JAIPRAKASH ASSOCIATES LTD. (JAL) THROUGH ITS DIRECTORversusTEHRI HYDRO DEVELOPMENT CORPORATION INDIA LTD.

                          [2019] 2 S.C.R. 41                               41


        JAIPRAKASH ASSOCIATES LTD. (JAL)                                   A
              THROUGH ITS DIRECTOR
                            v.
TEHRI HYDRO DEVELOPMENT CORPORATION INDIA LTD.
          (THDC) THROUGH ITS DIRECTOR
             (Civil Appeal No. 1539 of 2019)                               B
                 FEBRUARY 07, 2019
  [A. K. SIKRI, S. ABDUL NAZEER AND M. R. SHAH, JJ.]
      Arbitration and Conciliation Act, 1996:
                                                                           C
       s. 31(7)(a) – Power of arbitrator to award pendente-lite interest
– Arbitral Tribunal while allowing the claims, also granted pendente-
lite interest – Objection to award of interest in view of clauses 50
and 51 of General Conditions of Contract which barred grant of
interest – Single Judge of High Court quashed the award limited
to the interest – Order of Single Judge affirmed by Division Bench         D
of High Court – On appeal, held: As the clauses 50 and 51 of
General Conditions of Contract put a bar on arbitral Tribunal to
award interest, arbitral Tribunal did not have jurisdiction to do so.
      Doctrines/Principles:
      Principle of ejusdem generis – Applicability of – Discussed –        E
The principle is not applicable in the present case – Interpretation
of Statutes – Rules of Interpretation.
      Dismissing the appeal, the Court
       HELD: 1.1 Right from the stage of arbitration proceedings           F
till the High Court, clauses 50 and 51 of General Conditions of
Contract (GCC) are interpreted to hold that they put bar on the
arbitral tribunal to award interest. Even the majority award of
the arbitral tribunal recognised this. Notwithstanding the same,
it awarded the interest by relying upon *Board of Trustees for the
Port of Calcutta case. In case clauses 50 and 51 of GCC put a bar          G
on the arbitral tribunal to award interest, the arbitral tribunal did
not have any jurisdiction to do so. The High Court, both Single
Bench as well as Division Bench, rightly noted that the aforesaid
judgment was under the 1940 Act and the legal position in this
                                                                           H
                                  41
42               SUPREME COURT REPORTS                 [2019] 2 S.C.R.


A    behalf have taken a paradigm shift which position is clarified in
     **Sayeed Ahmed and Company case. This rationale given by the
     High Court is in tune with the legal position which stands
     crystallised by catena of judgments. [Para 16][55-C-E]
           1.2 The judgment in #Harish Chandra case is under the
B    1940 Act. This judgment is explained and distinguished in
     **Sayeed Ahmed and Company case. The judgment in Sayeed
     Ahmed and Company distinguishing the restrictive wording in
     #Harish Chandra case has been consistently followed by this Court
     in number of cases thereafter. In this scenario, when it is found
     that #Harish Chandra case which is of the vintage of 1940 Act
C    and is distinguished in **Sayeed Ahmed and Company case
     coupled with the fact that the ratio of **Sayeed Ahmed and
     Company case has been consistently followed, there is no reason
     to deviate from the construction to Clauses 50 and 51 of the GCC
     given by the arbitral tribunal in the first instance as well as the
D    High Court. [Paras 19 and 20][56-C-D, 57-H, 58-A-B]
           Secretary, Irrigation Department, Government of Orissa
           & Ors. v. G.C. Roy (1992) 1 SCC 508: [1991] 3 Suppl.
           SCR 417 – followed.
           Tehri Hydro Development Corporation (THDC) Limited
E          & Anr. v. Jai Prakash Associates Limited (2012) 12
           SCC 10 : [2012] 8 SCR 813 ; **Sayeed Ahmed and
           Company v. State of Uttar Pradesh & Ors. (2009) 12
           SCC 26 : [2009] 10 SCR 841 ; Sree Kamatchi Amman
           Constructions v. Divisional Railway Manager (Works),
           Palghat & Ors. (2010) 8 SCC 767 : [ 2010] 10 SCR
F          487 ; Union of India v. Bright Power Projects (India)
           Private Limited (2015) 9 SCC 695: [2015] 6 SCR
           488 ; Sri Chittaranjan Maity v. Union of India (2017)
           9 SCC 611 : [2017] 11 SCR 722; Reliance Cellulose
           Products Limited v. Oil and Natural Gas Corporation
G          Limited (2018) 9 SCC 266 : [2018] 6 SCR 618 – relied
           on.
           *Board of Trustees for the Port of Calcutta v. Engineers
           De-Space-Age (1996) 1 SCC 516 : [1995] 6 Suppl.
           SCR 327 – distinguished.
H
   JAIPRAKASH ASSOC. LTD. (JAL) v. THDC INDIA LTD.                    43


