IN THE HIGH COURT OF KARNATAKA AT BANGALQR'E.':i_"r..,_
DATED mls THE 21"" DAY 01: APRi.L 2009. D ;;f f r.-
BEFORE
THE HON'BLE MRJUSTICE S. 2iBDvsUl:. 'i
CIVIL MISCELLANEOUS r>r51'(T10:v..z§?0.61;*2(}05f...
Between:
M/S Sri Ba1aG0pz:l COnSEfL1CEi'()ni'$7Lifi, } i
(Formerly M/s Shree Jagannath C'0l]'sU'L3Cti()I1:s'._V __
Reptd. By its Ma:121ging Direei6r," -- . ..
6-3-1 .105, Rajbhav;1i1'R:Q€d, SDm3.jigi1dé1; in
Hyderabad W 5; 'V 9 f'
. . . .. Petitioner.
And :
Union of India, ii "
Reptd, F'
V ' -»'Fhe.VGene:ai*-- Manager,
' _.S0'u£h'Wes:te.ajn_j.Railxvay,
2 Hub1i,'K'a:f1.1a£aka.
Tile C;i'.:l'1.ie'i'f/-Xdtnirristmtive Officer (C),
». S0ri{.h__Wester11 Raiiway,
" *1'_8, Miiler Road.
r _y_BAé;nga1D1'e.
3 The Chief Engineer (C),
South Western Railway,
Hubii, Karnataka. .... Respondents,
(By Sri NS. Sanjay Gowda, Adv.)
This Civil Misc. Petition $5 i’i1ed”iir1de1’«Seetion .
the Arbitration and Conciliation Act, 1996 pi:_a’yi.r;g to z1.pp’oititfa__
Sole Arbitrator with regard to the dispute between thevpetitiorier ‘
and the respondent, etc.
This Civil Misc. Petition coming o1=._for:_Ad1nis:=;ior1 thiéi day,
the Court made the following; ” ‘
The petitioner ‘iL<3:.._a"_'Liini;tedLCompany'.ji'eeorfio1°ated under the
Companies7.Act. i1avii'1Vg:'it.$4'regi:::.tei"ed' 0ffic.e at Hyderabad. It was
previously kiiowenhiztos {Si'iV'3'§lg::1l'1E1'ia[h Constructions Limited'. Its
_..name h2:§–{ been chztnged. to the present name. It has been executing
"'»=_v_orE<:§'ef va.riot1x«Ce:1_ti*a1 and State Government Oi'ga11isat.io11s and
their"in's:tru1nen't::.iities. The second respoiident had called for
tenders for e':~:ec.titit)ii of balance earthwork from Ch 40000 to Ch
=.V'4ii5000'iih.etween Kadur and Chickmagaltir Stations of SOU[11~
_ 'Western Raiiway in connectio?Nwith New 136 line between the said
hm.
stations through NIT dated l7.i0.l.998. The ol”‘l”er made by the
petitioner was the lowest. Therefore, the second responde’r.t_
accepted the offer of the petitioner through his letter dated ~
(Annexure ‘B’). In terms of the said acceptance letter, i:i’it_ial y’al.tie M
of the work. was Rs.l.,0O,34,332/~ and the”enti’re« \&_zvo¢i’i<.;si1.At)"t'tlti
completed within six months from the date o'f__ac'<:Veptance_jEe'tter*i.e;.' i'
the work should be completed on oj"~vt.t§:ei7()i'e
acceptance letter also £}1£1l1Ci£1l,IL'1':€'£V_i"Jt) pet'itio':iei tjorieposit an arnount
of R33 lakhs towards security det)osi't'ai'1titheiA$:aid'_'_.amount has
since been recoveretl"i'r_oi'n the rri_nni'iig'~bil'l§_"of tljie petitioner and
the res onde_nts–.h'aw.e Vtiaf'-:;zii<'l_oarnoiint 'icing with them.
A _ , J .
