Delhi High Court
Ksr Brothers Through Its Partner ... vs Ignou Through Its Vice Chancellor on 16 November, 2021
$~1
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 16th November, 2021
+ ARB.P. 619/2021
M/S KSR BROTHERS THROUGH ITS PARTNER
JASWINDER SINGH ..... Petitioner
Through Mr. Mukesh Mohan Goyal,
Adv.
Versus
IGNOU THROUGH ITS VICE CHANCELLOR ..... Respondent
Through Mr. Amit Gupta, Adv.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
VIBHU BAKHRU, J. (ORAL)
1. The petitioner has filed the present petition under Section 11 of
the Arbitration & Conciliation Act, 1996 (hereafter the 'A&C Act')
praying that an arbitrator be appointed to adjudicate the disputes
between the parties that have arisen in connection with the contract
awarded to the petitioner for Operation and Routine Maintenance of
Electrical Sub-Station installed at IGNOU Campus, New Delhi.
2. The said contract was awarded to the petitioner in terms of letter
No. IG/CDU/45/ 2011/301 dated 30.03.2011 at a value of ₹4,98,500/-.
The maintenance work was to be carried out for a period of one year
to be reckoned from 01.04.2011. Thereafter, the parties entered into an
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RAWAL
agreement dated 01.04.2011 (hereafter the 'Agreement'). It is stated
that Clause 10 of the Agreement between the parties embodies an
arbitration agreement whereby the parties had agreed to refer the
disputes to arbitration.
3. The petitioner claims that during the term of the Agreement, the
petitioner was required to carry out certain additional work in respect
of the newly installed transformer, DG Set including LT panel and
AMF panel, at the office of the Vice Chancellor of IGNOU on the
same rates as mentioned in the Agreement. The petitioner claims that
it had carried out the said works as per the directions of the officials of
the respondent (IGNOU) and is entitled to be paid for the same. The
petitioner has further averred that it had followed up with the
respondent on numerous occasions for payment of its dues, however,
the respondent has failed and neglected to clear the same. The
petitioner states that it was informed that the requisite files have been
put up for sanction and the payments would be released shortly. Since
the payment was not released, the petitioner invoked the Arbitration
Clause by a notice dated 15.03.2019.
4. The respondent neither disputes the existence of an agreement
to refer the disputes to arbitration nor the fact that the petitioner has
invoked the said agreement by its notice dated 15.03.2019. The
respondent has opposed the present petition on the sole ground that the
disputes sought to be raised by the petitioner are ex facie barred by
limitation.
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RAWAL
5. The works in question were completed prior to January, 2013
and admittedly the petitioner had invoked the arbitration beyond the
period of three years from the said date.
6. The learned counsel for the petitioner contends that the
petitioner's claims are not barred by limitation as the respondent had
never disputed the same. He submits that after following up with the
respondent, the respondent had issued a letter dated 17.03.2016 calling
upon the petitioner to furnish logbooks for the site ESS-01 and ESS-
05 with effect from 01.08.2011 to 31.12.2012 "for further action in the
matter". He submitted that the respondent had also responded to the
notice dated 15.03.2019 by an e-mail dated 04.04.2019 stating that it
was looking into the matter for release of the payment against the
aforesaid work order.
7. In terms of sub-section (6A) of Section 11 of the A&C Act, the
scope for examination under Section 11 of the A&C Act is limited to
the existence of an arbitration agreement. However, it is also well
settled that the Courts would be required to briefly examine the
disputes as the existence of an arbitration agreement cannot be
examined without reference to the disputes.
8. Despite the limited scope of examination under Section 11 of
the A&C Act, the Supreme Court had held in Vidya Drolia v. Durga
Trading Corporation: (2021) 2 SCC 1 that in cases where the disputes
are ex facie barred by limitation, the Court would not appoint an
arbitrator to compel the parties to incur costs on a futile exercise. In
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RAWAL
the case of Bharat Sanchar Nigam Ltd. & Anr. v. Nortel Networks
India Pvt. Ltd.: (2021) 5 SCC 738, the Supreme Court following its
earlier decision in Vidya Drolia v. Durga Trading Corporation
(supra) observed as under:
"47. It is only in the very limited category of cases,
where there is not even a vestige of doubt that the claim is
ex facie time-barred, or that the dispute is non-arbitrable,
that the court may decline to make the reference.
However, if there is even the slightest doubt, the rule is to
refer the disputes to arbitration, otherwise it would
encroach upon what is essentially a matter to be
determined by the tribunal.
48. Applying the law to the facts of the present case, it
is clear that this is a case where the claims are ex facie
time-barred by over 5½ years, since Nortel did not take
any action whatsoever after the rejection of its claim by
BSNL on 4-8-2014. The notice of arbitration was invoked
on 29-4-2020. There is not even an averment either in the
notice of arbitration, or the petition filed under Section
11, or before this Court, of any intervening facts which
may have occurred, which would extend the period of
limitation falling within Sections 5 to 20 of the Limitation
Act. Unless, there is a pleaded case specifically adverting
to the applicable section, and how it extends the limitation
from the date on which the cause of action originally
arose, there can be no basis to save the time of
limitation."
