Meena Engineering and Contractors Pvt. Ltd. . v. Municipal Corporation of Greater Bombay
1995-11-09
S.M.JHUNJHUNUWALA
body1995
DigiLaw.ai
JUDGMENT - S.M. JHUNJHUNUWALA, J. :--These suits raise the same question of law and can be decided by common judgment. For the purpose of convenience, the brief facts that are set out relate to Arbitration Suit No. 1503 of 1990. The relevant dates in other suits which are different have been separately mentioned. 2. In each suit, the plaintiffs seek an order under section 20 of the Arbitration Act, 1940 (for Short, the Act) to file the Arbitration agreement in this Court as also an order of reference of plaintiffs claim to arbitration in accordance therewith. 3. Parties in these suits are common. The plaintiffs are Civil Engineering contractors and the Defendants are a statutory Corporation constituted under the provisions of the Bombay Municipal Corporation Act, 1888. In the month of April, 1988, the defendants had invited separate tenders for the work of desilting of open Nallas viz. 1) from Race Course to Love Grove pumping station and from E. Moses road upto Nehru Science Centre, 2) Joglekar Nalla at Dharavi, G/North ward and 3) Desilting of drainage channel, repairs to the collapsed portion of the drainage channel between Senapati Bapat Marg and Cleave Land Bunder Road, Worli. 4. On 11th April, 1985, the plaintiffs had submitted their tender to the defendants in respect of the work of desilting of drainage channel, repairs to the collapsed portion of the drainage channel between Senapati Bapat Marg and Cleave Land Bunder Road, Worli, Bombay (hereinafter referred to as the "work No. 1"). On the very day, the plaintiffs also submitted their tender to the defendants in respect of the work of desilting of open Nallas from Race Course to Love Grove pumping station and from E. Moses road upto Nehru Science Centre (hereinafter referred to as the "work No. 2"). On 11th April, 1985, the plaintiffs submitted tender to the defendants in respect of the aforesaid work of Desilting Joglekar Nalla at Dharavi, G/North Ward, Bombay (hereinafter referred to as "the work No. 3"). The said tenders of the plaintiffs were accepted by the defendants in the month of May, 1985 and the contracts to carry out the said works were awarded to the plaintiffs. The plaintiffs had only signed the formal agreements with the defendants in respect of the said work awarded to the plaintiffs.
The said tenders of the plaintiffs were accepted by the defendants in the month of May, 1985 and the contracts to carry out the said works were awarded to the plaintiffs. The plaintiffs had only signed the formal agreements with the defendants in respect of the said work awarded to the plaintiffs. The special Directions to the tenderers as also General Conditions of contract of civil works of the Municipal Corporation of Greater Bombay alongwith other documents formed part of the terms and conditions of the said agreements. The Arbitration Suit No. 1503 of 1990 has been filed in connection with the claim of the plaintiff arising in respect of the said work No. 1. Arbitration Suit No. 1504 of 1990 has been filed by the plaintiffs in respect of their claim arising in respect of the said work No. 2 and the Arbitration Suit No. 1505 of 1990 has been filed by the plaintiffs in respect of their claim arising in respect of the said work No. 3. 5. Clause 5 of the said special directions to the tenderers reads as under : "In the items of desilting and the removal of excavated earth, 30% quantity will be deducted for voids from depot measurements or lorry measurement as the case may be." It is the case of the plaintiffs that it was estimated that when the silt and sludge is allowed to dryup it contains voids which would be 30% of the quantity and therefore in the said Clause 5 the deduction of 30% of the quantity for voids from the measurements was provided. It is also the case of the plaintiffs that at the time of commencement of the said work, the Officers/Engineers of the defendants realised that excavated silt could not be stocked for drying up in nearby and instructed the plaintiffs to load the wet silt and sludge directly into the trucks and as such, the plaintiffs were made to load the said wet silt into the trucks in the presence of the Officers/Engineers of the defendants. It is also the case of the plaintiffs that since the said wet silt and the sludge was saturated they did not contain any voids and the same weighted much more than the dried silt.
