Delhi High Court
Rajveer Singh vs Government Of Nct Of Delhi Public ... on 29 November, 2021
$~5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 29.11.2021
+ ARB.P. 931/2021
RAJVEER SINGH . .... Petitioner
Through: Mr. Ashish Verma & Mr. Aranv
Kumar, Advs.
versus
GOVERNMENT OF NCT OF DELHI PUBLIC WORKS
DEPARTMENT CIVIL BUILDING MAINTENANCE
DIVISION ..... Respondents
Through: Mr. Anupam Srivastava, ASC for
GNCTD with Ms. Sarita Pandey, Advocate.
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 and Conciliation Act, 1996 (hereafter the 'A&C Act')
praying that an arbitrator be appointed to adjudicate the disputes that
have arisen between the parties.
2. The respondent had issued a notice inviting eligible contractors
for submitting their bid for constructing eight rooms in double storied
class rooms, one Laboratory for science, and a staircase at Govt. Girls
Secondary School (GGSS) No.2 Sector - V, Dr. Ambedkar Nagar, New
Delhi (School ID: - 923050).
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3. The petitioner had successfully bid for the said contract and its
offer was accepted on 18.05.2013. The scheduled date of
commencement of the work was stipulated as 01.08.2013 and the works
were to be completed on or before 31.01.2014.
4. There were certain delays in completion of the works, which
were finally completed on 10.11.2014. Thereafter, on 29.12.2020, the
petitioner submitted its Final Bill. The petitioner states that part
payment was made against the Final Bill on 06.06.2017. The respondent
disputes the same; according to the respondent, the Final Bill was paid
on 06.04.2017.
5. On 24.06.2020, the petitioner addressed a letter to the concerned
Executive Engineer, PWD raising certain claims for outstanding
payments. These claims were rejected by the concerned Executive
Engineer on 06.07.2020. Thereafter, on 18.08.2020, the petitioner filed
its claims with the concerned Superintendent Engineer, PWD along
with the letter of the Executive Engineer rejecting the same. The
Superintendent Engineer, PWD did not entertain these claims as well.
Consequently, the petitioner escalated the matter by referring its claims
to Chief Engineer, PWD and requested that a Dispute Resolution
Committee (DRC) be constituted to examine the petitioner's claims.
6. The petitioner received a letter dated 08.02.2021 from the Chief
Engineer informing the petitioner that the DRC had been constituted to
resolve the disputes.
7. On 12.02.2021, the petitioner preferred its claim before the DRC.
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It is stated that the DRC conducted a meeting on 16.03.2021. However,
the disputes remain unresolved. The petitioner sought reference of the
disputes to arbitration but the respondent has not concurred to do so.
8. In the aforesaid context, the petitioner filed the present petition.
9. The Arbitration Clause as contained in the General Conditions of
Contract (GCC) for Central P.W.D Works as modified by GCC 2010 -
Correction Slip No. 3, reads as under: -
"Settlement Of Disputes & Arbitration
Except where otherwise provided in the contract, all
questions and disputes relating to the meaning of the
specifications, design, drawings and instructions here-
in before mentioned and as to the quality of
workmanship or materials used on the work or as to
any other question, claim, right, matter or things
whatsoever in any way arising out of or relating to the
contract, designs, drawings, specifications, estimates,
instructions, orders or these conditions or otherwise
concerning the works or the execution or failure to
execute the same whether arising during the progress
of the work or after the cancellation, termination,
completion or abandonment thereof shall be dealt with
as mentioned hereinafter:
(i) If the contractor considers any work demanded
of him to be outside the requirements of the
contract, or disputes any drawings, record or
decision given in writing by the Engineer-in-
Charge on any matter in connection with or
arising out of the contract or carrying out of the
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work, to be unacceptable, he shall promptly
within 15 days request the Superintending
Engineer in writing for written instructions or
decision. Thereupon, the Superintending
Engineer shall give his written instructions or
decision within a period of one month from the
receipt of the contractor's letters.
