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2017 DIGILAW 522 (JHR)

Central Coalfields Limited v. S. N. Agarwal

2017-03-16

D.N.PATEL, RATNAKER BHENGRA

body2017
JUDGMENT D.N. Patel, J. - This Letters Patent Appeal has been preferred against the judgment and order dated 8th May, 2009 delivered by the learned Single Judge in W.P.(S) No. 3175 of 2005, whereby the petition preferred by the present respondent was allowed and the order passed by the learned Arbitrator dated 28th February, 2002 (Annexure 8 to the memo of the this Letters Patent Appeal) was quashed and set aside and hence, the original respondents have preferred the present Letters Patent Appeal. 2. Having heard counsel appearing for both sides and looking to the facts and circumstances of the case, it appears that the appellants had given a works contract to the respondent for construction of residential quarters at Sirka Colliery in the year 197677. Work commenced on 6th April, 1977 and was completed by 30th November, 1978. 3. It further appears from the fact of the case that the contract value of the subject work was Rs. 3,27,932 = 24 paise. Some extra amount of Rs. 17,006=27 paise was also sanctioned on 29th December, 1978. Thus, total value of the work on completion was Rs. 3,44,938=51 paise. 4. Rs. 3,44,839 = 12 paise have already been paid by this appellant to the respondent by way of 5th R/A bill after December, 1978 and this respondent (original petitioner) claims further amount of Rs. 65,637=70 paise. This is for residential quarter at Sirka Colliery. 5. So far as second claim is concerned, it is pertaining to residential quarters of AAO, Argada Area under the tender of the year 1977-78. This work commenced on 27th January, 1978 and was completed by 19th October, 1978. The total value of the work on completion was at Rs. 12,66,732=90 paise out of which Rs. 12,63,800 = 30 paise was paid by way of 8th R/A Bill on 9th December, 1978, whereas the respondent(original petitioner) claims further amount of Rs. 2,30,944=50 paise. 6. So far as third claim is concerned, it is also pertaining to residential quarter at Sirka Open Cast under Tender of 1978-79. Total value of the work was of Rs. 24,50,653=78 paise out of which Rs. 23,08,969=80 paise have already been paid by way of 9th R/A Bill, whereas this respondent (original petitioner) further claimed an amount of Rs. 6,60,208=19 paise. This work commenced on 27th November, 1978 and was to be completed on 23rd January, 1980. 7. Total value of the work was of Rs. 24,50,653=78 paise out of which Rs. 23,08,969=80 paise have already been paid by way of 9th R/A Bill, whereas this respondent (original petitioner) further claimed an amount of Rs. 6,60,208=19 paise. This work commenced on 27th November, 1978 and was to be completed on 23rd January, 1980. 7. So far as 4th claim is concerned, it was pertaining to construction of residential quarter at GM/AAO/SAM Argada under Tender Notice of the year 1979-80. This work commenced on 23rd January, 1980 and was to be completed on 23rd October, 1980. The contract value of the work was Rs. 7,79,199=43 paise. The work executed up to 14th February, 1981 for Rs. 1,74,106=54 paise and the same was paid by way of 3rd R/A Bill. 8. It further appears that with respect to these four claims a writ petition was preferred by the respondent earlier, being CWJC No. 1897 of 1998 (R) before the Hon''ble High Court at Patna, Ranchi Bench, Ranchi and the learned Single Judge was pleased to dispose of the writ petition directing this respondent (original petitioner) that if any fresh application is preferred before the present appellants the same will be decided in accordance with law. Thus, already a writ petition was preferred and was disposed of by this court without granting any relief. It further appears from the facts of the case that thereafter the claim of the respondent (original petitioner) was decided by the appellants vide order dated 13th October, 1999 (Annexure-2), whereby the claims of the respondent were rejected. Thereafter, it appears that the matter was referred to arbitration and the sole arbitrator was appointed. 9. It further appears that one more writ petition was preferred by the respondent, being CWJC No. 1924 of 2001, challenging a letter dated 30th January, 2001. This writ was disposed of by the learned Single Judge vide order dated 8th May, 2001. This petition was permitted to be withdrawn with a liberty to request the learned arbitrator to decide the dispute at the earliest. This order is at Annexure-7 to the memo of this Letters Patent Appeal. 