IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision : 06.04.2011 Arb. Case No.210 of 2006 Sheetal Construction Co. ...Petitioner Versus Punjab Health Systems Corporation Ltd. & others ...Respondents CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA Present : Mr. D.K.Singal, Advocate, for the petitioner. None for the respondents. HEMANT GUPTA, J. (ORAL) The petitioner has sought appointment of an Arbitrator under Section 11(6) of the Arbitration & Conciliation Act, 1996 (for short ‘the Act’) in respect of disputes between the parties arising out of an Agreement dated 10.10.1998. The petitioner was allotted contract for renovation and extension of District Hospital, Sangrur vide letter dated 14.09.1998. An Agreement dated 10.10.1998 was executed between the parties in respect of the said work allotted to the petitioner. The relevant extract of Agreement No.9/1989-99 dated 10.10.1998 is appended with the petition as Annexure A-2. As per the petitioner, it completed the work on 15.11.2000 and submitted final bill claiming a sum of Rs.29,85,296/- on 09.02.2001. But the payment of the final bill was not paid. On 11.07.2003, the petitioner was informed that the payment of final bill has been already made and that nothing is due and payable to the petitioner. Thereafter, the petitioner Arb. Case No.210 of 2006 approached the adjudicator in terms of Clause 25 of Section 3 of Conditions of Contract vide letter dated 05.08.2003. The adjudicator in its communication (Annexure A-19) communicated that the claim of the petitioner for adjudication at this stage is time barred and the petitioner was advised to approach appropriate authority of the Punjab Health Systems Corporation – respondents herein, to seek arbitration in the matter. Thereafter, the petitioner sought appointment of an Arbitrator vide communication dated 08.10.2003 (Annexure A-20) while proposing the name of Shri Kulbir Singh, SE, PWD (B&R), Patiala, as the nominee of the petitioner as the member of Arbitral Tribunal. Since no action was taken on such request for appointment of an Arbitrator, the petitioner filed the present petition. In reply, it is, inter alia pleaded that the petitioner has accepted full and final payment of the work of renovation and extension of District Hospital, Sangrur i.e sum of Rs.1,69,565/- vide cheque dated 23.05.2003. Therefore, the petitioner is not entitled to raise any dispute. The respondents have also pleaded that the petitioner has not raised dispute before the adjudicator or before this Court in terms of the limit of time provided in Clause 24 of the Agreement. The question; whether the time limit in which the petitioner has to raise dispute amounts to waiver of the right to claim of the amount, was a subject matter of the judgments of the Hon’ble Supreme Court. But Section 28 of the Indian Contract Act, 1872 has been amended vide Indian Parliament Act No.1 of 1997 w.e.f. 08.01.2007 when clause (b) was inserted. After amendment, Section 28 reads as under: “28. Agreements in restrain of legal proceedings void – Every agreement – (a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual 2 Arb. Case No.210 of 2006 legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, or (b) which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.” The question; whether the time limit fixed in the agreements amounts to waiver of the right after insertion of clause (b) as reproduced above has been examined by this Court in Arbitration Case No.124 of 2010 titled ‘Sunil Goyal Vs. Haryana State Agriculture Marketing Board & others’ decided on 06.04.2011, wherein it has been held to the following effect: “In terms of the said judgment, the amended Section 28 would be applicable to the facts of the present case and the extinguishment of right contemplated by Clause 25-A of the Agreement cannot be given effect to in terms of Section 28 of the Act as amended by Indian Parliament Act No.1 of 1997. In the present case, the contract between the parties was executed in the year 2002 i.e. much after Section 28 of the Act was modified. Therefore, the principle discussed in the aforesaid judgment would be applicable to the facts of the present case.” In view of the above, the disputes between the parties are required to be adjudicated by an Arbitrator. Consequently, Shri N.K.Jain, District Judge (Retd.) resident of H.No.879, Sector-12, Panchkula (Haryana) is appointed as an Arbitrator to adjudicate upon the disputes between the parties. The learned arbitrator shall be free to fix his fee in consultation with parties on the first date of hearing with liberty to the parties to seek directions, if any required, in the matter of fee. 06.04.2011 (HEMANT GUPTA) Vimal JUDGE 3