/2022 INSC 0209/
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NON­REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2030 OF 2022
[arising out of SLP (CIVIL) No.  4843 OF 2022]
[DIARY NO. 41870 OF 2019] 
BIHAR INDUSTRIAL AREA DEVELOPMENT
AUTHORITY & ORS. …     APPELLANTS
v.
RAMA KANT SINGH …    RESPONDENT
J  U  D  G  M  E  N  T
ABHAY S. OKA, J.
Delay condoned.  Leave granted.
1. The   first   appellant,   the   Bihar   Industrial   Area
Development   Authority,   has   been   constituted   under   the
provisions   of   the   Bihar   Industrial   Area   Development   Act,
1974.   A   tender   was   invited   by   the   executive   engineer   of   the
first appellant to carry out the drainage work in an industrial
area.   The   respondent   offered   a   bid   which   the   first   appellant
accepted.   Accordingly,   an   agreement   was   executed   on   15 th

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December   2007   by   and   between   the   first   appellant   and   the
respondent.   After   issuing   a   notice,   the   first   appellant
terminated the agreement and forfeited the security deposit of
the respondent.
2.   Under   the   Bihar   Public   Works   Contracts   Disputes
Arbitration Tribunal Act, 2008 (for short “the 2008 Act”), the
Bihar   Public   Works   Contract   Disputes   Arbitration   Tribunal
(for short, “the Arbitration Tribunal”) has been constituted for
dealing with and deciding the disputes between the parties to
a   works   contract.   Clause   (a)   of   Section   2   of   the   2008   Act
defines what is meant by a works contract.
3. Under sub­section (1) of Section 9 of the 2008 Act, when
any   dispute   arises   between   the   parties   to   the   contract,
irrespective   of   the   fact   whether   such   contract   does   or   does
not   contain   an   arbitration   clause,   either   party   can   refer   the
dispute   in   writing   in   the   prescribed   form   to   the   Arbitration
Tribunal.     The   dispute   can   be   referred   within   one   year   from
the   date   on   which   the   dispute   has   arisen.   The   respondent
filed   a   reference   to   the   Arbitration   Tribunal   on   21 st
  March
2013.     The   dispute   was   regarding   the   termination   of   the
agreement   made   on   8 th
  June   2010.   The   Arbitration   Tribunal
made   an   award   on   15 th
  September   2014.   One   of   the

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contentions   raised   by   the   first   appellant   before   the
Arbitration Tribunal was that the respondent did not refer the
dispute   to   the  Arbitration   Tribunal   within   one   year   from  the
date on which the dispute had arisen as provided under sub­
section   (1)   of   Section   9   of   the   2008   Act.   The   Arbitration
Tribunal held that Article 137 of the Limitation Act, 1963 (For
short, “the 1963 Act”) was applicable. Hence, it was held that
the reference made to the Arbitration Tribunal on 21 st
  March
2013, raising a dispute about the termination order dated 8 th
June   2010,   was   not   barred   by   limitation.   The   Arbitration
Tribunal held that the respondent was entitled to a refund of
the earnest money and the security deposit. It was held that
the respondent was entitled to unpaid dues in the sum of  Rs.
27,94,990/­   (Rupees twenty­seven lakh ninety­four thousand
nine hundred ninety only). The Arbitration Tribunal held that
the respondent is entitled to Rs.22,42,269/­ (Rupees twenty­
two   lakh   forty­two   thousand   two   hundred   and   sixty­nine
only)   towards   the   security   deposit.   In   addition,   the
Arbitration   Tribunal   held   that   the   respondent   is   entitled   to
the   amounts   of   Rs.6,22,476/­   (Rupees   six   lakh   twenty­two
thousand   four   hundred   seventy­six   only)   and   Rs.50,000/­

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(Rupees fifty thousand only) deducted towards the penalty by
the first appellant. Even the amount of provisional deduction
in   the   sum   of   Rs.3,68,400/­   (Rupees   three   lakh   sixty­eight
thousand   four   hundred)   was   ordered   to   be   refunded   to   the
respondent.  The Tribunal granted simple  interest  at  the rate
of 10% per annum on the amounts mentioned above. Except
on the amount of   Rs.22,42,269/­, interest was made payable
from   29 th
  July   2010.   On   the   amount   of   Rs. 22,42,269/­,
interest at the same rate was made payable from 1 st
 February
2011.
4. Being   aggrieved   by   the   award,   the   appellants   filed   a
revision petition before the High Court by invoking Section 13
of the 2008 Act.   By the impugned judgment, the High Court
dismissed the revision petition. The High Court also held that
Article 137 of the 1963 Act was applicable and, therefore, the
dispute   raised   by   the   respondent   was   not   barred   by   the
limitation. 
5. Shri Rajiv Dutta, the learned Senior Counsel appearing
for   the   appellants   submitted   that   under   sub­section   (1)   of
Section   9   of   the   2008   Act,   a   reference   to   the   Arbitration
Tribunal   was   maintainable   provided   it   was   made   within   one

