D. P. WADHAWA,j ( 1 ) THIS is a petition under S. 20 of the Arbitration Act (for short the Act ). ( 2 ) THE petitioner, a contractor, cntered into a contract withthe Indian Oil Corporation Limited (for short the Corporation), respondent No. 1, for construction of certain works at Faridabadfor the R and D Centre of the Corporation. Respondent No. 2 isthe head of the Randd Centre, Faridabad. The contract conmined an arbitration clause. Before. proceed further it is betterto set out the relevant clauses of the contract, between (he. parties touching on the arbitration. These are :-- (I)"1. 0. 23. 0. notified Clai. m shall mean a claim of thecontractor notified in accordance with the provisionsof Clause 6. 6. 1. 0. hereof. " (II) "6. 6. 1. 0. Should the contractor consider that he isentitled to any extra payment o,- compensation inrespect of the works over and above the amountdue in terms of the contrac as specified in. Clause6. 3. 1. 0. hereof or should. the Contractor dispute thevalidity of any deductions made or threatened by thecorporation from any Running Account Bills or any payments due to him in terms of the Contract, the Contractor shall forthwith give notice in writing ofhis claim in this behalf to the Engineer-in-Chargeand the Site Engineer within 10 (ten) days fromthe date of the issue of orders or instructionsrelative to any works for which the Contractor claims suchadditional payment or compensation, or on thehappening of other event upon which the Contractorbases such claim, and such notice shall give fullparticulars of the nature of such claim, grounds onwhich it is based, and the amount clamed. Thecontractor shall not be entited to raise any dain. nor shall the Corporation anywise; be liable in respect of any claim by the Contractor unless notice of such claim shall have been given by the Contractor to the Engineer-in-Charge and the Site Engineerin the manner and within the time aforcsaid, andthe Contractor shall be deemed to have waived anyor all claims and all his rights in respect of any claim not. notified to the Engineer-in-Charge and the Siteengineer in writing in the manner and within thetime aforesaid. " (III) "6. 6. 3. 0. Any or all claims of the Contractor notified in accordance with the provision of clause6. 6. 1. 0. notified to the Engineer-in-Charge and the Siteengineer in writing in the manner and within thetime aforesaid. " (III) "6. 6. 3. 0. Any or all claims of the Contractor notified in accordance with the provision of clause6. 6. 1. 0. hereof as shall remain presist at the time ofpreparation of Final Bill by the Contractor shall beseparately included in the Final Bill prepared by the Contractor in the form of a Statement of claimsattached thereto, giving particu!ars of the nature ofsuch claim, grounds on which it is based, and theamount claimed, and shall be supported by a copies of the notice (s) sent in respect thereof to theengineer-in-Charge and Site Engineer under Clause6. 6. 1. 0 hereof. In so far as such claim shall in anymaterial particular be at variance with the claimnotified by the Contractor within the provioson Of 6. 6. 1. 0 hereof, it shall be deemed to be a claimdifferent from the notified claim with consequencein respect thereof indicated in Clause 6. 6. 1. 0 hereof,and with consequences in respect of the notifiedclaim as indicated in Clause 6. 6. 3. 1 hereof. " (IV) "6. 6. 3. 1. Any and all notified claims not specificallyreflected and included in the Final Bill in accordance with the provisions of Clause 6. 6. 3. 0 hereof shallbe deemed to have been waived by the contractor. and the Corporation shall have no liability in respect thereof and the Contractor shall not bo entitledto raise or include in the Final Bill any claim (s)other than a notified claim conforming in all respects in accordance with the provisions of Clause6. 6. 3. 0 hereof. "9. 0. 0. 0. . . . . . . ANY dispute or difference betweenthe parties hereto arising out of any notified claimof the. Contractor included in his final Bill in accordance with the provisions of Clause 6. 6. 3. 0 hereof and/or arising out of any amount claimed by thecorporation (whether or not the amount claimedby the Corporation or any part thereof shall havebeen deducted from the Final Bill of the Contractoror any amount paid by the Corporation to the. . Contractor in respect of the work) shall be referred toarbitration by a Sole Arbitrator selected by the Contractor from a panel of three persons nominated bythe Head, Randd Centre. "the arbitration clause was modified by Work Orderno. . Contractor in respect of the work) shall be referred toarbitration by a Sole Arbitrator selected by the Contractor from a panel of three persons nominated bythe Head, Randd Centre. "the arbitration clause was modified by Work Orderno. 1 dated 3-12-1976 (item 13) as follows:- "the Sole Arbitrator shall be selected by the Contractorout of a penal of seven persons, nominated by the Head, R and D Centre. All the seven persons sonominated shall be Engineers of standing. " ( 3 ) THE contract is dated 17-12-1976. The stipulated datefor completion of the contract was 12-12-1978. However, the contract was completed on 1-7-1981. It is alleged that the delay in completion of the work under the contract was entirelydue to the default on the part of the Corporation. By a letterdated 27-7-1981 (Ex. P-138), the contractor subnutted its claimsamounting to Rs. 31. 55 lacs. These claim were specified under9 different items, and pertained to (1) cost difterence on materials purchased after 12-12-1978 (Rs. 2. 70 lacs); (2) escalationon electrical goods (Rs. 1. 50 lacs); (3) escalation on sanitarygoods etc. (Rs. O. 75 lac); (4) extra cost on trade items executedbeyond 25 percent variation (Rs. 1. 