10. Thereafter, the learned arbitrator decided the dispute between the parties vide order dated 28th February, 2002 (Annexure-8 to the memo of this Letters Patent Appeal) and the claims of the respondent (original petitioner) were rejected as they were time barred.. 11. This order is at Annexure-7 to the memo of this Letters Patent Appeal. 10. Thereafter, the learned arbitrator decided the dispute between the parties vide order dated 28th February, 2002 (Annexure-8 to the memo of this Letters Patent Appeal) and the claims of the respondent (original petitioner) were rejected as they were time barred.. 11. It appears that against this order passed by the learned arbitrator that the claims of the respondent were time barred, a writ petition was preferred by the respondent, being W.P.(C) No. 3175 of 2005, which was allowed by the learned Single Judge vide order dated 8th May, 2009 and the matter was again sent to the arbitrator by the learned Single Judge to decide the issues on merit, hence, the present Letters Patent Appeal was preferred by the original respondents stating that since the work orders were given approximately in the year 1977 and work was also completed by the year 1979-80, therefore, the claim made by the respondents were hopelessly time barred and no error was committed by the learned Arbitrator in deciding this aspect of the matter. It is further submitted by the counsel for the appellant that even otherwise also the decision of the arbitrator could have been challenged under section 34 of the Arbitration and Conciliation Act, 1996 before the Civil Judge, Senior Division at Ranchi and directly a writ petition should not have been preferred by the respondent. This aspect of the matter was not appreciated by the learned Single Judge while disposing W.P.(C) No. 3175 of 2005. 12. It is submitted by the counsel for the appellant that merely because the arbitrator has mentioned in paragraph 27 of the Conclusion of the Arbitral Proceeding that he is unable to name this conclusion as an Arbitration Award, that does not mean that the award passed by the learned arbitrator ceases to be an award. The arbitrator is a privately appointed judge by the consent of the parties to the dispute and his decision is always an award, which could have been challenged by the respondent under section 34 of the Arbitration and Conciliation Act, 1996 before Civil Judge, Senior Division. These aspects of the matter have not been properly appreciated by the learned Single Judge and hence, the judgment and order dated 8th May, 2009 passed in W.P.(C) No. 3175 of 2005 deserves to be quashed and set aside. 13. These aspects of the matter have not been properly appreciated by the learned Single Judge and hence, the judgment and order dated 8th May, 2009 passed in W.P.(C) No. 3175 of 2005 deserves to be quashed and set aside. 13. Counsel for the respondent (original petitioner) submitted that looking to the order passed by the learned Arbitrator dated 28th February, 2002, it cannot be said that this is an award. Moreover, claim of this respondent was never time barred looking to the letter dated 20th September, 1999 written by the Executive Engineer of the appellants. It has also been submitted by the counsel for the respondent that award was not passed by the learned arbitrator on merit at all and hence, no error has been committed by the learned Single Judge in remanding the matter to the learned Arbitrator and hence, this Letters Patent Appeal may not be entertained by this court. It is further submitted by the counsel for the respondent that even in the earlier order passed by this Court direction was to decide the matter on merit and hence, also the arbitrator ought to have decided the matter on merit. Reasons: 14. Having heard counsel appearing for both sides and looking to the facts and circumstances of the case, we, hereby, quash and set aside the order dated 8th May, 2009 passed in W.P.(C) No. 3175 of 2005 mainly for the following facts and reasons: (I) Looking to the disputes between the parties, it appears that the contract for construction of the residential quarters, as stated here in above, was given to the respondent by these appellants in pursuance of the tender of the year 1976-77. The work commenced in the year 1977 and some of which was completed in the year 1979 and some in the year 1980 and the last work was completed in February, 1981 as stated here in above. (II) It further appears from the facts of the case that a money suit type of writ petition was preferred, being C.W.J.C. No. 1897 of 1998(R) before Hon''ble the High Court at Patna, Ranchi Bench, Ranchi and the following order was passed by the learned Single Judge dated 17th February, 1999:- "In the faces and circumstances, I am not mclinea to pass any specific order deciding the claim under