1. ' This Misc. Appeal has been filed by the appellants challenging the orders passed by the Senior Civil Judge, Dadu in Execution Application No, 07 of 1992 on 16-11-1992.
2. ' Briefly the facts relevant for the purpose of this appeal are that F.C. Suit No, 106 of 1977 was filed by the parties with the prayer that the matter may be referred to sole arbitrator Mr. Allah Warayo Shaikh, retired Chief Engineer to decide the dispute between the parties and to settle the accounts.
3. Accordingly an Award was passed by the Arbitrator on 8-5-1980 and the respondent company was awarded a sum of Rs,9,82,553, against the appellants with bank interest at 12.5% from the date of filing of suit in the Court till payment while compensation for bid money .and loss to the respondent company was left to be decided by the Court while cost of Rs,35,400 was inflicted on both the parties in equal shares. The present appellants filed their objections and affidavit to the Award. However, the Award was confirmed and was made rule of the Court vide decree passed in terms of Award on 5-12-1981 and an Execution Application (Exh. No, 08 of 1982) was filed in the Court. In the meanwhile the appellants challenged the decree by filing Appeal No, 32 of 1982 in High Court of Sindh, Karachi and this Court vide judgment dated 20-4-1983 remitted the Award to Arbitrator for stating the reasons of Award within two, months and the parties were left to file their objections on subsequent Award which was to be decided by the executing Court. The arbitrator submitted fresh Award and statement of reasons in the trial Court on 16-5-1984. This fresh Award was contested by the parties and finally the trial Court was pleased to make the Award rule of the Court and allowed the interest at the' rate of 6% from the date of decree till payment and the appellants were directed to satisfy the decree within 90 days. However, the respondent continued with his Execution Application No,98 of 1982 filed by him earlier. The present appellants, therefore, submitted application under section 47/48, C.P.C. read with Order XXI, Rule 26, C.P.C. for dismissal of said Execution Application as the said earlier decree had no force. The trial Court passed the orders on 30-6-1992 whereby the application was allowed but the respondent was directed to file fresh Execution Application in light of later judgment of trial Court. The respondent filed another Execution Application being Exh.No, 07 of 1992 for execution of decree dated 15th December, 1981 (the first decree) claiming the amount of Award i.e. Rs, 9,82,553 with interest at 12.50% from the date of filing of suit till the final decree and 6% interest after the preparation of decree till payment.
4. This Execution Application was also contested. The executing Court rejected the objections of the appellants and allowed the said Execution Application ordering the writ of attachment to issue.
5. Being aggrieved, the appellants have preferred this Miscellaneous Appeal.
6. ' I have heard Mr. Riaz Ahmed, Advocate for the appellants and Mr. Kishen Chand, Advocate for the respondent. Mr. Riaz Ahmed, Advocate has submitted that the first decree of 1981 stands set aside and it is the final decree passed on 23-9-1987 which holds the field and the same is upheld in Appeals right up to the Hon'ble Supreme Court and, therefore, it is this decree which is executable and not the earlier decree.
7. ' As against this Mr. Kishan Chand, Advocate has submitted that the Award includes interest of 12.50% from the date of filing of the suit till payment and, therefore, the Executing Court cannot go behind this Award but has to execute the decree as it was passed at earlier stage. He has further submitted that the Hon'ble High Court and the Supreme Court have never set aside the Award as it is but have maintained the same. Both the learned counsel have referred to the different orders passed by the superior Courts and the trial Court at different stages.
8. ' I have perused all the orders and documents placed on the record. The first document is Award by the Arbitrator on 8-5-1980 whereby he has allowed an amount of Rs,9,82,553 to the respondent.
9. As regards compensation claimed by the respondent he has left it to the Court to decide the same while the Arbitrator has allowed the interest at the rate of 12.50% per annum. On the basis of this Award, the decree was passed allowing the same inclusive of the interest. However, this Award was challenged in First Appeal No, 32 of 1982 before this Court and a judgment was passed by my Lord Justice Naimuddin (as his Lordship then was) on 20-4-1983. By this judgment the Award was remitted to the Arbitrator for giving reasons in accordance with provisions of section 26-A of the Arbitration Act. It was further observed in the said order that the parties will be at liberty to file their objections to the Award as submitted afresh; and that these objections will be disposed of by the trial Court. This means that the decree which was passed earlier on 15th December, 1981 stood set aside and the matter became sub judice before the lower Court. The Arbitrator then submitted his reasons and the matter was taken up by the lower Court, who vide order passed on 23-9-1987 made the Award rule of the Court and subsequently a decree was passed. It will be pertinent to reproduce the operative part of the decree which reads as under: "The suit coming up for hearing before Mr. Rajaldas G. Basantani, Senior Civil Judge, Dadu in presence of plaintiff and his Advocate Mr. Kishanchand and in absence of Special Government Counsel Mr. S. Ahmed Faruqui for defendants Nos. 1 to 3 and also in absence of defendant No, 4.
10. This Court this 23rd day of September, 1987 has ordered that the award for Rs, 9,82,553 payable by the defendants to the plaintiff is confirmed and is made rule of Court. The plaintiff is also allowed interest of 6% per annum from the date of decree until payment is allowed. The official defendant shall make the payment and satisfy the decree within 90 days. The costs follow the event."
