workers  for  which  clause  (17)  makes provision in  its first  part and  so clause  (22) does  not enter into the picture at all. It is not correct to say that clause (17)  does not  apply and  so  clause  (22)  will  be attracted. [136-G-H] (vi) On  the language  of clause  (18, there  can be no doubt  that   the  arbitrator   was  right  in  holding  the respondents wholly  liable to  meet the  liabilities to  the Central Bank.  Under clause  (14), the  objector have  taken over the  entirety of dealing with the Central Bank. Just as all liabilities  to the  Central Bank  of India  are  to  be discharged by the objector, the amount of fixed deposit with the same Bank and due or received from it should also belong

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exclusively to them. The reasoning that the fixed deposit is not the part of the Bank account taken over by the opponents but an  independent assets  of the firm, which has only been pledge as  a security  for obtaining  necessary advance from the Bank  to enable the opponents to execute the contract is somewhat artificial and far-fetched, the contract, it should be treated  as an  integral part of the dealings between the objectors and  the said  Bank. This is indeed clear from the clarification  contained   in  clause   (18)  regarding  the Pratapnagar  factory.   The  position  regarding  the  fixed deposit is  therefore different. It should be treated as the exclusive property  of the  opponents not  divisible between the two groups. [138-E-G] 3. ACCOUNTS A perusal  of the  award shows  that the arbitrator has examined  the   state  of  the  accounts  in  great  detail, considered various  items  appearing  in  the  accounts  and elaborately discussed  the objections  put  forward  by  the objectors. The  question of onus does not have importance at this stage  where the  arbitrator has  examined  the  entire materials available  and reached his conclusion thereon. The other grievance  of the  opponents is  that  some  of  these entries are  not correct.  This of  course is  a question of fact, and  no ground  is found to interfere with the finding of the arbitrator. [140-F-G] 4.   ARITHMETICAL ERRORS There are  arithmetical errors  in the  decision of the arbitrator in respect of issue Nos. 7, 15(c) and 19(c) dealt with in  paragraph 52  and 69 of the interim award. If these errors are  rectified, the  opponents will  be  entitled  to receive a sum of Rs.1.52 lakhs.[140-H, 141-A] 5.   INTEREST (i) When  the  disputes  between  the  parties  pending adjudication  in   the  suit   have  been   referred  to  an arbitrator, the  arbitrator has  all the  powers  which  the Court itself would have in deciding the issues in the suit. (ii) There is some force in the contention that in Seth Thawardas Pherumal  v. Union of India, the grant of interest of the pre-reference period was set aside and to this extent its authority remain unaffected by the decision in Secretary Irrigation Department  v. G.C. Roy and that as the reference was prior  to the  coming into  force of  the Interest  Act, 1978, the award of interest for the pre-reference period was not justified. [146-F] (iii) That  apart, this is not a fit case for the grant of interest from January 1, 1980. The arbitrator should have been guided  by the  term of  clause  (5)  of  the  deed  of dissolution which  envisages the grant of interest only from the date  of valuation of the assets. At the same time, this cannot mean  that the  objectors can  take advantage  of the entire delay  in valuation.  Some reasonable  margin of time should  be allowed for this process. It would not be correct to mulct the objectors with interest at least till the lapse of a  reasonable time by which a valuation of all the assets and assessments  of the  rights of  respective parties under the deed have been undertaken. [146-G] (iv) It  will be  reasonable and  proper to  direct the payment of  interest from  January 1, 1983 onwards. There is however, no  reason to  otherwise modify  the   award on the question of  interest, either  in  regard  to  the  rate  of interest, or  in regard to the addition of interest till the date of  award to  be principle amount determined as payable to the applicants which is permissible under section 34 CPC. The award on interest will be modified accordingly. [147-A] Seth Thawardas  Pherumal v Union of India, [1955] 2 SCR

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48 and  Secretary Irrigation Department v G.C. Roy, [1992] 1 SCC 508, referred to. Per B.P. Jeevan Reddy, J. (Concurring) 1. The  decision in  G.C. Roy’s Case was concerned only with the  power of  arbitrator to  award  interest  pendente lite. It  was not concerned with his power to award interest for the  reference period.  This was made clear at more than one place in the said judgment. [149-B] 2. It  would not  be correct  to read  the first of the five principles  set out  in para  43 of  G.C.  Roy’s  case, [1992] 1  SCC 508,  532-33, as  overruling Jena’s case in so far as  it  dealt  with  the  arbitrator’s  power  to  award interest for  the pre-reference  period. Principle  No.  (i) should be  read along  with principle  No. (v) wherein it is clearly stated  that the interest for the period anterior to the  reference   (pre-reference  period)   is  a  matter  of substantive  law   unlike  interest   pendente   lite.   The conclusion in  para 44  again deals  with the  power of  the arbitrator  to   award  interest   pendente  lite.   It  is, therefore, not  right to  read the  said  decision  as  over ruling Jena’s  case in  so far as it dealt with the power of the arbitrator  to  award  interest  for  the  pre-reference period. [151-G-H] 3. So  far as  the instant  case is  concerned, it is a reference in  pending suit.  In such  a case, the arbitrator has all  the powers  of the  court in the matter of awarding interest. [152-A] Secretary Irrigation  Department v.  G.C. Roy, [1992] 1 SCC  508 and  Executive Engineer,  Irrigation,  Galimala  v. Abaaduta Jena, [1988] 1 SCR 253, referred to and explained. JUGAL KISHORE v. VIJAYENDRA SHARMA [RANGANATHAN, J.]

& CIVIL APPELLATE  JURISDICTION  :  Interlocutory  Application Nos. 10-16 of 1991 IN 3 Civil Appeal No. 1763 of 1980.      From the  Judgment and  Order  dated  4.7.1980  of  the Gujarat High  Court in Civil Revision Application No. 887 of 1980.      T.U. Mehta, H.S. Parihar, N.C. Shah and Kuldeep Parihar for the Appellants.      B.K. Mehta,  P.K. Manohar,  Mukul Mudgal,  S.K. Bisaria and Survesh Bisaria for the Respondents.      The Judgment of the Court was delivered by      RANGANATHAN, J.  All these applications can be disposed of by  a common  order. They arise out of awards given by an arbitrator appointed by this Court in C.A. 1763 of 1980. The application mainly  raise issues  as to  how far  the awards should be  made a  rule of  Court  and  can,  therefore,  be conveniently dealt with together.      A brief resume of the broad facts of the case will help in  appreciating   the  points   debates  before   us.   The controversy has  arisen out  of disputes  in the  family  of Prabhatilal Parashram  Sharma (P.P)  which consisted  of his wife Bhuribai,  four  sons  Jugalkishore  Prabhatlal  (J.P), Vijayendra Prabhatilal  (V.P), Gnanendra  Prabhatilal  (G.P) and  Mukesh   Prabhatilal  (M.P),   and  three  daughters  - Surajidevi, Kamaladevi  and Chamelidevi.  The  father  (P.P) died during  the pendency  of the  proceeding whereupon  the wife and  daughters, inter alia, were impleaded as his legal representatives. The  widow has  also subsequently died. The

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daughters have  evinced no interest in this litigation which pertains to the assets and liabilities of a partnership firm run by  P.P., J.P.,  V.P. and G.P  M.P. was not a partner of the firm  and was  not even  represented in  the arbitration proceedings initially.  It was  only after P.P. died that he was brought  in as  one of  his  legal  representatives.  An allegation was  made before  us  that  M.P.  was  person  of unsound mind  with lucid  intervals and  that the  award  is vitiated by a non-consideration of his rights and interests. However,  there  is  no  evidence  to  supports,  much  less substantiate, the  allegations as to his incompetence except a general  allegation. Moreover, he is represented before us by  counsel,   Shri  Bisaria  who  states  that  he  has  no objections to  the award  and that  he supports the stand of J.P. in  these proceedings.  In the result, the disputes are between P.P.  and J.P. (who seek to have the awards made the rule of court except on two or three issues) on the one hand and V.P.  and G.P. (who seek to have the awards set aside in material respects)  on the other P.P. and J.P. - of whom P.P has  since  died  -  are  hereinafter  referred  to  as  the applicants and V.P. and J.P. as ‘the objectors’. This is the first important  aspect to  be taken  note  of.  The  second essential aspect is that the issues in controversy before us have narrowed  down considerably.  The firm  in which  P.P., J.P., V.P.  and G.P.  were partners was carrying on business under two  names and  styles: viz  Variety Body  Builder and Variety Engineers.  It has  two  factories,  the  latter  at Maneja and  the former  at Pratapnagar.  The dispute between the two  groups was  in regard  to the equal division of the assets  and   liabilities  of  the  two  businesses  on  the retirement of P.P. and J.P. from the firm as per the term of a "deed  of dissolution"  dated 31.12.1979  executed by  and between the  partners. This  was the subject matter of Civil Suits Nos.  194, 510  and 584  of 1980, this Court suggested that the disputes be settled by arbitration. This suggestion was accepted and the parties agreed that the "subject matter of the  three suits  as well  as disputes  relating  to  the dissolution deed"  be referred  to the  arbitration of  Shri A.A. Dave  a retire  Judge of  the Gujarat High Court. After some time,  Shri Dave  was succeeded  by  Shri  A.D.  Desai, another retired  Judge of  the High Court of Gujarat and the latter was  succeeded by  Shri N.M. Miabhoy, a retired Chief Justice of  the Gujarat High Court, who eventually completed the arbitration  and made two awards : one, an interim award dated 22-2-91  and the other, the final award dated 18-7-91. The parties  are agreed  that the Pratapnagar factory by the opponents. About  this broad  division, there is no dispute. The controversy  at present  is restricted  to the following issues:      A. Valuation  by the  arbitrator of      the land,  raw material  and  semi-      finished   goods    at   the    two      factories;      B.  The   interpretation   by   the      arbitrator of the terms of the deed      of dissolution  as to  which of the      parties   should    bear    certain      outstanding liabilities;      C.   Certain    findings   of   the      arbitrator in regard to allegations      of falsification  of  accounts  and      payments to traders and depositors;      D. Some arithmetical errors said to      have crept into the award; and      F. Liability to pay interest.

