M/S Kishan Sahay Meena vs Union Of India
2022 Latest Caselaw 6065 Raj/2

       HIGH COURT OF JUDICATURE FOR RAJASTHAN
                   BENCH AT JAIPUR

             S.B. Arbitration Application No. 58/2020

M/s Kishan Sahay Meena, 6MB-280, Indra Gandhi Nagar,
Jagatpura, Jaipur (Raj.). 302017, Through Its Proprietor Sh.
Kishan Sahay Meena.
                                                                  ----Applicant
                                   Versus
Union Of India, Through The Executive Engineer, Jaipur Central
Devision-II, CPWD, A.G. Colony, Bajaj Nagar, Jaipur.
                                                                ----Respondent

For Applicant(s)         :     Mr. Dinesh Kumar Mishra
For Respondent(s)        :     Mr. Anand Sharma with
                               Mr. Namandeep Singh



          HON'BLE MR. JUSTICE PANKAJ BHANDARI

                                    Order

RESERVED ON                             ::                       31/08/2022
PRONOUNCED ON                           ::                       07/09/2022

1. The applicant has filed this arbitration application under

Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking

appointment of an arbitrator.

2. It is pleaded in the arbitration application that a contract was

entered into between the applicant and the non-applicant for

construction of office building and boundary wall for Income Tax

Department at Dausa. The contract was awarded to the applicant

vide letter of award dated 23.10.2013. It is also pleaded that the

work in question was completed on 20.09.2015 and the same was

handed-over to the non-applicant. The bills of the applicant have

not been cleared. The applicant complied with the conditions of

the agreement and when the non-applicant did not accede to the

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request of appointment of an arbitrator, the applicant was left with

no other alternative, but to approach the Court for appointment of

an arbitrator.

3. In reply to the said application, the non-applicant has stated

that the claim was not filed within limitation as per the General

Conditions of the Contract and thus, the applicant is not entitled to

have an arbitrator appointed.

4. It is contended by the counsel for the applicant that the

applicant has complied with the conditions provided in the

agreement. It is also contended that as per the terms of Clause 25

of the agreement, the applicant initially applied to the Executive

Engineer and when the Executive Engineer did not pass any order,

the applicant applied to the Superintending Engineer vide letter

dated 02.06.2019. It is further contended that when the

Superintending Engineer also did not pass any orders, the

applicant gave a notice to the Chief Engineer on 06.08.2019 to

refer the dispute to the Dispute Resolution Committee (hereinafter

referred to as "DRC"). Another notice dated 01.11.2019 was given

to the Chief Engineer to refer the matter to the DRC, but the Chief

Engineer vide its letter dated 04.06.2020 rejected the prayer

stating therein that the claims are time-barred as per Clause 25 of

the General Conditions of the Contract.

5. Counsel for the applicant has place reliance on Sagar

Constructions through Shri Subash Chand Saini Versus

Government of NCT of Delhi: ARB.P. No.856/2021 decided by

the Delhi High Court on 06.10.2021. Reliance is also placed on

M/s. Uttarakhand Purv Sainik Kalyan Nigam Limited Versus

Northern Coal Field Limited: Special Leave Petition (C)

No.11476 of 2018 decided by the Apex Court on 27.11.2019.

(3 of 6) [ARBAP-58/2020]

Reliance is further placed on Bharat Sanchar Nigam Ltd. & Ors.

Versus Nortel Networks India Pvt. Ltd.: (2021) 5 SCC 738 and

M/s. Rakesh Enterprises Versus Union of India: S.B. Arbitration

Application No.100/2019 decided by a Coordinate Bench of this

Court on 12.02.2021.

6. Counsel for the non-applicant has placed reliance on Simpark

Infrastructure Pvt. Ltd. Versus Jaipur Municipal Corporation: 2013

(1) WLN 111.

7. I have considered the submissions and have carefully gone

through the material on record.

8. The only dispute, which has been raised by the non-

applicant, is that the claim was not raised within the time provided

under the General Conditions of the Contract and the same is

time-barred. From perusal of the record, it is evident that the

applicant-claimant has been writing letters to the Executive

Engineer from 03.01.2017 to clear his claim. He had also given a

notice for demand of justice on 23.02.2017. A notice was also

given to the Director General, CPWD on 20.03.2017, yet another

letter was written to the Executive Engineer on 06.10.2017 and

further, letters were written to the Executive Engineer (Civil) on

20.03.2018 and a reminder was also sent on 30.04.2018 & third

and final reminder was also given to the Executive Engineer on

12.10.2020. Thereafter, the applicant approached the

Superintending Engineer vide letter dated 02.06.2019. The

applicant also wrote letters dated 06.08.2019 and 01.11.2019 to

the Chief Engineer to constitute the DRC, but no heed was paid to

the letter and finally vide letter dated 04.06.2020, the claim was

rejected by the non-applicants being barred as per Clause 25 of

the General Conditions of the Contract.