9. In view of the above, the limited question to be examined is
whether the claims sought to be raised by the petitioner are ex facie
barred by limitation.
10. Before proceeding further, it would be essential to refer the
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notice dated 15.03.2019 sent by the petitioner for invoking the
agreement to refer the disputes to arbitration. The said letter is set out
below:
"EXECUTIVE ENGINEER (E), Dated: 15th March, 2019
CDU, IGNOU,
NEW DELHI
Subject :Invocation of Arbitration to adjudicate the
dispute.
Name of Work :Operation and Routine Maintenance of
Electrical Sub-Station Equipments installed in ESS-5 at
IGNOU Campus, New Delhi
Reference : Work Order No. 1G/CDU/45/2011/301
Dated March 30, 2011.
Sir,
The above work was awarded to us vide your award letter
No.IG/CDU/45/2011/301 Dated March 30, 2011 with the
cost of work Rs.4,98,500/-. The work was awarded for a
period of one year to be reckoned from 01.04.2011. The
said contract however could be extended for further
period as decided by the department with mutual
understanding and after accessing performance of the
agency. Agreement No.EE/COU(E)/WO/2011-12/01
dated April 1, 2011 was executed between the parties.
During the continuation of the above work, we were also
requested to carry out the Additional work for operation
of newly installed Transformer, DG Set including LT
panel and AMF panel etc. for VC office at ESS-1, as per
item no.-1 of the above agreement/Contract and on the
same rates, terms and conditions. We continued the work
till 31.12.2012 and also handed over the site on 2nd
January, 2013 but no payment was made to us for the
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RAWAL
work done after January, 2012 for the main work and also
for the Additional work w.e.f. 01.08.2011. The amount
due is approximately Rs.10 Lac since January, 2013.
We have been pursuing regularly for release of our due
payment but every time you informed that file has been
sent to higher authority for sanction, but no payment
released. However, vide your letter No. IG/CMD/2015-
16/310 Dated: 17.03.2016, we were required to submit
log books for the sites of ESS-01 and ESS-05 w.e.f.
01.08.2011 to 31.12.2012 for further necessary action in
this matter even though the site has already been handed
over to you on 02.01.2013. The original as well as photo
copy with spiral binding of log books were handed over to
you.
On further pursuance, in November, 2018 it was informed
that our case has been placed in the technical Committee
meeting for release of our payment.
Since then also more than three months have passed, but
neither any payment has been made so far nor getting any
satisfactory response from you as such the dispute has
arisen for non-payment of our work done and we invoke
Arbitration Clause 10 of the agreement dated April 1,
2011. You are, therefore, requested to refer the dispute to
competent authority for appointment of Arbitrator in
terms of Clause 10 of the Agreement.
Thanks & Regards
Jaswinder Singh
KSR Brothers
An (SO 9001:2008 Cert. Co.
211-215 Vardhman Linz Plaza,
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By:DUSHYANT
RAWAL
B-1, Janakpuri, New Delhi-58
P: +91-11-45633112, 011-25558062
F,011-25546522
M: +91-9810066430
Email: [email protected]
W: www.ksrbrothers.com
W:www.thefountainers.com"
11. As is apparent from the tenor of the said letter, it is the
petitioner's case that the amount claimed by it was due since January,
2013. Such claim would be barred by limitation unless the petitioner
is able to establish that the respondent had acknowledged the
payments due to it. Unfortunately, the only communication available
with the petitioner is the letter dated 17.03.2016 whereby the
respondent had asked the petitioner to submit logbooks for the period
of 01.08.2011 to 31.12.2012 for necessary action in the matter.
Clearly, the said letter would not extend the period of limitation for
two reasons. Firstly, it is not an acknowledgment of any debt due.
Secondly, the said letter was issued beyond the period of three years
from the date of the cause of action. According to the petitioner, it
had handed over the site in January, 2013 and the amount of
₹10,00,000/- was owed by the respondent as on that date.
12. The learned counsel for the petitioner submitted that the period
of limitation has not begun as it is not the respondent's practice to ask
the contractor to issue any final bills. The final bill were prepared by
the respondent and in this case, the said bill has not been prepared. By
a letter dated 17.03.2016, the respondent had called upon the
petitioner to submit the logbook for preparation of the final bill and
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RAWAL
therefore, the period of limitation would only begin once the said bill
was prepared. The said contention is clearly unmerited and is contrary
to the petitioner's own stand in its notice invoking arbitration.
13. As noted above, the petitioner has clearly stated in its notice
that the amount of ₹10,00,000/- is due since January, 2013. The
petitioner had also asserted that the work had continued till 31.02.2012
and the sites were handed over on 02.01.2013. There can be no
dispute that the payments in respect of the work done by the petitioner
prior to 31.12.2012 would be due and payable to the petitioner on
completion of the said work. The time taken by the petitioner in
pursuing the respondent or by sending reminders would not extend the
period of limitation (See: Geo Miller & Co Pvt Ltd v Rajasthan
Vidyut Utpadan Nigam Ltd: 2019 SCC OnLine SC 1137)
14. In view of the above, this Court does not consider it apposite to
allow the present petition and appoint an arbitrator.
15. The petition is accordingly dismissed.
VIBHU BAKHRU, J
NOVEMBER 16, 2021
'gsr'
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