Bombay High Court
Western Coalfields Ltd., Through ... vs P.G. Gupta, Prop. Machine India, ... on 11 January, 2018
Bench: Z.A. Haq
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
ARBITRATION APPEAL NO. 13/2013
1] Western Coalfields Ltd.
Through Chairman cum Managing
Director, Coal Estate, Civil Lines,
Nagpur
2] Chief Engineer (Civil)
Western Coalfields Ltd.,
Coal Estate, Civil Lines,
Nagpur
3] Dy. Chief Engineer (Civil),
Western Coalfields Ltd.,
Kanhan Area, Dongariya,
Distt. Chhindwara (M.P.) ... APPELLANTS
...V E R S U S...
1] P.C. Gupta,
R/o. 3-A Onkar Apartment,
Opp. Govind Gaurkhed Complex,
Hajari Pahad, Seminary Hills,
Nagpur- 440 006
(Address of Respondent no. 1
amended as per Courts
order dated 08/05/2014)
2] A.G. Watwe, Sole Arbitrator,
43-A, Shivaji Nagar,
Hill Road, Nagpur ... RESPONDENTS
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Shri S.C. Mehadia, Advocate for the petitioners
Shri R. Joshi, Advocate for the respondent no. 1
===================================
CORAM:- Z.A. HAQ,J.
th
DATED :- 11 JANUARY, 2018
ORAL JUDGMENT :-
As the appeal is pending since 2013, record and
proceedings are received and the learned advocates for the
respective parties have shown willingness to argue the matter, the
appeal is taken up for hearing.
Heard.
Admit.
2] The respondent no. 1 had approached this Court under
Section 11 of the Arbitration and Conciliation Act, 1996
(hereinafter referred as " the Act of 1996") contending that though
he had completed the work, the present appellants had not made
the payment and as there was a clause providing that the dispute
between the parties has to be resolved by an arbitrator, an
arbitrator be appointed in the matter. Then Hon'ble Chief Justice,
by order dated 14/08/1998 appointed an arbitrator to resolve the
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dispute between the parties. At the time when arbitrator was to be
appointed, the present appellants had raised an objection that the
claim of the present respondent no. 1 is barred by limitation.
While appointing the arbitrator, the issue of limitation was kept
open to be considered by the learned Arbitrator.
The learned Arbitrator passed an award on 27/08/2007
accepting the objection raised by the present appellants that the
claim made by the present respondent no. 1 was barred by
limitation. The present respondent no. 1 had approached the
District Court under Section 34 of the Act of 1996 praying that the
award be set aside and the claim made by the present respondent
no. 1 be decreed. By the impugned order, the learned Principal
District Judge allowed the application filed by the present
respondent no. 1 under Section 34 of the Act of 1996, held that
the claim made by the present respondents was within limitation,
set aside the award dated 27/08/2007 and remanded the matter
to the arbitrator for considering the claim of the present
respondents afresh. Being aggrieved by this order, the appellants
have filed this appeal.
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3] The learned advocate for the appellants has submitted
that the work was admittedly completed on 30/11/1991 and as
per the terms of agreement, the payment was to be made to the
respondent no. 1 within six months i.e. till 30/05/1992, and the
notice under Section 21 of the Act of 1996 was given by the
respondent no. 1 on 12/01/1996 i.e. beyond the period of three
years from 30/05/1995 and therefore the claim of the respondent
no. 1 is time barred. It is submitted that the learned Principal
District Judge has committed an error by holding that the claim of
the present respondent no. 1 is within limitation, being misled by
the fact that the letter dated 13/09/1995 was issued by the
Deputy Chief Engineer (Civil) which according to the learned
Principal District Judge amounts to acceptance that the claim of
the present respondent no. 1 was under consideration and was
alive on that date and it being so, the claim made by the present
respondent no. 1 by notice dated 12/01/1996 was within
limitation.