      #State of Uttar Pradesh v. Harish Chandra and Company           A
      (1999) 1 SCC 63 : [1998] 2 Suppl. SCR 660 – stood
      distinguished.
      2. The principle of ejusdem generis is not applicable in the
present case. The rule of ejusdem generis would be applied only
if there is distinct genus or a category, which is lacking in the     B
instant case. This rule is applicable when particular words
pertaining to a clause, category or genus are followed by general
words. In such a situation, the general words are construed as
limited to things of same kind as those specified. In that sense,
this rule reflects an attempt ‘to reconcile incompatibility between
the specific and general words in view of the other rules of          C
interpretation that all words in a statute are given effect if
possible, that a statute is to be construed as a whole and that no
words in a statute were presumed to be superfluous’.
[Para 21][58 C, E-F]
      Lokmat Newspapers Pvt. Ltd. v. Shankarprasad (1999)             D
      6 SCC 275 : [1999] 3 SCR 907; Bharat Heavy
      Electricals Limited v. Globe Hi-Fabs Limited (2015) 5
      SCC 718 – relied on.
                        Case Law Reference
[1995] 6 Suppl. SCR 327       distinguished           Para 4          E
[2012] 8 SCR 813              relied on               Para 5
[1998] 2 Suppl. SCR 660       stood distinguished     Para 6
[2009] 10 SCR 841             relied on               Para 10
[1991] 3 Suppl. SCR 417       followed                Para 12 (a)     F
[2010] 10 SCR 487             relied on               Para 13
[2015] 6 SCR 488              relied on               Para 13
[2017] 11 SCR 722             relied on               Para 13
                                                                      G
[2018] 6 SCR 618              relied on               Para 14
[1999] 3 SCR 907              relied on               Para 21
(2015) 5 SCC 718              relied on               Para 21

                                                                      H
44                 SUPREME COURT REPORTS                     [2019] 2 S.C.R.


A           CIVIL APPELLATE JURISDICTION : Civil Appeal No.1539
     of 2019
            From the Judgment and Order dated 14.12.2012 of the High Court
     of Delhi at New Delhi in FAO (OS) No. 596 of 2011
            Rupinder S. Suri, Sr. Adv., Pawan Upadhyay, Sarvjit Pratap Singh,
B    Ms. Kriti Chopra, Ratik Sharma, Binod Kr. Behera, Ms. Swati Smita
     Pati, Salman Khan (for Ms. Sharmila Upadhyay), Advs. for the
     Appellant.
            Gourab Banerji, Sr. Adv., Puneet Taneja, Ms. Shaheen, Mohit
     Pandey, S.B. Mukherjee, Ms. Raka Chatterjee, Ms. Manisha Sinha, Advs.
C    for the Respondent.
            The Judgment of the Court was delivered by
           A.K. SIKRI, J. 1. Leave granted.
            2. The appellant herein was awarded the contract under which it
     was to execute certain Works. Agreement in this behalf was signed on
D    18th December, 1998. Some disputes arose between the parties. Since
     the agreement contained an arbitration clause, two claims raised by the
     appellant were referred for arbitration. The arbitral tribunal was of three
     Arbitrators. This arbitration was under the Arbitration and Conciliation
     Act, 1996 (hereinafter referred to as the ‘1996 Act’). The majority
E    award pronounced on October 10, 2010 allowed the two claims to certain
     extent. On the said claims awarded, the Arbitrators also granted interest
     at the rate of 10% per annum from the date when the arbitration was
     invoked, i.e., October 09, 2007, till 60 days after the award. Future
     interest at the rate of 18% per annum till the date of payment was also
     awarded.
F
            3. Dispute which has travelled upto this Court pertains only to the
     question as to whether the Arbitrators could award any interest in view
     of Clauses 50 and 51 of the General Conditions of Contract (GCC)
     which governed the terms between the parties. The objections were
     filed before the High Court. A Single Judge of the High Court of Delhi
G    passed the order dated November 15, 2011 quashing the award limited
     to the interest that was awarded by the Arbitrators. The appellant
     preferred intra-court appeal which has been dismissed by the Division
     Bench of the High Court, thereby upholding the judgment of the Single
     Judge. The effect is that the High Court has held that no interest is
H    payable as Clauses 50 and 51 of GCC bar the arbitrators from granting
     interest.
       JAIPRAKASH ASSOC. LTD. (JAL) v. THDC INDIA LTD.                       45
                      [A. K. SIKRI, J.]