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year   from   the   date   on   which   the   dispute   had   arisen.   He
pointed   out   that   the   dispute   arose   on   8 th
  June   2010,   when
the agreement was terminated, and the respondent's earnest
money   and   security   deposit   were   forfeited.   He   pointed   out
that   by   the   said   order,   the   respondent   was   blacklisted.   He
further   pointed   out   that   the   reference   to   the   Administrative
Tribunal   was   made   belatedly   on   21 st
  March   2013.   He   urged
that   the   reference   application   filed   by   the   respondent
proceeds   on   the   erroneous   footing   that   it   was   filed   within
limitation.   He   invited   our   attention   to   sub­section   (2)   in
Section 29 of the 1963 Act. He submitted that the 2008 Act is
a   local   law   which   describes   a   period   of   limitation   different
from   the   period   prescribed   by   the   Schedule   to   the   1963   Act
and,   therefore,   Section   5   of   the   1963   Act   will   not   apply.
Moreover, Article 137 of the 1963 Act will have no application
as sub­section (1) of Section 9 of the 2008 Act prescribes the
period   of   limitation   of   one   year.   He   submitted   that   as   the
respondent   was   blacklisted,   the   earnest   money   and   security
deposit paid by the respondent was rightly forfeited.
6. The learned senior counsel relied upon a decision of this
Court   in   the   case   of   Hukumdev   Narayan   Yadav   v.   Lalit

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Narayan   Mishra 1
.   This   decision   was   relied   upon   to   support
the contention that Section 5 of the 1963 Act will not apply.
The learned Senior Counsel also relied upon a decision of this
Court   in   the   case   of   the   State   of   Bihar   v .   Brahmaputra
Infrastructure   Limited 2
.   He   submitted   that   as   there   is   no
agreement   between   the   parties   to   conduct   the   arbitration   in
accordance   with   the   Arbitration   and   Conciliation   Act,   1996
(for   Short   “the   1996   Act”),   the   reference   to   the   Arbitration
Tribunal   will   be   governed   by   the   provisions   of   the   2008   Act.
He urged that grant of interest at the rate of 10% per annum
is illegal. 
7. The   learned   counsel   appearing   for   the   respondent
submitted   that   under   Section   18   of   the   2008   Act,   the
Arbitration   Tribunal   has   a   power   to   extend   the   period   of
limitation. He, therefore, submitted that there is no infirmity
in   the   finding   recorded   by   the   Arbitration   Tribunal   on   the
ground of bar of limitation. He submitted that the Arbitration
Tribunal   has   recorded   a   finding   that   there   was   no   clause   in
the   agreement   providing   for   the   forfeiture   of   the   earnest
money   and   security   deposit.   He   submitted   that   the   Tribunal
1   AIR 1974 SC 480 .
2   (2018) 17 SCC 444

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also   held   that   there   was   no   power   to   impose   a   penalty.   He
urged   that   the   award   of   interest   at   the   rate   of   10%   per
annum was justified. 
8. We have given careful consideration to the submissions
made   across   the   Bar.   Sections   8,   9,   13   and   18   of   the   2018
Act are relevant which read thus:
"8.   Act   to   be   in   addition   to   Arbitration   &
Conciliation   Act,   1996.   ­   Notwithstanding
anything   contained   in   this   Act,   any   of   the
provisions   shall   be   in   addition   to   and
supplemental   to   Arbitration   &   Conciliation   Act,
1996   and   in   case   any   of   the   provision   contained
herein   is   construed   to   be   in   conflict   with
Arbitration Act, then the latter Act shall prevail to
the extent of conflict."
"9.   Reference   to   Tribunal   and   making   of
award.   ­   (1)   Where   any   dispute   arises
between   the   parties   to   the   contract,   either
party   shall,   irrespective   of   whether   such
contract   contains   an   arbitration   clause   or
not,   refer,   within   one   year   from   the   date   on
which   the   dispute   has   arisen,   such   dispute
in   writing   to   the   Tribunal   for   arbitration   in
such   form   and   accompanied   by   such
documents   or   other   evidence   and   by   such
fees, as may be prescribed.
(2) On receipt of a reference under sub­section (1),
the Tribunal may, if satisfied after such inquiry as
it   may   deem   fit   to   make,   that   the   requirements
under   this   Act   in   relation   to   the   reference   are
complied   with,   admit   such   reference   and   where