writ jurisdiction. If the petitioner so chooses, may move before the appropriate forum/authority. If the petitioner so chooses, may move before the appropriate forum/authority. If the petitioner prefers fresh application before the General Manager (Construction), C.C.L., Ranchi giving therein the details of claim enclosing therein the supporting documents, the said authority will decide the claim by reasoned order. Admitted dues, if any, be paid in favour of the petitioner within a period of six months from the date of receipt of such representation. If the respondents dispute any amount or part thereof, may give reason for the same and communicate such reason to the petitioner within the aforesaid period. In such case, the petitioner will move before the Court of competent jurisdiction/appropriate forum. The writ petition stands disposed of with the aforesaid observations and directions. (S.J. Mukhopadhaya, J.)" (Emphasis supplied) (III) It further appears from the facts of the case that after the aforesaid order was passed by the learned Single Judge, present appellants decided the claims of the respondents in detail vide order dated 13th October, 1999 (Annexure 2 to this Letters Patent Appeal) and the claims were rejected by the appellants. Looking to the said order passed by the appellants, it appears that the respondent was liable to make payment of Rs. 11.165=02 paise to the appellants as there was delay in execution of the work. (IV) Thereafter, the matter was referred to the learned Arbitrator and meanwhile, one more writ petition was preferred being C.W.J.C. No. 1924 of 2001. which was permitted to be withdrawn vide order dated 8th May, 2001. For ready reference the said order is quoted hereunder:- "ORDER 2.8.5.2001 The petitioner has challenged the letter dated 30.1.2001 whereby and whereunder the 2nd respondent declined to accept the request of the petitioner. After some argument, counsel for the petitioner sought permission to withdraw this writ petition to enable the petitioner to request the arbitrator to decide the dispute on an early date. He is so permitted. If any application is filed by the petitioner before the Arbitrator for early disposal of the matter, he will try to sort out the dispute on an early date, in accordance with law. The writ petition stands disposed of. He is so permitted. If any application is filed by the petitioner before the Arbitrator for early disposal of the matter, he will try to sort out the dispute on an early date, in accordance with law. The writ petition stands disposed of. Sd- S.J. Mukhopadhaya'' (Emphasis supplied) (V) In view of the aforesaid order, this respondent had argued out the matter before the learned Arbitrator and ultimately the learned arbitrator passed an order dated 28th February, 2002 and it has been stated by the learned arbitrator that the claim of the respondent was hopelessly time barred. (VI) It appears from the facts of the case that no error has been committed by the learned arbitrator in deciding the period of limitation. The work was over, as stated here in above, in the year 1979-80 and 81 and thereafter, the claims were made in 1998 at a much belated stage. This aspect of the matter has been properly appreciated by the learned Arbitrator. If the claims are time barred the learned arbitrator is always at liberty to decide the claim of the claimant as time barred. There is no restriction upon the learned Arbitrator that even if the claims are time barred the learned Arbitrator has to decide the claims on merit. It is a discretionary power vested in the learned arbitrator to adjudicate the claims as time barred. (VII) It has been held by Hon''ble the Supreme Court in J.C. Budhraja vs. Chairman, Orissa Mining Corpn. Ltd., reported in (2008) 2 SCC 444 in paragraph 26 as under:- "26. Section 37(3) of the Act provides that for the purpose of the Limitation Act, an arbitration is deemed to have been commenced when one party to the arbitration agreement serves on the other party thereto, a notice requiring the appointment of an arbitrator. Such a notice having been served on 4-6-1980. it follows that the claims had to be rejected by the arbitrator on the ground that the claims were barred by limitation. The said period has nothing to do with the period of limitation for filing a petition under Section 8(2) of the Act. Insofar as a petition under Section 8(2) is concerned, the cause of action would arise when the other party fails to comply with the notice invoking arbitration. The said period has nothing to do with the period of limitation for filing a petition under Section 8(2) of the Act. Insofar as a petition under Section 8(2) is concerned, the cause of