It is also the case of the plaintiffs that since the said wet silt and the sludge was saturated they did not contain any voids and the same weighted much more than the dried silt. The plaintiffs had taken the test thereof and the results were submitted to the Engineers in charge of the defendants who agreed with the claim of the plaintiffs that the said wet silt and sludge did not contain voids. It is also the case of the plaintiffs that the plaintiffs had agreed to transport the said wet silt on the condition that the defendants would not deduct 30% of the quantity from the measurements and payments would be made accordingly for the entire measured quantity. Since the plaintiffs have been paid the amount payable to them deducting 30% in quantities by the defendants the plaintiffs are making claim in respect thereof against the defendants. Since the defendants have denied the claim of the plaintiffs and also denied to make reference to arbitration in respect of claim of the plaintiff against the defendants, the present suits, have been filed for the reliefs as aforesaid. 6. There are four essential conditions necessary to make the section 20 of the Act applicable. They are :- (i) The parties must have entered into an arbitration agreement : (ii) The agreement must have been entered into before a suit with respect to/its subject matter is filed in Court : (iii) A dispute or difference, contemplated in the agreement, must have arisen: and (iv) The Court has jurisdiction in the matter. Sub-section (2) to (4) lay down the procedure to be followed by the Court when an application is filed under section 20 and sub-section (5) makes other provisions of the Act applicable to arbitration to the extent possible. The scope of enquiry under this section is very much limited. On an application being moved under this section, all what the Court has to see is :- (i) Whether there is an arbitration agreement as between the parties, (ii) Whether there exists dispute between the parties ; (iii) Whether the dispute disclosed by the parties is covered by such arbitration agreement. There is no dispute between the parties as to existence of the arbitration agreement. Since Mr.
There is no dispute between the parties as to existence of the arbitration agreement. Since Mr. Dalal, the learned Counsel appearing for defendants has submitted that the suits being barred by limitation are not maintainable, it is necessary to consider as to when right to apply accrued in favour of the plaintiffs. Article 137 in the Third Division of the Schedule to the Limitation Act, 1963 applies to the applications under section 20 of the Act which are to be numbered as suits. Under the said Article, time begins to run when right to apply accrues. It is, therefore, necessary to consider as to when the right to apply accrued in favour of the plaintiffs. 7. As aforesaid, there is no dispute between the parties as regards existence of arbitration agreement between them. Similarly, if the suits as framed and filed are held to be in time, the disputes as disclosed by the parties would be covered by such arbitration agreement. Three running bills were submitted by the defendants in respect whereof the payments were made to the plaintiffs in the month of October 1985, June 1986 and October 1986. It is the case of the defendants that the plaintiffs had raised dispute by letters dated 25th July, 1986, 8th September, 1986 and 10th September, 1986 addressed to the defendants and since the claims made by the plaintiffs vide the said letters were denied by the defendants, the disputes arose in any event in the month of September 1986 and the suits having been filed in the month of March 1990 are beyond the period of three years when right to apply accured in favour of the plaintiffs. In the affidavit of the defendants filed in reply. It is stated that the final bill was prepared before the end of May 1988 and the plaintiffs have signed the final bill without any protest or objection and accepted full payment in respect thereof and as such, no claim now subsists in favour of the plaintiffs. 8. In view of averments made by the defendants in the said affidavit and to ascertain as to whether the suits as filed are barred by limitation and not maintainable, it is necessary to consider the said letters dated 25th July, 1986, 8th September, 1986 and 10th September, on which the reliance has been placed by the defendants.
8. In view of averments made by the defendants in the said affidavit and to ascertain as to whether the suits as filed are barred by limitation and not maintainable, it is necessary to consider the said letters dated 25th July, 1986, 8th September, 1986 and 10th September, on which the reliance has been placed by the defendants. It is also necessary to consider the final bill prepared by the defendants in the month of May 1988 which is alleged to have been signed by the plaintiffs without raising any objection thereto. Unfortunately, for the reasons best known to the defendants and their officers the material documents which are necessary and required to consider as to whether these suits are barred by limitation and in view of alleged acceptance of final bill of the defendants there is no arbitrable dispute in existence, have not been produced by the defendants. No cogent reason has been given for non-production of these documents. For want of these documents, it is not possible to presume that the dispute arose prior to the letter dated 6th July, 1988 addressed by the plaintiffs through their Advocates. In want of the relevant and material documents, it is also not possible to hold that the plaintiffs signed the final bill without protest or objection or that the plaintiffs received payment in full and final satisfaction of their claims or that no arbitrable dispute has remained in existence. In the circumstances, I hold that the dispute arose only in the month of July 1988 when the said letter was addressed by the advocate for the plaintiffs and claim of the plaintiffs was denied by the defendants and that arbitrable dispute exists. In this view of the matter, the suit filed by the plaintiffs are within time and the plaintiffs are entitled to the reliefs prayed for in the suits. 9. Accordingly, each of the suits is decreed in terms of prayers (a) and (b) thereof. The defendants are directed to appoint arbitrator in each matter in accordance with arbitration agreement on or before 15th December, 1995. In the event of arbitrator being not appointed on or before 15th December, 1995, the plaintiffs are at liberty to apply to this Court for further directions regarding appointment of arbitrator without filing fresh petition but merely on precipices. There shall, however, be no order as to costs of the suits. 10. Mr.
In the event of arbitrator being not appointed on or before 15th December, 1995, the plaintiffs are at liberty to apply to this Court for further directions regarding appointment of arbitrator without filing fresh petition but merely on precipices. There shall, however, be no order as to costs of the suits. 10. Mr. Dalal, the learned Counsel appearing for defendants, applies for stay of the operation of this order. Application is rejected. CC expedited. Petitions allowed.