2..«.{lt is*the caSe’–.ol’v_tl1e. petitioner that after CO£’fll}1Cl]CCIH€l1l
Vanci eixieeuuvtion’ot”eerLzt_in quantity of work, the respondents failed to
make-paylment ftir work that was executed from August, I999
and no woaj.ki’i1g drawings were provideci for the bridges. Tliereforc,
‘the’i.;5e’titi.o11er sustained huge losses on account of idling of
eatahilisliineilt well loss of business. Due to nomalloeation of
\t
{V
funds E0 the subject work, paymenis were hard 10 come by. Due to
hapliuzard planning by the respondents, the czlassifieatien of C_l,l§.ll:f”:-g
was made adversely afl’eeEing the planning of the ‘V’
whereby it has snsI:1ine.d loss of ab0u1_.R.s.__1.8.7(;)’
confiended that as Ehe respondents did not l’:L’2}.’I.”li.’:.-ill’§l;lVI’l’ll’C3f wqfig, iL:Vi::_ Tr ‘
deemed that they have abandoned 1ll5.,:h<g;k enlini11a1_i:¥g;
of conéract by Ehe1'esponden£s;_,.Even the
exient possible, the respondeniaziiiilid 'i:p;f{–p;.yu and even
on date, an aniciuntv0f:Vab_QLi1 final bill
amoum and is yet £0 be
released. Elie so eoinmitted by {he respondents,
{he petiti0nei'l"*susl£:1iiaed l:lllgCVl"(}SS(iS through idling and loss on
.. V21CC()UllE.§*'[')f lens of business. V
" ._ "'3.; li"iS"'_~lZL1_:érE1es"contended than eonsequeni upon issuing {he
_accep{£inee <leue:"," an agreement was eniered dated 20.12.2000. The
"ag1'ee;nent Came to be execuied nearly after one year five months
._:al.'1:er execuiing para of the C}L&§}ilEl€S due to non-zillocation of funcls
I
to the subject work. The respondents did not furnish the copy of
agreement t.o the petitioner even on date due to which it is;"no«t'j__£t _._ C
position to file the copy of the said agreement bef<)re..tlj'is
However, the respondents accepted the:v"worl{"e.xectrtedt:by_ the"
petitioner and periodical payments were ntade–_thou_<.:;i1 ..be~latedE,{:."~..
Although the petitioner had exec'e.ted._ the ivvork. t<)i'i..the:._"evX.tent
possible, the 2" respondent issued notice,'on20.4;2{30?. though
the petitioner is at fault and the :.i;aiAd'.iett;er is"r–:1tv./Xrinexttre The
agreement is governed by the»General"…Condiétions of contract
governing the Eiiignteeifiiig Departinent. o:fSi3tith'?Westcrii Raiivvay
and the Special Conditietnsof'Contract appended to the agreement.
Ciauses 63 and4__6-3.-Vvoll' (}ener':1li"'_Co:1ditions of Contract deal with
.v..1'esoit1t.ion oi' dispute:-;..ptl'1rot,tgl"t arbitration. Since the respondents
l':vvere*n_ot .niaki'n.g""p_ayments, petitioner addressed a letter dated
l9.t3~.2t)t)'7 cV2tll.i'.tigite2p<)n the 2"" respondent to pay certain amounts
'as stated zindthe said letter. As the respondents did not pay the
afinountsp demanded, the petitioner invoked Clause 64 of the
'WGer*ieral Conditions of Contract and requested the 1" respondent to
it
g/.
constitute an arhitra] Tribunal for resolving the dispute between the
parties as per its notice at Annexttre ‘G’. Since the procedure has
failed, petitioner has filed this petition under Section ll(‘6) of the
Arbitration and Conciliation Act, 1996 (‘Act’ for sli()rt)j”tl7or–<_"'–v
appointment of a Sole Arbitrator to resolve the disptitef:ai1tl,_ti'1e"
outstanding issue between the parties in;»avceorda:=1ce Vwri-tit ti*ie_'_}_
provisions of the agreement No.I/CKM/2;0O()i0lf(3Cl'E'tE$lC.l'.oateii:.,,,0:0A
20.12.2000.
