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1979 DIGILAW 197 (DEL)

B. L. GROVER v. UNION OF INDIA

1979-09-20

SULTAN SINGH

body1979
SULTAN SINGH ( 1 ) THIS is a petition under Section 20 of the Arbitration Act for filing of arbitration agreement and appointment of an arbitrator. The Plaintiff entered into contract with the defendants for the execution of the work of "construction of Delhi Side approach on Mai Mathura Road near Bhogal" and agreement No. SEDS/64 of 1956-57 was executed between the parties. The contract contained arbitration clause No. 25 under which it is provided that the disputes shall be referred to the Chief Engineer, Central Public Works Department and if he is unable or unwilling to act, to the sole arbitration of some other person to be apointed by him. Disputes arose between the parties and the plaintiff vide his letter dated 14th June, 1961 invoked the arbitration clause and required the defendants to appoint an arbitrator for adjudication of thirteen disputes detailed therein (Annexure B) to the petition. The Chief Engineer, vide letter dated 26th October, 1961 (Annexure-C) appointed an arbitrator to decide the disputes mentioned by the plaintiff except the disputes at items Nos, 10, 11, 12 (a), 12 (b), 12 (c) and 13 of Annexure-B, There was prose cution of the plaintiff and some officers of the department. The plaintiff was acquitted finally by this court on or about 30th May, 1975 as per judgment of V. D, Misra J. The arbitrator in the meantime had resigned, and no progress could be made in the proceeding before the arbitrator as all records of the case were lying with police. After his acquittal the plaintiff sought the appointment of an arbitrator and also the reference of other disputes which came to his light subsequently. He submitted 19 disputes as per his letter dated 24th August, 1976 (Annexure-L) including the disputes already submitted previously. The Chief Engineer, by letter dated 29th October, 1977 (Annexure-N) appointed Km. K. P. Sarojini Arbitrator, Ministry of Works and Housing, New Delhi, as sole arbitrator to decide and make award with reapect to nine claims only. The plaintiff by this petition prays that the defendants be directed to file the arbitration agreement and that the Chief Engineer defendant No. 4 be directed to refer all the 19 disputes as detailed in the plaintiff s letter dated 24th August, 1976 (Annexure-L) to the petition superseding the statement which he has sent to the arbitrator with his letter dated 29th October, 1977 (Annexure-N ). ( 2 ) THE defendants in their reply plead that the arbitrator had already entered on the reference and, therefore, the application under Section 20 of the Arbitration Act is not maintainable, that additional disputes raised by the plaintiff are barred by time and that thus the disputes are not referable to the arbitrator. The following issues were framed on 6th of November, 1978: (1) Whether the disputes mentioned in Annexure to the plaintiff s letter dated 24th August, 1976 to the Chief Engineer, P. W. D, New Delhi, are not referable to the arbitrator Miss. K, P. Sarojini, already appointed by the defendants (2) Relief. ( 3 ) THE Plaintiff on 12-3-IS79 filed an application (I. A. No. 805 of 1979) under Section 5 of the Limitation Act for condonation of delay in filing the petition under Section 20 of the Arbitration Act. The allegations are that certain disputes were referred to the arbitrator while the others were not referred by the Chief Engineer, that prosecution of the plaintiff ended and after his acquittal on 30-5-75 the plaintiff on 30-5-75 requested the defendants to appoint an arbitrator. The plaintiff prays that delay in filing petition under Section 20 of the Arbitration Act be condoned. The defendants in their reply plead that there is no sufficient cause for condonation. of delay in filing the petition. ( 4 ) THE learned counsel tor the plaintiff submits that there was no period of limitation prescribed for filing of a petition under Section 20 of the Arbitration Act within the meaning of Limitation Act, 1908. In Mohd. Usman v. Union of India, AIR 1969 SC 474 , the Supreme Court held that an application under Section 20 of the Arbitration Act was not covered by Article 181 of the Limitation Act and that the said article was restricted to application under the Code of Civil Procedure. In Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli, AIR 1969 SC 1335 it was again held that Article 137 of the Limitation Act, 1963 was confined to the applications under the Code of Civil Procedure. ( 5 ) IN view of these authorities it was assumed and the plaintiff was under a bona fide impression that there was no period of limitation for filing an application under Section 20 of the Arbitration Act. ( 5 ) IN view of these authorities it was assumed and the plaintiff was under a bona fide impression that there was no period of limitation for filing an application under Section 20 of the Arbitration Act. In The Kerala State Electricity Board, Trivandrum v. T. P. Kunhaliumma, AIR 1977 SC 282 , it was however held that Article 137, Limitation Act, 1963 applies to any petition or application filed under any Act. The Supreme Court differed with the view taken by it in Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli, AIR 1969 SC 1335 and held that Article 137 was not confined to applications contemplated by the Code of Civil Procedure only. It was also observed that the interpretation given to Article 181 of the Limitation Act, 1908 was not applicable with regard to Article 137 of the Limitation Act, 1963. ( 6 ) IN Municipal Corporation of Delhi v. Shah Construction Co. , Suit No. 160a of 1976 by order dated 22nd December, 1978 it was held by this court that an application under Section 20 of tha Abitration Act is governed by Article 137 of the Limitation Act, which article pre scribes a period of three