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    We shall deal with these issues one      after the other. A. VALUATION      (a) LAND:  The arbitrator  has fixed  the value  of the lands at  Pratapnagar at  Rs. 25 per sq. ft. and that of the lands at Maneja at Rs. 450 per sq. ft. These were the values ascribed to  the lands in the report of Sri Punambhai Patel, a Government  recognized valuer, who, by consent of parties, has been  asked to submit a report in this regard. According to the  objectors, the  value of  the lands at Maneja should not have  been taken  at more than Rs. 3 per sq. ft.; on the other hand  it is  urged that  the lands  Pratapnagar should have been  valued at  Rs. 58  per sq.  ft.. These  were  the figures  suggested  by  an  expert  witness  (Shri  Jaiswal) examined by  them  Prima  facie,  the  question  of  such  a valuation would  be a  question of fact and this Court would be loth  to interfere  with a finding of fact by arbitrator. Shri B.K. Mehta, appearing for the objectors, however, seeks to coat  this finding  with a  legal hue  by urging that, in determining the  values which  the did  for these lands, the arbitrator has  just adopted  the figures  set  out  in  the report of Punambhai Patel. In doing this he has erred in law on two  counts :  (i) he  seems to think that Patel, being a "Government" valuer,  his report was binding and conclusive; and (ii)  he has  accepted the  report without examining the said P.D. Patel as a witness, notwithstanding an application therefor on  behalf  of  his  clients,  and  given  them  an opportunity  of   cross-examination.     These  two  errors, according to  him, vitiate  the valuation  arrived at by the arbitrator. Learned  counsel cited  passages from  Russel on Arbitration  to  the  effect  that  the  provisions  of  the Evidence Act  are applicable  in arbitration proceedings and that the  report of  an expert  witness is not admissible in evidence by  the arbitrator  unless the  witness  is  orally examined and  the parties  given an  opportunity  to  cross- examine him  on his  opinion, irrespective  of  whether  the parties made a specific request for such examination or not. He also  cited the decision in U.P. Hotels and other v. U.P. State  Electricity   Board,  [1989]  1  SCC  359;  Ahmedabad Municipality v.  Shantilat, A.I.R.  1961 Guj. 196; Payyavula Vengamma v.  Payyavula Kesanna and Ors., [1953] 4 S.C.R. 119 and Perumal  Mudaliar v.  S.I. Railway Co., I.L.R. 1937 Mad. 764 in this context.      Having perused  the award  and heard  Shri T.U.  Mehta, counsel for  the applicants,  we are  of opinion  that  this contention cannot  be upheld  having regard  to the  special circumstance of  this case. In the first place the report of patel was  taken on  as an  exhibit with the consent of both parties and  without reservation  of any  kind. It  did  not therefore, need  formal proof  by producing  the expert as a witness. Secondly,  the irony  of the  situation is that, at the stage  of the  proceedings before the arbitrator, it was the applicants  who felt  aggrieved by  the Patel report and made an  application for  having  him  summoned  for  cross- examination. The  objectors did  not made  any such request. The request of the applicants was rejected and there counsel state before  us that  he did  not take up the issue further before this  Court as he was anxious to have the arbitration proceedings (which has been pending for several years with a number of  arbitrators succeeding  one another)  come to  an early conclusion. The silence of the objectors at that stage indicates that  they were  not interested in challenging the basis of  the report of Patel by examining him, particularly as they  were examining  Sri Jaiswal  as an  expert on their behalf. The  present objection  is raised  only as a belated

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technical objection in an attempt to upset the award on this point and  revive the  arbitration proceedings. Thirdly, the deed of dissolution itself stipulated that the assets should be got  valued by  a Government  approved valuer  and though perhaps it  was not  intended, as  Sri T.U. Mehta suggested, that such valuer’s report was to be conclusive, it seems the parties really  has no  tangible basis  for challenging  his opinion on  merit. The  applicants has  decided to lead oral evidence as  to instances  of other sales in the locality to support their  own "expert" (Jaiswal) into the box. Finally, a perusal  of the   award  shows that, though the arbitrator has  made   reference  to   the  report  of  Patel  and  its objectivity, he  has indicated sufficient grounds for fixing the values  in the  manner he has done. Briefly speaking, he rejected the  instances of  sale cited by the applicants. So far as  Jaiswal was  concerned, he  found that there was not much difference  between the  "base" value  for lands in the locality suggested by Patel (Rs. 25) and Jaiswal (Rs.30). He found that the ground given by Jaiswal for additions thereto were not  tenable and as between the base value of Rs 25 and Rs. 30,  he has  accepted the  former.  He  has  also  given reasons for   preferring  Patel’s valuation  of Rs.  4.50 in preference to  Jaiswal’s valuation of Rs. 2 in resect of the Maneja lands.  We are  satisfied that the arbitrator has, in the circumstances,  acted on  proper material  in fixing the value of the lands at Pratapnagar as well as Maneja and that his award  in this respect has to be upheld. Shri B.K. Mehta also made  a grievance  that the arbitrator misconducted the proceedings by shifting their venue to Baroda as a result of which the  objectors’ old  counsel could not appear for them and by  denying an  opportunity to  V.P. to give evidence in the case  by rejecting  his application  of adjournment  for this purpose  on the  ground of  illness. We  find that  the shifting of  the venue  to Baroda  was acquiesced in by both parties and  there is  a record  by the  arbitrator to  this effect. So  far as the request for the oral evidence of V.P. is concerned,  it was  made at  a belated  stage  after  the parties has  agreed to  have day  to day  proceeding and  to avoid  adjournment.   Also  V.P.  wanted  to  give  evidence primarily regarding  valuation of  immovable properties;  on this objectors  and already  examined their  expert and  the Government valuer’s  report was  also  on  record.  In  this situation and  having regard to the fact that limitation for giving an award was drawing to a close, the refusal to grant an adjournment to enable V.P. to appear and depose cannot be characterised as misconduct. We, therefore, see no substance in this objection.      B. RAW MATERIAL AND SEMI-FINISHED PRODUCTS      (i) This  topic has been discussed by the arbitrator at very great  length as  issue  Nos.  3  (c)  and  6.  He  has meticulously gone  into the  accounts, inventories and other materials placed  before him. It is not the province of this Court to  delve into  the details  and examine  whether  the opponents objections  in various  items  thereof  and  their genuineness or correctness should have been accepted or not. The principal  contention of the objectors in regard to this item that  can be  taken not  of is  that the arbitrator has committed an error in wholly ignoring admissions made by the applicants in the written statement filed by them in Special Suit No.  194/80 on the file of the Court of the Civil Judge (Senior Division)  Baroda and also in Special Leave Petition (Civil) No.  6168 of  1980 before  this Court. We find that, before the  arbitrator, the  contention of the objectors was base only  upon the  petition for  special leave  before the Supreme Court  referred to  above. We  do not  know  whether