       4. It may be pointed out that on interpreting Clauses 50 and 51 of    A
the General Conditions of Contract, the view taken by the High Court is
that these clauses categorically provide that no interest would be payable
to the contractor on the money due to him. The said Clauses read as
under:
       “Clause 50.0 Interest on money due to the contractor                  B
       No omission on the part of the Engineer in charge to pay the
       amount due upon measurement or otherwise shall vitiate or make
       void the contract, nor shall the contractor be entitled to interest
       upon any guarantee or payments in arrears nor upon any balance
       which may on the final settlement of his account, be due to him.      C
       Clause 51.0 No claim for delayed payment due to dispute
       etc.
       No claim for interest or damage will be entertained or be payable
       by the corporation in respect of any amount or balance which
       may be lying with the corporation owing to nay dispute, different
                                                                             D
       or misunderstanding between the parties or in respect of any delay
       or omission on the part of he Engineer in charge in making
       intermediate or final payments on in any other respect
       whatsoever.”
       The Award makes the following observations in this behalf:
                                                                             E
       “As seen from above, Clause 50.0 and 51.0 of the Contract
       deny interest on the Claimant’s dues by the Respondent due to
       dispute etc. However as per above quoted judgment of Hon’ble
       Supreme Court of India, the claim for interest can be considered
       by the Arbitration Tribunal.”
       Notwithstanding the same, the learned Arbitrators granted the         F
interest by relying upon the law declared by this Court in Board of
Trustees for the Port of Calcutta v. Engineers-De-Space-Age1 and
following observations from the said judgment were quoted:
       “………..In other words, according to their Lordships the
       arbitrator is expected to act and make his award in accordance        G
       with general law of the land but subject to an agreement,
       provided, the agreement is valid and legal. Lastly, it was pointed
       out that interest pendent like is not a matter of substantive law,
       interest for the period anterior to reference. Their Lordship
1
    (1996) 1 SCC 516                                                         H
46                    SUPREME COURT REPORTS                     [2019] 2 S.C.R.


A           concluded that when the agreement between the parties does
            not prohibit grant of interest and where a party claims interest
            and that dispute is referred to the arbitrator, he will have the
            power to award interest pedente lite for the simple reason that
            in such a case it is presumed that interest was implied term of
            the agreement between the parties; it is then a matter of exercise
B
            of discretion by the arbitrator. The position of law, has, therefore,
            been clearly stated in the aforesaid decision of the Constitution
            Bench.…………………...Strictly construed the term of the
            contract merely prohibits the Commissioner from paying interest
            to the contractor for delayed payment but once the matter goes to
C           the arbitration the discretion of the Arbitrator is not, in any manner,
            stifled by this term of the contract and the Arbitrator would be
            entitled to consider the question of grant of interest pendent lite
            and award interest if he finds the claim to be justified. We are,
            therefore, of the opinion that under the clause of the contract the
            Arbitrator was in no manner prohibited from awarding interest
D
            pendente lite.”
            5. As stated above, the High Court, on the other hand, has taken
     the view that if interest is prohibited as per the expressed terms of the
     contract between the parties, the Arbitrator does not get jurisdiction to
     award interest. Further, insofar as interpretation to the aforesaid clauses
E    is concerned, the High Court noticed that these Clauses were on the
     same terms as Clause 1.2.14 and 1.2.15 of the contract which were
     subject matter of construction in Tehri Hydro Development
     Corporation (THDC) Limited & Anr. v. Jai Prakash Associates
     Limited2. In the said judgment, this Court has categorically held that
F    those clauses to mean that no interest was payable on claim for delayed
     payment due to the contractor. Therefore, same construction needed to
     be given to Clauses 50 and 51 of GCC in the instant case.
            6. Mr. Rupinder S. Suri, learned senior counsel appearing for the
     appellant made two-fold submissions before us, which are to the following
     effect:
G
              (i) In the first place, it is submitted that judgment in
              Jayprakash Associates Limited case is contrary to the earlier
              judgment rendered by this Court in State of Uttar Pradesh v.
              Harish Chandra and Company3 . Both the judgments are by
     2
         (2012) 12 SCC 10
H    3
         (1999) 1 SCC 63
    JAIPRAKASH ASSOC. LTD. (JAL) v. THDC INDIA LTD.                           47
                   [A. K. SIKRI, J.]

         the Benches of Three-Judges. His submission is that judgment         A
         of Harish Chandra is earlier in point of time, which has not
         been taken note of in Jayprakash Associates Limited case. In
         such a scenario, as per Mr. Suri, the judgment which is passed
         earlier should hold the field and, therefore, we should be guided
         by the law laid down in Harish Chandra case.
                                                                              B
         (ii) Second submission, in the alternative, is that in order
         to resolve the conflict, the matter should be referred to a
         larger Bench.
       7. Dilating on the first submission, an attempt of Mr. Suri was to
show that the clauses of the contract in question, when interpreted
correctly would clearly bring about that these clauses did not prohibit the   C
Arbitrators from granting interest. The learned counsel emphasised the
words “or any other respect whatsoever” occurring in Clause 51 of the
GCC and argued that these are to be read ejusdem generis and should
take their colour from the earlier part of clause. He submitted that
when these words are read in the aforesaid manner, it is only in those        D
cases where some amount or balance is lying with the respondent because
of any dispute, difference or misunderstanding between the parties etc.,
interest is not payable. Such a situation would not arise in those cases
where claim is raised on other counts and awarded by the Arbitrators.
He also submitted that Clause 51 in the contract in the instant case was
similar to Clause 1.9 of the contract in Harish Chandra case and the          E
Court interpreted the said clause to mean that Arbitrator was not
precluded from awarding the interest.
         8. In this hue, his alternate submission was that two similar or
almost identical clauses are interpreted in a different manner in Harish
Chandra case and Jayprakash Associates case and, therefore, conflict          F
arises which needs to be resolved.
         9. Mr. Gourab Banerji, learned Senior Counsel appearing for
the respondent gave equally emphatic reply to the aforesaid submissions
of Mr. Suri. His first argument was that clauses in Harish Chandra
case and the present case were altogether different. Insofar as the
                                                                              G
instant case is concerned, it was governed by the law laid down in
Jayprakash Associates judgment which was in fact a case between
the same parties and in that case the Court had, while construing the
identically worded clauses, came to the conclusion that the Arbitrators
were precluded from granting any interest. His another contention was
that there was a difference between the scheme provided under the             H
48                    SUPREME COURT REPORTS                  [2019] 2 S.C.R.


