Judgment :- Koshy, J. What is the effect of section 37 (4) of the Arbitration Act, 1940 (hereinafter referred to as 'the Act') when a time-limit is fixed in the agreement to issue notice to appoint an arbitrator is the main issue to be decided in these cases. These four appeals arose out of a common judgment disposing of four arbitration requests filed under sections 5, 20 and 37 (4) of the Indian Arbitration Act, 1940. Appellants in all these cases are the same company and the issue to be considered in all these cases is one and the same. So, we are disposing of all the four appeals by this common judgment as agreed to by the parties. 2. The arbitration clauses in the four contracts which are the subject-matter of the cases are the same. We quote below the relevant sub-clause of the arbitration clause in the agreement: "It is also a term of the Contract that if the Contractor(s) do/does not made any demand for arbitration in respect of any claim(s) in writing within 90 days of receiving the intimation from the Company that the final bill is ready for payment or within 90 days from the date of final payment whichever is earlier. The claim of them contractor(s) will be deemed to have been waived and absolutely barred and the Company shall be discharged and released of all liabilities under then contract in respect of these claims." When the arbitration request was made, the contention raised by the appellant company was that since demand for arbitration request was not given in writing within ninety days of receiving the intimation from the company regarding the final bill, arbitration is barred and the company is discharged of all its obligations. It is also pointed out by the appellant company that the matter is covered by the decision of the Supreme Court in Wild Life Institute of India, Dehradun v. Vijay Kumar Garg (1997) 10 SCC 528 There, interpreting a similar clause in the contract, the Supreme Court observed as follows: "6. It is also pointed out by the appellant company that the matter is covered by the decision of the Supreme Court in Wild Life Institute of India, Dehradun v. Vijay Kumar Garg (1997) 10 SCC 528 There, interpreting a similar clause in the contract, the Supreme Court observed as follows: "6. It is also necessary to refer to the arbitration clause under the contract which clearly provides that if the contractor does not make any demand for arbitration in respect of any claim in writing within 90 days of receiving the intimation from the appellants that the bill is ready for payment, the claim of the contractor will be deemed to have been waived and absolutely barred and the appellants shall be discharged and released of all liabilities under the contract in respect of these claims. The liability, therefore, of the appellants ceases if no claim of the contractor is received within 90 days of receipt by the contractor of an intimation that the bill is ready for payment. This clause operates to discharge the liability of the appellants on expiry of 90 days as set out therein and is not merely a clause providing a period of limitation. In the present case, the contractor has not made any claim within 90 days of even receipt of the amount under the final bill. The dispute has been raised for the first time by the contractor 10 months after the receipt of the amount under the final bill." The court below did not accept the above contention and found that in view of section 37 (4) of the Act, the court has got power to enhance the time mentioned in the agreement provided the court is of the opinion that undue hardship is caused in the circumstances of the case. 3. 3. Section 37 (4) of the Act is as follows: "(4) Where the terms of an agreement to refer future differences, to arbitration provided that any claims to which the agreement applies shall be barred unless notice to appoint an arbitrator is given or an arbitrator is appointed or some other step to commence arbitration proceedings is taken within a time fixed by the agreement, and a difference arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such termss, if any, as the justice of the case may require, extend the time for such period as it thinks proper." By using the powers under section 37 (4) of the Act, the court below extended the time and directed the company to produce the original agreement. It was also directed to furnish panel of arbitrators. Before considering the main issue in dispute, we may consider the time lag in each of these cases: Arb. Appeal No. 2/2004 (O.S.No. 464/95) Final bill passed for payment :3-4-1993 Final bill paid :24-6-1993 Mistake pointed out in amount of