136. We have no hesitation in going to the extent of saying that where in a contract under which interest is payable it is agreed between the parties that if such interest be not paid punctually the defaulter shall be liable to pay interest at an enhanced rate, whether from the time of default or from the time when interest first became payable under the contract such agreement does not come within Section 74 of the Indian Contract Act, and is to be construed according to the intentions of the parties as expressed therein and not as a stipulation for a penalty. Such agreement is to be enforced according to its terms, unless it be found to have been when made unconscionable or fraudulent.

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140.iv. The discretion to grant interest would be available to the Arbitral Tribunal under clause (a) of sub section (7) of the Section 31 of the Act, 1996 only when there is no agreement to the contrary between the parties. When the parties agree with regard to any of the aspects covered in clause (a) of sub section (7) of the Section 31 of the Act, 1996, the arbitral tribunal would cease to have any discretion with regard to the aspects mentioned in the said provision. Once there is an agreement between the parties which provides that interest shall be at a particular rate, the arbitral tribunal thereafter is left with no discretion. In such circumstances, the arbitral tribunal would be bound by the terms of the agreement.