A Arbitration Act, 1940 (hereinafter referred to as the ‘1940 Act’) when
  contrasted with the 1996 Act. He argued that most of the judgments
  cited by the appellant including Harish Chandra were under 1940 Act
  whereas in the instant case award was passed under the 1996 Act. He
  also referred to certain recent judgments which have been rendered by
  this Court touching upon this very aspect. The precise manner in which
B
  he structured his arguments are recapitulated below:
         10. In the first instance, he pointed out that even the arbitrators
  accepted, on the interpretation of GCC Clauses 50 and 51, that these
  clauses deny interest on the appellant’s dues by the respondent due to
  dispute etc. Notwithstanding the same, the majority opinion awarded
C the interest relying upon the judgment of this Court in Board of Trustees
  for the Port of Calcutta. The learned Single Judge of the High Court,
  while reversing the aforesaid view, pointed out that 1996 Act had altered
  the position contained in the 1940 Act. Under the new Act, an arbitrator
  could not award pendente lite interest when there was an express bar
D against award of such an interest. This legal position is contained in
  Section 31(7)(a) of the 1996 Act and the legal position stood crystallised
  in the case of Sayeed Ahmed and Company v. State of Uttar Pradesh
  & Ors.4. Therefore, held the learned Single Judge, when Clauses 50
  and 51 of GCC imposed a complete bar on arbitral tribunal to award
  pendente lite interest, the arbitrators had no jurisdiction to award interest.
E Mr. Banerji submitted that the learned Single Judge even noticed the
  judgment in Harish Chandra case and distinguished the same on the
  ground that it arose under the 1940 Act. Furthermore, clause 1.9 in
  Harish Chandra case was indeed restrictive and differed from the
  wordings of Clauses 50 and 51 of the GCC which were closer to Clause
F G1.09 in Sayeed Ahmed case. On that basis, Harish Chandra judgment
  was distinguished which position has been upheld by the Division Bench
  of the High Court also. Mr. Banerji submitted that by the time Division
  Bench decided the case in September, 2012, it had the benefit of another
  judgment of this Court in THDC case which was not only between the
  same parties but even the clauses in the said case are pari materia with
G the clauses in the present case.
         11. We have considered the respective submissions and have gone
  through the legal position contained in the case laws cited before us by
  both the parties.

H    4
         (2009) 12 SCC 26
       JAIPRAKASH ASSOC. LTD. (JAL) v. THDC INDIA LTD.                          49
                      [A. K. SIKRI, J.]

       12. Insofar as power of the arbitral tribunal in granting pre-           A
reference and/or pendente lite interest is concerned, the principles which
can be deduced from the various judgments are summed up below:
       (a) A Constitution Bench judgment of this Court in the case
of Secretary, Irrigation Department, Government of Orissa & Ors.
v. G.C. Roy5 exhaustively dealt with this very issue, namely, power of          B
the arbitral tribunal to grant pre-reference and pendente lite interest.
The Constitution Bench, of course, construed the provisions of the 1940
Act which Act was in vogue at that time. At the same time, the
Constitution Bench also considered the principle for grant of interest
applying the common law principles. It held that under the general law,
the arbitrator is empowered to award interest for the pre-reference,            C
pendente lite or post award period. This proposition was culled out
with the following reasoning:
       “43. 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          D
       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 emerge:
                                                                                E
       (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 as it is
       for the period prior to the arbitrator entering upon the reference.      F
       This is the principle 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 form (sic forum) for resolution
       of disputes arising between the parties. If so, he must have the
       power to decide all the disputes or differences arising between          G
       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

5
    (1992) 1 SCC 508                                                            H
50                 SUPREME COURT REPORTS                     [2019] 2 S.C.R.


A          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
B          not opposed to law. (The proviso to Section 41 and Section 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
C          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
           [Seth Thawardas Pherumal v. Union of India, (1955) 2 SCR
           48 : AIR 1955 SC 468] has not been followed in the later decisions
D          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 case [(1988) 1 SCC 418 : (1988) 1 SCR
E          253] 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
F          period). For doing complete justice between the parties, such power
           has always been inferred.”
             It is clear from the above that the Court decided to fall back on
     general principle that a person who is deprived of the use of money to
     which he is legitimately entitled to, has a right to be compensated for the
G    deprivation and, therefore, such compensation may be called interest
     compensation or damages.
             (b) As a sequitur, the arbitrator would be within his jurisdiction
     to award pre-reference or pendente lite interest even if agreement
     between the parties was silent as to whether interest is to be awarded or
     not.
H
    JAIPRAKASH ASSOC. LTD. (JAL) v. THDC INDIA LTD.                              51
                   [A. K. SIKRI, J.]