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before the arbitrator, the written statement in Special Suit No. 194 of 1980 was exhibited and whether the arbitrator was made aware  of  the  written  statement  and  his  attention invited to  the alleged  admission therein.  This contention appears to  have been  taken for  the first time only in the objection taken  to the  award. This cannot be permitted. So far as  the reference  to the  Special  Leave  Petition  has concerned, the  arbitrator has  dealt with  the objection in his award.  He has  pointed out  that J.P.  had filed a suit against V.P.  seeking an  injunction restraining  him, inter alia, from despatching the equipment, the finished and semi- finished goods  which were  lying in  ‘Variety Body Builders and  Variety   Engineers’  and   also  seeking   an  interim injunction. The  interim injunction was granted by the Civil Judge but  this order  was upset  in revision. It is against this order of the High Court that the Special Leave Petition had been  filed. The averments in the Special Leave Petition and its  supporting affidavit  were based  on the figures of valuation contained  in an  inventory drawn  up on  1.1.1980 (Exhibit 71/2).  The opponent  contends that  the fact  that this exhibit  was relied  upon in the Special Leave Petition itself constitutes  an admission  as to  the correctness of, and the  applicants acquiescence  in, the  figures contained therein.      We are  unable to  agree. As rightly pointed out by the arbitrator, the  Special Leave  Petition was  only  directed against the order vacating the interim injunction granted by the trial court in favour of V.P. J.P.’s plea was that there were finished and semi-finished goods of high value lying in the factory and that V.P. and his group should be restrained from alienating these properties. It is in this context that exhibit 71/2 was filed to indicate that the valuation of the finished and  semi-finished goods  was approximately  to the tune of  Rs. 18.98  lakhs. There  was  dispute  between  the parties as  to whether  the statement in Exhibit 71/2 was an agreed statement or not. According to J.P., Exhibit 71/2 had been received  by  him  only  subject  to  verification  and checking and  that he  had to  no point of time accepted the valuation  placed   in  this   document  as   correct.  This contention has  been accepted  by the  arbitrator. But  that apart, as  pointed out by the arbitrator, the mere fact that J.P. relied  upon the  valuation given  in Exhibit  71/2 for purpose  of   seeking  an   injunction  against   V.P.  from alienating any  of the goods cannot be taken as an admission on his  part as  to their  value. For  the  purpose  of  the Special Leave  Petition, it  was sufficient for him to go by the value contained in the inventory. The arbitrator for him to  go   by  the  value  contained  in  the  inventory.  The arbitrator was  free to  go  into  the  whole  question  and determine the  valuation independently.  This objection  is, therefore, without substance.      (ii) The  second important  objection in regard to this issue is  that the applicants’ valuation, based on Ext. 576, an inventory made out by their storekeeper, of raw materials at Maneja  should not  have been  accepted and the objector’ contention, that some of the items mentioned in Ext.576 were items of  material issued free by the Government of India to enable the  objectors to  execute their  contract  with  the Department of  Atomic Energy and the rest were non-existent, should have  been accepted. This raises purely a question of fact and  we see  no reason  to interfere  with the reasoned findings of  the arbitrator on this issue. We have mentioned this item  only as  there is  an allied issue raised in this regard by  the parties. The objectors’ submit that the value of the  material issued  free should  be valued  at nil.  On

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behalf of  the applicants,  on the other hand, it is pointed out that  certain items  of lead  issued free  and in  their possession have  been valued by the arbitrator at Rs. 14 per kg, while  similar items  of lead  in the  possession of the applicant have  been valued at Rs. 8 per kg. It is suggested that this  is a patent error which needs to be rectified. We see no  substance in  these objections.  The arbitrator  has pointed out  that, so  far as the items in possession of the objectors’ are  concerned, there  was rate mentioned in Ext. 576 and  the figure  of Rs.  14 per kg was agreed to by both parties. Again,  so far  the lead  in the  possession of the applicants  is  concerned,  the  applicants  had  themselves valued it  at Rs.  8 per  kg. There  is nothing before us to indicate the nature of the material in question and there is no explanation  as to why the applicants who placed no value on the  same item  in the possession of the objectors valued the lead  in their possession at Rs. 8. In the circumstances there is  no  reason  to  interfere  with  the  arbitrator’s conclusions on these issues.                      C. INTERPRETATION      The  objection  based  on  the  interpretation  of  the dissolution deed relate to four issues :      (i) Bank liabilities;      (ii)  Gratuaity,  bonus,  P.L.  and      medical facilities;      (iii) Liability  of advance against      the   order   received   from   the      Department of Atomic Energy;      (iv) Excise liability.      To appreciate  the points  at issue, it is necessary to set out  the terms  of the deed of dissolution to the extent relevant in  this  present  context.  this  document,  dated 31.12.79,  is  described  as  a  "deed  of  retirement  from partnership", but,  as rightly  pointed  out  by  Shri  B.K. Mehta, nothing  really turns  on this label and there can be no doubt,  on a persual of the document, that it really sets down the  term  and  conditions  on  which  the  assets  and liabilities of  the business  carried on by the firm were to be divided between the two groups of partners. The deed is a carefully thought out document with its clauses set out in a logical sequence;  only, not apparently being a deed drafted by  lawyer,   its  language  in  some  places  is  not  very felicitous. Clauses  (1) to (4) set out the partners’ shares and the  decision, consequent  on the  applicants’ severance from the  firm, that  the applicants  should take  over  the factory at  Pratapnagar and  the objectors  that at  Maneja. Clauses (5)  and (6)  set out  the mode  of division  of the land, building,  machinery, outstandings  and  other  assets including goodwill.  Clauses (7), (8) and (9) make provision in respect of certain specific items, Clauses (10) and (11), read with  clause (12),  deals with the apportionment of the firm’s liabilities  towards depositors  and traders.  Clause (13) deals  with the  books of  account. Clause (14) makes a special provision  in respect  of the  bank account  of  the firm. Clause  (15) deals  with vehicles and clause (16) with residential premises. Clause (17) makes provision in respect of dues  to workers  and employees. Clause (18) to (20) make special provision  generally in  respect the  orders pending with the  firm and  in particular  with the  execution of  a contract taken by the Maneja firm and in particular with the execution of  a contract  taken  by  Maneja  firm  with  the Department of  Atomic   Energy, an  advance taken in respect thereof  and   a  bank   guarantee  executed   for  its  due performance. Clause  (21) provides  for  mutual  cooperation between the  two groups.  Clause (22)  stipulates a  50 : 50

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apportionment of  all "debts  and credits and expenses etc." and permits  J.P. to attend to all income-tax matters of the firm in  relation to  the period  prior to 31.12.79. This is the broad  outline of  the deed  and we shall refer later to the relevant  terms  of  specific  clauses  relied  upon  in respect of  specific issues.  The broad  contention urged on behalf of  the objectors  is that despite the obvious scheme of the  dissolution deed to bifurcate equally all the assets and liabilities of the firm, the arbitrator has burdened the objectors exclusively  with certain liabilities which should also be  borne by  the applicants  and divided certain asset which should  have come only to them between both groups. It is prayed  that this  imbalance  should  be  set  right.  As already mentioned,  the grievance  relates to  four items of apportionment.  Of   these,  the  plea  regarding  liability towards excise  duty has  not  been  pressed  and  we  shall proceed to consider the other three:      (i) Bank liabilities : Clause 11 of      the deed of dissolution reads thus      "(11) The 50% of the amount payable      to  the   traders  shall   be   the      responsibility of  partners  No.(1)      and   (2)    to   pay    and    50%      responsibility is  of partners  No.      (3) and  (4) to  disburse  and  the      selection of  own traders  shall be      made by  the partners  No. (3)  and      (4) and  whereas the responsibility      of  the  paying  the  dues  of  the      Central  Bank   is  undertaken   by      partners No.  (3) &  (4)  and  that      responsibility of paying the due of      the Maharashtra  Bank is undertaken      by partners No.(1) and (2).           [underlining added]      Under this  clause, the  responsibility of  paying  the dues  of  the  Central  Bank  has  been  undertaken  by  the objectors and  the responsibility  of paying the dues of the Maharashtra Bank  by the  applicants. Clause  14 of the deed reinforces this. It reads thus:      "(14) Parnters  No. (3)  & (4) have      to  operate  the  accounts  of  the      Central Bank and they have accepted      the responsibility for the same and      for that  purpose  any  consent  of      signature is required, partners No.      (1) and  (2) shall  do so. Partners      No. (1)  & (2)  have to operate the      accounts of the Bank of Maharashtra      and   they    have   accepted   the      responsibility for the same and for      that purpose  any consent signature      is required, partners No. (3) & (4)      shall do so."      It is  the application  of these clauses to the factual situation that has given rise to a dispute.      The factual position in this regard is as follows : The objectors have discharged the debts which the erstwhile firm owned to  the Central  Bank bu  the liabilities in favour of Bank of Maharashtra have not been cleared by the applicants. The  bank  has  filed  three  suits  against  the  erstwhile partnership impleading  both  group  of  member  as  parties therein. The  arbitrator has, in view of the terms of clause 11, directed  that as  an when a decree happens to be passed against the dissolved firm and its erstwhile partners in the