85 lacs): (5) under utilisation of labour etc. due to delay in supply of drawing (Rs. 7. 50lacs); (6) additional expenditure incurred on office establishmentetc. after 12-12-1978 (Rs. 11. 00 lacs): (7) loss suffered onaccount of interest recovered by the Corporation on Mobilisationadvance after 12-12-1978 (Rs. 3. 00 lacs); (8) loss suffered onaccount of natural calamity being collapsc of centering andshuttering of overhead tank due to squall on 16-6-1979 (Rs. 1. 75lacs); and (9) other miscellaneous losses (Rs. 1. 50 lacs ). ( 4 ) THE contractor submitted the final bill for the work executedunder the contract with letters dated 22-12-19,si (in respectof civil and mechanical works); dated 7-1-1982 (in resnectof extra items); and dated 16-3-1982 (in respect of electricalworlds ). ( 5 ) WITH letter dated 22-12-1981 with which the contractorsfinal bill in respect of civil and mechanica! works was sent, thea contractor also sent its claims amounting to Rs. 33. 25 lacs. Thisit is stated, was as per requirement of clause 6. 6. 3. 0. the excessin the claims now submitted with those submilted with letterdated 27-7-1981 was on account of items pertaining to extracost on trade items executed beyond 25 per cent variation whichin the earlier claim amounted to Rs. 1. 33. 25 lacs. Thisit is stated, was as per requirement of clause 6. 6. 3. 0. the excessin the claims now submitted with those submilted with letterdated 27-7-1981 was on account of items pertaining to extracost on trade items executed beyond 25 per cent variation whichin the earlier claim amounted to Rs. 1. 85 lacs while in the finalclaim it was Rs. 3. 55 lacs. ( 6 ) BY letter dated 28-12-1981 of the Corporation, the contractor was informed that "none of the claims now raised by youhave been notified within the provisions of Clause 6. 6. 1. 0 ofthe General Conditions of Contract, and that, therefore, thecorporation cannot be liable in respect of any such claims". This letter was in reply to letter dated 27-7-1981 of the contractor. ( 7 ) THEREAFTER, it appears, there was further correspondencebetween the parties on the question of appointment of the arbitrator. The final bill of the contractor with which it had appendedits claims for settlement was decided on 1-3-1983. Thefinal bill was, however, signed by the contractor under protest. Another notice dated 26-4-1983 was sent to the Corporation bythe contractor again seeking the panel of names from amongst whom the contractor was to select an arbitrator. Since therewas no response from the Corporation, the present petition wasinstituted. ( 8 ) ALONG with the petition, the contractor also filed anapplication under S. 37 (4) of the Act, it being IA No. 2210183. This sub-section is us follows :- " (4) Where the terms of an agreement to refer futuredifferences to arbitration provide that any claims towhich the agreement applies shall be barred unlessnotice to appoint an arbitrator is given or an arbitratoris appointed or some other step to cornmencearbitration proceedings is taken within a time fixedby the agreement, and a difference arises to whichthe agreement applies, the Court, if it is of opinionthat in the circumstances of the case undue hard ship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on suchterms, if any, as the justice of the case may require,extend the time for such period as it thinks proper. "it is prayed in this application that in case the court comesto the conclusion that 10 days period of notice ax envisagedby clause 6. 6. 1. "it is prayed in this application that in case the court comesto the conclusion that 10 days period of notice ax envisagedby clause 6. 6. 1. 0 was applicable in respect of any of the claimsof the contractor or that there has been delay in lodging anyof its claims, time be extended for such period on such termsas the court deems just and proper to enable the reference ofthe subject disputes to arbitration in terms of arbitration agreement between the parties. . ( 9 ) THE case of the Corporation is quite simple. In fact, itscase is what it said in its reply dated 28-12-1981 (Ex. P-139)to, the letter dated 27-7-1981 of the contractor. The Corpora tion denied that the contractor submitted any claims to it inaccordance with the provisions of clause 6. 6. 1. 0 or that thecontractor submitted any notified claim (s) with its final billin accordance with the provisions of clause 6. 6. 3. 0. The Corporation also referred to the difference of amounts in the twoclaims of the contractor : one submitted along with letter dated27-7-1981 and the other with the final bill. The contractorin its petition had also referred to its letter dated 12-2-1982which, according to the contractor, was a notice to the Corporation as contemplated by S. 37 (3) of- the Act This the Corporation denied. In this letter the contractor had stated thatin case it did not receive any positive response from the Corporation, it would seek redress through arbitration. To thea application under S. 37 (4) of the Act of the contractor, thecorpoiation raised the following preliminary objections :- "the application is misconceived and is not maintainable since Section 37 (4) of the Arbitration Act is not applicable to the present case, in as much asthe arbitration agreement does not apply to theclaims referred to in the Petition filed under Section 20 of the Indian Arbitration Act or to any of them, nor does there exist any term in the arbitration agreement that any claim to which theagreement applies shall be barred unless notice toappoint an arbitrator is given or an arbitrator isappointed or some other step to commence arbitration proceedings is taken within a time fixed. "it was said that the court had no jurisdiction to refer toarbitration any claims which are not notified claims includedin the final bill. "it was said that the court had no jurisdiction to refer toarbitration any claims which are not notified claims includedin the final bill. ( 10 ) ON the pleas thus raised the following issues wereframed :- 1. Is the claim within the scope of the arbitration agreement ?2. If so, if such a claim is covered. by the arbitrationagreement ?3. If issues 1 and 2 are decided against the petitioners, then are the petitioners entitled to extension oftime under Section 37 (4) of the Arbitration Act?4. Relief. Parties have led evidence by means of affidavits.