Sanjay Gupta v. Himachal Pradesh Power Corporation Ltd.
2018-11-16
SURYA KANT
body2018
DigiLaw.ai
JUDGMENT : Surya Kant, J. 1. The petitioner and the respondents-Corporation entered into agreement dated 3rd February, 2011, in terms whereof the petitioner was awarded the work of construction of 6 Type-I Sets in Colony Dadahu for Renuka Ji Dam Project. The award letter was issued on 21st January, 2011 followed by the above-mentioned agreement. The respondents-Corporation prepared the final bill which was duly received by the petitioner on 29th January, 2016. The petitioner thereafter served the respondents with a notice dated 30th August, 2017 invoking Clause 25 of the Contract Agreement for appointment of Arbitrator to adjudicate his claim re : additional demand of odd ` sixteen lacs. 2. The respondents turned down the petitioner's request on the basis of one of the sub-clauses of Clause 25 of the Agreement which provides, inter alia, that if the Contractor does not make any demand for arbitration in respect of any claim in writing within ninety days of receiving the information from the Government that the bills are ready for payment, the claim of the Contractor will be deemed to have been waived off and absolutely barred. 3. The solitary question, thus, which arises for consideration is - whether the respondents can refuse to refer the matter to the Arbitrator on the strength of the above-stated Clause which obligated the petitioner to raise the demand within ninety days from the date of receiving the final bill? 4. Such a question arose for consideration before Delhi High Court in Hindustan Construction Company versus DDA, 1999 (1) Arb. LR 272; Pandit Construction Company versus Delhi Development Authority and Anr., 2007 (3) Arb. LR 205 (Delhi); and M/s. Chander Kant & Co. versus The Vice Chairman, DDA & Ors., Arb. Petition No. 246 of 2005, decided on 26th May, 2009. 5. In Chander Kant & Co.'s case (supra), the Division Bench of Delhi High Court held that the restriction imposed in the Arbitration Clause to raise the claim within ninety days was ex facie illegal being directly hit by Section 28 of the Indian Contract Act, 1872, hence, was liable to be ignored. 6.
5. In Chander Kant & Co.'s case (supra), the Division Bench of Delhi High Court held that the restriction imposed in the Arbitration Clause to raise the claim within ninety days was ex facie illegal being directly hit by Section 28 of the Indian Contract Act, 1872, hence, was liable to be ignored. 6. Section 28 of the Indian Contract Act, 1872 provides that an agreement by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary Tribunals, or which limits the time within which he may enforce such rights, such agreement will be void. 7. In the instant case also, a part of Clause 25 of the Agreement, which restricts the time limit to invoke the Arbitration Clause within ninety days, is thus hit by Section 28 of the Indian Contract Act, 1872 and has to be treated void ab initio. 8. Since there exist a dispute between the parties, Clause 25 of the Agreement deserves to be invoked to refer the matter to an Arbitrator for adjudication. 9. The petition is accordingly allowed and Mr. B.S. Chouhan, District and Sessions Judge (Retired), r/o Village Grawn, Tehsil Sunni, District Shimla, presently residing at Tara View, Khalini, Shimla is appointed as the sole Arbitrator. He shall be paid fee as per Schedule IV of the Arbitration and Conciliation Act, 1996. The learned Arbitrator shall make an endeavour to adjudicate the dispute within three months.