Arbitration Case No. 165 of 2008 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arbitration Case No. 165 of 2008 Date of Decision: November 10, 2009 M/s Sukhdev and company ......... Petitioner versus The State of Haryana and others .......... Respondents 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:- Shri John Kumar, Advocate for Shri Vikram Singh, Advocate for the petitioner Shri Lokesh Sinhal, Additional Advocate General, Haryana. HEMANT GUPTA, J. The petitioner has sought appointment of an Arbitrator in respect of disputes arising between the parties pursuance to work of improvement of Hansi-Tosham-Behal-Sodiwas road vide letter dated 9.7.2000. It is the case of the petitioner that the payment of his final bill was released by the respondents on 14.10.2003 and that vide communication dated 22.03.2004, Annexure P-2, the petitioner has sought reference to an Arbitrator to resolve the dispute between them in terms of Clause 25-A of the agreement. It is contended that the communication of the respondent on 14.02.2005, Annexure P-3, that the claim of the petitioner is time barred is not correct as the petitioner has raised the dispute to the Arbitration Case No. 165 of 2008 [2] Arbitrator within 180 days in terms of sub-clause (9)(e) of Clause 25-A of the agreement. It was so communicated in the communication dated 19.4.2005, Annexure P-4. The present petition has been filed to seek appointment of an Arbitrator on 5.5.2008. In reply, it has been pointed out that the petition for appointment of an Arbitrator before this Court is barred by time in as much as, the request of the petitioner for appointment of Arbitrator was declined on 14.02.2005. The petitioner has invoked the jurisdiction of this Court after more than three years and, therefore, present petition is barred by limitation. It is also contended that, in fact, the claim of the petitioner cannot be referred to an Arbitrator in terms of Clause 25-A of the agreement as primary claim of the petitioner is based upon Clause 14.59 of the Haryana Schedule Rate (HSR). The claim of the petitioner for extra payment in terms of the aforesaid clause was declined on 13.11.2001. The petitioner could seek reference to an Arbitrator within 60 days of such communication in terms of sub-clause (1) of Section 25-A of the agreement but having failed to do so, the petitioner cannot be permitted to dispute such decision of the Executive Engineer Incharge after completion of the work. Before adverting to relevant clauses of agreement, reference may be made to certain averments in notice Annexure P-2 dated 22.03.2004. It is the case of the petitioner that the petitioner vide communication dated 28.08.2001, Annexure-A, has executed the work as per directions of the Sub Divisional Engineer and the Executive Engineer but less and detrimental rates have been paid. It is further averred that such claim was rejected on 13.11.2001, Annexure-C. It is also averred that the petitioner vide its application dated 28.08.2001 and vide its reference dated 7.2.2002, Arbitration Case No. 165 of 2008 [3] Annexure-D, to the Superintending Engineer sought direction to the Executive Engineer for payment of the above item as per the rates quoted by the Agency. On 13.03.2002, Annexure-F, Executive Engineer listed a number of defects/ shortcomings in the various items of work including the alleged defect in the correctly executed item No. 14.59. It was on 3.9.2002, Executive Engineer reported that all the defects have been rectified. In Para No. 7 of the said demand, the petitioner has claimed a sum of Rs.5,65,824.42 on account of wrong calculation in terms of HSR Item No. 14.59 and 14.54(d). Learned counsel for the respondents has argued that in terms of sub-clause (1) of Section 25-A of the agreement, any dispute during the progress of the work is required to be referred for being settled by the Executive Engineer-in-charge of the work. The Executive Engineer has 60 days to convey his decision to the contractor. If he conveys any decision, the contractor has the option to seek reference to the Arbitrator within next period of 60 days from the date of receipt of letter communicating the decision. If the contractor does not raise the dispute to an Arbitrator within the period of 60 days, the decision of the Executive Engineer is said to be final. The relevant sub-clause (1) of Clause 25-A reads as under:- “Clause 25-A (1) :- If any dispute or difference of any kind whatsoever shall arise between the Governor of Haryana/ his authorized agents and the contractor in connection with or arising out of the contract of the execution of the work that is (i) whether before its commencement or during the progress of the work or after its completion (ii) and whether before or after the termination abandonment of branch of the contract, it shall in the first instance be referred to for being settled by the Executive Engineer-in-charge of the work at the time and he shall within a period of sixty days after being requested in Arbitration Case No. 165 of 2008 [4] writing by the contractor to do so, convey his decision to the contractor and subject to arbitration as hereinafter provided such decision in respect of every matter so referred shall be final and binding upon the contractor in case the work is already in progress, the contractor will proceed with the execution of the work on receipt of the decision by the Executive Engineer-in-charge as aforesaid with all due diligence whether he or the Governor of Haryana / his authorized agent requires arbitration as hereinafter provided or not if the Executive Engineer-in-charge of the work has conveyed his decision to the contractor and no claim to arbitration has been filed with him by the contractor within a period of sixty days from the receipt of letter communicating the decision the said decision shall be final and binding upon the contractor and will not be a subject matter of arbitration at all if the Executive Engineer-in-charge of the work fails to convey his decision within a period of sixty days after being requested as aforesaid the contractor may within further sixty days of the expiry of first sixty days from the date on which request has been made to the Executive Engineer-in-charge request the Engineer-in-chief that the matter in dispute be referred to arbitration, as hereinafter provided”. (emphasis supplied). The claim of the petitioner is that the disputes are referable to the Arbitrator in terms of sub-clause (9)(e) of Clause 25-A of the agreement and that sub-clause (1) of Clause 25 of the agreement is not applicable. Sub- clause (9)(e) of Clause 25-A of the agreement reads as under: - “ 25-A (9) Neither party shall be entitled to bring a claim for arbitration if the appointment of such Arbitrator has not been applied within 6 months:- (a) to (d) xx xx xx xx (e) Of receiving an intimation from the Executive Engineer-in- charge of the work that final payment due to or recovery from Arbitration Case No. 165 of 2008 [5] the contractor had been determined which he may acknowledge and/ or receive. Whichever of (a) to (e) above is the latest”. Sub clause (9)(e) of Clause 25-A of the agreement is not applicable in the present case as the petitioner has claimed that work performed falls in terms of HSR No.14.59 during the progress of the work. Such claim was rejected on 13.11.2001. The cause of action to dispute the rejection of such decision by the Executive Engineer arose in the year 2001. It was open to the petitioner to seek reference to the Arbitrator in terms of sub-clause (1) of Clause 25-A of the agreement. Having failed to do so, the petitioner cannot seek reference to the Arbitrator after submission of final bill. Sub-clause (9)(e) of Clause 25-A of the agreement relates to the dispute which arise in relation to payment of final bill. The issues prior to preparation of final bill during the progress of the work, in respect of which the petitioner has sought decision of the Executive Engineer, cannot be permitted to be raised after the completion of the work. Still further, the claim of the petitioner was rejected on 14.02.2005 vide Annexure P-3. The present petition has been filed after three years on 5.5.2008. It is, thus, barred by limitation as the cause of action to claim the amount arose to the petitioner in any case when the same was rejected on 14.02.2005. Thus, I am of the opinion that the claim of the petitioner is not referable to the Arbitrator, it being barred by limitation. Consequently, present petition is dismissed. November 10, 2009 ( HEMANT GUPTA ) ks JUDGE