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2013 DIGILAW 124 (JK)

Dos Raj Nagpal v. Union of India and ors.

2013-03-05

M.M.KUMAR

body2013
1. This petition filed under clause 11 of the J&K Arbitration and Conciliation Act, 1997 (for brevity the Act) prays for appointment of an arbitrator by this Court. Brief facts; 2. A contract agreement no. CEUZ-31/92-93 to build quarters at Akhnoor was executed on 31.12.1992 (Annexure A) between the petitioner and respondents. According to the contract agreement the Engineer-in-Chief-respondent no. 3, is the designated authority to appoint an arbitrator and there are no specific qualification of the arbitrator indicated in the agreement. The claim of the petitioner is that it had completed the work and bill was raised which became subject matter of dispute. A perusal of the original record shows that the petitioner had submitted bills from 1993 which included claims for extra work done on the asking of respondents. Eventually on 01.01.1996, a final bill was prepared by the petitioner firm. Even respondents. On the foot of the bill there is a certificate by the contractor. It certified that entire payment due to it and its claims made from time to time were included in the bill irrespective of the fact whether they were accepted by the department or not. It also stipulated that the firm reserved its right to raise additional claims in the final bill. The bill was signed under protest which was paid on 31.01.2003: It is claimed that the legitimate payment due to the petitioner has been withheld for no fault on its part. A list of claims has been set out in para 11 of the petition. Despite notice dated 11.08.2003 requesting the Engineer-in-Chief-respondent no. 3 to appoint an arbitrator no heed has been paid to the request of the petitioner which led to the filing of the instant petition under Section 11 of the Act. 3. In the objections filed by the respondents it has been conceded that contract agreement no. CEUZ-31/92-93 was executed and work was allotted to the petitioner which was duly accepted by it on 31.12.1992. It is also conceded that the work was completed on 27.03.1995 (for Phase I) and 30.01.1995 (for Phase-II). However, it has been pointed out that the work was required to be completed on 27.09.1993 (for Phase-I) and 27.01.1995 (for Phase-II) which period was extended. It is also conceded that the work was completed on 27.03.1995 (for Phase I) and 30.01.1995 (for Phase-II). However, it has been pointed out that the work was required to be completed on 27.09.1993 (for Phase-I) and 27.01.1995 (for Phase-II) which period was extended. However, the main issue raised by the respondent is that the instant petition filed on 17.03.2005 is barred by limitation as provided under Article 181 of the J&K Limitation Act Svt. 1995 (1938 A.D.). According to the respondents, the petitioner has right to apply within three years for arbitration from the date cause of action has arisen which is 01.01.1996 and, therefore, the application filed by the petitioner in the year 2005 is clearly time barred. 4. Mr. Anil Mahajan, learned counsel for the petitioner has vehemently argued that the right to apply for appointment of an arbitrator in terms of Clause 70 of the IAFW of the general conditions in the contract agreement arose to the petitioner only on 30.01.2003 when the partial payment of final bill was made. According to the learned counsel it is wholly unwarranted and uncalled for to conclude that the cause of action had arisen when the so called final bill was submitted on 01.01.1996 because at that stage the petitioner could not be sure with regard to the disputed amount. The submission made by the learned counsel is that the cause of action would arise only when the dispute had surfaced on partial payment made on 31.01.2003 which was after a period of seven years of the submission of the so called final bill. In support of his submission learned counsel has placed reliance on the observations made by a Division Bench of Delhi Court in the case of Prasar Bharti v. MAA Communications 2010 (1) Arb. LR 551 (Delhi) (DB) and argued that limitation for filing an application under Section 11 (4) of the Act would start running only from the receipt of request