Reserved Judgment IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Arbitration Application No. 24 of 2006. M/s J.K. Ghai Engineers and Contractors, 29 Yumuna Colony, Dehradun (UA). …. Applicant. Vs. 1. Oil & Natural Gas Corporation Ltd. Tel Bhawan, Dehradun through the Chief Engineer. 2. The Chairman, Oil & Natural Gas corporation Ltd. Tel Bhawan, Dehradun. 3. The Superintending Engineer (Civil) Oil & Natural Gas Corporation Ltd., Tel Bhawan, Dehradun …..Opposite Parties. Sri S.K.Jain, learned counsel for the applicant. Sri J.P.Joshi, Adv., learned counsel for the respondents. Date January 11, 2008 Hon’ble B.S. Verma, J. This application under Section 11 (5) and 11(6) of the Arbitration and Conciliation Act, 1996 ( for short the Act) has been moved by the applicant to appoint an Arbitrator to decide the dispute between the applicant-Company and the opposite parties- Oil & Natural Gas Corporation Ltd. According to the applicant, Sri J.K. Ghai is the sole proprietor of the firm and the same is a registered contractor in the ONGC for the last 20 years. Tenders were invited by the respondent no. 1 for the work of renovation of Annexure Building, Double Storey Building, Dining Longe, Guest House, Tel Bhawan, Dehradun. The tender of the applicant was accepted and subsequently, a contract agreement was executed on 7-3-2002 between the parties and duly signed by the applicant and respondent no.1 copy of which has been annexed as Annexure No. 1. The details of the disputed claims have been mentioned in paragraph no. 6 and 7 of the application. According to the applicant, the contract work was taken up and the same was completed within the stipulated period to the satisfaction of the respondents. Thereafter, the applicant submitted the bills for payment several times but no payment was made by the respondent no.1. The respondents acknowledged the work and the amount claimed by the applicant through letters dated 1-3-2006 and 22-2-2006. Ultimately the applicant issued letter requesting the respondents to finalize the matter and to make payment of the final bills copy of which has been annexed as Annexure No. 2. When nothing was heard from the respondents, the applicant served a notice dated 31-01-2006 under Section 11 of the Act with the request to make payments to the applicant and to settle the dispute. The respondents sent reply to the notice vide letters dated 22-2-2006 and 1-3-2006 in which they acknowledged the payment claimed by the applicant and promised to release the application. Again the applicant sent a letter on 15-5-2006 to the respondents requesting them to make payments within fifteen days, but no heed was paid by the respondents. Again a letter of request was sent to the respondents copy of which is annexed as Annexure No.6. The applicant filed a Writ Petition No. 947 of 2006 before this Court for issue of mandamus directing the respondents to finalize the matter. However, the writ petition was dismissed as withdrawn on 13-09-2006 on the assurance given by the learned counsel for the respondents to settle the dispute, but in vain. Hence this application has been filed under Section 11 (5) and (6) of the Act for appointment of arbitrator as per arbitration clause of the agreement. The respondent filed short counter affidavit. It has been stated in the para no.4 that regarding the undisputed amount, the matter is under process and as soon as the same is finalized and approved the payment will be made. Subsequently, supplementary counter affidavit was filed by the respondents and in paragraph no. 7, it has been stated that so far as payment in respect of remaining 3 Agreements bearing No. 33/2001-02/TEL dated 7.3.02, No. 03/2004-05/TEL dated 28.4.2004 and No. 04/2004-05/TEL dated 28.4.2004 are concerned, the applicant did not submit the bill immediately after completion of work and upon signing of final measurements of the works carried under these agreements. The respondent after waiting for a long time, had to prepare the bills itself to discharge its liability and the payments due and payable as per the works carried out by the applicant have been released herein. The details of the payments made under each agreement have been communicated to the applicant vide letter dated 22-12- 2006. I have heard learned counsel for both the parties and perused the record. From a perusal of the application and the counter affidavit, supplementary counter affidavit and rejoinder affidavit filed by the parties, it is crystal clear that there is a dispute regarding claims preferred by the applicant and payments made by the respondents. Agreement Clause No. 25 refers to Settlement of Disputes, by way of arbitration, wherein it has been mentioned that if any dispute, difference, question or disagreement shall, at any time, hereafter arises between the parties including that of rights, liabilities or duties of the parties arising out of the contract agreement shall be referred to the sole arbitration of the person appointed by a Director of O.N.G.C. Ltd. Learned counsel for the applicant has argued that since the respondents have not appointed any arbitrator, therefore, a retired Judge of the High Court may be appointed as arbitrator. In the case at hand, the applicant has nowhere invoked arbitration clause and never requested the respondents to appoint an Arbitrator to settle the claims. Only the payment due was pressed by the applicant. It has not been denied that the applicant has sent letter for payment of the dues. The respondents vide letter dated 22-02- 2006 has acknowledged the letter dated 20-01-2006 of the applicant and has directed the Manager concerned to release the EMD amounts in favour of the agency. The case of the respondent in the supplementary counter affidavit is that the applicant has no cause of action to approach the Court for appointment of Arbitrator because the applicant never made any such request for appointment of Arbitrator as stipulated under the arbitration agreement. I do not agree with the contention of the respondents that the applicant cannot invoke the arbitration clause. There is a condition in the agreement, which reads as under:- “It is also a term of the contract that if the contractor(s) do/does not make any demand for arbitration in respect of any claim(s) in writing within 90 days of receiving the intimation from the Corporation that the bill is ready for payment, the claim of the contractor(s) will be deemed to have been waived and absolutely barred and the Corporation shall be discharged and released of all liabilities under the contract in respect of these claims.” It has been argued on behalf of the respondents that the claim of the applicant is time barred and that respondents have already made full and final payment of Rs. 18,37,910/- vide its letter dated 22-12-2006 (Annexure R-5) and it has been made clear that ONGC shall not be responsible for payment of interest in any manner whatsoever as claimed by the applicant. Learned counsel for the respondents has placed reliance upon the case of Shree Ram Mills Ltd. Vs. Utility Premises (P) Ltd.[(2007) 4 S.C.C. 599], wherein it has been held that where the Chief Justice comes to a finding that there exists a live issue, then naturally this finding would include a finding that the respective claims of the parties have not become barred by limitation. In the case at hand, as mentioned above, the application for appointment of Arbitrator had been filed on 17-10- 2006, while the alleged full and final payment was made by the respondents on 22-12-2006. In such circumstances, the claim of the applicant before the respondents is a live one. I am not inclined to accept the contention that the claim of the applicant is barred by the condition laid down in the contract agreement. Even in the short counter affidavit filed before this Court on 17-11-2006, no such plea of limitation was raised by the respondents. Having considered the rival contentions of the parties, I find that the dispute between the parties is referable to arbitration and the allegation where the applicant has accepted the payments made by the respondents on 22-12-2006 towards full and final satisfaction of the claim shall be looked into by the Sole Arbitrator. The application deserves to be allowed. The application under Section 11(5) and 11(6) of the Act filed by the applicant is allowed. The Director, Oil & Natural Gas Corporation Ltd. is directed either to proceed with the arbitral proceedings himself or to appoint Sole Arbitrator within a period of two weeks from the date of production of certified copy of this order, to settle the dispute between the parties. The Sole Arbitrator shall conclude the arbitral proceedings and shall pass his award, expeditiously as far as possible. Both the parties shall file necessary documents before the Sole Arbitrator as and when directed by him. Costs easy. (B.S.Verma,J.) RCP