Power Grid Corporation of India Limited v. B. C. Enterprise
2019-08-02
AJAY KUMAR MITTAL
body2019
DigiLaw.ai
JUDGMENT : Ajay Kumar Mittal, J. 1. This application has been filed under Section 5 of the Limitation Act, 1963 seeking condonation of 193 (One hundred and Ninety-Three) days delay in filing the petition under Section 11(4) of the Arbitration and Conciliation Act, 1996 (in short, "the Act") for appointment of Arbitrator. 2. Briefly, the facts relevant for adjudicating the controversy may be noticed. 3. The respondent was awarded a contract for construction of boundary wall, security room and gate at 132/33 KV Substation at Roing in Arunachal Pradesh under the Pallatana Transmission System, NER on 17-06-2010 for total contract price of Rs. 1,25,31,199/-. The final default notice was issued to the respondent on 17-10-2012 and the contract was terminated on 07-05-2014 for non-performance by the respondent. 4. A new tender for execution of the balance work of construction of boundary wall, security room and gate of 132 KV Roing Sub-Station in Arunachal Pradesh under Pallatana Transmission System at the risk and cost of the respondents with estimated cost of Rs. 40,01,586/- (Rupees Forty Lakhs One Thousand Five Hundred and Eighty-Six) only was floated on 12-11-2014. 5. Ultimately, on 19-07-2016, fresh tender was awarded to M/s. OM Traders, Lohit (Arunachal Pradesh) for Rs. 1,05,15,678/- (Rupees One Crore Five Lakhs Fifteen Thousand Six Hundred and Seventy-Eight) only. Accordingly, on 28-07-2016, the respondent was required to deposit this amount within thirty days in view of Clause 54.4 of GCC. 6. Thereafter, on 06-10-2016 approval for invoking the arbitration clause against respondent towards non-payment of recovery amount was obtained and petitioner issued notice on 12-11-2016 to the respondent under Section 11 of the Act for appointment of Arbitrator namely, Shri. P.C. Borpujar, (Retd), Judge, District Court, Guwahati. The notice was dispatched on 17-11-2016 which was not responded. A fresh notice was issued on 06-01-2017 under Section 11 of the Act which again was not responded by the respondent. Accordingly, the petition under Section 11(4) of the Act was filed on 16-11-2017. 7. It is the case of the petitioner that the contract in favour of the respondent was terminated on 07-05-2014 and the petitioner had sent a notice under Section 11 of the Act on 12-11-2016 which was returned unserved. Thereafter, another notice sent on 06-01-2017 also remained unserved for want of proper address.
7. It is the case of the petitioner that the contract in favour of the respondent was terminated on 07-05-2014 and the petitioner had sent a notice under Section 11 of the Act on 12-11-2016 which was returned unserved. Thereafter, another notice sent on 06-01-2017 also remained unserved for want of proper address. According to the petitioner there has been delay in filing the petition under Section 11(4) of the Act, and therefore, an application under Section 5 of the Limitation Act, 1963 (In short, the "1963 Act") has been filed seeking condonation of delay in presenting the petition under Section 11(4) of the Act. 8. Learned counsel for the petitioner submitted that the petitioner had been taking steps by sending legal notice to the respondent for appointment of Arbitrator under Section 11 of the Act, as the first notice was sent on 12-11-2016 and thereafter on 06-01-2017. It was claimed that it was under such circumstances the delay in approaching this Court has occurred. Reference was made to the judgment of the Supreme Court in AIR 2013 SC 3778 Schlumberger Asia Services Ltd. v. Oil and Natural Gas Corporation Ltd. in support of his case. 9. The issue under consideration in this petition is whether the delay of 193 days in filing the application before this Court is liable to be condoned in the facts and circumstances of the case. 10. Examining the legal position relating to condonation of delay under Section 5 of the "1963 Act" it may be observed that the Supreme Court in Oriental Aroma Chemical Industries Ltd. v. Gujarat Industrial Development Corporation and another, (2010) 5 SCC 459 laying down the broad principles for adjudicating the issue of condonation of delay, in paras 14 & 15 observed as under : "14. We have considered the respective submissions. The law of limitation is founded on public policy. The legislature does not prescribe limitation with the object of destroying the rights of the parties but to ensure that they do not resort to dilatory tactics and seek remedy without delay. The idea is that every legal remedy must be kept alive for a period fixed by the legislature. To put it differently, the law of limitation prescribes a period within which legal remedy can be availed for redress of the legal injury.