- ( 11 ) MR. Watel had various submissions to make. Stronglyrelying on a decision of the English Court of Appeal in Jedranska Slobodna v. Oleagine SA [ (1983)3 AH ER 602] (1 ). Mr. Watel submitted that notice contemplated in the aforesaidclause 6. 6. 1. 0 was merely a step to commence arbitration proceedings. If so, he submitted that the case fell within the provisions of S. 37 (4) of the Act if it is held that no notice asrequired under this clause was given. According to the contractor, the claims were basically because of delay in completion of the contract which delay was caused by the Corporationas the relevant drawings were not given to the contractor. Itwas submitted that when it is said that the claim of the contractor is not a notified claim as defined in clause 1. 0. 23. 0, itmerely means that notice of the claim was not given. To sumup, Mr. Watel submitted, in order to bring his case within thepurview of S. 37 (4) of the Act, that the claims were of recurring type and could not be quantified till the contract was completed; these arose out of the default committed by the Corporation and therefore the Corporation would know the consequences; the work was completed and accepted by the Corporation without demur; and if the claims are held to have extinguished the contractor could not go to the court and takinginto account the amounts involved there will be undue hardship caused to the contractor. It was asserted that notice ofbreach which was given by the contractor to the Corporationthough without specifying the amount would itself make theclaim a notified claim. Reliance was placed on a decision ofthe Supreme Court in Sterling General Insurance Co. It was asserted that notice ofbreach which was given by the contractor to the Corporationthough without specifying the amount would itself make theclaim a notified claim. Reliance was placed on a decision ofthe Supreme Court in Sterling General Insurance Co. Ltd. v. Planters Airways Pvt. Ltd. ( AIR 1975 SC 415 ) , whereinit was held that in interpreting S. 37 (4) of the Act the courthas to take aliberal view of the meaning of the words "underhardship". It was said "undue" must mean something whichis not merited by the conduct of the claimant, or is very muchdisproportionate to it. It was then held that the court musttake all the relevant circumstances of the case into consideration. Reliance was also placed on a decision of the Calcutta high Court in the Cotton Corporation of India Ltd. Theoriental Fire and General Insurance. Co. Ltd. ( AIR 1984 Cal. 355 ) , where the court took into account the amount involved in the dispute as one of the grounds while extending timeunder S. 37 of the Act. ( 12 ) ANTICIPATING the argument of the Corporation that arbitration agreement would apply only to that dispute which fellwithin the definition of a "notified claim", Mr. Watcl submittedthat the arbitration agreement would include within its compass any difference or dispate between the parties provided that (a) such dispute has been notified within ten days of the dateof occurrence, and (b) the same is included separately in thefinal bill. That such an interpretation should be given to thearbitration agreement in the present case, Mr. Watel reliedupon a decision of the Supreme Court in Union of India v. D. R. Revri and Co. ( AIR 1976 SC 2257 ) , wherein thesupreme Court observed as under :- "it must be remembered that a contract is a commercial document between the parties and it must beinterpreted in such a manner as to give efficacyto the contract rather than to invalidate it. It. would not be right while interpreting a contract,entered into between two lay parties, to applystrict rules of construction which are ordinarilyapplicable to a conveyance and other formal documents. The meaning of such a contract must begathered by adopting a commonsense approach andit must not be allowed to be thwarted by a narrowpedantic and legalistic interpretation. " ( 13 ) MR. would not be right while interpreting a contract,entered into between two lay parties, to applystrict rules of construction which are ordinarilyapplicable to a conveyance and other formal documents. The meaning of such a contract must begathered by adopting a commonsense approach andit must not be allowed to be thwarted by a narrowpedantic and legalistic interpretation. " ( 13 ) MR. V. N. Koura, learned counsel for the Corporation,submitted that the arbitration agreement in the parantce case didnot cover all disputes between the parties. According to him,the dispute for the purpose of the, arbitration agreement wouldnot merely be the notified claims but only those notified claimswhich are included in the final bill. Even a variation in thenotified claim would be a different claim. According to Mr. Koura, the present petition under S. 20 of the Act was not maintainable inasmuch as no difference between the parties hadarisen to which the arbitration agreement applied and furtherquestion as to whether time should be extended under S. 37of the Act would not be relevant Mr. Koura further submitted that in any case the court would not have jurisdictionto extend time for giving notice in writing of the claim ofthe contractor under clause 6. 