PNP 1 ARBAP76-10=3.9 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. ARBITRATION APPLICATION NO.76 OF 2010 Pragati Constructions ..Applicant. Vs. Union of India and another ..Respondents. .... Mr. Rajnish Shrivastava for the Applicant. Mr. T.J. Pandian for the Respondents. ..... CORAM : DR.D.Y.CHANDRACHUD, J. 3 September 2010. P.C. : 1. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996. A contract was arrived at between the parties in pursuance of a letter of acceptance dated 27 January 2004. The contract was governed by the general conditions of contract of the Central Railway. Clause 63 provided that all disputes and differences save and except for excepted matters shall be referred by the contractor to the Railways and that the Railways shall notify decisions thereon within 120 days. Clause 64 contained a provision for arbitration. By a letter dated 15 September 2006 the Applicant submitted its claim to the competent authority and stated that failing a decision in fifteen days, it shall be constrained to invoke the PNP 2 ARBAP76-10=3.9 provisions of Clause 63 for the appointment of an arbitrator. The claim of the Applicant was rejected by the Chief Engineer of the Central Railway by a letter dated 29 January 2007. On 3 October 2008 a final bill was prepared and payment was made to the Applicant. The Applicant signed by the measurement book under protest. On 13 March 2009 the Applicant invoked the provision for arbitration. 2. The defence to the Arbitration Application is that ex facie the claim of the Applicant is barred by the contractual period of limitation set out in the agreement between the parties. Clause 64(1)(iv) states thus : “64(1)(iv) If the contractor(s) does/do not prefer his/their specific and final claims in writing within period of 90 days of receiving the intimation from the Government that the final bill is ready for payment he/they will be deemed to have waived his/their claim(s) and the Railway shall be discharged and released of all liabilities under the contract in respect of these claims.” 3. From the aforesaid clause it is clear that the contractor has to prefer a specific claim in writing within ninety days of receipt of intimation that the final bill is ready for payment failing which he would be deemed to have waived his claim. The validity of such a clause has been up held by the Supreme Court in P.Manohar Reddy v. Maharashtra Krushna Valley PNP 3 ARBAP76-10=3.9 Development Corporation1. The Supreme Court followed its earlier decision inter alia in the case of Wild Life Institute of India v. Vijay Kumar Garg2 where it was held as follows : “It is also necessary to refer to the arbitration clause under the contract which clearly provides that if the contractor does not make any demand for arbitration in respect of any claim in writing within 90 days of receiving the intimation from the appellants that the bill is ready for payment, the claim of the contractor will be deemed to have been waived and absolutely barred and the appellants shall be discharged and released of all liabilities under the contract in respect of these claims. The liability, therefore, of the appellants cease if no claim of the contractor is received within 90 days of receipt by the contractor of an intimation that the bill is ready for payment. This clause operates to discharge the liability of the appellants on expiry of 90 days as set out therein and is not merely a clause providing a period of limitation. In the present case, the contractor has not made any claim within 90 days of even receipt of the amount under he final bill. The dispute has been raised for the first time by the contractor 10 months after the receipt of the amount under the final bill.” 4. In the present case, it is evident from the facts which are not in dispute that the claim of the contractor which was raised on 15 September 2006 was rejected by the Central Railway on 29 January 2007 and a decision was notified. Thereafter the final bill was prepared and payment was effected on 3 October 2008. It was for the Applicant to raise a claim within ninety days of the receipt of an intimation. Evidently the Applicant failed to do so 1 2009 ALL SCR 1152. 2 (1997) 10 SCC 528. PNP 4 ARBAP76-10=3.9 and the provision for arbitration was invoked only on 13 March 2009. On the admitted facts as they stand, the claim of the Applicant is barred by the contractual provision. In these circumstances, it would not be either appropriate or proper for this Court in the exercise of the jurisdiction under Section 11(6) to appoint an arbitrator. The Arbitration Application is accordingly dismissed. (Dr. D.Y.Chandrachud, J.)