action would arise when the other party fails to comply with the notice invoking arbitration. Therefore, the period of limitation for filing a petition under Section 8(21 seeking appointment o f an arbitrator cannot be confused with the period of limitation for making a claim. The decisions of this Court in Major (Retd.) Inder Singh Rekhi vs. D.D.A., Pancnu Gopal Bose vs. Board of Trustees for Port of Calcutta and Utkal Commercial Corpn. vs. Central Coal Fields Ltd. also make this position clear." (Emphasis supplied) (VIII) It has been held by the Hon''ble Supreme Court in Schlumberger Asia Services Ltd. vs. ONGC Ltd. reported in (2013) 7 SCC 562 at paragraph No. 25 as under:- 25. The observations made in SBP & Co. were explained by this Court in Indian Oil Corpn. Ltd., which are as under: (Indian Oil Corpn Ltd. case, SCC p. 515, para 14) "14. To find out whether a claim is barred by res judicata, or whether a claim is ''malafide'', it will be necessary to examine the facts and relevant documents. What is to be decided in an application under Section 11 of the Act is whether there is an arbitration agreement between the parties. The Chief Justice or his designate is not expected to go into the merits of the claim or examine the tenability of the claim, in an application under Section 11 of the Act. The Chief Justice or his designate may however choose to decide whether the claim is a dead (long-barred) claim or whether the parties have, by recording satisfaction, exhausted all rights, obligations and remedies under the contract, so that neither the contract nor the arbitration agreement survived. When it is said that the Chief Justice or his designate may choose to decide whether the claim is a dead claim, it is implied that he will do so only when the claim is evidently and patently a long time-barred claim and there is no need for any detailed consideration of evidence. When it is said that the Chief Justice or his designate may choose to decide whether the claim is a dead claim, it is implied that he will do so only when the claim is evidently and patently a long time-barred claim and there is no need for any detailed consideration of evidence. We may elucidate by an illustration: if the contractor makes a claim a decade or so after completion of the work without referring to any acknowledgement of a liability or other factors that kept the claim alive in law, and the claim is patently long time barred, the Chief Justice or his designate will examine whether the claim is a dead claim (that is, long time-barred claim). On the other hand, if the contractor makes a claim for payment, beyond three years of completing of the work but say within five years of completion of work, and alleges that the final bill was drawn up and payments were made within three years before the claim, the Court will not enter into a disputed question whether the claim was barred by limitation or not. The Court will leave the matter to the decision of the Tribunal. If the distinction between apparent and obvious dead claims, and claims involving disputed issues of limitation is not kept in view, the Chief Justice or his designate will end up deciding the question of limitation in all applications under Section 11 of the Act." (emphasis supplied) These observations make it clear that it is optional for the Chief Justice or his designate to decide whether the claim is dead (long-barred). It is also made clear by this Court that the Chief Justice or his designate would do so only when the claim is evidently and patently a long time-barred claim. The claim could be said to be patently on a time-barred, if the contractor makes it a decade or so after completion of the work without referring to any acknowledgement of a liability or other factors that kept the claim alive in law. On the other hand, if the contractor makes a claim, which is slightly beyond the period of three years of completing the work say within five years of completion, the Court will not enter into the disputed questions of the fact as to whether the claim was barred by limitation or not. On the other hand, if the contractor makes a claim, which is slightly beyond the period of three years of completing the work say within five years of completion, the Court will not enter into the disputed questions of the fact as to whether the claim was barred by limitation or not. The judgment further makes it clear that there is no need for any detailed consideration of evidence. (Emphasis supplied) (IX) It has been held by Hon''ble the Supreme Court in Voltas Ltd. vs. Rolta India Ltd reported in (2014) 4 SCC 516 , paragraph no. 28 as under:- "28. In our considered opinion, the aforesaid decisions do not