The idea is that every legal remedy must be kept alive for a period fixed by the legislature. To put it differently, the law of limitation prescribes a period within which legal remedy can be availed for redress of the legal injury. At the same time, the courts are bestowed with the power to condone the delay, if sufficient cause is shown for not availing the remedy within the stipulated time. 15. The expression "sufficient cause". employed in Section 5 of the Indian Limitation Act, 1963 and similar other statutes is elastic enough to enable the courts to apply the law in a meaningful manner which sub serves the ends of justice. Although, no hard and fast rule can be laid down in dealing with the applications for condonation of delay, this Court has justifiably advocated adoption of a liberal approach in condoning the delay of short duration and a stricter approach where the delay is inordinate-Collector (L.A.) v. Katiji N. Balakrishnan v. M. Krishnamurthy and Vedabai v. Shantaram Baburao Patil.". 11. It was further noticed by the Apex Court in R.B. Ramlingam v. R.B. Bhavaneshwari, 2009 (1) RCR (Civil) 892 as under :- "..... It is not necessary at this stage to discuss each and every judgment cited before us for the simple reason that Section 5 of the Limitation Act, 1963 does not lay down any standard or objective test. The test of "sufficient cause" is purely an individualistic test. It is not an objective test. Therefore, no two cases can be treated alike. The statute of limitation has left the concept of "sufficient cause" delightfully undefined, thereby leaving to the Court a well-intentioned discretion to decide the individual cases whether circumstances exist establishing sufficient cause. There are no categories of sufficient cause. The categories of sufficient cause are never exhausted. Each case spells out a unique experience to be dealt with by the Court as such." It was also recorded that:- "For the aforestated reasons, we hold that in each and every case the Court has to examine whether delay in filing the special leave petition stands properly explained. This is the basic test which needs to be applied. The true guide is whether the petitioner has acted with reasonable diligence in the prosecution of his appeal/petition....". 12.
This is the basic test which needs to be applied. The true guide is whether the petitioner has acted with reasonable diligence in the prosecution of his appeal/petition....". 12. From the above, it emerges that the law of limitation has been enacted which is based on public policy so as to prescribe time limit for availing legal remedy for redressal of the injury caused. The purpose behind enacting law of limitation is not to destroy the rights of the parties but to see that the uncertainty should not prevail for unlimited period. Under Section 5 of the 1963 Act, the courts are empowered to condone the delay where a party approaching the court belatedly shows sufficient cause for not availing the remedy within the prescribed period. The meaning to be assigned to the expression "sufficient cause" occurring in Section 5 of the 1963 Act should be such so as to do substantial justice between the parties. The existence of sufficient cause depends upon facts of each case and no hard and fast rule can be applied in deciding such cases. 13. The Apex Court in Oriental Aroma Chemical Industries Ltd. and R.B. Ramlingam's cases (supra) noticed that the courts should adopt liberal approach where delay is of short period whereas the proof required should be strict where the delay is inordinate. Further, it was also observed that judgments dealing with the condonation of delay may not lay down any standard or objective test but is purely an individualistic test. The court is required to examine while adjudicating the matter relating to condonation of delay on exercising judicial discretion on individual facts involved therein. There does not exist any exhaustive list constituting sufficient cause. The applicant/petitioner is required to establish that inspite of acting with due care and caution, the delay had occurred due to circumstances beyond his control and was inevitable. 14. The question regarding whether there is sufficient cause or not, depends upon facts of each case and is to be decided taking totality of events which had taken place in a particular case. 15. Now I proceed to examine the factual matrix herein. It may be observed that the respondent has neither responded to the notices issued by the petitioner under Section 11 of the Act nor did it put in appearance in pursuance of the notice issued to him by this Court. 16.