mention in Section 11 (4) (a) or (b) of the Act. The limitation for an application under Section 11 (6) would start running on happening of contingencies mentioned in Sub Clause (a) or (b) or (c). Therefore, a petition filed within three years of approaching the competent authority for appointment or an arbitrator would be within time. Mr. The limitation for an application under Section 11 (6) would start running on happening of contingencies mentioned in Sub Clause (a) or (b) or (c). Therefore, a petition filed within three years of approaching the competent authority for appointment or an arbitrator would be within time. Mr. Mahajan has also placed reliance on the observations made by a Division Bench of Calcutta High Court in Bhilai Wires Limited. V. Bharat Sanchar Nigam Limited, 2011 (1) Arb. LR 74 (Calcutta) indicating that the date of last payment would be the relevant date for purposes of commutation of limitation for the entire period claimed by. the contractor. Viewed from that point it has been submitted that the filing of the present petition is within the period of limitation. 5. Banking upon the observations made in para 24 of the judgment of Hon'ble the Supreme Court in case of Steel Authority of India Limited v. J. C. Budharaja, (1999) 8 SCC 122 , Mr. Sachin Gupta, learned counsel for the respondent has argued that the date of claim made in January, 1996 should be the date of cause of action and not the date of payment. He has also placed reliance on the observations made by the Constitution Bench of the Supreme Court in a celebrated judgment rendered in case of SB & Co. v. Patel Engineering Ltd. and anr. (2005) 8 SCC 618 and argued that the Chief Justice or his nominee judge have a right to decide the preliminary -issue which included as to whether the claim is a live claim or it is state one and hit by delay and laches. 6. The question which falls for determination is when the period of limitation start running. Is it from the submission of bill by the petitioner on 01-01-96 when cause of action claims to have arisen or when the payment was made on 31-01-2003. In order to appreciate the rival contentions" set out in extensor the bill, the certificate at its foot and signature under protest- 1. CBI No. 19 2. CBI No. 16 3. CBI No. 35 4. CBI No. 23 5. CBI No. 39 6. CBI No. 49 7. CBI No. 44 8. CBI No. 22 9. CBI No. 46 10. CBI No. 33 11.CBINo.25 12. CBI No. 34 13. CBI No. 46 14. CBI No. 19 15. CBI No. 30 16. CBI No. 31 17. CBI No. 16 3. CBI No. 35 4. CBI No. 23 5. CBI No. 39 6. CBI No. 49 7. CBI No. 44 8. CBI No. 22 9. CBI No. 46 10. CBI No. 33 11.CBINo.25 12. CBI No. 34 13. CBI No. 46 14. CBI No. 19 15. CBI No. 30 16. CBI No. 31 17. CBI No. 34 18. CBI No. 05 19. CBI No. 25 20. CBI No. 11 21. CBI No. 61 22. CBI No. "OA No. CEUZ-31/92-93: M/S DES RAJ NAGPAL dt. 10.3.93 Vr.No. 71/1070/BP-l dt.6,3.93 dt. 8.4.93 Vr.No. 71/1002/BP-l dt.2.4.93 dt. 10.6.93 Vr.No. 71/1011/BP-l dt.7.6.93 dt. 29.7.93 Vr.No. 71/1019/BP-ldt.28.7.93 dt. 8.9.93 Vr.No. 71/1024/BP-l dt.6.9.93 dt. 5.10.93 Vr.No. 71/1031/BP-l dt.4.10.93 dt. 6.11.93 Vr.No. 71/1033/BP-l dt.3.11.93 dt. 4.12.93 Vr.No. 71/1038/BP-l dt.4.12.93 dt. 10.1.94 Vr.No.71/1041/BP-l dt.10.1.94 dt. 10.3.94 Vr.No. 71/1049/BP-l dt.7.3.94 dt. 25.4.94 Vr.No. 71/1003/BP-l dt.19.4.94 dt. 15.6.94 Vr.No. 71/1004/BP-l dt.6.6.94 dt. 23.7.94 Vr.No. 71/1007/BP-|Jdt.16.7.94 dt. 6.8.94 Vr.No. 71/1010/BP-l dt.5.8.94 dt. 4.10.94 Vr.No. 71/1011/BP-l dt.7.9.94 dt. 4.10.94 Vr.No. 71/1012/BP-l dt.23.9.94 dt. 12.12.94Vr.No. 71/1014/BP-l dt.5.12.94 dt. 31.12.94 Vr.No. 71/1017/BP-l dt.28.12.94 dt. 17.2.95 Vr.No. 71/1021/BP-l dt.27.1.95 dt. 26.5.95 Vr.No. 71/1014/BP-l dt.22.5.95 dt. 23.6.95 Vr.No. 71/1015/BP-l dt.6.6.95 Vr.No. 71/1022/BP-l dt.29.12.95 Rs. 5,11,840.00 Rs. 2,07,850.00 Rs. 3,93,560.00 Rs. 4,62,210.00 Rs. 6,78,310.00 Rs. 4,02,550.00 Rs. 6,00,300.00 Rs. 3,53,280.00. Rs. 8,62,700.00 Rs. 5,20,200.00 Rs. 8,57,825.00 Rs. 4,52,795.00 Rs. 51,949.00 Rs. 3,62,004.00 Rs. 7,49,110.00 Rs. 1,02,825.00 Rs. 6,25,928.00 Rs. 1,69,184.00 Rs. 5,50,050.00 Rs.11,09,710.00 Rs. 2,46,370.00 Rs. 1.95.700.00 Rs. 10466260.00 Deduct - Payment made on Running Account Receipts:- 1st Payment-Voucher No........................dated........... 2nd Payment-Voucher No........................dated........... 