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suits filed  by the  bank, the  applicants will be liable to discharge those decree and if any part thereof happens to be recovered so  recovered from  them. So far as this direction is concerned,  there is  no quarrel.  However, it  was found that the  debts due to the Central Bank, which the objectors have cleared,  are in excess of the debts due to the Bank of Maharashtra .  The  objectors  raised  a  claim  before  the arbitrator that the bank liabilities are to be borne equally by both  group and that 50% of the excess of the dues of the Central Bank over those of the Bank of Maharashtra should be borne by  the applicants.  The arbitrator has negatived this claim. Shri B.K. Mehta submits that the arbitrator’s finding proceeds on  an erroneous  interpretation  of  the  deed  of dissolution. He  contends that the rights of parties in this regard  are   covered  by   clause  (22)   of  the  deed  of dissolution. The clause reads thus:      "(22) There  shall be 50% liability      of partners  No.(1) &  (2) for  the      debts and credits and expenses etc.      upto the  date 31.12.1979  and  50%      liability is  of partners No. (3) &      (4) and that partner No. (1) has to      attend  the   Income  tax-Sale  tax      Officers etc.  for the  dealings of      the firm upto 31.12.1979."      According to Shri Mehta, however, clause (22) overrides clause (14)  only  deals  with  a  procedural  question  and provides which  of the  group is  to operate  the respective existing bank accounts but that the substantive liability in this regard is covered is only by clause (22). We are unable to accept  this plea. Clause (11) of the deed of dissolution is very  clear that the responsibility of paying the dues of the Central  Bank is  undertaken by  the  objectors.  Merely because the  liability to  the said  bank is larger than the liability to  the Bank  of Maharashtra, the objectors cannot ask for  a contribution of the excess from the applicants. A perusal of  the various  clause of  the deed  of dissolution shows that  various assets  and liabilities of the firm have been apportioned  between the two groups of partners. Clause (14) deals  with bank accounts. It is in two part. The first is that  the Central  Bank account  is to be operated by the objectors  and  the  Bank  of  Maharashtra  account  by  the applicants. The  second is  that each of the parties accepts the responsibilities  for the  respective bank account. This shows that  the liability  to each of the bank is taken over by the  respective group. There is no scope for any doubt or ambiguity in  this regard  at all.  In our view, clause (22) has no  relevance in  this context  nor is  it, in  any way, inconsistent with  or redundant  to clause (14) or any other terms of  the deed.  It is  in the  nature  of  a  residuary clause. Having dealt specifically earlier with various types of assets  and liabilities,  this clause which declares that the liability  of the  partners will  be equal in respect of debts credits and expenses upto 31.12.79 and that the income tax -  sales tax  proceedings should be looked after by J.P. obviously relates  to matter  not  dealt  with  earlier.  It cannot be  construed as overriding the specific provision in clause (14)  in respect  of the  liabilities to the bank. As pointed out  by the  arbitrator, where  the parties intended any liability  to be borne by both groups, the deed in terms say so  - for  example, clause  (17) and  if it had been the parties intention  that the  bank liabilities should also be so divided,  the deed  would have  made it  clear. Shri T.U. Mehta urged  before us  than there  were special reasons why the Central  Bank account  and the  liability in that regard

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was assigned  to the  opponents.  We  do  not  think  it  is necessary to go into this aspect of the matter. The terms of the dissolution  deed are  very clear and the arbitrator was right in saying that the terms of clause (14) clearly govern the issue presently in question.      Shri B.K.  Mehta contended  that, as the arbitrator has not read  clause (22) of the dissolution deed as a residuary clause but  treated it  only as  a general clause, we cannot substitute a different interpretation by reading clause (22) as the  residuary clause.  We  find  no  substance  in  this contention. In  the first place, if we read clause (22) as a general clause,  clause (14),  being a  specific  clause  in respect of  bank debts, will certainly override clause (22). That apart,  if the  conclusion of  arbitrator is consistent with a proper interpretation of clause (22), there can be no objection to  our upholding the conclusion of the arbitrator though on a different reasoning.      Shri B.K. Mehta also contended that this finding of the arbitrator is inconsistent with his reasoning and conclusion in regard clause (17) of the deed while dealing with another items of  liability in  issue. This we shall advert to while dealing with   the  next item.  A reference was also made to clause (6)  before the  arbitrator. But  that clause  has no relevance in  this context  and  is  not  inconsistent  with clause (14)  as contended.  It is  primarily, concerned with the outstanding  book debts  due to  the firm  and, though a reference is  made to  "debts and  credits" it  only ensures that the  collections should  be equally divided between the two groups.  We do  not see  how this a decree happens to be passed against the dissolved firm and its erstwhile partners in the  suits filed  by the  bank, the  applicants  will  be liable to  discharge those  decrees and  if any part thereof happens to  be recovered  from the opponents, they should be reimbursed to  the extent  of the  amount so  recovered from them. So  far as  this direction  is concerned,  there is no quarrel. However,  it was  found that  the debt  due to  the Central Bank,  which the  objectors  have  cleared,  are  in excess of the debts due to the Bank of Maharashtra should be borne by  the applicants.  The arbitrator has negatived this claim. Shri B.K. Mehta submits that the arbitrator’s finding proceeds on  an erroneous  interpretation  of  the  deed  of dissolution. He  contends that the rights of parties in this regards  are   covered  by   clause  (22)  of  the  deed  of dissolution. The clause reads thus :      "(22) There  shall be 50% liability      of partners  No. (1)  & (2) for the      debts and credits and expenses etc.      upto the  date 31.12.1979  and  50%      liability is  of partners No. (3) &      (4) and that partner No. (1) has to      attend  the  Income  tax-Sales  tax      Officers etc.  for the  dealings of      the firm upto 31.12.1979."      According to Shri Mehta, however, clause (22) overrides clause (14).  He says  that clause  (14) only  deals with  a procedural question  and provides  which of the groups is to operate the  respective existing  bank accounts but that the substantive liability  in this  regard is covered is only by clause (22).  We are unable to accept this plea. Clause (11) of  the   deed  of   dissolution  is  very  clear  that  the responsibility of  paying the  dues of  the Central  Bank is undertaken by the objectors. Merely because the liability to the said  bank is  larger than  the liability to the Bank of Maharashtra, the  objectors cannot ask for a contribution of the excess  from the  applicants. A  perusal of  the various

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clause of  the deed of dissolution shows that various assets and liabilities  of the  firm have  been apportioned between the two  groups of  partners. Clause  (14) deals  with  bank accounts. It  is in two parts. The first is that the Central Bank account is to be operated by the objectors and the Bank of Maharashtra account by the applicants. The second is that each of  the parties  accepts the  responsibilities for  the respective bank  account. This  show that  the liability  to each to  each of  the banks  is taken over by the respective group. There  is no scope for any doubt or ambiguity in this regard at  all. In our view, clause (22) has no relevance in this context  nor is  it, in  any way,  inconsistent with or redundant to  clause (14)  or any other term of the deed. It is in  the  nature  of  a  residuary  clause.  Having  dealt specifically  earlier  with  various  types  of  assets  and liabilities, this  clause which  declares that the liability of the  partners will  be equal  in respect of debts, credit and expenses  upto 31.12.79  and that the income tax - sales tax proceeding  should be  looked after  by  J.P.  obviously relates to  matter not  dealt with  earlier.  It  cannot  be construed as  overriding the  specific provision  in  clause (14) in  respect of  the liabilities to the bank. As pointed out by  the  arbitrator,  where  the  parties  intended  any liability to  be borne by both groups, the deed in terms say so -  for examples,  clause (17)  and if  it  has  been  the parties’ intention  that the bank liabilities should also be so divided,  the deed  would have  made it  clear. Shri T.U. Mehta urged  before us  that there  were special reasons why the Central  Bank account  and the  liability in that regard was assigned  to the  opponents.  We  do  not  think  it  is necessary to go into this aspect of the matter. The terms of the dissolution  deed are  very clear and the arbitrator was right in saying that the terms of clause (14) clearly govern the issue presently in question.      Shri B.K.  Mehta contended  that, as the arbitrator has not read  clause (22) of the dissolution deed as a residuary clause but  treated it  only as  a general clause, we cannot substitute a different interpretation by reading clause (22) as the  residuary clause.  We  find  no  substance  in  this contention. In  the first  place, if we read clause(22) as a general clause,  clause (14),  being a  specific  clause  in respect of  bank debts, will certainly override clause (22). That apart,  if the  conclusion of  arbitrator is consistent with a proper interpretation of clause (22), there can be no objection to  our upholding the conclusion of the arbitrator though on a different reasoning.      Shri B.K. Mehta also contended that this finding of the arbitrator is  inconsistent with  his conclusion  in  regard clause (17)  of the  deed while dealing with another item of liability in  issue. This  we shall  advert to while dealing with the next item. A reference was also made to context and is not  inconsistent with  clause (14)  as contented.  It is primarily concerned  with the  outstanding book debts due to the firm  and, though  a reference  is made  to  "debts  and credits" it  only ensures  that the  collections  should  be equally divided  between the  two groups.  We do not see how this clause,  again, could override the unequivocal terms of clause (14).      Allied with  the  question  of  bank  liability  is  an objection pertaining  to  a  fixed  deposit  which  will  be discussed separately later.      (ii) Gratuity,  bonus etc. : The relevant clause of the deed of  dissolution in relation to this item is clause (17) which read as follows:      "(17) Partners  No. (3)  & (4) have

