M/S KISHAN SAHAY MEENA V. UNION OF INDIA

ARBAP/58/2020

AI Insights

The case involves M/s Kishan Sahay Meena, the applicant, who sought the appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, against the Union of India, represented by the Executive Engineer, Jaipur Central Division-II, CPWD, the respondent. The dispute arose from a contract for construction work awarded to the applicant by the respondent, which was completed, but the bills were not cleared. The applicant attempted to resolve the issue through various levels of the respondent's hierarchy but was unsuccessful, leading to this application. The respondent contested the application on grounds of the claim being time-barred as per the General Conditions of the Contract. The court examined the correspondence between the parties and relevant legal precedents, ultimately deciding in favor of the applicant.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 725689 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 07-09-2022
• Assessment Year: misc
• Other Referred Cases: Sagar Constructions through Shri Subash Chand Saini Versus Government of NCT of Delhi, M/s. Uttarakhand Purv Sainik Kalyan Nigam Limited Versus Northern Coal Field Limited, Bharat Sanchar Nigam Ltd. & Ors. Versus Nortel Networks India Pvt. Ltd., M/s. Rakesh Enterprises Versus Union of India, Simpark Infrastructure Pvt. Ltd. Versus Jaipur Municipal Corporation
• Laws Referred To: Arbitration and Conciliation Act, 1996, Indian Contract Act, 1872, Limitation Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ANAND SHARMA; NAMANDEEP SINGH
• Assessee Lawyers: DINESH MISHRA
• Keywords: Appointment of arbitrator; Construction contract; Time-Barred Claim; Arbitration application; Dispute resolution committee
• Section: 28; 11(6); 45(3)