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the   Tribunal   is   not   so   satisfied,   it   may   reject   the
reference summarily.
(3) Where the Tribunal admits the reference under
sub­section (2), it shall, after recording evidence if
necessary,   and   after   perusal   of   the   material   on
record   and   on   affording   an   opportunity   to   the
parties   to   submit   their   arguments,   make   an
award   or   an   interim   award,   giving   its   reasons
therefor.
(4) The Tribunal shall use all reasonable dispatch
in   entering   on   and   proceeding   with   the   reference
admitted   by   it   and   making   the   award,   and   an
endeavour   shall   be   made   to   make   an   award
within   four   months   from   the   date   on   which   the
Tribunal had admitted the reference.
(5)   The   award   including   the   interim   award   made
by   the   Tribunal   shall,   subject   to   an   order,   if   any
made   under   Section   –   12   or   13,   be   final   and
binding on the parties to the dispute.
(6)   An   award   including   an   interim   award   as
confirmed   or   varied   by   an   order,   if   any,   made
under Section – 12 or 13 shall be deemed to be a
decree   within   the   meaning   of   section   –   2   of   the
Code   of   Civil   Procedure,   1908   of   the   principal
Court of original jurisdiction within the local limits
whereof the award or the interim award has been
made and shall be executed accordingly.” 
                                   ( emphasis added )
"13. Revision.­  (1) The High Court may, suo motu
at any time or on an application made to it within
three months from the date on which the award or
interim award is made or reviewed under this Act,
by   any   party   aggrieved   by   the   award   or   interim
award so made or reviewed, call for the record of
any case in which an award or interim award has

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been made or as the case may be reviewed and if
the Tribunal appears­ 
(a)   to   have   exercised   a   jurisdiction   not   vested
in it by law, or 
(b) to have failed to exercise a  jurisdiction   so
vested, or 
(c)   to   have   acted   in   the   exercise   of   its
jurisdiction   illegally   or   with   material
irregularity,   the   High   Court   may   make   such
order in the case as it thinks fit.
(2) For the   purpose   of   exercising  its  powers  of
revision   under   this   section,   ∙   the   High   Court
shall have the same powers as it has, and as
far as may be, follow the same procedure as it
follows,   under   the   Code   of   Civil   Procedure,
1908   while   exercising   its   powers   of   revision
under   section­115   of   the   Code   and   for   that
purpose  the  Tribunal  shall   be  deemed  to   be  a
Court subordinate to it.”
“18.   Extension   of   period   of   limitation   in
certain   cases.   –   The   Tribunal   may   admit   a
reference   under   sub­section   (2)   or   entertain   an
application   for   review   under   sub­section   (1)   of
Section 11 or for revision under sub­section (1) of
Section 12 after the period of limitation laid down
in   sub­section   (1)   of   Section   8,   sub­section   (2)   of
section 11 or  as  the   case   may be, sub­section (1)
of   Section   12   if   the   party   satisfies   the   Tribunal
that the party had sufficient cause for not making
the   reference,   or   as   the   case   may   be,   the
application   for   review   or   revision   within   such
period.”
9. In this case, admittedly, there is no arbitration clause in
the agreement between the parties. Sub­section (1) of Section

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9   provides   that   even   if   there   is   no   arbitration   clause,   the
dispute   arising   between   the   parties   to   the   contract   must   be
referred   to   the   Arbitration   Tribunal.   The   dispute   has   been
defined   under   Clause   (e)   of   Section   2   of   the   2008   Act.   It
means any difference relating to any claim arising out of the
execution or non­execution of the whole or a part of a works
contract,   including   the   dispute   regarding   rescission   thereof.
Section 22 of the 2008 Act starts with a non­obstante   clause
which   provides   that   notwithstanding   anything   contained   in
any   other   law,   rule,   order,   scheme,   or   contract,   any   dispute
as defined under section (e) of Section 2 shall be regulated by
the   provisions   of   the   2008   Act   in   the   absence   of   an
arbitration clause in the agreement.
10. In   view   of   Section   8   of   the   2008   Act,   if   any   of   the
provisions  of  the   2008  Act  are  in  conflict  with  the   1996  Act,
the   latter   shall   prevail   to   the   extent   of   the   conflict.   In   the
present   case,   as   there   is   no   arbitration   clause   in   the
agreement between the parties, the provisions of the 1996 Act
will   have   no   application.   Therefore,   the   reference   to   the
Arbitration Tribunal will be governed by the 2008 Act.
11. As   noted   earlier,   under   sub­section   (1)   of   Section   9   of
the 2008 Act, the period of limitation is of one year from the