6. 1. 0 and further that this clausedoes not merely stipulate a period of ten days but other conditions as well like giving of full particulars of the nature of theclaim, grounds on which it is based and the amount claimedand is to be given to a particular authority. With referenceto various letters written by the contractor prior to the letterof 27-7-1981, Mr. Koura submitted that none of these lettersmet the requirements of clause 6. 6. 1. 0. He said that theseletters could at best be taken as mere hints by the contractorof some possible claim, but these would certainly not be takenas substitute for a notified claim as required under the aforesaid clause. Referring to the letter of 27-7-1981 Mr. Kourasubmitted that even this did not meet the requirement of theclause. It was not addressed to the Engineer-in-charge/siteengineer within ten days and also did not give any particularof the alleged claims and at best it contained heads of variousclaims and again this was no compliance with the provisionsof the clause. Referring to the letter of 27-7-1981 Mr. Kourasubmitted that even this did not meet the requirement of theclause. It was not addressed to the Engineer-in-charge/siteengineer within ten days and also did not give any particularof the alleged claims and at best it contained heads of variousclaims and again this was no compliance with the provisionsof the clause. It was stated by the Corporation that this dausewas agreed to so as to prevent the contractor from raising anygeneral claims at the end of the works when the claims couldneither be properly verified nor properly assessed and that theobject was to confine the contractor "only to those claims ofwhich there could be a contemporaneous verification of thefactors involved and the facts and figures given and to excludegeneral claims and assessments subsequently made". It wayargued that if a particular drawing had not been furnished bythe Corporation in time and as a result thereof the contractorincurred any wasteful or additional expenditure or damage hecould have notified the Engineer-in-charge and the Site Engineer of the delay in furnishing of the drawing by the Corporation, with the details of personnel and equipment etc. renderedidle, and the costs, charges and /or, damages etc. incurred as aresult thereof at least within ten days of the receipt of thedrawing. It was also submitted that before all these clausesin the agreement were agreed to, the contractor had desiredthat the arbitration clause should apply to all the disputes anddifferences arising under the contract, but this was not agreedto. Only change agreed to was that instead of three thereshould be seven names from which the contractor was to selectan arbitrator and clause 9. 0. 0. 0 was amended accordingly. Mr. Koura referred to a decision of the English Court of Appealin Babanaft International v. Avan Petroleum [ (1982) 3 Aller 244] as being fully applicable to the present case. Imay note here that this judgment was distinguished in thedecision of the Court of Appeal cited by Mr. Watel. Thus,according to Mr. Koura, neither S. 20 nor S. 37 of the Actapplied. ( 14 ) UNDER S. 20 of the Act, I have to see if anydifference has arisen to which the arbitration agreement, as contained in clause 9. 0. 0. 0 applied and if so whether I should extend the time under S. 37 (4) of the Act, in case I walve thetime-bar limit. ( 14 ) UNDER S. 20 of the Act, I have to see if anydifference has arisen to which the arbitration agreement, as contained in clause 9. 0. 0. 0 applied and if so whether I should extend the time under S. 37 (4) of the Act, in case I walve thetime-bar limit. ( 15 ) THE first limb of argument of Mr. Watel is that hecomplied with the requirements of clause 6. 6. 1. 0 and, if so, inthat case, as to whether the claim was barred by limitation ornot was to be decided by the arbitrator, and he refers to a decision of a Full Bench of this Court in Ved Prakash v Unionof India (AIR 1984 Delhi 325) which approved a decisionof the Division Bench in Jai Chand Bhasin v. Union of India (AIR 1983 Delhi 508 ). In Ved Parkash s case the petitioner by his letter dated 29-6-1981 asked the respondent toappoint an arbitrator. The Chief Engineer refused to males theappointment. The reason he gave was that the petitioner hadmade the request for appointment of an arbitrator after the expiry of 90 days and it was a term of the clause that such a request should be made within 90 days, otherwise the,government shall be discharged and released of all liabilities and allclaims would be deemed to have waived. Raying on a Divisionbench decision in Jai Chand Bhasin (supra), the court held thatthis question falls within the province of the arbitrator to whomthe disputes shall be referred. Whether the demand or arbitrationhas been made within the stated time and whether the claimsshould be deemed to have been waived in terms of the clauseis essentially a question for the arbitrator to decide. The courtis not concerned with it at this stage. The court has only tosee that there are disputes and all those disputes ace to be referred to arbitration as per agreement between the parties andthe arbitrator can decide those questions. ( 16 ) IN Jai Chand Bhasin (supra), the court held that in theaforesaid circumstances, S. 37 of the Act had no applicability. When there is no admission by the applicant/contractorin his application under S. 20 of the Act that the demand forarbitration in respect of his claim is beyond the period statedin the arbitration agreement, the question of invoking S. 37is premature and does not