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Arbitration Application No. 58/2020 M/s Kishan Sahay Meena, 6MB-280, Indra Gandhi Nagar, Jagatpura, Jaipur (Raj.). 302017, Through Its Proprietor Sh. Kishan Sahay Meena. ----Applicant Versus Union Of India, Through The Executive Engineer, Jaipur Central Devision-II, CPWD, A.G. Colony, Bajaj Nagar, Jaipur. ----Respondent For Applicant(s) : Mr. Dinesh Kumar Mishra For Respondent(s) : Mr. Anand Sharma with Mr. Namandeep Singh HON'BLE MR. JUSTICE PANKAJ BHANDARI Order RESERVED ON :: 31/08/2022 PRONOUNCED ON :: 07/09/2022 1. The applicant has filed this arbitration application under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator. 2. It is pleaded in the arbitration application that a contract was entered into between the applicant and the non-applicant for construction of office building and boundary wall for Income Tax Department at Dausa. The contract was awarded to the applicant vide letter of award dated 23.10.2013. It is also pleaded that the work in question was completed on 20.09.2015 and the same was handed-over to the non-applicant. The bills of the applicant have not been cleared. The applicant complied with the conditions of the agreement and when the non-applicant did not accede to the (2 of 6) [ARBAP-58/2020] request of appointment of an arbitrator, the applicant was left with no other alternative, but to approach the Court for appointment of an arbitrator. 3. In reply to the said application, the non-applicant has stated that the claim was not filed within limitation as per the General Conditions of the Contract and thus, the applicant is not entitled to have an arbitrator appointed. 4. It is contended by the counsel for the applicant that the applicant has complied with the conditions provided in the agreement. It is also contended that as per the terms of Clause 25 of the agreement, the applicant initially applied to the Executive Engineer and when the Executive Engineer did not pass any order, the applicant applied to the Superintending Engineer vide letter dated 02.06.2019. It is further contended that when the Superintending Engineer also did not pass any orders, the applicant gave a notice to the Chief Engineer on 06.08.2019 to refer the dispute to the Dispute Resolution Committee (hereinafter referred to as “DRC”). Another notice dated 01.11.2019 was given to the Chief Engineer to refer the matter to the DRC, but the Chief Engineer vide its letter dated 04.06.2020 rejected the prayer stating therein that the claims are time-barred as per Clause 25 of the General Conditions of the Contract. 5. Counsel for the applicant has place reliance on Sagar Constructions through Shri Subash Chand Saini Versus Government of NCT of Delhi: ARB.P. No.856/2021 decided by the Delhi High Court on 06.10.2021. Reliance is also placed on M/s. Uttarakhand Purv Sainik Kalyan Nigam Limited Versus Northern Coal Field Limited: Special Leave Petition (C) No.11476 of 2018 decided by the Apex Court on 27.11.2019. (3 of 6) [ARBAP-58/2020] Reliance is further placed on Bharat Sanchar Nigam Ltd. & Ors. Versus Nortel Networks India Pvt. Ltd.: (2021) 5 SCC 738 and M/s. Rakesh Enterprises Versus Union of India: S.B. Arbitration Application No.100/2019 decided by a Coordinate Bench of this Court on 12.02.2021. 6. Counsel for the non-applicant has placed reliance on Simpark Infrastructure Pvt. Ltd. Versus Jaipur Municipal Corporation: 2013 (1) WLN 111. 7. I have considered the submissions and have carefully gone through the material on record. 8. The only dispute, which has been raised by the non- applicant, is that the claim was not raised within the time provided under the General Conditions of the Contract and the same is time-barred. From perusal of the record, it is evident that the applicant-claimant has been writing letters to the Executive Engineer from 03.01.2017 to clear his claim. He had also given a notice for demand of justice on 23.02.2017. A notice was also given to the Director General, CPWD on 20.03.2017, yet another letter was written to the Executive Engineer on 06.10.2017 and further, letters were written to the Executive Engineer (Civil) on 20.03.2018 and a reminder was also sent on 30.04.2018 & third and final reminder was also given to the Executive Engineer on 12.10.2020. Thereafter, the applicant approached the Superintending Engineer vide letter dated 02.06.2019. The applicant also wrote letters dated 06.08.2019 and 01.11.2019 to the Chief Engineer to constitute the DRC, but no heed was paid to the letter and finally vide letter dated 04.06.2020, the claim was rejected by the non-applicants being barred as per Clause 25 of the General Conditions of the Contract. (4 of 6) [ARBAP-58/2020] 9. The Apex Court in M/s. Uttarakhand Purv Sainik Kalyan Nigam Limited Versus Northern Coal Field Limited (supra) set aside the order of the High Court whereby the arbitration application was dismissed being barred by law. The Apex Court held that it is for the arbitrator to decide the issue of limitation. 10. In Sagar Constructions through Shri Subash Chand Saini Versus Government of NCT of Delhi (supra), the Delhi High Court held as under: “43. After the 1997 amendment to Section 28 of the Indian Contract Act, 1872, not only the curtailment of the period of limitation is void, but also the extinction of right, if sought to be brought by the agreement within a specific period, which period is less than the period of limitation prescribed for the suit under the Contract in question, is also rendered void. In other words, after the amendment to Section 28 of the Indian Contract Act, 1872 by Act 1 of 1997, the distinction between curtailing of the period of limitation and extinction of the right itself, after the specified period, no longer exists.\" It is also held by the Apex Court as under: “14. The period of limitation for the disputes will commence from the date of cause of action till invocation of the agreement to refer the disputes to arbitration. The question whether the disputes are within the period of limitation falls within the jurisdiction of the Arbitral Tribunal and unless it is, ex facie, apparent that the disputes are barred by limitation, the parties are required to be referred to arbitration (See -Vidya Drolia & Ors. v Durga Trading Corporation: (2021) 2 SCC 1).” 11. In Bharat Sanchar Nigam Ltd. & Ors. Versus Nortel Networks India Pvt. Ltd. (supra), the Apex Court held that period of limitation for filing an application under Section 11 of the Act of 1996 would be governed by Article 137 of the First Schedule of the Limitation Act. The period of limitation will begin to run on the (5 of 6) [ARBAP-58/2020] date when there is a failure to appoint an arbitrator. The judgment referred to by the counsel for the non-applicant Simpark Infrastructure Pvt. Ltd. Versus Jaipur Municipal Corporation (supra) would not apply to the facts of the present case as in that case the dispute was not resolved amicably in accordance with the terms of the agreement and therefore, the application for appointment of an arbitrator was rejected by the Court. However, in the present case in hand, since the applicant has written various letters to the Executive Engineer, then to the Superintending Engineer and Chief Engineer and the DRC was not constituted and thereafter, the applicant has approached to the Court. It cannot be said that he had not tried to amicably resolve the dispute in terms of the General Conditions of the Contract. 12. The Delhi High Court in Sagar Constructions through Shri Subash Chand Saini Versus Government of NCT of Delhi (supra) has held that in terms of Section 28 of the Indian Contract Act, the period of limitation cannot be curtailed and the rights of the parties cannot be extinct by an agreement. As per Section 45(3) of the Indian Contract Act, the Court has power to condone the delay in matters pertaining to arbitration. Thus, I am of the considered view that the reasons assigned in rejecting the prayer for appointment of an arbitrator vide letter dated 04.06.2020 cannot be accepted for the very reason that the time cannot be curtailed in view of Section 28 of the Indian Contract Act. The arbitration application therefore deserves to be and is accordingly, allowed and Mr. Justice S.K. Keshote (Retired), 10 Eden Garden, Flat No.302, Bajaj Nagar Enclave, Near Gandhi Nagar Railway Station, Jaipur, is appointed as an arbitrator to decide the dispute. (6 of 6) [ARBAP-58/2020] 13. The appointment of the sole arbitrator is subject to the declarations being made under Section 12 of the Arbitration and Conciliation Act, 1996 with respect to the independence and impartiality, and the ability to devote sufficient time to complete the arbitration within prescribed period. 14. Accordingly, arbitration application stands allowed. The arbitrator shall be entitled to lay down fees as provided under Manual of Procedure for Alternative Disputes Resolution, 2009 as amended from time to time. 15. Registry is directed to intimate Mr. Justice S.K. Keshote (Retired) and obtain his formal consent. 16. The observations made herein-above are only for the purpose of deciding the present application and the same will not disentitle the parties to raise all valid objections before the learned Arbitrator and the Arbitrator will be free to dispose the said objection without being influenced by the observations made by this Court. (PANKAJ BHANDARI),J SUNIL SOLANKI /PS "