JUDGMENT R.M.S. Khandeparkar, J. - This appeal arises from Order dated 19th April, 1997 passed in Special Civil Suit No. 110/96/B by Civil Judge, Senior Division, Panaji. By the impugned order the trial Court has rejected the application filed by the appellant under Section 20 of the Arbitration Act. 1940, hereinafter called as 'the old Act', on the ground that the application is barred by limitation as well as the appellant has failed to place on record the agreement or duly certified copy thereof as required under the Arbitration and Conciliation Act, 1996, hereinafter called as 'the new Act'. 2. The facts in brief relevant for the decision are that the appellant was awarded the work of blacktopping of the road from Hutatma Smarak to Chichonimanas in Village Panchayat Dhargal Pednem Taluka by Order dated 3rd April, 1991. The work was required to be completed by 11th April, 1992. However, for one reason or other the same could not be completed till April 1993 and it was completed on 30th April, 1993. According to the appellant the final bill in respect of the work done by him is yet to be prepared. Meanwhile the appellant by his letter dated 26th June, 1995 preferred certain claims and consequently demanded the payment of certain amounts from the respondents in relation to the work done by the appellant. Further by a letter dated 21st July, 1995 the appellant called upon the respondent to appoint the sole arbitrator in view of the failure on the part of the Executive Engineer to pay the amount claimed by the appellant by his letter dated 26th June, 1995. According to the appellant, the respondent having failed to appoint an arbitrator within the stipulated period, the appellant application under Section 20 of the Arbitration Act for reference of the disputes to an Arbitrator. The said application was filed sometime in June 1996. The respondent herein objected to the said application being not maintainable including the objection regarding the application being barred by the law of limitation. 3.
The said application was filed sometime in June 1996. The respondent herein objected to the said application being not maintainable including the objection regarding the application being barred by the law of limitation. 3. While assailing the impugned order, Shri. S.G. Desai, the learned senior advocate appearing for the appellant, submitted that the trial court ought to have considered that the arbitration proceedings in respect of the dispute raised by the appellant had already commenced on the date when the new Act come into force and, therefore, considering the provisions contained in the new Act the proceedings in the instant matter are governed by the provisions of the old Act and therefore, there was no need for the appellant to file the original arbitration agreement or any certified copy thereof, which is otherwise required under the new Act. As regards the issue of limitation, the learned advocate submitted that there was no question of the application being barred by the law of limitation, unless the final bill was issued by the respondent besides, the fact that the trial court has not given any reasons for arriving at the finding that the application is barred by the law of limitation. He placed reliance in the decision of the apex Court in the matter of Major (Retd.) Inder Singh Rekhi v. Delhi Development Authority. ( AIR 1988 SC 1007 = 1988(2) Arb. LR 270.). 4. Shri. M.S. Joshi, the learned Additional Government Advocate appearing for the respondent, on the other hand submitted that the application for reference of the dispute to arbitration wa admittedly filed in June 1996 much after the enforcement of the new Act and, therefore, no fault can be found with the tried with the trial court for dismissing the application for non-compliance of the mandatory provisions contained in Section 8. As regards limitation, he submitted that the work was completed in April 1993 and the application for arbitration was filed in June 1996. Being so, it is beyond the period of 3 years and, therefore, is squarely barred by law of limitation. 5. The points for determination which arise in the present appeal are: (a) Whether the matter in issue is governed by the old Act or the new Act? (b) Whether on the face of the application filed by the appellant, the same appears to be barred by law of limitation?
