Arbitration Case No.95 of 2008 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arbitration Case No.95 of 2008 Date of Decision : 08.05.2009 The Bagial Cooperative L & C ...Petitioner Societies Limited Bagial. Versus Punjab Mandi Board, Gurdaspur ...Respondent through its Executive Engineer (C). CORAM:HON'BLE MR. JUSTICE HEMANT GUPTA Present: Mr. Ravi Malhotra, Advocate, for the petitioner. Mr. Rajdeep Singh Cheema, Advocate, for the respondent. HEMANT GUPTA, J. (ORAL) The petitioner has sought appointment of an Arbitrator for adjudicating the dispute between the parties arising out of an agreement dated 18.5.2001 for construction of link roads. As per the petitioner, he has completed the work at the total cost of Rs.24,28,189/- on 30.11.2001, whereas, only a sum of Rs.15,94,705/- has been paid on 7.11.2003 i.e. after a lapse of two years. The petitioner has, thus, alleged that the amount of Rs.8,33,481/- has been withheld by the respondent without any reason. The petitioner claims a sum of Rs.13,62,471/- by including damages and interest for delayed payment. It is the case of the petitioner that a notice was served upon the respondent on 13.3.2004 to appoint an Arbitrator or to make the payment. Arbitration Case No.95 of 2008 2 Since, the Arbitrator was not appointed, the petitioner filed the present petition before learned District Judge, Gurdaspur on 19.5.2004. The said petition stands transferred to this Court, in view of the judgment of Hon'ble Supreme Court in M/s State Bank of Patiala & Co. Vs. M/s Patel Engineering Ltd. & Anr. (2005) 3, SCC 618. In the written statement, the stand of the respondent is that the petition for appointment of an Arbitrator is not within limitation, as the Arbitrator to be appointed within 180 days from the date of payment to the contractor. However, it is admitted that the agreement was signed on 7.6.2001 and the estimated cost was Rs.23,90,834/- and the work was to be completed within two months, but the petitioner has not completed the same within two months. Therefore, the penalty has been rightly imposed upon the petitioner. It has been further pleaded that the final bill was prepared on 12.6.2007. However, it is not disputed that the amount was actually paid to the petitioner on 7.11.2003. The stand of the respondent is that period of 180 days is to be completed from the date of final bill was prepared i.e. 12.6.2007 and not from 7.11.2003, when the payment was made. Clause 25 (a) of the agreement dealing with the appointment of an Arbitrator reads as under : “If any question, difference or objection whatsoever shall arise in any way connected with or arising out of this instrument or the meaning or operation of any part thereof the rights, duties or liabilities of either party, then save in so far as the decision of any such matter is hereinbefore provided for and has been so decided, every such matter including Arbitration Case No.95 of 2008 3 whether its decision has been otherwise provided for and/or whether it has been finally decided accordingly or whether the contract should be terminated or has been rightly terminated and as regards the rights and obligations of the parties as the result of such terminated shall be referred for arbitration to the Superintending Engineer of the Board of acting as such at the time of reference within 180 days viz. six months from the date of payment to the contractor or when the contractor is not willing to receive the payment from the date of payment to the contractor or when the contractors is not final Bill is ready for payment and his decision shall be final and binding and where the matter involves a claim under or the payment or recovery or deduction of money only the amount, if any, awarded in such arbitration shall be recoverable in respect of the matter so referred.” As per the aforesaid clause, the disputes are required to be referred to the arbitration of Superintending Engineer within 180 days i.e. six months from the date of payment to the Contractor. Admittedly, the payment of Rs.15,94,788/- has been made on 7.11.2003. The period is to commence from the date of payment and not from the preparation of the final Bill. The petitioner has sought appointment of an Arbitrator within six months from the date of payment i.e. 7.11.2003, therefore, it cannot be said that the petition filed by the petitioner is beyond the period of limitation. In view of the above, I do not find any merit in the stand of the respondent that the petition is beyond the period of limitation. The Arbitration Case No.95 of 2008 4 present petition is allowed. Mr. H.P.Handa (Retd.) District Judge, H.No.335, Shaheed Udham Singh Nagar, Jalandhar, is appointed as an Arbitrator to adjudicate upon the dispute(s) 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 15.7.2009 for further proceedings. 08.5.2009 (HEMANT GUPTA) Vimal JUDGE