Rajbir Singh Vs Union of India and Another

@JUDGMENTTAG-ORDER

S.K. Mahajan, J.@mdashThis petition has been filed u/s 11(6) of the Arbitration & Conciliation Act,1996 for reference of certain disputes to the Arbitrator. The case as set up in the petition is that the petitioner was awarded the work of providing "counter beam on the city sides of the left forward Bund from RD 220M to RD 250M" and the work under the contract was completed on 24.10.1989. It is further stated in the petition that the accounts were finalised by the respondents on 28.5.1990. However, by a letter dated 24.6.1996 the respondents raised a demand for a sum of Rs.40,586.75 paise calling upon the petitioner to deposit the said amount since the same was allegedly not payable to the petitioner. This amount has since been recovered by the respondents from the amount due to the petitioner under some other contract. After this amount had been recovered, the petitioner by letter dated 22.8.1996 invoked the provisions of the arbitration agreement for referring certain disputes to the Arbitrator. Besides the dispute of unjustified recovery of Rs.40,596.75 made in July,1996 the petitioner also sought the dispute about the increase in wages of labour under clause 10C of the contract and compensation in relation to the additional work allegedly executed by the petitioner to be referred to the arbitrator.

2.In the reply filed by the respondents a preliminary objection has been taken that the accounts having been finalised on 28.5.1990 the petition was not within time.

3.I have heard learned counsel for the parties on the question whether the petition was within time and in case this Court was of the view that the claims which are now sought to be referred by the petitioner were not within time, can this Court still refer the dispute about the claim of Rs.40,586.75 to the Arbitrator being not within the pecuniary jurisdiction of this court?

4. Mr.Lakhanpal has filed an affidavit by way of evidence and has referred to the judgments reported as Jai Chand Bhasin Vs. Union of India (UOI) and Another, , Mohd. Usman Military Contractor, Jhansi Vs. Union of India (UOI), Ministry of Defence, , The Vulcan Insurance Co. Ltd. Vs. Maharaj Singh and Another, and State of West Bengal Vs. A. Mondal, in support of his contention that the question whether the claim was barred by limitation or otherwise was to be decided not by the court before making a reference to the Arbitrator but it should be left to the Arbitrator to decide this question as well. Mr.Lakhanpal, Therefore, submits that this is not within the jurisdiction of the court to decide the question whether the matter can be referred to the Arbitrator or not on the ground of limitation and it is only for the arbitrator to decide whether the claim was within time.

5. The judgments referred to by Mr.Lakhanpal are not applicable to the facts of the present case. In view of the judgment of the Supreme Court in The Kerala State Electricity Board, Trivandrum Vs. T.P. Kunhaliumma, , it is now settled that Article 137 of the 1963 Limitation Act will apply to any petition or application filed under any Act to a civil Court. Differing with an earlier judgment of the Court in Town Municipal, Council, Athani Vs. The Presiding Officer, Labour Courts, Hubli and Others etc., , the Supreme Court held that Article 137 of the 1963 Limitation Act was not confined to applications contemplated by or under the CPC but will apply to any petition or application filed under any Act to a civil Court. This view was reiterated by the Supreme Court in Major (Retd.) Inder Singh Rekhi Vs. Delhi Development Authority, , and it was held that Article 137 of the Limitation Act 1963 will apply to any petition or application filed in a civil Court. Therefore, Article 137 will apply to application filed u/s 20 of the Arbitration Act. The period of three years prescribed under Article 137 will start from the day when the right to apply accrue. In Union of India Vs. M/s. Momin Construction Company, , the Supreme Court again held that the right to apply u/s 20 of the Arbitration Act accrues when the final bill in respect of the construction work was passed and an application u/s 20 of the Arbitration Act having been filed after three years was plainly barred u/s 137 of the Limitation Act.

6. In the present case, it is the case of the petitioner himself that "after the completion of the work which was recorded to be executed as per applicable specifications of the contract the Respondents finalised the accounts on 28.5.1990. While finalising the accounts the amount due and payable towards rise in wages of labour and other dues admissible by way of compensation as well as certain work executed etc. were not released". It clearly shows that, according to the petitioner himself, as on 28th May, 1990 when the accounts were finalised certain amount allegedly due to the petitioner were not released. If that was the position, the petitioner could have raised a dispute about the said dues allegedly not released to him or seek the said disputes to be referred to an arbitrator in terms of the arbitration agreement between the parties. That having not been done, in my view, the petitioner cannot now after a lapse of more than eight years file this application for reference of the said disputes to an arbitrator, as the same is clearly barred under Article 137 of the Limitation Act. In my view, Therefore, the disputes now sought to be referred regarding the alleged rise in the wages of labour and compensation in relation to additional work cannot be referred to the arbitrator.

7. The only other question which, Therefore, remains for consideration is whether the dispute relating to the recovery of Rs.40,586.75 can still be referred to the Arbitrator. It is not in dispute that it was by way of letter dated 24.7.1996 that the respondent raised a demand for Rs.40,586.75. As the demand was raised in 1996 and recovery also appears to have been made shortly thereafter, in my view, the dispute about this claim is within limitation and can be referred to an arbitrator. As originally in the petition the petitioner had sought to refer the claims of the value of more than Rs.5 lacs to an arbitrator and this court had the jurisdiction to decide the petition, I direct the respondent to appoint an Arbitrator within six weeks in terms of the arbitration agreement between the parties for adjudication of the dispute as to whether the defendant was justified in making recovery of Rs.40,586.75 from the petitioner. The claims regarding interest on this amount and costs of proceedings will also be decided by the Arbitrator. With these observations, this petition stands disposed of with no order as to costs.