3rd Payment-Voucher No........................dated........... 4th Payment-Voucher No........................dated........... 5th Payment-Voucher No........................dated........... 6th Payment-Voucher No........................dated........... 7th Payment-Voucher No........................dated....... 8th Payment-Voucher No........................dated....... 9th Payment-Voucher No........................dated....... 10th Payment-Voucher No.......................dated, Total Payments Net Amount of the Bill Net Amount of the Bill in words Deduct balance (if any) of Security See V overleaf) Actual amount to be paid to the contractor 10460250 10550550.00 Rs. P. 10560429.99 10466250.00 1047911.00 34500.40 17079.99 12060.00 71/1023/BP-l 01 JAN 96 " CERTIFICATE" CANOCEUZ-31/92-93 "It is certified that I have prepared this Final Bill in respect of CANO CEUZ-31/92-93 Name of work Provn of mol acorn for JCO's/Havs/ors at Akhnoor for claiming entire, payment due to me from this contract agreement. This Final Bill includes all claims raised by me from time to time irrespective of the fact where they are admitted/accepted by the department or not. This Final Bill includes all claims raised by me from time to time irrespective of the fact where they are admitted/accepted by the department or not. I now categorically certify that I have not more claims in respect of this contract beyond those already included in this Final Bill by me and this amount so claimed by me shall be in full and final satisfaction of all my claims under this contract agreement. I shall however reserve my right to raise claim to the extent disallowed to me from this Final Bill." Signed under protest Sd/- (Signatures of contractor)" The original Bill is set out below, which shows cuttings and the signature appended under protest:- 7. It is evident from record that certificate has been given on a separate typed sli which is pasted on the bill. There are apparently cuttings in the bill and the certificate clearly stating in the last sentence that the petitioner reserve his right to raise claim to the extent disallowed to him from the final bill. He had signed it under protest. There was no communication rejecting a part of the claim nor there was a communication rejecting any claim. The intention of the respondents was revealed when only a part of payment was made on 31.01.2003. The stipulation in the certificate attached at the foot of the bill, reserving his right by the petitioner, did not mature into a cause of action –till payment of amount lesser then reflected in the bill was made on 31.01.2003. There was a clear term that the petitioner was to raise dispute if his bill was disallowed partially. It became evident only when payment was made. Therefore, the claim of the petitioner to seek appointment of an arbitrator is not barred by the period of limitation. 8. On account of the clear position from record I do not feel the necessity of dealing with the judgments cited at the bar because none of the judgments would come close to the facts of this case. For example, in J. C. Budharaja's case (supra) claim for damages was made by contractor on 29.08.1979 on account of delay of two years in handing over of work sites. Thereafter a supplementary agreement was executed. A dispute concerning execution of work in respect of supplementary agreement arose in 1985. For example, in J. C. Budharaja's case (supra) claim for damages was made by contractor on 29.08.1979 on account of delay of two years in handing over of work sites. Thereafter a supplementary agreement was executed. A dispute concerning execution of work in respect of supplementary agreement arose in 1985. In these circumstances Hon'ble the Supreme Court held that the claim made in respect of first agreement raised by the contractor in 1979 became time barred. This case would have no application even remotely. Similar is the position of other judgments cited at the bar. 9. As a sequel to the above discussion this petition succeeds. The respondents are directed to appoint an Engineering Officer as arbitrator within 30 days in respect of contract agreement No. CEUZ-31/92-93 dated 31.12.1992 in terms of clause 70 of IAFW by an authority as per tender document.