If the Superintending Engineer fails to give his
instructions or decision in writing within the
aforesaid period or if the contractor is
dissatisfied with the instructions or decision of
the Superintending Engineer, the contractor
may, within 15 days of the receipt of
Superintending Engineer's decision, appeal to
the Chief Engineer who shall afford an
opportunity to the contractor to be heard, if the
latter so desires, and to offer evidence in support
of his appeal. The Chief Engineer shall give his
decision within 30 days of receipt of contractor's
appeal. If the contractor is dissatisfied with the
decision of the Chief Engineer, the contractor
may within 30 days from the receipt of the Chief
Engineer decision, appeal before the Dispute
Redressal Committee (DRC) along with a list of
disputes with amounts claimed in respect of each
such dispute and giving reference to the
rejection of his disputes by the Chief Engineer.
The Dispute Redressal Committee (DRC) shall
give his decision within a period of 90 days from
the receipt of Contractor's appeal. The
constitution of Dispute Redressal Committee
(DRC) shall be as indicated in Schedule 'f'. If
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the Dispute Redressal Committee (DRC)fails to
give his decision within the aforesaid period or
any party is dissatisfied with the decision of
Dispute Redressal Committee (DRC), then
either party may within a period of 30 days from
the receipt of the decision of Dispute Redressal
Committee (DRC), give notice to the Chief
Engineer for appointment of arbitrator on
prescribed proforma as per Appendix XV,
failing which the said decision shall be final
binding and conclusive and not referable to
adjudication by the arbitrator. It is a term of
contract that each party invoking arbitration
must exhaust the aforesaid mechanism of
settlement of claims/disputes prior to invoking
arbitration.
(ii) Except where the decision has become final,
binding and conclusive in terms of Sub Para (i)
above, disputes or difference shall be referred
for adjudication through arbitration by a sole
arbitrator appointed by the Chief Engineer,
CPWD, in charge of the work or if there be no
Chief Engineer, the Additional Director General
of the concerned region of CPWD or if there be
no Additional Director General, the Director
General of Works, CPWD. If the arbitrator so
appointed is unable or unwilling to act or resigns
his appointment or vacates his office due to any
reason whatsoever, another sole arbitrator shall
be appointed in the manner aforesaid. Such
person shall be entitled to proceed with the
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reference from the stage at which it was left by
his predecessor..."
10. The learned counsel appearing for the respondent does not
dispute the existence of an arbitration agreement (Clause 25 of GCC -
Arbitration Clause), however, the respondent opposes this petition on
the ground that the claims raised by the petitioner are barred by
limitation.
11. Mr Srivastav, learned counsel appearing for the respondent states
that the respondent has filed a reply to the present petition, however, the
same is not on record. He states that there is no dispute as to the
existence of the Arbitration Agreement and the parties had agreed that
the disputes between the parties would be referred to arbitration. He,
however, submits that the claims made by the petitioner are ex-facie
barred by limitation and therefore, following the principle laid down by
the Supreme Court in Vidya Drolia v. Durga Trading Corporation:
(2021) 2 SCC 1, the present petition is liable to be dismissed.
12. Mr Srivastav states that in terms of the Arbitration Clause, the
petitioner was required to make its claim within a specified period and
in any event, within a period of three years from the date of cause of
action. He states that in the present case, the petitioner had claimed that
part payments were made on 06.06.2017 but the payment of Final Bill
was made on 06.04.2017. If the petitioner was dissatisfied with the said
payment, it was required to invoke the dispute resolution clause and
refer the claims to the Superintendent Engineer within a period of three
years from that date. He submits that although, the petitioner had made
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a claim before the Executive Engineer, the same was not in terms of the
Arbitration Clause. In the aforesaid view, since the claims were first
made before the Superintendent Engineer on 18.08.2020, the question
whether the claims were barred by limitation is required to be
considered with reference to that date. He submits that since this was
beyond the period of three years from 06.04.2017, the claims raised by
the petitioner are barred by limitation.