final bill/claim raised. :3-2-1994 Demand for arbitration (Lawyer notice) :9-5-1994 Arb. Appeal No. 3/2004 (O.S.No. 462/96) Final bill prepared :8-10-1993 Final bill paid :8-11-1993 Claim submitted (no response) :20-12-1995 Demand for arbitration (Lawyer notice) :20-12-1995 Arb. Appeal No. 4/2004 (O.S.No. 422/95) Final bill passed for payment :5-4-1994 Final bill paid :10-6-1994 Claim submitted :7-6-1994 Claim rejected :8-9-1994 Demand for arbitration (Lawyer notice) :17-10-1994 Arb. Appeal No. 5/2004 (O.S.No. 528/95) Final bill prepared :11-5-1993 Final bill paid :11-8-1993 Mistake/shortfall in payment pointed out/Claim submitted :20-10-1993 Demand for arbitration (Lawyer notice) :9-3-1995 4. It is well-settled law that merely because final bill was signed and for getting the money a receipt was executed in full settlement of the bill, arbitration clause cease to exist, when there are any real disputes. In Damodar Valley Corporation Ltd. v. K.K. Kar (1974) 1 SCC 141, Apex Court observed as follows: "6. It appears to us that the question whether there has been a full and final settlement of a claim under the contract is itself a dispute arising 'upon' or 'in relation to' or 'in connection with' the contract. In Damodar Valley Corporation Ltd. v. K.K. Kar (1974) 1 SCC 141, Apex Court observed as follows: "6. It appears to us that the question whether there has been a full and final settlement of a claim under the contract is itself a dispute arising 'upon' or 'in relation to' or 'in connection with' the contract. These words are wide enough to cover the dispute sought to be referred." In Union of India v. L. K Ahuja and Co (1988) 3 SCC 76, Apex Court held as follows: "In order to be entitled to ask for a reference under section 20 of the Act, there must be an entitlement to money and a difference or dispute in respect of the same. It is true that on completion of the work, right to get payment would normally arise and it is also true that on settlement of the final bill, the right to get further payment gets weakened but the claim subsists and whether it does subsist, is a matter which is arbitrable." (See: paragraph 8) But claim should be raised within the time prescribed under the Limitation Act. In Jayesh Engineering Works v. New India Assurance Co. Ltd. (2000) 10 SCC 178 also, Apex Court held that mere 'accord and satisfaction' will not prevent parties to raise arbitration dispute on circumstances of the case. In Chairman and MD., N.T.P.C. Ltd. v. Reshmi Constructions, Builders and Contractors (2004) 2 SCC 663, Apex Court held as follows: "18. Normally, an accord and satisfaction by itself would not affect the arbitration clause but if the dispute is that the contract itself does not subsist, the question of invoking the arbitration clause may not arise. But in the event it be held that the contract survives, recourse to the arbitration clause may be taken, (See: Union of India v. Kishorilal Gupta (A.I.R. 1959 S.C. 1362) and Naihati Jute Mills Ltd. v. Khyaliram Jagannath (A.I.R. 1968 S.C. 522)." The contention of the appellant company is not that because final bill is signed, contractors cannot raise any demand on the principle of accord and satisfaction. But, their contention is that demand was not raised within the stipulated time in the agreement though within the time prescribed under the Limitation Act and because of that the company is discharged from all its liabilities as held by the Apex Court in Wildlife Institute's case (supra). But, their contention is that demand was not raised within the stipulated time in the agreement though within the time prescribed under the Limitation Act and because of that the company is discharged from all its liabilities as held by the Apex Court in Wildlife Institute's case (supra). But, in that case, section 37 (4) was not invoked by the parties, and therefore, effect of section 37 (4) was not considered. 5. In Shetty's Construction Company Pvt. Ltd. v. Konkan Railway Corporation Limited and another (1999) 8 SCC 604, the arbitration clause provided that the contractor after 90 days but with 180 days of his presenting his final claim on disputed matters shall demand in writing that the dispute be referred to arbitration. Instead of doing so, the party approached the court for appointing an arbitrator. The Apex Court held that the court cannot permit either party to get out of the contractual obligations regarding resolution of disputes by arbitration dehors the scheme of arbitration envisaged by the contractual terms. Parties were relegated to resort to the contractual clause. Effect of section 37 (4) was not discussed