11. ' The above decree of the Senior Civil Judge, Dadu shows that the Award to the extent of amount of Rs,9,82,553 has been made rule of the Court. This decree does not include pendente lite interest of 12.50% but instead interest at the rate of 6% has been allowed from the date of decree till payment.
12. This decree was challenged before this Court by the present appellants in First Civil Appeal No, 22 of 1988. This appeal was dismissed with costs and the abovesaid decree of the Senior Civil Judge, Dadu was maintained. Being aggrieved, the present appellants preferred CPSLA No,381-K of 1991 before the Hon'ble Supreme Court and the Hon'ble Supreme Court vide orders passed on 17-11-1991 refused to grant leave to appeal. Thereafter the Executing Court has passed the impugned order on 16-11-1992. A perusal of the impugned order would show that the objections of the present appellants have been rejected and the Execution Application moved by the present respondent claiming pendente lite interest at 12.50% have been allowed.
13. Now the question that arises is whether the executing Court can go behind the decree and whether the Arbitrator could grant pendente lite interest. As discussed above, it is clear that the trial Court while passing decree on 23-8-1987 did not allow the interest as allowed by the Arbitrator. This shows that the trial Court had modified the Award as provided under section 15 of the Arbitration Act as obviously the 'Arbitrator had no powers to grant the pendente lite interest as is held in the case of Ghulam Abbas v. Trustees of the Port of Karachi PLD 1987 SC 393. In this case their Lordships have been pleased to hold as under: "As far as the grant of interest from the date of the award until the payment of the principal sum it may be abserved that the Arbitrator can under no circumstances award interest for the period beyond the passing of the decree by the Court on the award for the simple reason that the statutory provisions contained in section 29 of the Arbitration Act take over and it is the Court within whose discretion lies the power to order interest from the date of the decree at such rate as the Court deemed reasonable, to be paid on the principal sum as adjudged by the award and confirmed by the decree. From this it necessarily follows that future interest with effect from the date of the decree could not legally be awarded by the Arbitrator. However, the facts are that the award was made the rule of the Court by the learned Single Judge with the result that the part of the award granting interest beyond the date of the decree until payment was also incorporated in the decree passed by the Court. As held in Sheikh Mahboob Alam v. Sheikh Mumtaz Ahmad PLD 1956 Lah. 276 although, the Court could set aside this part of the award, it was open to it to exercise its own power under section 29 of the Arbitration Act and grant interest. Therefore, in making this portion of the award a part of the decree the Court must be deemed to have adopted it in the exercise of its own power under section 29. However, in his statement of claim the appellant had claimed interest only up to 3rd October, 1973. The issues were framed by the learned Arbitrator on the pleadings of the parties and, therefore, interest beyond 3rd October, 1973, was not the subject- matter of reference for adjudication before the Arbitrator. The Arbitrator, therefore exceeded his authority in any case, to have awarded future interest for the period between the date of the award and the date of the decree on any basis. The reference was also earlier made to the case of Union of India and another v. M/s. D.P. Wadia and Sons (AIR 1977 Bom. 10), in which the award of interest was upheld on the ground that no reasons were assigned by the arbitrator. We are unable to agree with the view of the law and also feel that the facts in the present case are different. The award on the face of it refers to the statement of the claim in which the contractor claimed interest by way of damages and it is on that basis that the decision of the Arbitrator in the facts of the present case could not according to law grant interest as claimed, there would be an error of law apparent on the face of the record. The mere fact that pleadings were filed before the Arbitrator and issues were then settled on the pleadings of the parties incorporating the question of interest does not necessarily give rise to the inference that the parties had agreed to refer specifically the question of grant of interest as a question of law for the decision of the Arbitrator, so as to preclude any party to the arbitration from challenging the award on the ground of error of law on the face of the award.
14. ' The conclusion from the foregoing discussions is that so far as the item of interest in dispute is concerned, the Arbitrator committed an illegality in awarding interest except that the interest awarded from the date of decree onwards has been saved by virtue of section 29 of the Arbitration Act."
15. In view of the above case-law, it is clearly established that the Arbitrator had no authority or power to grant such interest from the date of filing of the suit till payment or even till the date of award and obviously it is for these reasons that the trial Court has declined to incorporate the item of interest, which is a separate item, in the decree. As regards the interest allowed by the trial Court at the rate of 6% from the date of decree till payment, it may be observed that the same has been allowed under the provisions of section 29 of the Arbitration Act, which reads as under: "29. Interest on awards.---Where and in so far as an award is for the payment of money the Court may in the decree order interest, from the date of the decree at such rate as the Court deems reasonable, to be paid on the principal sum as adjudged by the award and confirmed by the decree."
16. This order however, dated 23-9-1987 has not been challenged by respondent. In this view of the matter, I accept the present appeal, set aside the impugned order passed by the trial Court. Mr. Riaz Ahmed, Advocate for the appellants has stated that the appellants nave already deposited a sum of Rs,9,82,553 being the amount of award in Court on 8-3 1992. He has also submitted that a further amount of Rs, 2,49,420 has also been deposited in Court on the same day being interest from the date of decree till the payment in Court at the rate of 6% per annum. The respondent will be at liberty to withdraw this amount from the Court. There will be, however, no order as to costs.