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date   on   which   the   dispute   has   arisen,   which   date   in   the
present   case   is   8 th
  June   2010,   when   the   first   appellant
terminated the agreement.
12. As   the   2008   Act   provides   for   a   specific   period   of
limitation, Article 137 of the schedule in the 1963 Act will not
apply. To that extent, the Arbitration Tribunal has committed
an   error.   Under   Section   18   of   the   2008   Act,   the   Arbitration
Tribunal has the power to condone the delay. The High Court
recorded   a   finding   that   as   the   representation   made   by   the
respondent   against   the   order   of   termination   of   the   contract
was   kept   pending   for   an   inordinately   long   time   and   was   not
at   all   decided,   the   delay   was   explained   by   the   respondent.
The   High   Court,   by   recording   the   said   finding   in   paragraph
10 of the impugned Judgment, held that sufficient cause was
made   out   by   the   respondent   for   the   delay.   As   observed
earlier, the Arbitration Tribunal has the power to condone the
delay   in   making   a   reference.   Therefore,   under   Article   136   of
the   Constitution   of   India,   this   is   not   a   fit   case   to   interfere
with the  award on  the ground  that  the  reference  was barred
by limitation. 

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13. On   merits,   we   find   that   the   Arbitration   Tribunal   has
interpreted   various   clauses   of   the   agreement   between   the
parties and held that there was no provision therein to forfeit
the   earnest   money   as   well   as   the   security   deposit.   The
Arbitration   Tribunal   held   that   the   first   appellant   had   made
only   a   part   payment   of   the   4 th
  bill.   The   Arbitration   Tribunal
held   that   an   amount   of   Rs.   27,94,990/­   (Rupees   twenty­
seven   lakh   ninety­four   thousand   nine   hundred   ninety   only)
was not paid  as per the 4 th
 bill.
14. As   can   be   seen   from   Section   13   of   the   2008   Act,   the
scope of revision is limited. A perusal of the judgment of the
High   Court   shows   that   it   has   considered   and   interpreted
some   of   the   clauses   in   the   agreement   between   the   parties.
High   Court   found   that   the   Arbitration   Tribunal   had   the
jurisdiction  to   make  the   award  and   that   the   award  does  not
suffer   from   manifest   illegality   and   material   irregularity.   The
High Court rightly found that the scope for interference with
the   award   of   the   Arbitration   Tribunal   in   revisional
jurisdiction   was   very   narrow.   In   the   absence   of   any
perversity,   the   High   Court   could   not   have   given   a   different

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interpretation   to   the   clauses   in   the   agreement   from   the   one
provided by the Arbitration Tribunal.
15. Though   the   High   Court   held   that   the   respondent   had
explained  the  delay   in   approaching   Arbitration   Tribunal,  the
delay   was   of   21   months.     Moreover,   the   respondent's
reference   petition   proceeded   on   the   footing   that   there   is   no
delay. The Arbitration Tribunal granted interest at the rate of
10% on   Rs. 22,42,269/­ (Rupees twenty­two Lakhs forty­two
thousand   two   hundred   sixty­nine   only)   from   1 st
  February
2011. On the other claims, the interest was granted from 29 th
July   2010.   In   the   facts   of   the   case,   we   do   not   find   any
justification   for   the   grant   of   interest   on   the   claims   made   by
the   respondent.   To   that   extent,   the   award   will   have   to   be
modified. 
16. However,   interest   will   be   payable   by   the   appellants   on
the amounts awarded at the rate of 10% per annum from the
date   of   making   the   reference   to   the   Arbitration   Tribunal,   in
the   event   the   entire   principal   amount   made   payable   under
the award is not paid to the respondent within three months
from today. 

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17. Hence,   the   appeal   is   partly   allowed.   The   impugned
award   made   in   Reference   Case   No.35/2013   is   modified   only
to the extent to which interest at the rate of 10% was allowed
on the claims. 
18. We   direct   the   appellants   to   pay   only   the   principal
amounts   payable   as   per   the   award   to  the   respondent   within
three months from today.   On the failure of the appellants to
pay   the   said   amounts   within   three   months   from   today,   the
appellant shall pay the interest at the rate of 10% per annum
on   the   principal   amounts   set   out   in   the   award   with   effect
from 21 st
 March 2013.
19. The   Civil   Appeal   stands   disposed   of   with   the   above
directions.     All   the   pending   applications,   if   any,   also   stand
disposed of.            
……..…………………J.
(AJAY RASTOGI)
……..…………………J.
(ABHAY S. OKA)
New Delhi;
March 15, 2022.