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    taken over  all  responsibility  of      servants-employees    of     Maneja      Factory and  partners No.(1)  & (2)      have taken  over the responsibility      of      servants-employees       of      Pratapnagar Factory.  However,  the      gratuity payable  to the workers of      the both the factories, Pratapnagar      and Maneja  shall be  borne equally      by all  four partners.  It shall be      accounted  on   the  basis  of  the      existing   pay   scale   of   their      salaries as on date 31.12.1979."      The objectors  contended, relying on clause (22) of the deed that  the liability  for payment  of  gratuity,  bonus, reimbursement  of   medical  expenses   and  encashment   of privilege leave  for the  period prior to 31.12.79 should be shared equally  between  both  groups.  The  arbitrator  has accepted this  claim in  regard to gratuity but has rejected the  same   in  respect   of  bonus,  medical  expenses  and encashment of  privilege leave.  A claim in respect of wages for December  1979 was conceded on behalf of the applicants. It is  argued that  the gratuity  payable to  the workers of both the factories, Pratapnagar and Maneja, having been held to be  the responsibility  of both  groups and the applicant having conceded  before the  arbitrator that  the wages  and salaries for December 1979 were to be borne by the dissolved firm, the  arbitrator should  have held  that it  was clause (22) and  not clause (17) that applied in this regard. It is not quite  clear why  the  applicants  that  might  be,  the finding of  the arbitrator  that the  responsibility for the three types  of expenses referred to above in respect of the employees of  the factory  allotted to each party would fall on the respective party is unexceptionable. The parties have agreed, under  clause (17),  that, except  for gratuity, all other payments  to workers  will be  borne by the respective parties. This  is  a  specific  kind  of  liability  towards workers for  which clause  (17) makes provision in its first part and  so clause  (22) does not enter into the picture at all. It  is not  correct to  say that  clause (17)  does not apply and so clause (22) will be attracted.      (iii) Liability to Department of Atomic Energy (D.A.E)- There were  three  issues  before  the  arbitrator  on  this subject viz issues 17 and 38. Theses issues 17 read thus-      Issue 17  : Whether  the applicants      are entitled to receive one-half of      the amount  of fixed deposit lodged      with the  Central Bank  by  way  of      guarantee?      Issue 38  : "Do the opponents prove      that, though  according to the deed      of retirement  Ext.3, they  have to      discharge  the   liability  of  Rs.      15,12,000  (Rupees   fifteen  lakhs      twelve  thousand   only)   to   the      Department of  Atomic  Energy,  are      they entitled  to receive credit of      half the amount from the applicants      as per  the terms  of the  deed  of      retirement Ext.3?"      The grievance  of the  objectors is that, while holding them fully  responsible to  discharge the  liability of  the Central Bank,  the arbitrator  has held both groups entitled to share in the fixed deposit above mentioned which had been lodged with the bank in relation to the contract. Further he

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has also  included the raw material acquired out of advances received from  the D.A.E  as part  of the  assets  divisible between to  two groups.  This treatment,  it is urged is not warranted by the terms of the deed of dissolution.      Taking theses  three items  one after  the other, there can be  no doubt  that the responsibility of discharging the lability to  the Central  Bank of  India, in  respect of the Contract with  the D.A.E,  is wholly  that of the objectors. Clause (18) of the deed is quite clear on this. It says:      "(18) An  Order from  Bhabha Atomic      Energy  for   supply  of  shielding      Blocks has  been taken  by the firm      in the  name of ‘Variety Engineers’      and  against   the  said  order  an      advance of  rupees fifteen lakhs is      received  (by  the  firm)  and  the      Central Bank  has  given  guarantee      for the  same and  the bank has got      equitable mortgage over Pratapnagar      and Maneja  Factories  however  the      partners   No.(3)    &   (4)   have      undertaken the  sole responsibility      to execute  the said order in full.      In case  of any  breach of the said      order, the  partners No.(3)  &  (4)      shall be  entirely responsible  and      that partners  No.(1) &  (2)  shall      have  no   responsibility  in   any      manner whatsoever  along with their      Pratapnagar Block."      On the  language of  the above  clause, there can be no doubt  that   the  arbitrator   was  right  in  holding  the respondents wholly  liable to  meet the  liabilities to  the bank as we have already held earlier.      Turning  now  to  the  amount  of  fixed  deposit,  the arbitrator’s finding  is that  the amount lying in the fixed deposit account  with the  Central Bank  was an asset of the firm and should be equally divided between the two groups of partners. It  is an  admitted position  that, at the time of taking the loan amount from the bank, there was an amount of Rs.2,26,750, lying as fixed deposit with the bank, which was pledge to obtain the advance from the bank. The claim of the applicants is  that as the amount lying in the fixed deposit account got  released after the loan of the Central Bank was discharged in  full and  that as  the amount  lying  in  the deposit account  was the  property of  the  firm,  the  same should  be   equally  divided  between  the  two  groups  of partners. The arbitrator accepted this contention. We are of opinion this  his view  is erroneous. Under clause (14), the objectors have  taken over the entirety of dealings with the said bank.  Just as  all liabilities  to the Central Bank of India are  to be  discharged by  the objectors the amount of fixed deposit with the same bank and due or received from it should also  belong exclusively  to them. The reasoning that the fixed  deposit is  not a  part of the bank account taken over by  the opponents but an independent asset of the firm, which had  only been  pledged as  a security  for  obtaining necessary advances  from the bank to enable the opponents to execute the  contract is somewhat artificial and farfetched, particularly as by pledging it with the bank for purposes of execution of  the contract,  it  should  be  treated  as  an integral part  of the dealings between the objectors and the said bank.  This is  indeed  clear  from  the  clarification contained in  clause (18) regarding the Pratapnagar factory. The Pratapnagar block has also been mortgaged to secure bank

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advances but  the clause  specifically mentions that it will be treated  as part  of the assets of the factory. If it had been  intended  to  give  similar  treatment  to  the  fixed deposit, the  clause  would  have  expressly  said  so.  The position regarding  the fixed deposit is therefore different and we  are of  the view  that is  should be  treated as the exclusive property  of the  opponents not  divisible between the two groups.      Turning   now   to   the   position      regarding the  raw  materials,  the      opponents’   objection   reads   as      follows:      "The impugned  award provides  that      the  liability   of  executing  the      order of  Atomic Energy  Department      of the  Government of  India is  of      the    applicants     herein    and      consequently the  liability of  Rs.      15.12 lakhs  paid by the Department      of  Atomic   Energy   as   advances      against the  order is  also that of      the applicants herein. However, the      machinery   and    raw    materials      purchased  for   the   purpose   of      carrying  out   the   contract   of      manufacturing  and   supplying  the      non-tendered   products    to   the      Departments of  Atomic Energy under      its  order  and  the  finished  and      semi-finished goods are directed to      be divided  equally between the two      parties. This  view of  the learned      arbitrator on  a plain  reading  of      clause   NO.   18   is   apparently      erroneous  because   it  is   self-      contradictory inasmuch  as  if  the      liability to carry out the order of      Department of  Atomic Energy  is of      the applicants  NO. 1  and  herein,      the raw material finished and semi-      finished   goods    and   machinery      admittedly purchased and ear-marked      for the  purpose of  compliance  of      the order  cannot be  divided  into      two groups.  The learned arbitrator      (erred)   in   holding   that   the      liability of  the amount  of Rs. 12      lakhs  being  advance  against  the      order is of both the groups or that      the  raw   materials  finished  and      semi-finished goods  and  machinery      admittedly purchased  and earmarked      for this  order must  not be solely      assigned  to   the  share   of  the      applicants NO. 1 and 2 herein."      If the  averments  made  as  above  are  correct,  then perhaps the  ground of  objection would  be unexceptionable. However, there  is no record no material or evidence to show that any  part of  the  raw  material  or  other  stock  was purchased out  of the              bank advance. It has been pointed out  that  on the date on which the dissolution deed was written  the contract  with the  Department   of  Atomic Energy had  been taken over by the objectors. They also knew that they were taking upon themselves the burden of repaying the advance of 15 lakhs of rupees to the said Department. If