13. The petitioner relies upon the orders passed by the Supreme
Court in Suo Motu Writ Petition (Civil) No.3 of 2020 captioned as In
Re: Cognizance for Extension of Limitation in support of his
contention that by virtue of the said order, the period of limitation was
suspended with effect from 15.03.2020. Therefore, the petitioner's
invocation of the dispute resolution clause was not barred by the statute
of limitation. However, Mr Srivastav submits that the said contention is
not sustainable as the order dated 23.03.2020 passed by the Supreme
Court in Re: Cognizance for Extension of Limitation (supra) did not
extend the period of limitation for invoking arbitration. He also handed
over the copy of the order dated 08.03.2021 passed by the Supreme
Court in the above writ petition wherein the Supreme Court had noted
as under:-
"Due to the onset of Covid-19 pandemic, this
Court took suo motu cognizance of the situation
arising from difficulties that might be faced by
litigants across the country in filing petitions/
applications/ suits/ appeals/ all other proceedings
within the period of limitation prescribed under
the general law of limitation or under any special
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laws (both Central or State). By an order dated
23.03.2020 this Court extended the period of
limitation prescribed under the general law or
special laws whether compoundable or not with
effect from 15.03.2020 till further orders."
14. He submits that the aforesaid noting makes it amply clear that the
period for invoking the arbitration was not extended by the Supreme
Court. He submits that only those proceedings where the general law of
limitation (the Limitation Act, 1963) applied, were suspended.
15. Prima facie, this Court is unable to accept Mr Srivastav's
aforesaid contention. As noted above, the Supreme Court had clearly
held that the period of limitation for the specified proceedings as well
as 'all other proceedings' was extended by the order dated 23.03.2020.
Thus, the limited question to be considered is whether the invocation of
the arbitration falls within the expression 'other proceedings.' This
Court is of the view that the said question requires to be addressed by
examining the plain language of Section 21 of the A&C Act. Section 21
expressly provides that an arbitral proceeding would commence on the
date on which the request for the dispute to be referred to arbitration is
received by the respondent. According to the respondent, the petitioner
was required to file its claims before the Superintendent Engineer, PWD
within a period of three years from 06.04.2017 but the request for
invocation of the Dispute Resolution Mechanism in this case was
received on 18.08.2020.
16. This Court finds no reason to exclude arbitral proceedings from
the expression 'other proceedings' as used by the Supreme Court in the
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order dated 23.03.2020. There is no reason to treat the alternate dispute
mechanism different from filing of a civil action (suit) insofar as the
period of limitation is concerned. The disruption caused by the outbreak
of Covid-19 would equally affect parties from invoking arbitration as it
would disable the parties from instituting any civil action in the courts.
The Supreme Court was cognizant of the disruption caused by the
outbreak of Covid-19 and the measures instituted to combat its spread,
while passing the said order. The Supreme Court had accordingly,
couched the said order suspending limitation in very wide terms to
comprehensively cover all proceedings. By subsequent orders passed in
Suo Motu Writ Petition (Civil) No. 3 of 2020, the Supreme Court had
also clarified that the time for an Arbitral Tribunal to make an award
under Section 29A of the A&C Act was also covered.
17. The contention that the Limitation Act 1963, does not apply to
arbitral proceedings is also unfounded. The plain language of Section
43 of the A&C Act makes it amply clear that the provisions of
Limitation Act, 1963 are applicable to arbitral proceedings. The learned
counsel for the respondent had fairly stated that if the reference of the
disputes to the Superintendent Engineer was made within a period of
three years from 06.04.2017, the same would be within limitation.
However, since the period of limitation was suspended with effect from
15.03.2020, as noticed above, the invocation of the dispute resolution
clause on 18.08.2020 was within the period of limitation. Thus, this
Court is unable to accept that the invocation of the dispute resolution
clause is, ex facie, barred by limitation
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18. In view of the above and considering that there is no dispute as
to the existence of the arbitration agreement, this Court considers it
apposite to allow the present petition.
19. At this stage, the learned counsel appearing for the parties request
that the parties be referred to Delhi International Arbitration Centre
(DIAC) and the arbitration be conducted under the aegis of DIAC and
in accordance with its rules. The Arbitrator shall be appointed under the
rules of DIAC.
20. In view of the consensus between the parties and at their request,
the parties are referred to DIAC and are at liberty to approach the
Coordinator, DIAC for further proceedings.
21. The Registry is directed to send a copy of this order to the
Coordinator, DIAC.
22. The petition is allowed in the aforesaid terms.
VIBHU BAKHRU, J
NOVEMBER 29, 2021
pkv
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