5. The points for determination which arise in the present appeal are: (a) Whether the matter in issue is governed by the old Act or the new Act? (b) Whether on the face of the application filed by the appellant, the same appears to be barred by law of limitation? (c) Whether for non-compliance of the provisions contained in Section 8 regarding filing of arbitration agreement or certified copy thereof are mandatory and failure thereof would warrant dismissal of the application? 6. Upon hearing the advocates for the parties and on perusal of the records, it is evident that indisputedly after the completion of the work, the appellant addressed a letter dated 26th June, 1995 giving details about all his claims and calling upon the respondents to decide about the same within 15 days. In the said letter it was also made known to the respondents that if the respondents failed to give necessary decision on the claim of the appellant within 15 days of the receipt of the notice, the appellant would treat the said claim as being disputed by the respondents. It is also not disputed that Clause 25 of the agreement between the parties provides for reference of dispute to an Arbitrator. Undisputedly the appellant issued a notice dated 21st July, 1995 to the respondent calling upon the respondent to appoint the arbitrator to decided the dispute between the parties, in view of failure on the part of the respondent to take appropriate decision on the claims put forth by the appellant in his letter dated 26th June, 1995. In other words, the notice requiring the appointment of an Arbitrator in terms of arbitrator agreement was served by the appellant on the respondent in July 1995 that is much prior to the implementation of the new Act. 7. Bearing in mind the above factual aspect of the case, it is necessary to peruse the provisions of law contained in the old Act as well as the new Act in order to ascertain as to which of the two Acts would apply to the matter in issue. Section 85(1) of the new Act provides for repeal of the old Act.
Section 85(1) of the new Act provides for repeal of the old Act. However, sub-section (2) thereof provides thus: "(2) Notwithstanding such repeal - (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force otherwise agreed by the parties but this act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force." It is thus clear that sub-section (2) of Section 85 clearly saves the proceedings already commenced under the old Act and provides that the same would be governed by the provisions of the old Act. The term used in the sub-section (2) of Section 85 is 'arbitral proceeding. Section 21 of the new Act provides that unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent. In other words, the arbitral proceedings commence from the date of receipt of request for dispute being referred to arbitration. And in case such request was received prior to the day the new Act came into force, then in terms of provisions contained in Section 85(2), the proceedings would be governed by the provision of the old Act. 8. In the instant case undisputedly the request for reference of dispute was receive by the respondent by virtue of letter dated 21st July, 1995 addressed by the appellant which was much prior to the date of enforcement of the new Act, Undisputedly the new Act came into force with effect from 25th January, 1996. Being so, the proceedings in the instant case are to be necessarily governed by the old Act and not by the new Act. Therefore the first point is to be answered accordingly. 9. As regards the second point date of issuance of the final bill would be relevant in the facts and circumstances of the case. Undisputedly on the face of the application itself it is not clear as to whether such a final bill was prepared 3 years prior to the filing of the application. Even in the reply filed by the respondent, they have not disclosed as to when the final bill was issued.
Undisputedly on the face of the application itself it is not clear as to whether such a final bill was prepared 3 years prior to the filing of the application. Even in the reply filed by the respondent, they have not disclosed as to when the final bill was issued. Moreover the issue regarding limitation being primarily dependent upon the date of issuance of the final bill as is held by the apex court in the matter of Major (Retd.) Inder Singh Rekhi (supra), it would not permissible for the court to reject the application without giving an opportunity to the parties to place necessary materials on record in that respect and without parties being heard on that issue. Indeed the learned advocate for the appellant is justified in making grievance about absence of reasons in the impugned order for arriving at the finding that the application is barred by law of limitation. It appears that the trial court was impressed by the fact that the work was completed by 30th April, 1993. Certainly the same cannot be the date for cause of action in each and every case for filing application for arbitration proceedings in view of the decision of the apex court in the matter of Major (Retd.) Inder Singh Rekhi (supra). The finding of the trial court on the point of limitation therefore is to be set aside and the issue is to be kept open to be decided on merits after giving fair opportunity to both the parties in that respect. 10. Since the matter in question is being governed by the provisions of the old Act, the third point does not require to be considered in this case. 11. In the result, therefore, the appeal succeeds and is hereby allowed. The impugned order is quashed and set aside and the application filed by the appellant is restored. The matter is remanded to the trial court to proceed with the proceedings in accordance with law. There shall be no order as to costs. Appeal allowed.