         (c) Conversely, if the agreement between the parties specifically       A
prohibits grant of interest, the arbitrator cannot award pendente lite
interest in such cases. This proposition is predicated on the principle
that an arbitrator is the creature of an agreement and he is supposed to
act and make his award in accordance with the general law of the land
and the agreement. This position was made amply clear in G.C. Roy
                                                                                 B
case in the discussion that ensued thereafter:
       “44. Having regard to the above consideration, 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          C
           dispute (along with 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                 D
           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,          E
           keeping the ends of justice in view.”
         (d) Insofar as 1940 Act is concerned, it was silent about the
jurisdiction of the arbitrator in awarding pendente lite interest. However,
there is a significant departure on this aspect insofar as 1996 Act is
concerned. This distinction has been spelt out in Sayeed Ahmed case in           F
the following manner:
       “Re: Interest from the date of cause of action to date of award
       7. The issue regarding interest as noticed above revolves around
       Clause G1.09 of the Technical Provisions forming part of the
       contract extracted below:                                                 G
           “G. 1.09. No claim for interest or damages will beentertained
           by the Government with respect to any money or balance which
           may be lying with the Government or any become due owing
           to any dispute, difference or misunderstanding between the
           Engineer-in-Charge on the one hand and the contractor on the
                                                                                 H
52                  SUPREME COURT REPORTS                       [2019] 2 S.C.R.


A               other hand or with respect to any delay on the part of the
                Engineer-in-Charge in making periodical or final payment or
                any other respect whatsoever.”
                               xx                xx                xx
                14. The decisions of this Court with reference to the awards
B               under the old Arbitration Act making a distinction between the
                pre-reference period and pendente lite period and the
                observation therein that the arbitrator has the discretion to award
                interest during pendente lite period in spite of any bar against
                interest contained in the contract between the parties are not
C               applicable to arbitrations governed by the Arbitration and
                Conciliation Act, 1996.”
             13. The aforesaid position is reiterated in Sree Kamatchi Amman
     Constructions v. Divisional Railway Manager (Works), Palghat &
     Ors.6 and Union of India v. Bright Power Projects (India) Private
     Limited7. Later judgment is by a bench of three Judges. This legal
D
     position is reiterated in Sri Chittaranjan Maity v. Union of India8
     which is authored by one of us (Nazeer, J.). In that case, the Court
     considered the same very question which falls for determination by us,
     namely, whether the arbitral tribunal was justified in awarding interest
     on delayed payments in favour of the appellant? After noticing that
E    clause 16(2) of GCC in that case bars the payment of interest, it was
     held that under the 1996 Act, the position wherein is different from 1940
     Act, the interest could not be awarded. Following observations from
     this judgment may be noted:
            “16. Relying on a decision of this Court in Ambica Construction
F           v. Union of India [Ambica Construction v. Union of India,
            (2017) 14 SCC 323] , the learned Senior Counsel for the appellant
            submits that mere bar to award interest on the amounts payable
            under the contract would not be sufficient to deny payment on
            pendente lite interest. Therefore, the arbitrator was justified in
            awarding the pendente lite interest. However, it is not clear from
G           Ambica Construction [Ambica Construction v. Union of India,
            (2017) 14 SCC 323] as to whether it was decided under the
            Arbitration Act, 1940 (for short “the 1940 Act”) or under the 1996
     6
        2010) 8 SCC 767
     7
       (2015) 9 SCC 695
     8
H      (2017) 9 SCC 611
       JAIPRAKASH ASSOC. LTD. (JAL) v. THDC INDIA LTD.                          53
                      [A. K. SIKRI, J.]

        Act. It has relied on a judgment of Constitution Bench in State of      A
        Orissa v. G.C. Roy [State of Orissa v. G.C. Roy, (1992) 1 SCC
        508] . This judgment was with reference to the 1940 Act. In the
        1940 Act, there was no provision which prohibited the arbitrator
        from awarding interest for the pre-reference, pendente lite or post-
        award period, whereas the 1996 Act contains a specific provision
                                                                                B
        which says that if the agreement prohibits award of interest for
        the pre-award period, the arbitrator cannot award interest for the
        said period. Therefore, the decision in Ambica Construction
        [Ambica Construction v. Union of India, (2017) 14 SCC 323]
        cannot be made applicable to the instant case.”
        14. In a recent judgment in the case of Reliance Cellulose              C
Products Limited v. Oil and Natural Gas Corporation Limited 9, the
entire case law on the subject is revisited and legal position re-emphasised.
That was also a case which arose under the 1940 Act. The Court held
that under the 1940 Act, an arbitrator has power to grant pre-reference
interest under the Interest Act as well as pendente lite and future interest,   D
however, he is constricted only by the fact that an agreement between
the parties may contain an express bar to the award of pre-reference
and/or pendente lite interest. Further, the Court has evolved the test of
strict construction of such clauses, and unless there is a clear and express
bar to the payment of interest that can be awarded by an arbitrator,
clauses which do not refer to claims before the arbitrators or disputes         E
between parties and clearly bar payment of interest, cannot stand in the
way of an arbitrator awarding pre-reference or pendente lite interest.
Further, unless a contractor agrees that no claim for interest will either
be entertained or payable by the other party owing to dispute, difference,
or misunderstandings between the parties or in respect of delay on the          F
part of the engineer or in any other respect whatsoever, leading the
Court to find an express bar against payment of interest, a clause which
merely states that no interest will be payable upon amounts payable to
the contractor under the contract would not be sufficient to bar an
arbitrator from awarding pendente lite interest. Further, the grant of
pendente lite interest depends upon the phraseology used in the                 G
agreement, clauses conferring power relating to arbitration, the nature
of claim and dispute referred to the arbitrator, and on what items the
power to award interest has been taken away and for which period.
Also, the position under Section 31(7) of the 1996 Act, is wholly different,
9
    (2018) 9 SCC 266                                                            H
54                 SUPREME COURT REPORTS                      [2019] 2 S.C.R.