in that judgment also. 6. In Sterling General Insurance Co. Ltd. v. Planters Airways Pvt. Ltd. (1975) 1 SCC 603 Apex Court considered the effect of a similar clause in the agreement stipulating time limit for raising arbitration. Clause 12 of the agreement in that case was as follows: "If the Company shall disclaim liability to the insured for any claim hereunder and such claim shall not within three calendar months from the date of such disclaimer have been preferred to arbitration under the provisions herein contained, then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder." But, parties did not seriously contended that in such case, section 37 (4) will not apply. Court was mainly considering the meaning of the term 'undue hardship'. The Supreme Court held that’ undue hardship’ in section 37 (4) of the Act should be given a liberal meaning. The court also considered English decisions in the absence of Indian decisions to take such a view. Court was mainly considering the meaning of the term 'undue hardship'. The Supreme Court held that’ undue hardship’ in section 37 (4) of the Act should be given a liberal meaning. The court also considered English decisions in the absence of Indian decisions to take such a view. The court also considered that the earlier view of the court in Steamship Company of 1912 v. Anglo-American Grain Co.(1958) 2 Lloyd’s Rep 341 that if a claim is rejected on the question of time bar, that will cause hardship; but, that cannot be called an 'undue hardship' was diluted and that strict view was departed from in the subsequent cases. In Watney, Combe, Reid & Co. v. E.M. Dower & Co. Ltd. (1956) 2 Lloyd’s Rep. 129, Lord Goddard said that mere fact of bar of limitation of the claim cannot be called an’ undue hardship'. But in F.E. Hookway & Co. Ltd., v. H.W.H. Hooper & Co.Ltd (1950) 2 All E.R. 842. Court took a liberal view and said that the court can take a lenient view provided the delay is not caused on the fault of the claimants. In Stanhope Steamship Co. Ltd. v. British Phosphate Commissioners (1958) 2 Lloyd’s Rep 325, Singleton, J. held as follows: "What, then, is the meaning of 'undue hardship’? 'Undue', it is said by Mr. Mac Crindle, means something which is not merited by the conduct of the claimant. That may be right. If the result of claimant's being perhaps a day late is so oppressive, so burdensome, as to be altogether out of proportion to the fault, I am inclined to think that one may well say that there is undue hardship. Both the amount at stake and the reasons for the delay are material considerations." After considering the observations of Lord Denning, in Liberian Shipping v. A. King & Sons (1967) 1 All. E.R. 934 the Apex Court held as follows: "14. Therefore, we will have to take a liberal view of the meaning of the words 'undue hardship'. 'Undue' must mean something which is not merited by the conduct of the claimant, or is very much disproportionate to it. 15. E.R. 934 the Apex Court held as follows: "14. Therefore, we will have to take a liberal view of the meaning of the words 'undue hardship'. 'Undue' must mean something which is not merited by the conduct of the claimant, or is very much disproportionate to it. 15. Keeping in view these principles, it has to be seen whether in the facts and circumstances of this case, there was reasonable and sufficient ground for not preferring the claim to arbitration within the time specified in Clause 12 of the policy and whether there would be 'undue hardship' to the respondent if time is not extended." A reading of the above Judgment would show that notwithstanding the term in the contract of agreement to raise an arbitration dispute within a time-limit and also a term in the agreement that the company will be discharged of all its liabilities, if undue hardship is caused, section 37 (4) of the Act can be made use of and time for raising arbitration can be extended by the court having jurisdiction. 