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indeed there  was on stock, as on 31.12.79, raw material and other semi-finished  or finished goods then one would expect a specific  clause in  the deed  of  dissolution  in  regard thereto the  effect that  they would    not  be  taken  into account for purpose of valuation under clause (5) to (8). On the contrary,  clause (5)  and (8)  provide that all the raw material, finished goods semi-finished goods and un-finished goods laying  at Pratapnagar  and Maneja factories should be value divided  between the  parties equally  Shri T.U. Mehta stated that  in fact  the arbitrator  made  a  note  is  his minutes that  there is no evidence to show that raw material and other  goods at  the factory had any connection with the contract  with   the  Department   of  Atomic   Energy.  We, therefore, uphold the arbitrator’s finding in this regard.      Before we  leave this topic, we should mention that the opponents also  claim that  the denial  of an opportunity to examine V.P.  has prejudiced  their case  in respect of this issue  as   well.  We  have  touch  upon  this  point  while discussing the  question of  valuation of lands and, for the reasons discussed  there, we  hold that  the award cannot be vitiated on this ground.      (iv) Excise  liability -  This issue  was  not  pressed before us  and the arbitrator’s conclusion in this regard is upheld                         D. ACCOUNTS      In regard  to the  findings of  the arbitrator  on  the accounts between  the two  parties, two objections have been taken .  The first  objection is that the arbitrator wrongly placed the  onus of  proving the truth of the entries in the accounts  on  the  objections.  It  is  submitted  that  the accounts were  maintained by  the applicants and that it was for them  to prove  the truth  of  the  entries  therein.  A perusal of  the award shows that the arbitrator has examined the state  of  the  accounts  in  great  detail,  considered various items  appearing in  the  accounts  and  elaborately discussed the  objections put  forward by the objectors. The question of  onus does  not have  importance at  this  stage where the  arbitrator  has  examined  the  entire  material, available and  reached his  conclusion  thereon.  The  other grievance of  the opponents is that some of these entire are not correct. This of course is a question of fact and we are unable to  find any ground to interfere with the findings of the arbitrator.                    E. ARITHMETICAL ERRORS      One behalf of the objectors it is stated that there are arithmetical errors  in the  decision of  the arbitrator  in respect of  issue Nos.  7, 15(c)  and 19(b),  dealt with  in paragraph 52  and 69  of the interim award and that if these errors are  rectified the  opponents  will  be  entitled  to receive a  sum of  Rs. 1.52 lakhs, Shri T.U. Mehta on behalf of the applicants concedes the correctness of this claim. He agrees that  the  award  can  be  so  rectified.  We  direct accordingly.                         F. INTEREST      As a  result of  his conclusions on various issues, the arbitrator  came  to  the  conclusion  that  a  sum  of  Rs. 20,09,906 was  payable by  the applicants  to the objectors. Then, as to interest, he gave the following directions:      "Clause (iii)  - According  to deed      of retirement  Ex.3, the applicants      are entitled  to  interest  at  the      rate of  15 per cent per annum from      1-1-1980 on  the amount  which they      are entitled  to recover  from  the      opponents.

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    (iv)  I   do  not  agree  with  the      contention  of   Mr.  Makwana  that      interest is  to run  from the  date      that  the  value  of  the  disputed      articles   are   decided.   In   my      opinion, the correct interpretation      of the  interest clause  in Ex.3 is      that interest  is payable  from the      date of the dissolution. This is so      because  the  scheme  of  partition      embodied in Ex.3 is that each group      of parties is made the owner of the      raw material  etc. of the firm from      31.12.1979   the    date   of   the      dissolution.      (v) The  applicants are entitled to      receive interest at 15 per cent per      annum on  the amount  found due  to      them. Calculating  interest at  the      rate from  1-1-1980  to  18th  July      1991 the  total amount  of interest      comes to Rs. 34,82,162 only.      (vi) Therefore,  the applicants are      entitled  to   receive   from   the      opponents a  sum of  Rs.  20,09,906      (Rs. Twenty  lac nine thousand nine      hundred and six only) plus interest      of Rs.  34,82,162 (Rs.  Thirty four      lac eighty two thousand one hundred      sixty two  only). The  total amount      which thus  becomes payable  to the      applicants by  the opponents  comes      to Rs.  54,92,068 (Rs.  fifty  four      lac ninety two thousand sixty eight      only)."      Half of  the above  amount viz.  Rs. 27,46,034 was held payable to  J.P. The  other half  was payable  to P.P.  But, since he  had died J.P. became entitled to one-eighth of the amount due  to P.P. viz. Rs. 3,43,254 and the balance of Rs. 24,02,780   was   held   payable   to   such   other   legal representatives of P.P. as may be found by a competent court to be  entitled to  succeed to him. In respect of the sum of Rs. 30,89,288  thus payable to J.P. as well as the amount of Rs. 24,02,780  payable to  the other legal representative of P.P., the  arbitrator director the objectors to pay interest at 15%  per annum  from the date of the award (19.7.91) till the date of payment. The objectors  contest this  portion of the award on several grounds. They say -      (i)  that  the  arbitrator  has  no      jurisdiction to award interest from      the date  of dissolution (1.1.1980)      till  the   date   of   the   award      (18.7.91),  overlooking   the  well      settled principle  that in  case of      dissolution     of     partnership,      interest as  a rule is awarded only      from the date of the decree;      (ii) that the arbitrator overlooked      that interest  at the contract rate      from the  date of  suit  is  not  a      matter  of   right   but   one   of      discretion;      (iii) that  the suits  filed by the      applicants in the present case, out

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    of  which  the  arbitration  arose,      were not  suits for dissolution but      suits for  injunction in  which  no      claim for  interest can  be or  was      made;      (iv) that  the arbitrator could not      have awarded interest from the date      of award  till the  date of payment      as, in this case,      (a)   the    agreement    impliedly      prohibited interest      (b) there was no claim for interest      and      (c) the  dispute regarding interest      was not  specifically  referred  to      the arbitrator; and      (v) that  the  arbitrator,  in  any      event, erred  in granting  interest      upon interest.      We cannot  accept the  contention of the objectors that no interest  could have  been awarded by the arbitrator. The reference to  arbitration is  no only of all disputes in the three suits  pending between the parties put also of all the disputes arising  out of  the deed of dissolution. We do not now have before us the precise allegation and prayers in the various suits  nor do  we have before us the details of C.A. 1763/80 or of the proceeding out of which it arose. The deed of dissolution,  however, envisages  the payment of interest and also  specifies the point of time from which interest is payable.  Clause (5) of the deed, broadly, provides that all the assets  the Pratapnagar  factory should be taken over by the applicants  and the Maneja factory by the objectors at a valuation to  be made  by all  of them  and that  the  party getting assets  of higher  value should compensate the other party for the difference. It proceeds to say:      ".....the    valuation    of    raw      material, finished  goods and semi-      finished goods  is to  be  made  by      partners no.  (1), (2),  (3) &  (4)      jointly and  the excess  amount, if      any, after having valued in plants,      buildings,  machineries   and   raw      materials and  vehicles become  due      and payable,  the same in full will      be  paid   with  12   months   with      interest at  the rate of 15% p.a by      the partners  no. (3)  and  (4)  to      partners   nos.    (3)   and   (4).      Accordingly,  the   amount  of  the      first instalment  is to  be paid to      the partners  within 30  days  from      the date  of the  valuation and the      remaining amounts  is to be paid at      the intervals of three months after      lapses of  thirty days  and in this      manner, the entire remaining amount      shall be  paid in  full  within  12      months. The  terms of the 12 months      is to  be calculated  from the date      of finalisation of valuation."      It was,  therefore, the  intention of  the parties that interest should  run from  the date  of valuation; it was to run even during the period of 12 months for payment evisaged by the  clause itself.  It is  not correct,  as suggested on behalf of  the objector, to read into this clause an implied