years from the date when the right to apply accrues. In view of this state of authorities the plaintiff was justified in holding the bona flde impression that there was no period of limitation tor the petition under Section 20 of the Arbitration Act. It was, therefore, only after the decision of this court announced on 22nd December, 1978 that the plaintiff realised that Article 137 of the Limitation Act would apply to a petition under Section 20 of the Arbitration Act. This state of affairs is a sufficient cause within, the meaning of Section 5 of the Limitation Act and, therefore, I hold that there was sufficient cause for the plaintiff for not filing the petition under Section 20 of the Arbitration Act earlier. The petition under Section 20 of the Arbitration Act is, therefore, admitted beyond the period of limitation prescribed in Article 137 of the Limitation Act, 1963. ( 7 ) THE contention of the learned counsel for the defendants is that the claims raised by the plaintiff are barred by time. The question whether the claims are within time is a matter for decision by the arbitrator and not by the court. ( 7 ) THE contention of the learned counsel for the defendants is that the claims raised by the plaintiff are barred by time. The question whether the claims are within time is a matter for decision by the arbitrator and not by the court. The next contention of the learned counsel for the defendant is that the present petition under Section 20 of the Arbitration Act is not maintainable because the plaintiff has already taken proceedings under chapter II of the Arbitration Act meaning thereby that an arbitrator has already been appointed without intervention of the court and, therefore, no arbitrator can be appointed. It is correct that Km. K. P. Sarojini has already been appointed as an arbitrator by the Chief Engineer, Central Public Works Department but the disputes now sought to be referred were never referred to the said arbitrator at all. It cannot, therefore, be said that the plaintiff has taken any proceedings within the meaning of Chap- ter II of the Arbitration Act. The differ- ences that have arisen between the par- ties have not already been referred to the arbitrator. S. 20 (1) of the Arbitra- tion Act reads as under: "where any persons have entered into an arbitration agreement before the in- stitution of any suit with respect to the subiect matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them, instead of proceed- ing under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates; that the agreement be filed in court. " ( 8 ) IN order to attract the provisions of Section 20 of the Arbitration Act the fol- lowing conditions are necessary: (I) That the arbitration agreement must have been entered into before the institution of any suit, with respect to the sub- ject-matter of the agreement or any part of it. (ii) That a difference has arisen to which the agreement applies, and it sought to be referred. (iii) That proceedings under Chapter BE of the Act have not been started i. e. arbi- trator has not been appointed without intervention of court for adjudication of such disputes. (ii) That a difference has arisen to which the agreement applies, and it sought to be referred. (iii) That proceedings under Chapter BE of the Act have not been started i. e. arbi- trator has not been appointed without intervention of court for adjudication of such disputes. ( 9 ) IT is admitted that the disputes which are now sought to be referred by the plaintiff have not been referred so far by the Chief Engineer, to any arbi- trator and, therefore, it cannot be said that proceedings under Chapter II of the Arbitration Act have been taken. The learned counsel for the defendants has cited Ravu Venkata Surya Rao v. Ravu Venkata Rao, ,alr 1963 Andh Pra 286 and Mangal Prasad v. Lachhman Prasad, AIR 1964 All 108 (FB ). The facts of these two authorities are not at all applicable to the facts of the present case. In both these authorities arbitrator had already been appointed outside court and the dis- putes were already referred to the arbi- trator who for one reason or the other could not proceed with the arbitration and the aggrieved party sought appoint- ment of arbitrator for reference of the same disputes for the second time. l ( 10 ) DISPUTES which have been detailed in Annexure-L are the disputes relating to the contract and the work in question. They are all, it is admitted covered with- in the meaning of clause 25 of the Arbi- tration Clause. I, therefore, hold that all the disputes raised by the plaintiff are referable to arbitration. The disputes de- tailed in the reference letter dated 29th October, 1977 (Annexure-N) are already pending before the arbitrator. I, there- fore, order that all the disputes mention- ed in the plaintiff s letter dated 24th August, 1976 (Annexure-L) excluding the disputes already pending before the ar- bitrator as detailed in (Annexure-N) shall be referred by the Chief Engineer de- fendant No. 4 to an arbitrator. The plain- tiff s counsel states that Kumari K. P. Sarojini arbitrator is not acting at pre- sent as such and, therefore, a new arbi- trator is to be appointed. The plain- tiff s counsel states that Kumari K. P. Sarojini arbitrator is not acting at pre- sent as such and, therefore, a new arbi- trator is to be appointed. The Chief En- gineer defendant No. 4 is, therefore, di- rected to appoint an arbitrator within two months from the date of this order re- ferring all the disputes detailed in the plaintiff s letter dated 24th August, 1976 (Annexure-L) to the petition but excluding the disputes which have already been referred by him as per his reference letter dated 29th October, 1977 (Annexure-N to the petition ). Parties are left to bear their own costs. A copy of this order with copies of Annexure l including x and Annexure n be sent to the Chief Engineer, defendant No. 4.