15. Now I proceed to examine the factual matrix herein. It may be observed that the respondent has neither responded to the notices issued by the petitioner under Section 11 of the Act nor did it put in appearance in pursuance of the notice issued to him by this Court. 16. The respondent was originally awarded a contract for 'Construction of boundary wall, security room and gate at 132/33 KV substation at Roing Substation in Arunachal Pradesh under Pallatana Transmission System, NER' vide Letter of Award (LOA) No. NESH/CSM/2518/LOA/477. The respondent committed default in carrying out terms of the contract and, therefore, final Default Notice was issued to the respondent vide letter No. NETTEZU/RSS-01/2012-13/363 dated 17-10-2012. The Contract was finally terminated on 07-05-2014. On 12-11-2014, a new tender for execution of 'Balance work of construction of boundary wall, security room and gate at 132 KV Roing Substation in Arunachal Pradesh under Pallatana Transmission System, NER' with estimated cost of Rs. 40,01,586/- was floated. Having remained unsuccessful in getting a bidder, again fresh tender for Balance work of construction of Boundary wall, security room and gate with the same estimated cost of Rs. 40,01,586/- was floated on 07-12-2015. Subsequently, the contract was awarded to M/s. OM Traders, Lohit (Arunachal Pradesh) vide letter of Award (LOA) No. NESH/CSM/EPS/2500-177/LOA/255 dated 19-07-2016 for Rs. 1,05,15,678/-. Accordingly, in terms of clause 54.4 of GCC, the petitioner issued notice requiring the respondent to deposit Rs. 1,05,15,678/- within 30 days from the date of the notice, i.e., 28-07-2016. The petitioner on 06-10-2016, after getting approval for invoking the arbitration against the respondent towards non-payment of recovery amount issued legal notice to the respondent on 12-11-2016 under Section 11 of the Act for appointment of Arbitrator nominating an arbitrator, namely, Shri. P.C. Borpujar (Retd.) Judge, District Court, Guwahati. Notice was dispatched on 17-11-2016. Receiving no response, thereafter, fresh notice under Section 11 of the Act was sent to the respondent on 06-01-2017. Respondent remained silent and thus, and after waiting for some reasonable time, the petitioner approached this Court by way of petition under Section 11(4) of the Act on 16-11-2017.
Notice was dispatched on 17-11-2016. Receiving no response, thereafter, fresh notice under Section 11 of the Act was sent to the respondent on 06-01-2017. Respondent remained silent and thus, and after waiting for some reasonable time, the petitioner approached this Court by way of petition under Section 11(4) of the Act on 16-11-2017. Alongwith the petition, an application under Section 5 of the 1963 Act seeking condonation of delay of 193 days has been filed as according to the petitioner three years period from the date of termination on 07-05-2014 expired on 07-05-2017, whereas the petition under Section 11(4) of the Act had been filed on 16-11-2017, thus resulting in delay of 193 days in presenting the petition. 17. A petition/application filed under Section 11 of the Act is not a suit. It also cannot be equated to a suit. It is an application. The Schedule to the 1963 Act does not provide a period of limitation for an application under Section 11 of the Act. Thus, it would fall under the Third Division of the Schedule dealing with Applications in specified cases. Part II thereof deals with other Applications. Part II contains Article 137 only which reads:- PART II – OTHER APPLICATIONS Description of Application Period of limitation Time form which period begins to run 137. Any other application for which no period of limitation is provided elsewhere in this division Three years When the right to apply accrues. 18. As noticed above, there is no period of limitation prescribed for moving an application under Section 11(4) of the Act. Thus, it would fall under Article 137 of the Schedule. 19. Now, it would be germane to examine whether the period of three years would commence from 07-05-2014 when the contract was terminated or from 19-07-2016 when new contract for carrying out balance work amounting to Rs. 1,05,15,678/- was issued to M/s. OM Traders, Lohit (Arunachal Pradesh) under LOA No. NESH/CSM/EPS/2500-177/LOA/255 dated 19-07-2016. The petitioner thereafter had invoked clause 54.4 of GCC requiring the respondent to deposit Rs. 1,05,15,678/- within 30 days in terms thereof. It is noteworthy to record that clause 54.4 of the GCC was invoked within three years after termination of the contract on 07-05-2014 which resulted in fresh cause of action arising in favour of the petitioner to invoke the arbitration clause in terms of the agreement dated 17-06-2010. 20.
1,05,15,678/- within 30 days in terms thereof. It is noteworthy to record that clause 54.4 of the GCC was invoked within three years after termination of the contract on 07-05-2014 which resulted in fresh cause of action arising in favour of the petitioner to invoke the arbitration clause in terms of the agreement dated 17-06-2010. 20. Is the delay in such circumstances attributable to the negligence on the part of the petitioner to pursue its legal remedies. The answer would necessarily be in the negative. Further, it has been held by the Supreme Court in AIR 2013 SC 3778 Schlumberger Asia Services Ltd. v/s Oil and Natural Gas Corporation Ltd. that it is not imperative for the Chief Justice or his designate to decide questions whether claim was dead one or a long barred at the time of deciding an application under Section 11(4) of the Act. 21. Thus, in such circumstances, taking the cause of action accruing on 07-05-2014 on termination of the contract, the sufficient cause for filing belated application under Section 11(4) of the Act has been explained which is accepted. Even otherwise, as noticed earlier if fresh cause of action is taken from 19-07-2016, the application under Section 11(4) of the Act cannot be held to be barred by limitation. The application under Section 5 of the Limitation Act, 1963 is thus allowed and stand disposed of accordingly. The petition/application under Section 11(4) of the Act be listed for further proceedings in accordance with law.