arise. When there is no admission by the applicant/contractorin his application under S. 20 of the Act that the demand forarbitration in respect of his claim is beyond the period statedin the arbitration agreement, the question of invoking S. 37is premature and does not arise. At the stage of the applicationunder S. 20 the court is only to see that there are disputes and those disputes are to be referred to arbitration as per agreementbetween the parties and the arbitrator can decide those questions. The court is not concerned with the question whetherthe claim of the party to the arbitration agreement is barred bytime. That question falls within the province of the arbitratorto whom the dispute is referred. The court was further of theview that S. 37 bears close resemblance to S: 28 of the Act. Just as the court has power under S-28 to enlarge the time formaking the award, similarly S. 37 (4) empowers the court toextend the time for giving notice for appointing can arbitrator145in respect of any claim beyond the period of 90 days in statedcircumstances of undue hardship. It was asserted that. at thestage of anapplication under S. 20 when the applicant maintains that his claim is within time invocation of S. 37 (4) is notattracted. ( 17 ) THE second limb of the argument of Mr. Watel is that if the court finds that the claim of the contractor is barred asno notice to appoint an arbitrator was given within time prescribed or that an arbitrator was not so appointed or some othersteps to commence arbitration proceeding were not taken, thenthe court should extend time on the facts and cicrumstances ofthe case. This argument, I am afraid, could only be advancedif the contractor admitted specifically that its claim was so barred. Otherwise, in view of the aforsaid two decisions of thiscourt, I cannot possibly go into this question as to whether theclaim of the contractor is barred by time or not. There has tobe a clear admission of the contractor to that effect. ( 18 ) ANALYSING the clause in the case it has first to be seenif there, is a dispute to which the arbitration clause applies. So,the question of existence of dispute is to be seen first. Thatdispute has to be raised inaccordance with the provision of theagreement to attract the applicability of the arbitration clause. ( 18 ) ANALYSING the clause in the case it has first to be seenif there, is a dispute to which the arbitration clause applies. So,the question of existence of dispute is to be seen first. Thatdispute has to be raised inaccordance with the provision of theagreement to attract the applicability of the arbitration clause. If no such dispute exists, the arbitration clause is not applicable and in fact there would be no arbitration agreement. In fact, if reference is made to the arbitration clausem the precent case, no time limit as such is prescribed forthe appointment of the arbitratior. As I see clause 6. 6. 1. 0exists independently of clause 9. 0. 0. 0. Under clause 6. 6. 1. 0,the contractor shall forthwith give notice in writing of his claimto the Engineer-in-charge and the Site Engineer within ten daysfrom the date of issue of order of instructions relative to anyworks for which the contractor claims such additional paymentor compensation, or on the happening of other event uponwhich the contractor bases such claim; (ii) such notice shallgive full particulars of the nature of such claims; (iii) groundson which it is based; and (iv) the amount claimed. The contractor is debarred from raising any claim unless notice of suchclaim has been given in the manner and within the time prescribed, otherwise the contractor "shall be deemed to havewaived any or all claims and all his rights in respect of anyclaim not notified to the Engineer-in-charge and the Site Engineer in writing in the manner and within the time aforesaid". Underclause 6. 6. 3. 0 if any of the claims which has been notified inaccordance with clause 6. 6. 1. 0 still remains/persists at the timeof preparation of final bill, the contractor is to specify the samein the form of a statement of claim attached to the final bill,again giving the particulars of the nature of the claims, groundson which the claims are based and the amount claimed and thisagain is to be supported by copy of the notice sent in respect. thereof to the Engineer-in-charge and Site Engineer. It is specifically mentioned in clause 6. 6. 3. 0 that if the claim attachedwith the final bill be at variance with the claim notified underthe provisions of clause 6. 6. 1. thereof to the Engineer-in-charge and Site Engineer. It is specifically mentioned in clause 6. 6. 3. 0 that if the claim attachedwith the final bill be at variance with the claim notified underthe provisions of clause 6. 6. 1. 0, it shall be deemed to be aclaim different from the notified claim with consequencethat it shall stand waived as given in clause 6. 6. 1. 0. However,under clause 6. 6. 3. 1. claim notified under clause 6. 6. 1. 0which is not calculated in the final bill stands waived. , Thus. the parties agreed that before any claim/dispute could be subject matter of arbitration, certain formalities had to be goneinto. Clause 9. 0. 0. 0 which deals with arbitration applies onlyto disputes and differences arising out of a notified claim includedin the final bill of the contractor. As noted above, there is notime limit prescribed in clause 9. 0. 0. 0. In these circumstances. it is therefore difficult to see as to how the provisions of S. 37 (4)would apply to the requirements of clause 6. 6. 1. 0, assuming thatthe disputes in the present case are (1) covered under clause9. 0. 