A    inasmuch as Section 31(7) of the 1996 Act sanctifies agreements between
     the parties and states that the moment the agreement says otherwise, no
     interest becomes payable right from the date of the cause of action until
     the award is delivered.
            15. After discussing and analysing almost all the judgments on
B    this subject, the legal position is summed up in the following manner:
            “24. A conspectus of the decisions that have been referred to
            above would show that under the 1940 Act, an arbitrator has
            power to grant pre-reference interest under the Interest Act,
            1978 as well as pendente lite and future interest. However, he is
            constricted only by the fact that an agreement between the parties
C           may contain an express bar to the award of pre-reference and or
            pendente lite interest. Since interest is compensatory in nature
            and is parasitic upon a principal sum not having been paid in time,
            this Court has frowned upon clauses that bar the payment of
            interest. It has therefore evolved the test of strict construction of
D           such clauses, and has gone on to state that unless there is a clear
            and express bar to the payment of interest that can be awarded
            by an arbitrator, clauses which do not refer to claims before the
            arbitrators or disputes between parties and clearly bar payment
            of interest, cannot stand in the way of an arbitrator awarding pre-
            reference or pendente lite interest. Thus, when one contrasts a
E           clause such as the clause in Second Ambica Construction case
            [Ambica Construction v. Union of India, (2017) 14 SCC 323 :
            (2018) 1 SCC (Civ) 257] with the clause in Tehri Hydro
            Development Corpn. Ltd. [Tehri Hydro Development Corpn.
            Ltd. v. Jai Prakash Associates Ltd., (2012) 12 SCC 10 : (2013)
F           2 SCC (Civ) 122] , it becomes clear that unless a contractor agrees
            that no claim for interest will either be entertained or payable by
            the other party owing to dispute, difference, or misunderstandings
            between the parties or in respect of delay on the part of the
            engineer or in any other respect whatsoever, leading the Court to
            find an express bar against payment of interest, a clause which
G           merely states that no interest will be payable upon amounts payable
            to the contractor under the contract would not be sufficient to bar
            an arbitrator from awarding pendente lite interest under the 1940
            Act. As has been held in First Ambica Construction case [Union
            of India v. Ambica Construction, (2016) 6 SCC 36 : (2016) 3
H           SCC (Civ) 36] , the grant of pendente lite interest depends upon
    JAIPRAKASH ASSOC. LTD. (JAL) v. THDC INDIA LTD.                              55
                   [A. K. SIKRI, J.]

       the phraseology used in the agreement, clauses conferring power           A
       relating to arbitration, the nature of claim and dispute referred to
       the arbitrator, and on what items the power to award interest has
       been taken away and for which period. We hasten to add that the
       position as has been explained in some of the judgments above
       under Section 31(7) of the 1996 Act, is wholly different, inasmuch
                                                                                 B
       as Section 31(7) of the 1996 Act sanctifies agreements between
       the parties and states that the moment the agreement says
       otherwise, no interest becomes payable right from the date of the
       cause of action until the award is delivered.”
       16. In this whole conspectus and keeping in mind, in particular,
that present case is regulated by 1996 Act, we have to decide the issue          C
at hand. At this stage itself, it may be mentioned that in case clauses 50
and 51 of GCC put a bar on the arbitral tribunal to award interest, the
arbitral tribunal did not have any jurisdiction to do so. As pointed out
above, right from the stage of arbitration proceedings till the High Court,
these clauses are interpreted to hold that they put such a bar on the            D
arbitral tribunal. Even the majority award of the arbitral tribunal recognised
this. Notwithstanding the same, it awarded the interest by relying upon
Board of Trustees for the Port of Calcutta case. The High Court,
both Single Bench as well as Division Bench, rightly noted that the
aforesaid judgment was under the 1940 Act and the legal position in this
behalf have taken a paradigm shift which position is clarified in Sayeed         E
Ahmed and Company case. This rationale given by the High Court is
in tune with the legal position which stands crystallised by catena of
judgments as noted above.
       17. Another reason given by the High Court is equally convincing.
The Clauses 50 and 51 of GCC are pari materia with Clauses 1.2.14 and            F
1.2.15 of GCC in THDC case. Those clauses have been interpreted by
holding that no interest is payable on claim for delayed payment due to
the contractor. Same construction adopted in respect of these clauses,
which, in fact, is a case between the same parties, is without any blemish.
       18. In this backdrop, the only argument of the appellant that remains
                                                                                 G
to be considered is as to whether such a construction is contrary to the
judgment in Harish Chandra case.
       19. Complete answer to this argument is provided in Reliance
Cellulose Products Limited judgment. Following discussion contained
therein which discussed THDC judgment would amply demonstrate this:
                                                                                 H
56                 SUPREME COURT REPORTS                      [2019] 2 S.C.R.