render any assistance to the proposition canvassed by the learned Senior Counsel for the respondent. We are inclined to think so on two counts. First, in Praveen Enterprises the Court has carved out an exception and, while carving our an exception, has clearly stated that the limitation for "such counterclaim" should be computed as on the "date of service of notice" of "such claim on the claimant" and not on the date of final counterclaim. We are absolutely conscious that a judgment is not to be read as a statute but to understand the correct ratio stated in the case it is necessary to appreciate the repetitive use of the words. That apart, if the counterclaim filed after the prescribed period of limitation before the arbitrator is saved in entirety solely on the ground that a party had vaguely stated that it would be claiming liquidated damages, it would not attract the conceptual exception carved out in Praveen Enterprises. In fact, it would be contrary to the law laid down not only in the said case., but also to the basic principle that a time-barred claim cannot be asserted after the prescribed period of limitation." (Emphasis supplied) (X) The learned Single Judge, vide order dated 8th May, 2009, has pointed out one isolated letter dated 20th September, 1999, written by one Executive Engineer of this appellant. Such type of letter has no value in the eve of law for grant of limitation looking to the decision taken by the appellants, which is much earlier in point of time, i.e. 13th October, 1999 (Annexure 2 to the memo of this Letters Patent Appeal) which was in pursuance of an order dated 17th February, 1999, passed in the writ petition, being C.W.J.C. No.1897/98(R) it has been mentioned in the said letter by the appellant (original respondent) that the claimant has maintained a "Long Golden Silence" (Page no. 6 to the order dated 13th October, 1999, passed by the present Appellant, which is at Annexure-2 to the memo of the petition) Thus, the period of limitation was also kept in mind by the appellants from the very beginning and hence the so called letter dated 20th September, 1999 of the Executive Engineer of this appellant, which was an annexure to W.P.(C) No. 3175 of 2005, has got no value in the eye of law. It ought to be kept in mind that the appellant is a public body. Out of several employees of this appellant, some work in its favour while some other may also work in favour of the private parties. It is also probable that some strange letter, written by a low ranking officer of the appellant, is totally in favour of the claimant. In the facts of the present case also, one such letter dated 4th March, 2008 was written by Senior Oversear of the appellants by which the total claim of the respondent has been accepted. This Senior Overseer was given charge-sheet. It ought to be kept in mind that in a public Body few employees are honest and few are dishonest. Few are enthusiastic and few are lethargic. Even there can be further permutation and combinations like those, who are honest may be lethargic and who are dishonest may be enthusiastic. The Executive Officer, who has written letter dated 27th September, 1999 and another employee, who is a Senior Overseer of the appellant, who has written a letter dated 4th March, 2008 (Annexure R 1 annexed with the affidavit filed by the respondents in this Letters Patent Appeal) may fall within the category of dishonest and enthusiastic. The Executive Officer, who has written letter dated 27th September, 1999 and another employee, who is a Senior Overseer of the appellant, who has written a letter dated 4th March, 2008 (Annexure R 1 annexed with the affidavit filed by the respondents in this Letters Patent Appeal) may fall within the category of dishonest and enthusiastic. These type of letters make no difference to the appellants which is a public sector undertaking, especially when it is apparent that the claim of the respondent is hopelessly time barred. The works, one by one, was awarded since the year 1977 and was completed in the year 1978-79, 80 and 81 with all delay and the claim was made in 1998 i.e. much later, as stated herein above and hence, no error was committed by the learned Arbitrator in deciding that the claim of the original applicant who is the respondent in the present Letters Patent Appeal, was hopelessly time barred. This aspect of the matter was not appreciated by the learned Single Judge while delivering judgment dated 8th May, 2009 in W.P.(C) No. 3175 of 2005. 15. We, therefore, quash and set aside the judgment dated 8th May, 2009 delivered by the learned Single Judge in W.P.(C) No. 3175 of 2005. 16. This Letters Patent Appeal is allowed and disposed of.