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prohibition against  the  award  of  interest  generally  in respect of  amounts becoming  payable under  the award.  The arbitrator was, therefore justified in granting interest but could it  have been  granted w.e.f.  1.1.1980 and  at 15% is question.  Sri   T.U.  Mehta  contends  that  the  agreement evisages payment  of interest from the date of valuation and points out  that the  parties did  undertake a  valuation of material etc. as on 1.1.1980 as envisaged by the clause 5 of the deed.  He  says,  therefore,  that  the  applicants  are entitled to interest from 1.1.1980. In any event, he submit, the arbitrator has the discretion to grant interest from the date of  dissolution and  it is  this he  has done. Interest after all, is compensation for the applicants being deprived of what  was  lawfully  due  to  them  as  on  the  date  of dissolution and  so must run from that date. He say that the applicants should  not suffer  because of  the delay  in the finalisation. He  also urges  that the  payment of  compound interest is  also in  order and cities Mulla and the Code of Civil Procedure (Vol. I p.258).      In deciding  the issues debated it is necessary to bear one important  fact in  mind which  is that,  in the present case, the  disputes between the parties pending adjudication in a suit have been referred for arbitrator. In such a case, the arbitrator  has all  the powers  which the  Court itself would have  in deciding the issues in the suit. Secondly, it may be  useful to  keep in  mind the  parameter for award of interest by  an arbitrator  as enunciated  by this  Court. A Constitution  Bench   of  this  Court  has  dealt  with  the arbitrator’s powers  to grant  interest pendente lite in its recent decision  in Secretary. Irrigation Department v. G.C. Roy, [1992] 1 S.C.C. 508. The principle have been summarised in para 43 of the judgment in the following words:      "43.  The  question  still  remains      whether arbitrator  has been  power      to award  interest  pendente  lite,      and if  so on  what  principle.  We      must reiterate that we have dealing      with  the   situation   where   the      agreement  does   not  provide  for      grant of  such interest nor does it      prohibit such grant. In other word,      we are  dealing with  a case  where      the agreement is silent as to award      of interest.  On  a  conspectus  of      aforementioned    decision,     the      following principle emerge:      (i) A person deprived of the use of      money to  which he  is legitimately      entitled  has   a   right   to   be      compensated  for  the  deprivation,      call it  by any  name.  It  may  be      called  interest,  compensation  or      damages. This  basic  consideration      is as  valid  for  the  period  the      dispute  is   pending  before   the      arbitrator or  as  it  is  for  the      period  prior   to  the  arbitrator      entering upon  the reference.  This      is the  principal  of  Section  34,      Civil Procedure  Code and  there is      no  reason  or  principle  to  hold      otherwise   in    the    case    of      arbitrator.      (ii)   An    arbitrator    is    an      alternative from  (sic  forum)  for

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    resolution  of   disputes   arising      between the parties. If so, he must      have the  power to  decide all  the      disputes  or   differences  arising      between   the   parties.   If   the      arbitrator has  no power  to  award      interest pendente  lite, the  party      claiming it would  have to approach      the court  for that  purpose,  even      though   he   may   have   obtained      satisfaction in  respect  of  other      claim  from  the  arbitrator.  This      would    lead    multiplicity    of      proceeding.      (iii) An arbitrator is the creature      of an  agreement. It is open to the      parties to  confer  upon  him  such      power and  prescribe such procedure      for him  to follow,  as they  think      fit,  so   long  as  they  are  not      opposed to  law.  (The  proviso  to      Section  41   and  Section   3   of      Arbitration  Act   illustrate  this      pint). All  the same, the agreement      must be in conformity with law. The      arbitrator must  also act  and make      his award  in accordance  with  the      general law  of the  land  and  the      agreement.      (iv) Over  the years,  the  English      the Indian courts have acted on the      assumption that where the agreement      does not  prohibit and  a party  to      the reference  makes  a  claim  for      interest, the  arbitrator must have      the   power   to   award   interest      pendente lite.  Thawardas  has  not      been   followed    in   the   later      decisions of  this  Court.  It  has      been explained and distinguished on      the basis  that in  that case there      was no  claim for interest but only      a claim  for unliquidated  damages.      It has  ben  said  repeatedly  that      observations in  the said  judgment      were not  intended to  lay down any      such absolute  or universal rule as      they   appear    to,    on    first      impression. Until  Jena case almost      all the  courts in  the country had      upheld the  power of the arbitrator      to award  interest  pendente  lite.      Continuity and  certain is a highly      desirable feature of law.      (v) Interest pendente lite is not a      matter  of  substantive  law,  like      interst for  the period anterior to      reference (pre-  reference period).      For doing  complete justice between      the parties,  such power has always      been inferred."      Sri  B.K.   Mehta  contends   that  the  power  of  the arbitrator to grant pendente lite interest can be exercised, as stated  in para  44 of the above judgment only "where the agreement between the parties does not prohibit the grant of

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interest  and   where  a   party  claim  interest  and  that dispute......is referred  to the  arbitrator" and that these conditions are  not fulfilled  here. We do not agree. In the face of  clause 5  of  the  agreement  which  envisages  the payment of  interest,  it  is  futile  to  contend  that  it prohibits the  grant of  interest. The claim in the suit and the claim  under the  deed of dissolution were comprehensive enough to include the claim of interest and its reference to the arbitrator.  The arbitrator  was, therefore,  within his rights in granting interest pendente lite i.e. from the date of reference  (26.9.80) till  the date  of decree in term of the award.      Sri B.K.  Mehta, however,  contends that the arbitrator could not have awarded interest for the pre-reference period and that,  on merits, even pendente lite interest should not have been  awarded in  this case as normally courts in suits for  accounts   grant  interest   only  from   the  date  of determination  of  the  amounts  payable.  So  far  as  pre- reference interest in concerned, he invites attention to the case of Seth Thawardas Pherumal v. Union, [1995] 2 S.C.R. 48 where the grant of interest for the pre-reference period was set aside  and submits  that, to  this extent, its authority remains unaffected  by the decision in Secretary, Irrigation Department v.  Roy and  as the  reference in  this case  was prior to  the coming  into force  of the Interest Act, 1978. There is  some force  in this  contention. That apart, we do not think  that this is a fit case for the grant of interest from 1.1.1980. The arbitrator should have been guided by the term of  clause 5  of the deed of dissolution which envisage the grant of interest only from the date of valuation of the assets.  At  the  same  time,  this  cannot  mean  that  the objectors  can   take  advantage  of  the  entire  delay  in valuation. In  our opinion,  some reasonable  margin of time should be allowed for this process. We think it would not be correct to  mulet the  objectors with interest at least till the lapse  of a  reasonable time by which a valuation of all the assets  and assessments  of right  of respective parties under the  deed could  have been undertaken. In our view, it will be reasonable and proper to direct the payment of interest from  1.1.1983 onwards.  We direct  accordingly. We see, however, no reason to otherwise modify the award on the question of  interest, either  in  regard  to  the  rate  of interest or in regard to the addition of interest till the date  of award  to the  principal amount  determined  as payable to the applicants which is permissible under S.34 of the Code  of Civil  Procedure. The award on interest will be modified accordingly.      We have  dealt with all the principal objections to the award. Only  two minor  contentions need  to be referred to. The applicants  raised an objection on the question of costs awarded by  the arbitrator  but we  see no  merit in  it and reject the  same. Sri  B.K. Emit  raised a  point  based  on S.2(d) of the Arbitration Act but he did not press it and so we have  not   dealt with  it.  This  disposes  of  all  the contentions raised  before  us.  We  uphold  the  awards  of 22.2.91 and  18.7.91 subject  to the modifications indicated above.      Before  parting   with  the   appeal,  however,  it  is necessary to  touch on   two more aspects debated before us. On behalf  of the applicants, it is submitted that the title deeds of the Pratapnagar factory had been deposited with the Central Bank  as security  for the  advances taken  from but that the  banks is  refusing to  return the title deeds even though the  bank’s dues  have  been  fully  cleared.  It  is obvious that,  if its due have been cleared, the bank has no