A           “Also, unlike the clause in Tehri Hydro Development Corporation
            Ltd. (Supra), clause 16 does not contain language which is so
            wide in nature that it would interdict an arbitrator from granting
            pendente lite interest. It will be remembered that the clause in
            Tehri Hydro Development Corportation Ltd. (supra) spoke of no
            claim for interest being entertained or payable in respect of any
B
            money which may be lying with the Government owing to disputes,
            difference or misunderstanding between the parties and not merely
            in respect of delay or omission; Further, the clause in Tehri Hydro
            Development Corporation Ltd. (supra) goes much further and
            makes it clear that no claim for interest is payable “in any other
C           respect whatsoever.”
            It is pertinent to mention that the aforesaid judgment also discusses
     and analyses Harish Chandra case. In the first place, the judgment in
     Harish Chandra case is under the 1940 Act. More pertinently, this
     judgment is explained and distinguished in Sayeed Ahmed and Company
D    case in the following paragraphs:
            “17. The appellant strongly relied upon the decision of this Court
            in State of U.P. v. Harish Chandra & Co. [(1999) 1 SCC 63]
            to contend that Clause 1.09 of the contract did not bar the award
            of interest. The clause barring interest that fell for consideration
            in that decision was as under: (SCC p. 67, para 9)
E
                 “1.09. No claim for delayed payment due to dispute, etc.
                 No claim for interest or damages will be entertained by the
                 Government with respect to any moneys or balances which
                 may be lying with the Government owing to any dispute,
                 difference; or misunderstanding between the Engineer-in-
F                Charge in making periodical or final payments or in any other
                 respect whatsoever.”
            This Court held that the said clause did not bar award of interest
            on any claim for damages or for claim for payment for work
            done. We extract below the reasoning for such decision: (SCC p.
G           67, para 10)
                 “10. A mere look at the clause shows that the claim for interest
                 by way of damages was not to be entertained against the
                 Government with respect to only a specified type of amount,
                 namely, any moneys or balances which may be lying with the
                 Government owing to any dispute, difference between the
H
    JAIPRAKASH ASSOC. LTD. (JAL) v. THDC INDIA LTD.                           57
                   [A. K. SIKRI, J.]

          Engineer-in-Charge and the contractor; or misunderstanding          A
          between the Engineer-in-Charge and the contractor in making
          periodical or final payments or in any other respect whatsoever.
          The words ‘or in any other respect whatsoever’ also referred
          to the dispute pertaining to the moneys or balances which may
          be lying with the Government pursuant to the agreement
                                                                              B
          meaning thereby security deposit or retention money or any
          other amount which might have been with the Government
          and refund of which might have been withheld by the
          Government. The claim for damages or claim for payment
          for the work done and which was not paid for would not
          obviously cover any money which may be said to be lying             C
          with the Government. Consequently, on the express language
          of this clause, there is no prohibition which could be culled out
          against the respondent contractor that he could not raise the
          claim for interest by way of damages before the arbitrator on
          the relevant items placed for adjudication.”
                                                                              D
                                                       (emphasis supplied)
      18. In Harish Chandra [(1999) 1 SCC 63] a different version
      of Clause 1.09 was considered. Having regard to the restrictive
      wording of that clause, this Court held that it did not bar award
      of interest on a claim for damages or a claim for payments for
      work done and which was not paid. This Court held that the              E
      said clause barred award of interest only on amounts which
      may be lying with the Government by way of security deposit
      retention money or any other amount, refund of which was
      withheld by the Government.
      19. But in the present case, Clause G1.09 is significantly different.   F
      It specifically provides that no interest shall be payable in respect
      of any money that may become due owing to any dispute,
      difference or misunderstanding between the Engineer-in-Charge
      and contractor or with respect to any delay on the part of the
      Engineer-in-Charge in making periodical or final payment or in
      respect of any other respect whatsoever. The bar under Clause           G
      G1.09 in this case being absolute, the decision in Harish Chandra
      [(1999) 1 SCC 63] will not assist the appellant in any manner.”
      20. It is also pertinent to note that the judgment in Sayeed Ahmed
and Company distinguishing the restrictive wording in Harish Chandra
has been consistently followed by this Court in number of cases thereafter.   H
58                    SUPREME COURT REPORTS                     [2019] 2 S.C.R.