0:0, and (2) that the contractor did take steps to commencearbitration proceedings within the time fixed by "the arbitrationagreement. Mr. Watel s argument is that notified claim is nothing but a claim in writing to the Corporation within ten days ofthe date of occurrene and this claim is to be included separatelyin the final bill. According to him clauses 6. 6. 1. 0, 6. 6. 3. 0 and9. 0. 0. 0 are inextricably interlinked and, therefore, the notifiedclaim is merely "some other steps to commence arbitration proceedings" as envisaged in S. 37 (4) of the Act. ( 19 ) BEFORE referring to the decisions referred to by counselfor the parties it would be appropriate to discuss the basicsinvolved in a case like the present one. Normally, in commercial contracts one comes across a provision requiring certainformalities to be performed within a stipulated time. ln defaultthe arbitration is barred. In shipping contracts there is a clauseknown as the "centrocon" arbitration clause which would be anideal example. This clause reads as follows :- ". . . . . . . . . . . . Normally, in commercial contracts one comes across a provision requiring certainformalities to be performed within a stipulated time. ln defaultthe arbitration is barred. In shipping contracts there is a clauseknown as the "centrocon" arbitration clause which would be anideal example. This clause reads as follows :- ". . . . . . . . . . . . ANY claim must be made in writting andclaimants arbitrator appointed within three monthsof final discharge, and where this provision is notcomplied with the claim shall be deemed to bewaived and absolutely barred. . . . . . . . ". Lord Denning MR in Agro Company of Canada v. Richmondshipping Ltd. (1973 I Lloyd s Rep. 392) expressed theview that the courts now appears to regard a contractual timelimit as a positively beneficial feature of a commercial contract. The objects of such a clause are, it has been stated- (i) to provide some limit to the uncertainties and expense of arbitrationand litigation; (ii) to facilitate the obtaining of material evidencesand (iii) to facilitate the settling of accounts for each transaction as and when they fall due. The English courts have repeatedly upheld the three months time limit fixed by the Centrocon clause and have even enforced shorter periods than this,though clauses of this type are held to be construed strictly anda claim will not be barred by lapse of time unless the provisiondearly applies to the claim in question. A distinction has tobe made where a clause in the contract extinguishes the claimbut that would not bar the right to refer the claim to arbitration. The result would simply be that when the arbitratormakes his award it would be to the effect that claim failsthen there is a clause which bars the right to arbitration butdoes not defeat the claim. The only effect of failure to complywith the time limit is that the enforcement cannot beeffectedby means of an arbitration. If the claimant wishes to assert bisrights he must file a civil suit. The only effect of failure to complywith the time limit is that the enforcement cannot beeffectedby means of an arbitration. If the claimant wishes to assert bisrights he must file a civil suit. ( 20 ) IN the Law and Practice of Commercial Arbitration inengland by Sir Mustill and Boyd, the learned authors, commen ting upon the above two types of lime barring provisions, observed as under :- THESE two different types of time-barring provision maysometimes be combined in a single clause failureto comply with the limits fixed by the clause destroys both the claim itself, and the arbitrator s rightto adjudicate upon it. ln many instances, the distinction between these twospecies of, clause gives rise. to no difficulty, since it is common for the clause itself to state explicitlythat failure to perform the required formality within the time limit will have the effect of barring theclaim. Thus, the clause may provide that in defaultof compliance the claim shall be deemed to be waived and absolutely barred or that all claims shall bedeemed to be waived . Rather less specific, batnone the less sufficiently clear, ale those clauses whichstipulate that the formality to be performed within the time limit is the giving of a notice of claim,not (as in the case of some clauses) the commencementof an an arbitation Here. there is no need toread the clause as having any effect on the party sright to arbitrate; if the clause stipulates that notice of claim must be given within a certain number ofdays, then the obvious interpretation is that if thenotice is rot so given, the claim is lost. " (Pages 168-169, 1982 Edn.) ( 21 ) COMMENTING on the provisions of S. 27 of the English. Arbitration Act, which is almost similar to S. 37 (4) of the Indian Arbitration Act, the learned authors said:- "it will be observed that the section only applies in terms to those agreements which provide that in defaultof timely compliance with the specified formalitiesany claims to which the agreement applies shall bebarred . But relief under the section can he grantedwhether the: effect of the clause is to bar the claim,or merely to bar the right to have the claim decidedin an arbitration. Nor is the word claims limitedto causes of action it applies to any claim to havean issue decided by arbitration, The application of the. But relief under the section can he grantedwhether the: effect of the clause is to bar the claim,or merely to bar the right to have the claim decidedin an arbitration. Nor is the word claims limitedto causes of action it applies to any claim to havean issue decided by arbitration, The application of the. section, is also limited to thoseagreements where the formalities to be. completedwithin the time limit consist either of the giving ofnotice to appoint-an -. arbitrator, or the