Punjab-Haryana High Court
M/S Asha Singhal vs Union Territory Of Chandigarh And ... on 3 July, 2024
Author: Suvir Sehgal
Bench: Suvir Sehgal
Neutral Citation No:=2024:PHHC:082203
ARB-119-2022 -1-
IN THE HIGH COURT OF PUNJAB & HARYANA AT
CHANDIGARH
245 ARB-119-2022
Date of decision:03.07.2024
M/S ASHA SINGHAL ...PETITIONER
VS.
UNION TERRITORY OF CHANDIGARH AND OTHERS
...RESPONDENTS
CORAM: HON'BLE MR. JUSTICE SUVIR SEHGAL
Present: Mr. Prince Goyal, Advocate
for the petitioner.
Mr. Ashish Rawal, Advocate
for the respondents.
***
SUVIR SEHGAL J.
1. Instant petition has been filed under Section 11 of the
Arbitration and Conciliation Act, 1996, (for short "the Act"), for
appointment of an independent Arbitrator to decide the claim of the
petitioner.
2. Counsel for the petitioner submits that the petitioner was
allotted work of construction of Community Centre at Model Jail, U.T.,
Chandigarh, vide allotment letter dated 20.12.2012, Annexure A-1. He
submits that the general conditions of the contract for C.P.W.D. works -
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2010 formed a part and parcel of the contract agreement and Clause 25,
thereof, provides for settlement of disputes by way of arbitration. He
submits that the petitioner completed the work on 31.07.2016, but the
final bill remained unpaid and a communication dated 18.02.2021,
Annexure A-3, was sent to the respondent for balance payment, which
was followed by communications, Annexures A-4 and A-5. He submits
that vide memo dated 09.07.2021, Annexure A-7, respondents intimated
that no final bill or claim is pending with them. Petitioner by
communication dated 31.07.2021, Annexure A-8, sent a copy of the
measurement bill and requested for payment. When no response was
received, petitioner invoked the arbitration clause by serving a notice
dated 20.11.2021, Annexure A-9, which remained unattended.
3. Upon notice, petition has been contested by the respondents by
filing a reply, wherein it has been submitted that the petitioner was
unable to complete the work, which was withdrawn from him vide letter
dated 18.07.2016, Annexure R-1, and the remaining work was assigned
to another agency. It has been submitted that a gross amount of
Rs.1,17,58,159/- was sanctioned and after making deductions, the
balance amount was released to the petitioner. A categoric stand has
been taken that the measurement bill refer to by the petitioner was paid
in November, 2015, and the petitioner has raised a claim after the expiry
of the period of limitation.
4. Counsel for the respondents submits that as the claim is barred
by time, the petition deserves to be dismissed. He has placed reliance
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upon a judgment of the Supreme Court in Secunderabad Cantonment
Board Versus M/s B. Ramachandraiah & Sons 2021 AIR (SC) 1391.
5. I have heard counsel for the parties and considered their
respective submissions.
6. At the outset, arbitration clause deserves to be noticed and is
reproduced hereunder:-
"CLAUSE 25
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 thing 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 work, to be
unacceptable, he shall promptly within 15 days
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request the Superintending Engineer in writing for
written instruction 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 letter.
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 this
decision, the contractor shall within a period of 30
days from receipt of the decision, 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.
(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
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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 reference from
the stage at which it was left by his predecessor.
It is a term of this contract that the party
invoking arbitration shall give a list of disputes with
amounts claimed in respect of each such dispute
along with the notice for appointment of arbitrator
and giving reference to the rejection by the Chief
Engineer of the appeal.
It is also a term of this contract that no
person, other than a person appointed by such Chief
Engineer CPWD or Additional Director General or
Director General of works, CPWD, as aforesaid,
should act as arbitrator and if for any reason that is
not possible, the matter shall not be referred to
arbitration at all.
It is also a term of this contract that if the
contractor does not make any demand for
appointment of arbitrator in respect of any claims in
writing as aforesaid within 120 days of receiving the
intimation from the Engineer-in-charge that the
final bill is ready for payment, the claim of the
contractor shall be deemed to have been waived and
absolutely barred and the Government shall be
discharged and released of all liabilities under the
contract in respect of these claims.
