Goel Construction Co. vs Union Of India (Uoi) And Ors.
2003 Latest Caselaw 317 Del

JUDGMENT

S. Mukerjee, J.

1. The relief claimed in the present arbitration application preferred under Sections 8 and 11 of the Arbitration & Conciliation Act, 1996 is for directing the respondents to file the original arbitration agreement and to appoint an Arbitrator. The brief facts of the case are as under.

2. The applicant is a contractor engaged in Works Contracts with various Government/Local bodies, in the name and style Goel Construction company having office D-1C/46-C, Janakpuri, Near Lajwanti chowck, New Delhi-58.

3. Vide Agreement No. 1/EE/PaWD-IV/97-98, the applicant had entered into such a contract with the respondents through its Executive Engineer, Parliament Works Divn., IV CPWD, I.P. Bhawan, New Delhi (Respondent No. 3 herein) for the work "Construction of M.P. Flat No. 165 and 166 at South Avenue, New Delhi". The stipulated date of start was 21.4.97 and the stipulated date of completion of work by 20.10,97 with the tendered amount of Rs.9,46,004/-.

4. It is contended by the applicant, that the Respondents have committed breach of contract in as much as the final dues have not been paid. Vide letter dated 15.7.2000 and 9.3.2001(Annexure P-1to the main application), the applicant had raised his claims and disputes with the Respondent No. 3, which could not be settled amicably.

5. The applicant then requested the Superintending engineer on 3.4.2001 (Annexure P-2 to the main application), but no response was received.

6. These disputes/claims were then taken to Respondent No. 3 on 11.5.2001 (Annexure P-3 to the main application) in accordance with the clause 25(i), but the disputes still could not be resolved.

7. The disputes/claims are to be settled through Arbitration in accordance with clause 25 of the Agreement, copy of which is annexed to the main application as Annexure P-4.

8. The applicant invoked the said Arbitration clause vide letter dated 11.7.2001 (Annexure P-5 to the main application).

9. It is submitted by the Counsel for respondents that Clause 25 specifies a mechanism of resolving disputes, and the same had to be read in it's totality Along with other clauses of the agreement. It is submitted that the applicant never approached the Superintending Engineer for redressal during the currency of the contract. In fact, the applicant has approached the Suptd. Engineer only on 3.4.2001 i.e. nearly 15 months after the physical completion of the project. This belated exercise on the part of the applicant it is alleged, was just to cover up his willful disregard of contractual provision and to mislead this Court; and that the applicant having clearly not followed the procedure laid down in the clause, therefore the present application is liable to be dismissed.

10. Respondent states that the project was physically completed on 6.1.2000 and completion recorded on 7.3.2000. As per clause 9 of the agreement, it is allegedly mandatory for the applicant to submit final Bill within three months of the physical completion of work, or within one month of the date of the final certificate of completion recorded by the Engineer-in-charge, whichever is earlier.

11. It is further alleged that the applicant miserably failed to submit final Bill as per clause 9 of the agreement and that in fact, due to this breach committed by the applicant, the respondents were forced to prepare final Bill in order to settle the account of the applicant.

12. The procedure for submission of final Bill by contractor it is submitted, is prescribed only so that the agency could raise their claims, if at all, in their final bills. As such the applicant was required to submit the final Bill by 6.4.2000. Since the applicant never submitted the final Bill as per clause 9 of the agreement, all claims were an afterthought and were liable to be rejected.

13. It was further submitted by the Ld. counsel for the respondent that clause 25 has full mechanism of reconciliation before arbitration is resorted to, but the applicant did not follow the reconciliation path. The CE (NDZ)-I vide its letter No. 4(8)/2000-A & C(NDZ) I dated 26.6.2001, informed the applicant about violation of clause 25 committed by applicant, and so the request for appointment of arbitrator, could not be conceded to.

14. On a prima facie consideration as is envisaged for present purposes, I find that it was not disputed that the final bill was prepared on 5.7.2000 and/or that the applicant raised the claim/dispute for the first time on 15.7.2000, as per Annexure P-1.

15. Sub-clause (ii) of clause 25 of the Arbitration Agreement between the parties, provides that any claims/dispute has to be raised within 120 days of receiving the intimation that the final bill is ready for payment. In case the contractor does not raise any claim/dispute within this period, the same may then be deemed to have been waived and absolutely barred.

16. The respondents have cited the decision of the High Court of Rajasthan rendered in Mahesh Chand Vs Union of India and Ors. However, the same cannot be applied to the facts and circumstances of the present case, because in that case admittedly the claim was raised for the first time beyond the stipulated period provided in contract. whereas in the present case the claims/disputes were raised well within 120 days of receiving intimation when the final bill was ready for payment.

17. In any case this aspect viz whether the disputes are arbitrable or not itself can be agitated by the respondent before the arbitrator and if so raised will no doubt be considered and dealt with by the arbitrator in accordance with law. As held by the Hon'ble Supreme Court of India in M/s Konkan Railway Corporation Ltd & Anr Vs. M/s Rani Construction Pvt. Ltd reported as JT 2000 (Suppl 2) SC 150, this Court while dealing with such an application, discharges functions administrative in character and hence cannot enter upon an adjudication of vexed questions of law or fact.

18. Despite due service of notice and expiry of stipulated period, the respondents have failed to appoint the arbitrator in terms of contract. Therefore as held by Hon'ble Supreme Court in Datar Switchgears Ltd. Vs Tata Finance Ltd. & Anr. reported as (2000) 8 SCC 151, the arbitrator has to be appointed by this Court. Accordingly the disputes, as enumerated in Para 7 (E) of the application, are referred to the sole arbitration of Sh. R. J. Bakhru. Retired chief Engineer CPWD, 336 Mandakini Enclave Alakhnanda. The arbitrator will decide the claims/disputes as well as counter claims, if any, of the respondent. He will fix his own fee and will complete the arbitration as expeditiously as possible.

19. Petition stands allowed with the above direction. No order as to costs.