appointmentof art arbitrator, or some other step to commencearbitration proceedings. The section has no applcation to limitation provsions under which the stepto be taken is the giving of a notice of claim. " (pages 176-177 ). ( 22 ) IN the case reported as Jedranska Slobodna v. Oleaginesa ( (1983) 3 All ER 602), the chartered vessel arrived at theport on 1-5-1980 and waited for discharge until 7-9-1980. Dw charge was finally completed on 15-11-1980. The time for thecommencemerit of arbitration expired on 15-2-1981. , Which was. under the arbitration clause which read as under:-- ALL disputes from time to time arising ou t of this contract shall,. . . . . . . . . . . . . . be referred-to the final arbitrament. . . . . . . . . . . . . . . . Any claim must be made inwriting and claimants Arbitrator anpoitited withinthree months of final discharge and where this vision n6t complied with the claim shafl6q deemedto be waived and absolutely baired. . . . . . . . . ,. . ". No clam in writing was made nor the ship owners arbitratorappointed within that period and thd question that arose wasb that whether the court has jurisdiction under S. 27 of the Enghsharbitration Act to extend the time, and if it has jurisdictionwhether it should extend the time. This section reads asfollows :- "power of court to extend time for commencing arbitra-tion proceedings. This section reads asfollows :- "power of court to extend time for commencing arbitra-tion proceedings. Wherfc the tenfls of an agreementto refer future disputes to arbitration provide thatany claims to which the agreement applies shall bebarred unless notice to appoint an ybitrator is givenor an arbitrator is appointed Or some other step tocommence arbitration proceedings is taken within atime fixed by the agreement, and a dispute arisesto which the agreement applies, the High Court, ifit is of opinion that in the circumstances of the caseundue hardship would otherwise be caused, andnotwithstanding that the time so fixed has expired. may, on such terms, if any, as the justice of thecase may require, but without prejudice to the pro-visions of any enactment limiting the time fof thecommencement of arbitration proceedings, extend thetime for such period as it thinks proper. "the court held that whole of the clause related to arbitrationthe first sentence required claims to be referred to arbitrati ofthe second sentence dealt with the requirement that the clai)is to be in writing and the arbitrator appointed in the l mheperiod and the consequences if this does not occur. The COTIIH held "the) use of the singular where this provision is not conpbed with is a clear indication that the notice requirement isstep to commence arbitration proceedings . " The court observe"we agree with Lloyd J that the appointment of the arbitrateand the mking of the claim in writing in the arbitration clausego hand in hand, and that both provisions are so inextricablybound together that they should be regarded as part of the sameprocess of commencing arbitration procedeings". This judgementdistinguished the three Judges decision of the Court of Appeal (Babanaft International v. Avant Ptetroleum (1982) 3 All ER244) referred to by Mr. Koura. In this latter case there weretwo clauses in the agreement. The arbitration clause providedthat any or all differences and disputes of whatsoever nature arisingout of the Charterparty be pui to arbitation in the City oflondon. It contained no time limit for commencing arbitrationproceedings. There was another clause being clause M2 which wasseparate from the arbitration clause and which read as follows:- "charterers shall be discharged and released from allliability in respect of any claims. It contained no time limit for commencing arbitrationproceedings. There was another clause being clause M2 which wasseparate from the arbitration clause and which read as follows:- "charterers shall be discharged and released from allliability in respect of any claims. Owners may haveunder this Charter Party * * * * * unless a claimhas been presented to Charterers in writing with allavailable supporting documents, within 90 (ninety)days from completion of discharge of the cargo concerned under this Charter Party. "it was held in this case that making of a claim does not byitself commence the arbitration proceedings or necessarily leadto their being commenced. The claim may be conceded orsettled amicably. Donaldson, LJ observed, "in essence S. 27empowers the court to extend the time fixed for giving noticeto appoint an arbitrator, appointing an arbitrator or taking someother step to commence arbitration proceedings if doing so wiltprevent a claim becoming time-barred. It does not empower the court to extend any other time limits". This judgementof the Court of Appeal was distinguished in the decision citedby Mr. Watel on the ground that the arbitration clause and clause M2 were separate distinct and unrelated. ( 23 ) I am of the view that of the judgment of the Court ofappeal in. Babanaft. International v. Avant Petroleum (:supra)refeerred to by Mr. Koura is more apt in the present case. Thecourt cannot extend the time for making a claim under clause6. 6. 1. 0 under S. 37 (4) of the Act. Until a claim is made in accordance with this clause, there could not be any disputewhich could be referred to arbitration under clause 9. 0. 0. 0. ( 24 ) MR. Watel made a distinction that in any ease noticesas regards claim Nos. 4, 8 and 9 were sent. He referred tovarious letters addressed by the contractor to the Corporationin this regard. I do not think any of these letters fulfils therequirements of clause 6. 6. 1. 