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2014 DIGILAW 1178 (ALL)

SANDIP ACADEMY OF ENGINEERING, MUMBAI v. VICE-CHANCELLOR, M. J. P. ROHILKHAND UNIVERSITY, BAREILLY

2014-04-11

PANKAJ MITHAL

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JUDGMENT Hon’ble Pankaj Mithal, J.—Heard Sri Swetashwa Agrawal, learned counsel for the petitioner and Sri Vivek Verma, learned counsel for the respondent. 2. Petitioner has applied for referring the dispute between the parties to arbitration under clause 11 of the Arbitration and Conciliation Act, 1996. The respondent University started a Center for Distance Education and for supply of the study material to the said center entered into a contract with the petitioner on 17th July 2003 whereunder the petitioner was supposed to supply the study material to the center for a period of 5 years starting from academic year 2003-04. 3. The said agreement provides for the settlement of dispute by reference to the Vice-Chancellor of the University whose decision was to be final and binding upon the parties. 4. The petitioner alleges that he has not been paid for the study material supplied by it as per the agreement. The petitioner continued to supply the study material even as per the new syllabus which was introduced by the respondent university after dis-continuing the earlier syllabus. 5. The petitioner contends that when the payment was not made, a dispute was raised and the arbitration clause was invoked vide notice dated 4.1.2009, a copy of which has been filed as annexure 3 to the petition. However, inspite of the said notice and subsequent reminders, Vice-Chancellor neither entered into the dispute himself for settlement of the claim of the petitioner nor referred it to any other person for adjudication. 6. Sri Vivek Verma, learned counsel for the respondent university has filed counter-affidavit and has opposed the reference of the dispute to the arbitrator on the ground that the distance learning programme for which the contract was granted to the petitioner was disapproved by the Chancellor of the University vide order dated 3.6.2005. The order of the Chancellor disapproving the programme was challenged by one of the colleges before the High Court and the writ petition was dismissed with certain observations for refund of fees to the students.Therefore, the agreement had come to an end and the petitioner is not entitle to demand any reference of the dispute to the arbitrator. His second objection to the petition is that no notice invoking the arbitration clause as alleged was ever served upon the respondent university. The only notice which was received by the respondent university was dated 13.5.2004. His second objection to the petition is that no notice invoking the arbitration clause as alleged was ever served upon the respondent university. The only notice which was received by the respondent university was dated 13.5.2004. The claim of the petitioner on the said date was barred by time. 7. The above facts and circumstances clearly proves that the parties have entered into an agreement dated 17th July 2003 and the said agreement contains an arbitration clause. The said agreement was for a period of 5 years commencing from year 2003-2004 and as such was valid upto the session 2007-08. The agreement was not rescinded, cancelled or revoked despite disapproval of the programme by the Chancellor on 3.6.2005. 8. The disapproval of the programme by the Chancellor and the dismissal of the writ petition challenging the order of disapproval has no material bearing on the question of referring the dispute between the parties to the arbitral tribunal. 9. It has been settled by a series of decisions of the Supreme Court, the last being Branch Manager, M/s. Magma Leasing and Finance Limited and another v. Polturi Madhavilata and others, AIR 2010 SC 488 , that even if the contract between the parties containing an arbitration agreement comes to an end or perishes the arbitration agreement continues to exist though for a limited purpose for deciding the dispute which may have arisen between the parties under the said contract. 10. It is not the case of the respondent university that the claim or the dispute as raised by the petitioner does not arise from the contract in question. 11. In view of the above, as the contract was never cancelled, the disapproval to the programme would not affect the arbitration agreement and the reference of the dispute in connection with the above contract to the arbitral tribunal. 12. The contract was subsisting till the session 2007-08 and even assuming the petitioner has invoked the arbitration clause for the first time on 13.5.2011, the claim does not prima facie appear to be belated. 13. 12. The contract was subsisting till the session 2007-08 and even assuming the petitioner has invoked the arbitration clause for the first time on 13.5.2011, the claim does not prima facie appear to be belated. 13. A perusal of the observations of the Supreme Court in SBP and Company v. Patel Engineering Limited and another, (2005) 8 SCC 618 , as explained and clarified in Indian Oil Corporation Limited v. SPS Engineering Limited, (2011) 3 SCC 507 , makes it clear that the Chief Justice or his designate is competent to decide if the claim sought to be resolved by arbitration is stale or dead or is long time barred but it is not imperative upon him to enter into the said exercise. It can be left to be decided by the Arbitral Tribunal even if it appears to be slightly overtime. However, where the claim is evidently and patently dead or long time barred and does not involve entry into disputed questions of fact or evidence, the Court may refuse it to refer to arbitration. 14. The above view has been followed and reiterated by the Supreme Court in Schlumberger Asia Services Limited v. Oil and Natural Gas Corporation Limited, (2013) 7 SCC 562 and it has been held that the Chief Justice or his designate need not enter into detail consideration of evidence in exercising power under Section 11 of the Act and leave the question of claim being barred by time if it is slightly overtime to be decided by the Arbitral Tribunal. 15. Thus, the question of limitation is open to be set up in the arbitration. 16. In view of the aforesaid facts and circumstances, I am of the opinion that the dispute as raised by the petitioner is in relation to the above contract and is referable for adjudication to the sole arbitrator as the Vice-Chancellor of the university has failed to adjudicate it or to refer it to arbitration. 17. Accordingly, as a person designated by Hon. the Chief Justice in exercise of powers under Section 11 of the Arbitration and conciliation Act, 1996 Hon. Mr. Justice O.N. Khandelwal, a former Judge of this Court resident of 1/17, Vishwas Khand, Gomti Nagar, Lucknow, Mobile No. 9935557745 is hereby appointed as the sole arbitrator. 18. 17. Accordingly, as a person designated by Hon. the Chief Justice in exercise of powers under Section 11 of the Arbitration and conciliation Act, 1996 Hon. Mr. Justice O.N. Khandelwal, a former Judge of this Court resident of 1/17, Vishwas Khand, Gomti Nagar, Lucknow, Mobile No. 9935557745 is hereby appointed as the sole arbitrator. 18. A copy of this order is directed to be communicated to the learned Arbitrator with the request to enter into arbitration and to complete the proceedings in accordance with law uninfluenced by any finding or observation made herein above.