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business to  hold on to the title deeds. We are  inclined to believe  that  the  bank’s  objection  is  based  not  on  a reluctance to  part with  the title  deeds but  only on  its uncertainty as  regards the  person to  whom to  return  the same. Since the bank may face some problems if it hands over the title  deeds to  J.P. both  in view  of  the  litigation between the  groups as  well as due to the death of P.P., it apparently wants  to safeguard  itself by  some direction of the court obtained at the instance of all the parties. Since all the  concerned parties  are before us and since they are all agreed  that the  title deeds can be returned to J.P. on behalf of  all of  them, we clarify that, if the bank’s dues have all been cleared and it has no other claim on the title deeds,  it   should  return  the  title  deeds  to  J.P.  as representing the  entire body  of legal  representatives  of P.P. i.e.  all his  sons and  daughters. We  further clarify that J.P.  will receive  and hold  these title deeds only on behalf of  the estate  of P.P.  and not  in  his  individual capacity.      The  other   aspect  which  needs  consideration  is  a difficulty caused  by the  terms of the order of appointment of the arbitrator in this case. As already pointed out, C.A. 1763/80 in  which the arbitrator was appointed was an appeal arising out  one of  the  proceedings  in  the  civil  suits between   the parties.  The appeal  should  have  been  kept pending but  the C.A.  itself  appears to have been disposed of by  the order  dated 26.8.80.  This is a clear  oversight We, therefore, restore C.A. 1763/80 and direct therein that, by    consent  of all  the parties, Civil Suits No. 194, 510 and 584  as well as C.A.  1763/80 shall stand disposed of in terms of  the awards  dated 22.2.91 and  18.7.91 as modified by us  by this  order. There  shall be  a decree in the said suits in terms of the awards so modified.      I.A. No.  10 to  12 and 14/1991 raise objections to the award which   stand  disposed of  by  our  order.  I.A.  No. 13/1991 is  an application  by J.P.  for a  direction to the bank to  deliver to  him the  title deeds to the Pratapnagar property. We  have dealt  with this issue also in the course of our  order. By  I.A.  No.  15/1991,  J.P.  claims  to  be substituted as  the sole  heir of  P.P.  All  the  sons  and daughters have been brought on record before the  arbitrator and here  by our  order dated  23.7.1990 subject  to certain conditions which  will stand.  If J.P. claims to be the sole heir of  P.P., it will be open to him to establish his claim in appropriate  proceedings. We  express no  opinion on  his claim based  on a  will of P.P. as it is unnecessary for the purposes of  these  proceedings.  I.A.  No.  16/1991  is  an application to  delete the  name  of  P.P.’s  wife  who  was brought on  record as  one of  his legal heirs  by the order dated  23.7.1990   as  she   has  subsequently   died.  This application is ordered.      In the  result, C.A. 1763/80, and I.A. Nos. 10 to 16 of 1990 stand disposed of in the above terms.      B.P. JEEVAN  REDDY, J.  During the course of arguments, two  different   interpretations  were   placed   upon   the principles  enunciated   by  the   Constitution   Bench   in Secretary, Irrigation  Department  v.  G.C.  Roy,  [1992]  1 S.C.C. 508.  On one  hand it was contended, relying upon the first of  the five  principles set  out in  para 43 that the said decision  lays down  that even  for  the  pre-reference period, interest  can be  granted in  all cases and that the earlier  decision   of  this  court  in  Executive  Engineer Irrigation Galimala  v. Abaaduta  Jena, [1988]  1 S.C.R. 253 has been  overruled in  that behalf  as well.  On the  other side, it was contended that it was not so and that so far as

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the pre-reference  period  is  concerned,  the  Constitution Bench decision  does not  say anything  contrary to what was said in  Jena. It  is in view of the said contentions that I thought it appropriate to clarify the matter since I was the member of  the Bench  which  decided  Secretary,  Irrigation Department v. G.C. Roy      The decision  in G.C  Roy was  concerned only  with the power of arbitrator to  award interest  pendente  lite.  It  was  not concerned with  his power  to award  interest for  the  pre- reference period.  This was  made clear   at  more than  one place in the judgment. In para 2 it is stated that reference to the Constitution Bench was only for deciding the question whether the  decision in  Jena was  correct in  so far as it held that arbitrator has no power to award interest pendente lite. In para 8 it is stated:      "Generally, the  question of  award      of interest  by the  arbitrator may      arise in respect of three different      periods, namely: (i) for the period      commencing from the date of dispute      till the date the arbitrator enters      upon the  reference; (ii)  for  the      period commencing  from the date of      the  arbitrator’s   entering   upon      reference till  the date  of making      the award; and (iii) for the period      commencing from  the date of making      of the  award  till  the  date  the      award is made the rule of the court      or till  the date  of  realisation,      whichever  is   earlier.   In   the      appeals before  us we are concerned      only with  the second  of the three      aforementioned periods."      Then  after   reviewing  a   number  of  decision,  the principles emerging  therefrom were stated in para 43 in the following words:      "The question still remains whether      arbitrator has  the power  to award      interest pendente  lite, and  if so      on  what     principle.   We   must      reiterate that  we are dealing with      the situation  where the  agreement      does not  provide for grant of such      interest nor  does it prohibit such      grant.  In   other  words,  we  are      dealing  with   a  case  where  the      agreement is  silent as to award of      interest.  On   a   conspectus   of      aforementioned    decisions,    the      following principles emerges:      (i) A  persons deprived  of the use      of   money   to    which   he    is      legitimately entitled  has a  right      to   he    compensated   for    the      deprivation, call  it by  any name.      It   may    be   called   interest,      compensation  or     damages.  This      basic consideration is as/valid for      the period  the dispute  is pending      before the  arbitrator as it is for      the period  prior to the arbitrator      entering upon  the reference.  This      is the  principle of  S.34, C.P.C.;

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    and there is no reason or principle      to hold  otherwise in  the case  of      arbitrator.      (ii)   An    arbitrator    is    an      alternative form  for resolution of      disputes   arising    between   the      parties. If  so, he  must have  the      power to decide all the disputes or      differences  arising   between  the      parties. If  the  arbitrator has no      power to  award  interest  pendente      lite, the  party claiming  it would      have to approach the Court for that      purpose, even  though he  may  have      obtained satisfaction in respect of      other claims  from the  arbitrator.      This  would lead to multiplicity of      proceedings.      (iii) An arbitrator is the creature      of an  agreement. It is open to the      parties to  confer  upon  him  such      powers and prescribe such procedure      for him  to follow,  as they  think      fit,  so   long  as  they  are  not      opposed to  law. (The proviso to s.      41 and  s.  3  of  Arbitration  Act      illustrate  this  point).  All  the      same,  the  agreement  must  be  in      conformity with law. The arbitrator      must also act and make his award in      accordance with  the general law of      the land and the agreement.      (iv) Over  the years.  the  English      and Indian Courts have acted on the      assumption that where the agreement      does not  prohibit and  a party  to      the reference  makes  a  claim  for      interest, the  arbitrator must have      the   power   to   award   interest      pendente lite.  Thawardas  has  not      been   followed    in   the   later      decisions of  this  Court.  It  has      been explained and distinguished on      the basis  that in  that case there      was no  claim for interest but only      a claim  for unliquidated  damages.      It has  been said  repeatedly  that      observations in  the said  judgment      were not  intended to  lay down any      such absolute  or universal rule as      they   appear,    to    on    first      impression.   Until   Jena’s   case      almost  all   the  courts   in  the      country had upheld the power of the      arbitrator   to    award   interest      pendente   lite.   Continuity   and      certainty  is  a  highly  desirable      feature of law.      (v) Interest pendente lite is not a      matter  of  substantive  law,  like      interest for the period anterior to      reference  (pre-reference  period).      For doing  complete Justice between      the parties,  such power has always      been inferred.

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    The conclusion  was then  stated  in  para  44  in  the following words:      "Having   regard   to   the   above      considerations, we  think that  the      following is  the correct principle      which should  be followed  in  this      behalf:      Where  the  agreement  between  the      parties does  not prohibit grant of      interest and  where a  party claims      interest    and     that    dispute      (alongwith the  claim for principal      amount   or    independently)    is      referred  to   the  arbitrator,  he      shall  have   the  power  to  award      interest pendente lite. This is for      the reason   that in such a case it      must be  presumed that interest was      an implied  term of  the  agreement      between the  parties and  therefore      when the  parties refer  all  their      disputes -  or refer the dispute as      to  interest   as  such  -  to  the      arbitrator, he shall have the power      to award  interest. This  does  not      mean  that   in  every   case   the      arbitrator should necessarily award      interest pendente  lite.  It  is  a      matter within  his discretion to be      exercised in  the light  of all the      facts  and   circumstances  of  the      case, keeping  the ends  of justice      in view."      In the  circumstances, it  would not be correct to read the first  of the  five principles  set out  in para  43  as overruling Jena  in so far as it dealt with the arbitrator’s power  to  award  interest  for  the  pre-reference  period. Principle No.  (i) should  be read  along with principle No. (v) wherein  it is  clearly slated that the interest for the period anterior to the reference (pre-reference period) is a matter of substantive law unlike interest pendente lite. The conclusion in para 44 again deals only with the power of the arbitrator  to   award  interest   pendente  lite.   It  is, therefore, not right to read the said decision as overruling Jena in  so far as it dealt with the power of the arbitrator to award interest for the pre-reference period. So far  as the  matter before  us  is  concerned,  it  is  a reference in  a pending suit. In such a case, the arbitrator has all  the powers  of the court  in the matter of awarding interest. I agree with the conclusion arrived at by my learned brother S. Ranganathan, J. N.V.K. Matters disposed of.