4. The respondents have filed [llt3_i’I’…S_L£ILt§!I1CI].[‘(3lf_Qi)j€0il()I]S
contendingthat~.ti’1e .lett:;:’t*-ofacceptanee”was issued to the petitioner
on 9.7.1.999 and istthsequerntiy.Alan agreement was executed on
_.20.12.20Clp0.0 Noticesiliwere issued to the petitioner about the poor
‘p’rogres.s_ii; _the.peitVeeution of the work. it is further contended that
the 0t’in0;i}–.me0tisttre–1ftte;its were taken by the Railways on 16.10.2002
and the4″‘peti~tion’er was asked to attend the office. to sign the
“nlee,essary papers on or before 27.4.2002. However, the petitioner
did notilatteiid the o’t’fiee and thus the petitioner has accepted the
is
a’
measurements. It is also contended that the petitioner did not n,ialie”.__
any claims in writing within the period prescribed in the.eot1t1=éiet., i.~
thus deemed to have waived all its claims and the Rai’iw.a:ysps’taiidA
discharged of all their liabilities and there iS””tht’iS’11QV’£lI;b’itr2iljl*I3.
disputes which require to be referred tt?1s_arbit2ratiot1.VTl:er’efo:’e3V the
claim is not only time barred but also They ;_5raye.d for
dismissal of the petition.
5. The petitioziefilias; t’:£!edirej’oinrterl Cori’te–1rding that there is
a change of iiaijaef__e;if’ the ‘peti~ti0ner”‘”froznV ‘M/s Sri Jagannath
C0nstrt1ctio.ns’: to .’SritBalagojiial”Constructions Limited’ and it is
further contended”thatxiesoondeiijts are not right in contending that
..Vp6llllOll~?i~l’ did. not signv the papers as per Annexure ‘C’ and
l”r_espon–ri_ents a«re’ye’t.t_0 pay the final bill even on. date. Since there
wasno*-accord.’fan_d’;=satisfaction, the claims raised by the pet.it.ioner
are st1sEai;iaVb.l1e..VPts long the final bill is not paid, all the terms of
‘ ‘agreement remain alive and hence it cannot be said that the
Ucriaiirrs raised by the petitioner are staie.
it
6. I have heard the learned Counsel for the parties.
7. it is also not in dispute that the agreement—-betweeit:’the
parties is’ governed by General Conditions; <):,f~+.%o,t1t1*aet .go~Vemin_g f
Engineering Department of S0uth-W:es.t_ern Raiiway and'the.Vs_peci_a1 V
conditions of the contract appended 21,g_1'een1en,t.i.'C1att§.es 63
and 64 of the General Conditi'ons¥_of{_rhe"'eontrargt deal with the
settlement of the dispute tliro.Ltgi:» arbitration, wvhitjh;.are as under:
"SettlentAé'nti_V'bfii?§spLr§es:'A V V.
637, Mgtter.§’._;fii;_ci:fly dtftf€iff7!f_F1¢d by the Railway: All
kind whatsoever arising
out Of’ir the Contractor’s representation ntake and
V ” 4_noti”f.y decision on all matters for which provision has
fiteen made in ciauses 8(3), 18, 22(5), 39, 43(2), 45(3),
55, 55–A(5), 57, 57A, 61(1), 61(2) and 62(1.)(b) of
K43
:’
General Conditions of the contract or in any clause fow 7
the special conditions of the contract shali be deemed»
as ‘excepted matters’ shall stand specifically exct’-uded-,:
from the purview of the arbitration~vcl.ause_’landnot
referred to arbitration.
64(I)(z’.). Demand for Arbitrafiait}’*tin the ‘ex/’exit
dispute or difference between:rt–he.A.arties lieie tons
the construction or t)peratiorr_pfo;’thils”–.cVo1it’i*act, or the
respective rights and on any
matter in ;qulesti’on, itiispu-te on any
accountgor Raiiways of
anyVyVcerti_i’i’ca_te may claim to be
entl”!.Vtlecl_ the R.ai’lw_z1y_ fails to make a decision
within’ E20 such case, but except
in any of. the fex.cep.teG..–rnattei’s’ re’l’eri’ed to in clause
‘$3 of’ these ic”ondi_tion.~;, the Contractor,’ after 120 days
A ‘ V. 3 ‘but iw:itliin’«.i:8(} days of his presenting his final claim on
rnatters, shaii demand in writing that then
‘ lcllisptityelor :iil’ference be referred to arbitration.
V * :,4_(ii)ll¥- The demand for arbitration shall specify the
V’ v matters which are in question or subject of the dispute
or difference also the amount of claim l[€Z!'{1~WlS{‘,.
lit
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Onty such dispute(s) or differeneets) in respect of
which the demand has been tnacte, together wiéthnrii’
eounterelaitns or set or shall be referred to 2trbiti~_a;ti–t3n
and other matters shall not be inc1ttde.d_–“i’nv–the
reference.