A    In this scenario, when we find that Harish Chandra case which is of
     the vintage of 1940 Act and is distinguished in Sayeed Ahmed and
     Company coupled with the fact that the ratio of Sayeed Ahmed and
     Company has been consistently followed, there is no reason to deviate
     from the construction to Clauses 50 and 51 of the GCC given by the
     arbitral tribunal in the first instance as well as the High Court. Above all,
B
     these clauses is pari materia with with Clauses 1.2.14 and 1.2.15 of
     GCC in THDC case which was a judgment between the same parties.
            21. Insofar as argument based on the principle of ejusdem generis
     is concerned, the Division Bench has held that that is not applicable in
     the present case. We find that it is rightly so held. Ejusdem generis is
C    the rule of construction. The High Court has negated this argument in
     the following manner:
            “18. The rule of ejusdem generis guides us that where two or
            more words or phrases which are susceptible of analogous
            meaning are cupled together, a noscitur a sociis,they are to be
D           understood to mean in their cognate sense and take colour from
            each other but only if there is a distinct genus or a category.
            Where this is lacking i.e. unless there is a category, the rule cannot
            apply.”
            As rightly held, the rule of ejusdem generis would be applied
E    only if there is distinct genus or a category, which is lacking in the instant
     case. This rule is applicable when particular words pertaining to a clause,
     category or genus are followed by general words. In such a situation,
     the general words are construed as limited to things of same kind as
     those specified. In that sense, this rule reflects an attempt ‘to reconcile
     incompatibility between the specific and general words in view of the
F    other rules of interpretation that all words in a statute are given effect if
     possible, that a statute is to be construed as a whole and that no words in
     a statute were presumed to be superfluous’. (See Lokmat Newspapers
     Pvt. Ltd. v. Shankarprasad10). In fact, construing the similar clause,
     this Court in the case of Bharat Heavy Electricals Limited v. Globe
     Hi-Fabs Limited11 has held that rule of ejusdem generis is not applicable
G
     inasmuch as:
            “12. The rule of ejusdem generis has to be applied with care
            and caution. It is not an inviolable rule of law, but it is only
     10
          (1999) 6 SCC 275
     11
H         (2015) 5 SCC 718
JAIPRAKASH ASSOC. LTD. (JAL) v. THDC INDIA LTD.                                59
               [A. K. SIKRI, J.]

 permissible inference in the absence of an indication to the                  A
 contrary, and where context and the object and mischief of the
 enactment do not require restricted meaning to be attached to
 words of general import, it becomes the duty of the courts to
 give those words their plain and ordinary meaning. As stated by
 Lord Scarman:
                                                                               B
     “If the legislative purpose of a statute is such that a statutory
     series should be read ejusdem generis, so be it, the rule is helpful.
     But, if it is not, the rule is more likely to defeat than to fulfil the
     purpose of the statute. The rule like many other rules of
     statutory interpretation, is a useful servant but a bad master.”
                                                                               C
 So a narrow construction on the basis of ejusdem generis rule
 may have to give way to a broader construction to give effect to
 the intention of Parliament by adopting a purposive construction.
             xx                  xx                          xx
 15. A word of caution is here necessary. The fact that the ejusdem
 generis rule is not applicable does not necessarily mean that the             D
 prima facie wide meaning of the word “other” or similar general
 words cannot be restricted if the language or the context and the
 policy of the Act demand a restricted construction. In the
 expression “defect of jurisdiction or other cause of a like nature”
 as they occur in Section 14(1) of the Limitation Act the generality           E
 of the words “other cause” is cut down expressly by the words
 “of a like nature”, though the rule of ejusdem generis is strictly
 not applicable as mention of a single species “defect of jurisdiction”
 does not constitute a genus. Another example that may here be
 mentioned is Section 129 of the Motor Vehicles Act which
 empowers any “police officer authorised in this behalf or other               F
 person authorised in this behalf by the State Government” to detain
 and seize vehicles used without certification of registration or
 permit. The words “other person” in this section cannot be
 construed by the rule of ejusdem generis for mention of single
 species, namely, “police officer” does not constitute a genus but             G
 having regard to the importance of the power to detain and seize
 vehicles it is proper to infer that the words “other person” were
 restricted to the category of government officers. In the same
 category falls the case interpreting the words “before filing a written
 statement or taking any other steps in the proceedings” as they
                                                                               H
60                 SUPREME COURT REPORTS                     [2019] 2 S.C.R.


A          occur in Section 34 of the Arbitration Act, 1940. In the context in
           which the expression “any other steps” finds place it has been
           rightly construed to mean a step clearly and unambiguously
           manifesting an intention to waive the benefit of arbitration
           agreement, although the rule of ejusdem generis has no application
           for mention of a single species viz. written statement does not
B
           constitute a genus.
             16. In the present case we noticed that the clause barring interest
           is very widely worded. It uses the words “any amount due to the
           contractor by the employer”. In our opinion, these words cannot
           be read as ejusdem generis along with the earlier words “earnest
C          money” or “security deposit”.
           22. The upshot of the aforesaid discussion would be to hold that
     the conclusions of the High Court in the impugned judgment are correct
     and need no interference. This appeal is accordingly dismissed.

D    Kalpana K. Tripathy                                         Appeal dismissed.




E




F




G




H