Arbitration Case No.113 of 2008 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arbitration Case No.113 of 2008 Date of decision : 10.11.2010 Arun Malik .....Petitioner Versus Secretary, Public Health Department and others ...Respondents **** CORAM : HON'BLE MR. JUSTICE MUKUL MUDGAL, CHIEF JUSTICE 1. Whether Reporters of local papers may be allowed to see the judgment? 2. Whether to be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? Present: Mr. Manoj Sood, Advocate for the petitioner. Mr. B.S.Rana, Addl. Advocate General, Haryana for the respondents. MUKUL MUDGAL,C.J. (Oral) This petition has been filed by the petitioner under Section 11 of the Arbitration & Conciliation Act, 1996 ( for short 'the Act'), for appointment of an Arbitrator to adjudicate upon the disputes between the parties. Clause 9 of the agreement contains the Arbitration Clause which reads as under:- “9. Neither party shall be entitled to bring a claim for arbitration is the appointment of such arbitration has not been applied within 6 months. (a) of the date of completing of work as certified by the Executive Engineer-in-charge or (b) of the date of abandonment of the work or ( c) of its non/commencement within 6 months from the date of abandonment or written order to commence the work Arbitration Case No.113 of 2008 -2- as applicable. (d) of the completion of the work through any alternative agency or means after withdrawal of the work from the contractor in whole or in part and/or its recession, or (e) of receiving an intimation from Executive Engineer-in- charge of the work that final payment due to or recovery from the contractor had been determined which he may acknowledge and/or receive whichever of (a) to ( c) above is the latest. If the matter is not referred to arbitration within the period prescribed above all the rights and claims of any party under the contract shall be deemed to have been forfeited and absolutely barred by time vain for civil litigation notwithstanding.” There is no dispute with regard to existence of arbitration clause as well as invocation thereof by the parties. The only ground taken by the respondent for not appointing the Arbitrator till date is that petitioner had invoked the arbitration clause after two years of the payment of final bill whereas as per clause 9 of the agreement, the claim could be brought for arbitration within a period of six months of the date of completing of work or of the date of abandonment of the work or completion of work through any alternative agency or of receiving an intimation from Executive Engineer-in-charge of the work that final payment due to or recovery from the contractor had been determined which he may acknowledge and/or receive. Mr. Rana further urged that in this case final bill was paid to the petitioner on 16.5.2005, therefore, invocation of arbitration clause on 7.5.2007 was after passing a time of about two years and as such the Arbitrator was not appointed. In this regard he places reliance upon Wild Life Institute of India, Dehradun Vs. Vijay Kumar Garg (1997) 10 Arbitration Case No.113 of 2008 -3- Supreme Court Cases 528. Faced with the situation, learned counsel for the petitioner contended that limitation provided for raising a claim is three years and in this regard he places reliance upon Major (Retd.) Inder Singh Rekhi Vs. Delhi Development Authority AIR 1988 Supreme Court 1007, M/s Groupe Chimique Tunisien SA Vs. M/s Southern Petrochemicals Industries Corpn. Ltd. AIR 2006 Supreme Court 2422 and M/s Shree Ram Mills Ltd. Vs. M/s Utility Premises (P) Ltd. 2007(2) R.C.R. (Civil) 721. In my view, the first judgment of the Hon'ble Supreme Court in Major (Retd.) Inder Singh Rekhi Vs. Delhi Development Authority AIR 1988 Supreme Court 1007 clearly covers the dispute involved in the present petition in view of the law laid down in para 5 which reads as under:- “The application under S.20 of the Act was filed in court in January, 1986, that is to say, within the period of three years therefore the application was within time. The High Court was in error in dismissing the application on the ground of limitation. The judgment and order of the High Court are, therefore, set aside. The High Court is directed to make an order under S.20 of the Act and give consequential directions in respect of the same. The costs of this appeal would be costs in the arbitration proceeding. The appeal is thus allowed and disposed of as aforesaid.” Undoubtedly the case Wild Life Institute of India, Dehradun Vs. Vijay Kumar Garg (1997) 10 Supreme Court Cases 528 cited by the respondents supports their plea but in that judgment the view taken by the Hon'ble Supreme Court in its earlier judgment in Major (Retd.) Inder Singh Rekhi Vs. Delhi Development Authority AIR 1988 Supreme Arbitration Case No.113 of 2008 -4- Court 1007 had not been considered by the Hon'ble Judges on whose judgment the learned counsel for the respondents has relied upon. Even otherwise also in the later judgments of Hon'ble Supreme Court in M/s Groupe Chimique's and M/s Shree Ram Mills Ltd's cases (supra), it has been held that issue of limitation can be considered and decided by the Arbitral Tribunal/Arbitrator. The Hon'ble Supreme Court in M/s Shree Ram Mills Ltd's cases (supra) held as under:- “What is the effect of MoU dated 19.1.2005; was the respondent justified in repudiating the said MoU; and what is the effect of repudiation thereof on the earlier agreement dated 27.4.1994 would be for the Arbitral Tribunal to decide. In Groupe Chimique Tunisien SA Vs. M/s Southern Petrochemicals Industries Corpn. Ltd., 2006(3) RCR (Civil) 440 : [(20060 5 SCC 275] this Court had clearly held in para 10 that the Arbitral Tribunal can also go into the question of limitation for the claims in between the parties. We have discussed this subject only to hold that since the issue in between the parties is still alive, there would be no question of stifling the arbitration proceedings by holding that the issue has become dead by limitation. We leave the question of limitation also upon the Arbitral Tribunal to decide.” Accordingly, Arbitration Petition for appointment of Arbitrator is allowed, and Shri Krishanjit Singh, Former Chief Engineer, Union Territory, Chandigarh, resident of House No.140, Sector 40-A, Chandigarh is appointed as Arbitrator to adjudicate upon the disputes between the parties. In the meanwhile, the parties will exchange the statements of claim and response thereof. The statement of claim be supplied to counsel for the respondents within four weeks and response to the Arbitration Case No.113 of 2008 -5- statement of claim shall be supplied to the counsel for the petitioner within four weeks thereafter. The parties shall appear before the Arbitrator on 21.1.2011 or on an agreed date convenient to the parties but not later than a fortnight from the date of exchange of pleadings as directed aforesaid. The Arbitrator shall dispose of the reference not later than six months from the date of first appearance of the parties. With these direction this petition is disposed of. November 10, 2010 (Mukul Mudgal) Pka Chief Justice