The arbitration shall be conducted in
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accordance with the provisions of the Arbitration
and Conciliation Act, 1996 (26 of 1996) or any
statutory modifications or re-enactment thereof and
the rules made thereunder and for the time being in
force shall apply to the arbitration proceeding
under this clause.
It is also a term of this contract that the
arbitrator shall adjudicate on only such disputes as
are referred to him by the appointing authority and
give separate award against each dispute and claim
referred to him and in all cases where the total
amount of the claims by any party exceeds
Rs.1,00,000/-, the arbitrator shall give reasons for
the award. It is also a term of the contract that if any
fees are payable to the arbitrator, these shall be
paid equally by both the parties.
It is also a term of the contract that the
arbitrator shall be deemed to have entered on the
reference on the date he issues notice to both the
parties calling them to submit their statement of
claims and counter statement of claims. The venue
of the arbitration shall be such place as may be
fixed by the arbitrator in his sole discretion. The
fees, if any, of the arbitrator shall, if required to be
paid before the award is made and published, be
paid half and half by each of the parties. The cost of
the reference and of the award (including the fees, if
any, of the arbitrator) shall be in the discretion of
the arbitrator who may direct to any by whom and
in what manner, such costs or any part thereof shall
be paid and fix or settle the amount of costs to be so
paid."
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7. A perusal of the clause reproduced above shows that a
contractor is required to raise a claim within 120 days of receiving
intimation from the Engineer In-charge that the final bill is ready for
payment, failing which, it shall be deemed that he has waived his right.
Document appended by the respondents with reply, Annexure R-4,
shows the details of the running bills raised by the petitioner and the
payments made against them. Its perusal makes it apparent that the final
bill was never prepared. It cannot, therefore, be said that the petitioner at
any stage received any information from the Engineer In-charge that the
final bill has been prepared for payment. In any case, the period of 120
days as specified in the above reproduced clause is hit by Section 28 of
the Contract Act as has been held by the Supreme Court in Grasim
Industries Ltd. Versus State of Kerala, (2018) 14 SCC 265.
8. Coming to the objection of limitation raised by the
respondents, suffice is to mention that Supreme Court in Bharat
Sanchar Nigam Ltd. & Anr. Versus M/s Nortel Networks India Pvt.
Ltd. (2021) 5 SCC 738, has held that the issue of limitation pertains to
the maintainability or admissibility of the claim, which has to be decided
by the arbitral tribunal. As to whether the claim is barred by time or is
prohibited because of non-fulfillment of some condition in the
arbitration clause has to be decided by the arbitral tribunal either as a
preliminary issue or at the final stage after evidence is led by the parties.
9. This Court is, therefore, of the view that the petition deserves
to succeed. To be fair to the counsel for the respondents, it deserves to be
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noted that the judgment in Secunderabad Cantonment Board's case
(supra), would not be of any help to them as in the said matter, after
invoking the arbitration clause vide letter issued in November, 2006, the
claimant had filed a petition seeking appointment of an Arbitrator in the
year 2013. In this background, Supreme Court held that the petition
seeking appointment of an Arbitrator is barred by time. This judgment is
not applicable to the facts of the present case.
10. Consequently, petition is allowed. Mr. Sanjeev Kaushik,
former Member Judicial, Central Administrative Tribunal, Kothi
No.1033, Sector 12-A, Panchkula, Mobile No.9417233385 is appointed
as the sole Arbitrator to adjudicate the dispute between the parties,
subject to declaration to be made by him under Section 12 of the Act
with regard to his independence and impartiality to adjudicate the
dispute between the parties.
11. Parties are directed to appear before the learned Arbitrator on
05.08.2024 or on any day, time and place to be fixed and communicated
by the learned Arbitrator at his convenience.
12. The arbitrator shall be paid fee in accordance with the Fourth
Schedule of the Act, as amended.
13. The arbitrator is requested to complete the proceedings as per
time limit specified under Section 29-A of the Act.
14. Needless to mention that all the questions arising between the
parties in this matter shall remain open for determination in the arbitral
proceedings and any observation made hereinabove will not be binding on
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the learned Arbitrator.
15. Copy of the order be sent to the learned arbitrator.
03.07.2024 (SUVIR SEHGAL)
sheetal JUDGE
Whether Speaking/Reasoned Yes/No
Whether Reportable Yes/No
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