7. Considering the three-member Bench decision in Sterling General Insurance Co. Ltd.'s case (supra), we are of the view that if undue hardship is caused, section 37 (4) of the Act can be invoked in appropriate cases by the court for extending the time stipulated in the arbitration agreement Otherwise, section 37 (4) will have no application at all. In Rao Shiv Bahadur Singh and another v. State of Vindhya Pradesh AIR 1953 SC 394 it is incumbent on the Court to avoid a construction which will render a part of the Statute devoid of any meaning or application. The words used in section 37 (4) are clear, plain and unambiguous. In such circumstances, as held by the Apex Court in Nelson Motis v. Union of India and another AIR 1992 SC 1981, Courts are bound to give effect to that meaning. Section 37 (4) applies only when the agreement to refer future differences to arbitration provides that claims to which the agreement applies shall be barred unless notice to appoint an arbitrator is given within a particular time as in these cases. In such cases, if the Court is of the opinion that undue hardship is caused, Court can extend the time. But, it should be within the time stipulated in the Limitation Act. In such cases, if the Court is of the opinion that undue hardship is caused, Court can extend the time. But, it should be within the time stipulated in the Limitation Act. Whether undue hardship is caused or not is to be determined on the circumstances of each case even though a liberal approach can be taken by the Court. The word 'undue hardship' is different from mere 'hardship'. The word 'undue’ was not used as a mere surplusage. The maxim 'utres magis valeat quarn pereat' mentions that it could not be assumed that the Legislature had used any word without a purpose. As held by the Privy Council in Quebee Railway Light Heat and Power Co. Ltd. v. Vandry and others AIR 1920 PC 181 the Legislature is deemed not to waste or to say anything in vain. The Apex Court in Aswini Kumar Ghose and another v. Arabinda Bose and Another AIR 1952 SC 369 held that it is not a sound principle of law of construction to brush aside word in a statute as being surplusage except under compelling circumstances. This view has been followed consistently by the Courts in India. In exercising the discretion to extend time under section 37 (4) of 1940 Act corresponding to section 43 (3) of 1996 Act, Court must take all relevant circumstances for consideration. The bona fides and reasonableness of the conduct of the claimant, the amount of stake involved, existence of prima facie case, delay in not taking steps for arbitration within a reasonable time, reasons given for the delay, possibility of causing prejudice to other side in reopening settled matters by extending time, etc. are all matters relevant in considering whether undue hardship would be caused if time is not extended. The question of 'undue hardship' has to be decided in relation to the facts of each case and the burden is on the party who claim for extension beyond the time stipulated in the arbitration clause in the agreement seeking the aid of section 3 7 (4) of the Act. The power vested in the Court under the above section cannot be exercised in a mechanical manner. If the amount is very huge which may affect the financial stability of the person making the claim and if there is prima facie case, rejection of the claim merely on the ground of delay may cause’ undue hardship'. The power vested in the Court under the above section cannot be exercised in a mechanical manner. If the amount is very huge which may affect the financial stability of the person making the claim and if there is prima facie case, rejection of the claim merely on the ground of delay may cause’ undue hardship'. Of course, he must give a reasonable explanation for delay to satisfy bona fides. 8. Now we will consider whether undue hardship is caused in these cases to the contractor. Going by the plaint, in Arb. Appeal No.2 of 2004, final bill was passed for payment on 3-4-1993. Much before that date, the contractor must have got the notice for final bill. In any event, final bill was paid on 24-6-1993. Security deposit was also taken back. Agreement itself was worked out. A mistake in final bill was pointed out on 3-2-1994 that by a mistake in calculation, there is a short payment of Rs.6,092. But, there was no contention at that time that the final bill was signed under coercion or there are other claims which are not considered in the final bill. Demand for arbitration was given on 9-5-1994, after about one year of the payment of the amount and even after getting back the security deposit by the claimant. Merely because a claim was raised at the sweet will and pleasure of the contractor, Court cannot hold that there is undue hardship. The court below found that there is undue hardship caused in all these cases, but did not consider the dates of claim and who was at fault in not claiming for arbitration within the time stipulated in the arbitration clause or why claim was not filed at least within a reasonable time. The Court below found 'undue hardship' in all these cases by a sweeping observation in paragraph 15 without consideration of the facts of each case. The court below at paragraph 15 held as follows: "15. Here from the