REPORTABLE

       IN THE SUPREME COURT OF INDIA     CIVIL  APPELLATE JURISDICTION

CIVIL  APPEAL No. 62  OF 2003        

   NATIONAL ALUMINIUM CO. LTD. & ANR. ...   Appellant(s)                         Versus    G.C.KANUNGO ...  Respondent(s)   

J U D G M E N T

Dr.ARIJIT PASAYAT,

Heard.

Challenge in this appeal is to the order of a learned Single Judge of the  

Orissa  High  Court  dismissing  the  miscellaneous  appeal  filed  by  the  present  

appellant.   In  the  miscellaneous  appeal  which  was  filed  under  Section  39  of  

Arbitration  Act,  1940  (in  short  the  'Act')  challenge  was  to  the  order  passed  by  

learned Civil Judge, Senior Division, Angul making the award rule of the Court.   

The primary stand before the High Court was that the claim made by the  

respondent-contractor was barred in  terms of  Section 137 of  the Limitation Act,  

1963, (in short 'Limitation Act')  The High Court did not accept the stand of the  

appellant.   

In the present appeal,  Mr. A.Sharan,  learned ASG appearing  for  the  

appellant  submitted that the claim was

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barred and for substantiating this stand reference was made to certain dates which  

are almost undisputed.  The work order in this case was issued on 18.12.1985 and the  

work was completed on 15.6.1987.  On 20.05.1995, the respondent made a request for  

appointment of an Arbitrator and on 29.6.1995 an Arbitrator was appointed.  It is  

the case of the appellant that sometime in 1989, final bill was paid and there was  

nothing remaining to be paid and therefore the further correspondence, if any, are of  

no consequence.  In any event, the office notings on which reliance has been placed  

by the Arbitrator as well as the courts below did not confer any legal right on the  

respondent.  It was also submitted that the award for the additional work done was  

against the terms of the contract.   It was, however, fairly accepted that the later  

point was never argued before the High Court.  It was also submitted that the rate at  

which interest has been awarded is high.  

In  response,  Mr.  R.K.Rath,  learned  senior  counsel  appearing  for  the  

respondent submitted that there are several documents on which the courts below  

have placed reliance.  This unmistakably  show that the matter was alive and more  

particularly the letter of the appellant dated 26.8.1992 to the respondent puts the  

controversy beyond doubt.

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“Dear Sir,

The case file for consideration of your different claims for the  

above said work is processed.

The decision is awaited.

After the decision is known, the same shall be communicated to

you.

In other words, there was no finality in the matter and the matter was  

alive for consideration.  If this date i.e. 26.5.1992 is taken into account, the claim  

made was within the period of three years.  That being so, the claim as made was  

within the period of limitation and the stand of  the appellant  that the claim was  

barred by limitation is not tenable.  

Another point which has been urged with some vehemence is that the rate  

at which interest has been granted is 15%.  It is stated that rate is quite high.  In  

response, learned counsel for the respondent stated that presently the applicable rate  

is 18% and there is nothing infirm in the award of interest @ 15%.

Considering  the  peculiar  facts  of  the  case  we  direct  that  the  interest  

payable will be 12% p.a. in place of 15% as awarded.  The appeal is allowed to the  

aforesaid extent.

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The documents submitted by way of furnishing security as filed in this  

court shall be handed over to learned counsel for the respondent.

              ...................J.                                  (Dr. ARIJIT PASAYAT)   

             ....................J.                          ((ASOK KUMAR GANGULY)

New Delhi, April 29, 2009.