M/S Shahi And Associates vs State Of U.P. .

The Supreme Court held that the reduction of interest from 18% p.a. to 6% p.a. by the High Court was erroneous as it relied on para 7-A of Section 24 of the Uttar Pradesh Civil Laws (Reforms and Amendment) Act, 1976, which is obsolete following the repeal of the Arbitration Act, 1940 under Section 85 of the Arbitration and Conciliation Act, 1996. The Court emphasized that the interest should be awarded as per Section 31(7)(b) of the Act of 1996, which allows for 18% p.a. interest from the date of the award until actual payment. The appeal was allowed, restoring the original interest rate awarded by the Arbitrator.