pleadings in all the plaints it is clear that a huge amount has been claimed by the plaintiff towards loss on various heads. He was said to be under the legitimate belief that the claim put forward by him would be settled and there was such assurance also from the side of the defendants. It is true that, that has been denied by the defendants. He was said to be under the legitimate belief that the claim put forward by him would be settled and there was such assurance also from the side of the defendants. It is true that, that has been denied by the defendants. So considering the facts and circumstances if the Arbitration now sought for by the plaintiff is not allowed, there would be undue hardship caused to him. So I am of the view that this court can extend the time as per section 37 (4) of the Arbitration Act in the facts and circumstances of this case. ……………………………….” When the final bill amount was received on 24-6-1993 and arbitration claim was filed only in 1994, without any reasonable explanation for the time lag, it cannot be stated that undue hardship is caused. It was not proved by the appellant that at any time after the settlement of final bill respondent promised to pay any additional amount. It is true that there may be hardship. We note that after giving notice, final bill was prepared and final bill was paid and accepted by the parties. Security deposit was also released. After eight months, on 3-2-1994, a small mistake was pointed out regarding calculation. Even in that there was no case that claimants were entitled to more amount and they signed the bill due to coercion. Hence, it is the appellants' own mistake in not preferring the claim within the time prescribed under the arbitration agreement or within a reasonable time. Bona fide of the appellant in raising a belated claim is not proved. It cannot be termed as undue hardship. Otherwise, in all cases when claim is raised, it can be contended undue hardship will be caused whenever a belated dispute is not referred to the arbitrator. Similar is the case with regard to Arb. Appeal No.3 of 2004. Final bill was prepared on 8-10-1993 and final bill was paid on 8-11-1993. Even a claim was submitted on 20-12-1995 and on the same day demand for arbitration was made. There, the delay is more than 2 years. No undue hardship is caused in such circumstances as the claim is only an afterthought. In Arb. Appeal No.5 of 2004, final bill was prepared on 11-5-1993 and final bill was paid on 11-8-1993. Even a claim was submitted on 20-12-1995 and on the same day demand for arbitration was made. There, the delay is more than 2 years. No undue hardship is caused in such circumstances as the claim is only an afterthought. In Arb. Appeal No.5 of 2004, final bill was prepared on 11-5-1993 and final bill was paid on 11-8-1993. On 20-10-1993, some mistakes were pointed out in the calculations; but demand for arbitration was made only on 9-3-1995, after more than one and a half years. It shows that there is no undue hardship. Even if contractor agrees to receive final bill due to necessity, nothing prevented him from advancing a claim within a reasonable time. Therefore, even if section 37 (4) is applicable, circumstances in the above three cases show that no undue hardship was caused to the contractor and the court below went wrong in granting time under section 37 (4). Therefore, Arb. Appeal Nos. 2, 3 and 5 of 2004 are to be allowed. 9. In the case of Arb. Appeal No.4 of 2004, final bill was prepared for payment on 5-4-1994. Immediately, a claim was filed on 7-6-1994. Final bill was paid on 10-6-1994. But, his claim submitted on receipt of notice of final bill was rejected only on 8-9-1994 and demand for arbitration was raised on 17-10-1994. He put forward the claim even before final bill was passed and that was rejected only on 8-9-1994 and demand for arbitration was made within 90 days, that is, 17-10-1994 and therefore is filed in time, even though, in strict sense, demand for arbitration is said to be made after three months of the intimation of final bill. His claim put forward before the bill was finalized was, rejected only on 8-9-1994, and immediately he issued notice for appointment of arbitrator and rejection of the claim in appointing arbitrator in this case has really caused undue hardship. Bona fides of the respondent in Arb.Appeal No.4 of 2004 cannot be doubted. Time was rightly extended by the court below. Therefore Arb. Appeal No.4 of 2004 is dismissed as the court below was right in allowing the arbitration request. Arb. Appeal Nos. 2, 3 and 5 of 2004 are allowed and Arb. Appeal No. 4 of 2004 is dismissed.