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9. The Apex Court in M/s. Uttarakhand Purv Sainik Kalyan

Nigam Limited Versus Northern Coal Field Limited (supra) set

aside the order of the High Court whereby the arbitration

application was dismissed being barred by law. The Apex Court

held that it is for the arbitrator to decide the issue of limitation.

10. In Sagar Constructions through Shri Subash Chand Saini

Versus Government of NCT of Delhi (supra), the Delhi High Court

held as under:

"43. After the 1997 amendment to Section 28 of the Indian Contract Act, 1872, not only the curtailment of the period of limitation is void, but also the extinction of right, if sought to be brought by the agreement within a specific period, which period is less than the period of limitation prescribed for the suit under the Contract in question, is also rendered void. In other words, after the amendment to Section 28 of the Indian Contract Act, 1872 by Act 1 of 1997, the distinction between curtailing of the period of limitation and extinction of the right itself, after the specified period, no longer exists."

It is also held by the Apex Court as under:

"14. The period of limitation for the disputes will commence from the date of cause of action till invocation of the agreement to refer the disputes to arbitration. The question whether the disputes are within the period of limitation falls within the jurisdiction of the Arbitral Tribunal and unless it is, ex facie, apparent that the disputes are barred by limitation, the parties are required to be referred to arbitration (See -Vidya Drolia & Ors. v Durga Trading Corporation: (2021) 2 SCC 1)."

11. In Bharat Sanchar Nigam Ltd. & Ors. Versus Nortel Networks

India Pvt. Ltd. (supra), the Apex Court held that period of

limitation for filing an application under Section 11 of the Act of

1996 would be governed by Article 137 of the First Schedule of

the Limitation Act. The period of limitation will begin to run on the

(5 of 6) [ARBAP-58/2020]

date when there is a failure to appoint an arbitrator. The judgment

referred to by the counsel for the non-applicant Simpark

Infrastructure Pvt. Ltd. Versus Jaipur Municipal Corporation

(supra) would not apply to the facts of the present case as in that

case the dispute was not resolved amicably in accordance with the

terms of the agreement and therefore, the application for

appointment of an arbitrator was rejected by the Court. However,

in the present case in hand, since the applicant has written

various letters to the Executive Engineer, then to the

Superintending Engineer and Chief Engineer and the DRC was not

constituted and thereafter, the applicant has approached to the

Court. It cannot be said that he had not tried to amicably resolve

the dispute in terms of the General Conditions of the Contract.

12. The Delhi High Court in Sagar Constructions through Shri

Subash Chand Saini Versus Government of NCT of Delhi (supra)

has held that in terms of Section 28 of the Indian Contract Act,

the period of limitation cannot be curtailed and the rights of the

parties cannot be extinct by an agreement. As per Section 45(3)

of the Indian Contract Act, the Court has power to condone the

delay in matters pertaining to arbitration. Thus, I am of the

considered view that the reasons assigned in rejecting the prayer

for appointment of an arbitrator vide letter dated 04.06.2020

cannot be accepted for the very reason that the time cannot be

curtailed in view of Section 28 of the Indian Contract Act. The

arbitration application therefore deserves to be and is accordingly,

allowed and Mr. Justice S.K. Keshote (Retired), 10 Eden Garden,

Flat No.302, Bajaj Nagar Enclave, Near Gandhi Nagar Railway

Station, Jaipur, is appointed as an arbitrator to decide the dispute.

(6 of 6) [ARBAP-58/2020]

13. The appointment of the sole arbitrator is subject to the

declarations being made under Section 12 of the Arbitration and

Conciliation Act, 1996 with respect to the independence and

impartiality, and the ability to devote sufficient time to complete

the arbitration within prescribed period.

14. Accordingly, arbitration application stands allowed. The

arbitrator shall be entitled to lay down fees as provided under

Manual of Procedure for Alternative Disputes Resolution, 2009 as

amended from time to time.

15. Registry is directed to intimate Mr. Justice S.K. Keshote

(Retired) and obtain his formal consent.

16. The observations made herein-above are only for the

purpose of deciding the present application and the same will not

disentitle the parties to raise all valid objections before the learned

Arbitrator and the Arbitrator will be free to dispose the said

objection without being influenced by the observations made by

this Court.

(PANKAJ BHANDARI),J

SUNIL SOLANKI /PS

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