0. These letters were written asa matter of course without making any claim. In the lettersit is complained that : drawings have not been given and "incase of any further delay all damages and idle labour chargesshall be borne by the Indian Oil Corporation" (Ex. P-3 dated9-3-1977); "the labour force i? not idle at present but will becomeidle if further drawings are not received" (Ex. In the lettersit is complained that : drawings have not been given and "incase of any further delay all damages and idle labour chargesshall be borne by the Indian Oil Corporation" (Ex. P-3 dated9-3-1977); "the labour force i? not idle at present but will becomeidle if further drawings are not received" (Ex. P-4 dated12-3-1977); "therefore, till the full set of drawings are availableto us the interest charge may kindly be waived" (Ex. P-5dated 19-3-1977); "in absence of drawings we are incurring unnecessary expenditure of Rs. 2,0001- per day on account ofidle labour, hire charges for machinery, staff and other miscellaneous expenses etc. , which is a great loss to the company. It is requested that the drawings may be arrange and issuedwithin 24 hours on. receipt of this letter, failing which Rs. 2,000. 00per day. will be claimed on account of suspension of work and hampering of progress clue to failure of the department to supplythe requisite details drawings" (Ex. P-6 dated 22-3-1977): - we,therefore, request you. to kindly send us complete drawingsalong with necessary, working details to enable us to proceedwith the work. It is needless to point out than we have alreadysuffered heavy financial loss due to non-availability of drawings" (Exi. P-8 dated 1-4-1977): "our skilled labourers are sittingidle and incurring heavy expenses. It is also noted that monsoonis approaching soon" (Ex. P-IO dated 15-4-1977) "wewould like to bring to your notice hat until such drawings usrequired by us are not given to us in full sets it is becomingdifficult to expedite the work and all loss borne by us on thisaccount shall be at the cost of the department which shall befully liable for such charges. We do not want any piecemealdelivery of the drawings as it is not possible to plan theprocurement of materials or schedule the work to be executed in a planned and phased banner" (Ex. P-1. 1dated 3-5-1977); and "any delay in getting the necessary details shall cause unnecessary loss to us which shall be to youraccount" (Ex. P-13 dated 8-6-1977 ). The above are some ofthe examples of the notices claimed by the contractor to havebeen sent. Mr. Watel wants me to rule that these fulfil therequirements of a "notified claim" under clause 6. 6. 1. 0. . I amafraid I cannot agree. P-13 dated 8-6-1977 ). The above are some ofthe examples of the notices claimed by the contractor to havebeen sent. Mr. Watel wants me to rule that these fulfil therequirements of a "notified claim" under clause 6. 6. 1. 0. . I amafraid I cannot agree. The clause is quite simple and uunambiguous and I nedd not refer to any rule of interpretation to construe the clause. ( 25 ) AS regards the contention that it was not possible tocomply with the requirements of clause 6. 6. 1. 0 in terms in caseof continuing breach, I have not been able to appreciate this argument as no particular instance of a continuing breach wasbrought to my notice. If the argument is relating to non-supplyof drawings in time, the least the contractor could do was togive his claim within ten days of the receipt of the drawingand not wait till the whole contract was complete. No correlafionhas been shown as to why a notified claim could not be preferredwithin the period when the drawings were received and thewhole contract was completed, if the argument of continuingbreach, is to be accepted. ( 26 ) I think it is too late in the day to contend that clause6. 6. 1. 0 is void merely because it not only bars the claims butthe remedy as well : see Vulcan Insurance Co. v. Maharj Singh ( AIR 1976 SC 287 ) (9) where the Supreme Court held thefollowing clause in an insurance policy to be valid : "in no case whatever shall the Company be liable forany loss or damage after the expiration of twelvemonths from the happening of the loss or damageunless the claim is the subject of pending action orarbitration. " ( 27 ) IN any case, in the instant case the issue pertained to thearbitrability of the notified claim under cl. 9. 0. 0. 0. What mattersarc agreed to be referred to arbitration depend upon the agreement between the parties. It, therefore, appears to me thatcl. 9. 0. 0. 0 would apply only to a notified claim. After takingthis view, I have to hold that the present petition under S. 20of the Act is not maintainable. 9. 0. 0. 0. What mattersarc agreed to be referred to arbitration depend upon the agreement between the parties. It, therefore, appears to me thatcl. 9. 0. 0. 0 would apply only to a notified claim. After takingthis view, I have to hold that the present petition under S. 20of the Act is not maintainable. Perhaps, it was not necessaryfor me to analyse the provisions of S. 37 (4) of the Act but thearguments were intermixed and it was difficult to extricate oneself from both examining the provisions of S. 20 vis-a-vis S. 37 (4)of the Act particularly when the submission was that a notifiedclaim was merely a step in proceeding to commence arbitration. ( 28 ) IN view of the above discussion, it has to be held thatthe claim in the present case is not covered by the arbitrationagreement or that it is not within the scope of the arbitrationagreement. It has also to be held that the petitioner is notentitled to any extension of time under S. 37 (4) of the Act. All these issues are thus held m favour or the respondent Corporation and against the petitioner contractor. ( 29 ) THE suit is accordigly dismissed but with no orcter asto costs.