Arbitration Case No. 7 of 2009 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arbitration Case No. 7 of 2009 Date of Decision: 7.10.2009 M/s Gargson Builders ......Petitioner Versus Union of India and others .......Respondents CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? Present: Shri D.K. Singal, Advocate, for the petitioner. Shri Puneet Jindal and Shri Ashutosh Gupta, Advocate, for the respondents. HEMANT GUPTA, J. (Oral). The petitioner has sought appointment of an Arbitrator in respect of the disputes arising between the parties in respect of the implementation of the contract and of the construction at Chandigarh Railway Station, awarded to the petitioner on 28.3.2005. It is the case of the petitioner that it has completed the work allotted to it. The payment of final bill was made to the petitioner. But the security amount, amounting to Rs.2,11,375/- was kept by the Arbitration Case No. 7 of 2009 [2] respondents towards the Defect Liability Period. The petitioner sought the release of the security amount vide communication dated 12.12.2006. However, the same was refuted by the respondents vide communication dated 19.12.2006 [ Annexure P.5 ]. It was pointed out that the petitioner has failed to repair the cracked surface of the newly constructed platform Nos. 4 and 5 within the time frame given and that the Railways is going ahead to get the surface repaired through other agency at the risk and cost of the petitioner. It was also pointed out that another contractor has been engaged and the outstanding dues towards risk and cost amount of repair comes to Rs.2,97,443/-. Therefore, the security deposit available will be adjusted against the above recoverable amount. The petitioner sought appointment of an Arbitrator vide letter dated 22.12.2007 (Annexure P.6), but the same was denied in terms of the supplementary agreement executed between the parties. A copy of the said supplementary agreement was supplied to the petitioner, which is annexed as Annexure-B along with the letter Annexure P.8. In the notice to seek arbitration, the petitioner has not only disputed the work executed at the risk and cost of the petitioner and adjustment of the security against the said work, but also included many other claims. Learned counsel for the respondents has vehemently argued that in terms of supplementary contract executed, a copy of which is Annexure R.3, all the claims of the petitioner have been adjusted and Arbitration Case No. 7 of 2009 [3] settled and therefore, there is no dispute between the parties which is required to be referred to an Arbitrator. It is also argued that in terms of Clause 64 of the agreement, the petitioner can raise dispute within 180 days of presenting its claim on the disputed matters. Since the final payment has been released to the petitioner on 24.4.2006, therefore, the request for appointment of Arbitrator on 22.12.2007, is beyond the period of limitation, contemplated by the parties in terms of Clause 64 of the agreement. I have heard learned counsel for the parties and am of the opinion that the dispute in respect of the work executed at the risk and cost of the petitioner and the consequent adjustment of the security alone is required to be adjudicated upon by an Arbitrator. All other claims cannot be referred to an Arbitrator in terms of Clause 64 of the agreement, which permits raising of the dispute only within 180 days of the presentation of the final claim. Since the final claim was made on 24.4.2006, the petitioner cannot be permitted to raise any other dispute vide demand notice dated 22.12.2007. The dispute in respect of execution of work at the risk and cost of the petitioner has arisen after the payment of final bill. Therefore, such claim does not fall within the time limit of 180 days. In view of the above, the dispute between the parties regarding the work executed at the risk and cost of the petitioner and adjustment of the security alone falls within the scope of Arbitration. Consequently, Shri R.P. Bhasin, former District Judge, resident of Arbitration Case No. 7 of 2009 [4] House No. 538, Sector-7, Panchkula, is appointed as an Arbitrator to adjudicate upon the aforesaid dispute between the parties. The Arbitrator shall be free to fix his fee in consultation with the parties. Parties are directed to appear before the Arbitrator on 9.11.2009 for further proceedings. [ HEMANT GUPTA ] JUDGE 7-10-2009 ds