4] The learned advocate for the respondent no. 1 has
submitted that the appellants had not prepared the final bill within
six months and therefore the appellants cannot contend that the
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limitation started to run from 01/06/1992. Supporting the
conclusions of the learned Principal District Judge, the advocate
for the respondent no. 1 has pointed out that by letter dated
19/08/1995, the Deputy Chief Engineer (Civil) informed the
respondent no. 1 that the approval to final extension of time to
complete the work upto 30/11/1991 was granted subject to token
penalty of Rs. 2,000/-, and this shows that till 19/08/1995, the
claim of the present respondent no. 1 was under consideration by
the appellants and was alive, and considering the facts of the case,
it has to be held that the notice issued by the respondent no. 1
under Section 21 of the Act of 1996 on 12/01/1996 was within
limitation. To support the submission, reliance is placed on the
following judgments:-
a) The judgment given by the Hon'ble Supreme Court in
the case of Major (Retd.) Inder Singh Rekhi vs Delhi
Development Authority reported in AIR 1988 S.C. at page
1007.
b) The judgment given by this Court in the case of R.P.
Souza and Co., Goa and others vs Chief Engineer, P.W.D.,
Panaji, Goa and others reported in 2000 (1) Mh.L.J at page
558.
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c) The judgment given by the Hon'ble Supreme Court in
the case of National Aluminium Co. Ltd. & Anr. Vs G.C.
Kanungo reported in AIR 2009 S.C. at page 2928.
In the case of R.P. Souza and Co., Goa and others
(supra), the claim raised by the claimant was held to be within
limitation as it was filed within three years of the preparation of
the final bill. In the present case, the final bill is not prepared. It
would have been a different thing if the final bill was prepared
after 01/06/1995 and the respondent no. 1 raised the dispute
within three years of preparation of the final bill.
In the case of Major (Retd.) Inder Singh Rekhi (supra),
the facts recorded in para 2 of the judgment show that the work
was completed on 02/04/1980, the claimant had sent a letter
dated 28/02/1983 to the Delhi Development Authority, requesting
to finalise the bills, and as this letter was sent within the period of
limitation, i.e. three years, treating that the cause of action had
arisen on 28/02/1983, the application filed under Section 20 of
the Arbitration Act, 1940 in January, 1986 i.e. within three years
from 28/02/1983 was considered to be within the prescribed
period. In the present case, the first communication by the
respondent no. 1 is on 10/12/1995 which was beyond the period
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of limitation, calculating it from 01/06/1992 on which date the
cause of action had arisen as the claim of the respondent no. 1 is
not based on the final bill but is based on the fact that he had
completed the work on 30/11/1991 and according to the
agreement, the payment was required to be made within six
months.
In the judgment given in the case of National
Aluminium Co. Ltd. & Anr.(supra), the final bill was paid by the
company to the claimant in 1989, on 26/08/1992, the company
had sent a letter to the claimant which shows that the company
was considering the claim of the claimant regarding the difference
of amounts, and the request for appointment of an arbitrator was
made on 26/06/1995 i.e. within three years from 26/08/1992.
The claim of the claimant was found to be within limitation as the
company informed the claimant within three years from the
payment of the final bill that the request of the claimant for the
amount of difference was under consideration and then the
request for appointment of an arbitrator was made within three
years from 26/08/1992. In the present case, there is nothing on
record to show that from 01/06/1992 till 31/05/1995, there was
any communication by the appellants to the respondent no. 1
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informing him that the claim of the respondent no. 1 was under
consideration. The respondent no. 1 issued first communication
on 10/12/1995 which is beyond three years. The communication
dated 19/08/1995 issued by the Deputy Chief Engineer (Civil) on
which the advocate for the respondent no. 1 relies to contend that
the claim of the respondent no. 1 was under consideration also
does not help the respondent no. 1 as this communication dated
19/08/1995 is issued after the prescribed period of limitation and
in view of Section 18 of the Limitation Act, 1963, the respondent
no. 1 cannot rely on it.
5] Considering the facts of the case, I hold that the
respondent no. 1 made the claim and sought appointment of an
arbitrator after the prescribed period of limitation. The learned
Arbitrator had rightly rejected the claim of the respondent no. 1 as
time barred. The order passed by the learned Principal District
Judge is unsustainable and has to be set aside.
Hence, the following order is passed:-
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O R D E R
1] The impugned order is set aside.
2] The application filed by the respondent
no. 1 under Section 34 of the Act of 1996 is
dismissed.
3] The award passed by the arbitrator on
27/08/2007 is restored.
The appeal is allowed in the above terms. In the
circumstances, the parties to bear their own costs.
JUDGE
Ansari