(ii)(a) — The arbitration proceedings sha1i–._be ass»u’3frted °
to have eonamenceé from the ._a written and V”-¢’tlli’i’*£iii ii
demand for arbitration received b’y..the.._i’ai1way..
(b) The claimant shall sttbrni-t hisfi:1aini’sta.!:ingthat the
facts stn ortinr: the eraivmsi» alonvwiithv a’i’i[” relevant
t s V V . :2 r
documents a’ndi}t..ie reiiefi oi’ re’mecii’t:r)1.1s311t a atinst
each elaimx iztti.:hVi.t1_ .pe’:’io’Ci-.o_f 30 days from the date of
appointment of “Tt’ii)uIt2ll.
(cg). The RaitWziy~sha1I¢s;ub1nit its defence statement and
. , e_t.ai.nt(s), if any, within a period of 60 days of
ii.._rreci’ei;§t–«._oo1″ of ctairns from Tribunal thereafter,
‘,t1n1ess_.ioi’ih_erwtse extension has been granted by
Ti1’ibLii1iE’.aiii
V’ -»{r’.1’zi’) — No new ctaim shall be added during proceedings
by either party. However, at party may amend or
it
I
H
supplement the original claim or defence thereof
during {l’lC course of arbitraiion proceedings; subject 1’0… T
acceptance by Tribunal; having due regard to the (}(“3:~lE1}=’.’ ‘
in making it.
(iv) — if the Contractor(s) does/do no: p’rei’ei’
specific and final claims; in W.i”lil I}g, a periefi 1
90 days of receiving the intiii1a’riii):i1i.f’roni tlie
that the filial bill is 1’eady for ‘pay:ii;§ni;”~ia_¢/they ‘wail ii;
deemed to have waiifeeliijhisgtrhebir, and the
Railway sha11,_be disehahrged’ [mid r”i>ei’e;i;;¢a-“‘ of all
iiabilities tindeigi-hthe. lycoairaez “:1V”t’;v2~f.§_Z.)”_.’_:V:(E'{ of these
claims.” 1 ‘V ‘V i V. J i
8. It’iiievideii:._fr(ii*n.:Clatise~~64(i)(iv) that if {he Contractor
does notprefer his spvec:ifie’- and firiai claims in wriiing within a
period 9E0′;la§2’s« after reeeiiving the intimation from Railways that
tihenfinal’ for payment, he will be deemc-:.cl to have
V V’ waivetlhis V_c’l21.i.ii§~l’and the Railway shali be d.ischarged and released
a,llTliabil’i:.ies under the coritiact in respect of the saici claim.
ll
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tiger
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9. Section 43 of the Arbitration Act provides for applieatiori”‘–._»
of the Limitation Act to arbitration as it applies to the pi'<)eeVedihg$'n:W.
of the Court. It is as under:
“43. Limitationsu (I) TheVLi1n.it:uienii”Act, ”
(XXXVI of i963), shall applyyto”«arbitrutior1:–:.._T213;
applies to proceeding in. Court. _
(2) For the purposes of }1nc-i”~tiie
Act, 1963 (XvXXy1*t~ oi’::__1’9(f~.3}i}’ a11..fi1’hi1:ratiojn ishaii be
deemed tciiihaive1’eorg1me.r1eed~._ois7the date referred in
Seetior1i”2rE~..iA 7;
(3) to submit future
disputes “z;rhiti’2~1t..i’«ou’provides that any claim to which
ztgreethent «shall be barred uniess some step
i”tr)_c:oru~meriee__arbitra1 proceedings is taken within 21
agreement, and :1 dispute arises to
i’9s3hic.i’1~ étgreemeut applies, the Court, if it is of
opinion that in the eireunistauces of the ease undue
A :i1<21'r(iSi]ip would otherwise be caused, and
iiinotwithstaiiding that the time so fixed has expired,
it
13
may on such terms, if any, the justice of the case
may require, extend the time for such period as i.t
thinks proper.
(4) Where the Court orders that an parbitral
set aside, the period between the coitr1111encei.nent the
arbitration and the date of the orderiiof th.ei.Cour.:t °
be excluded in computing pi’escribezjVAiiby
Limitation Act, 1963
cornmencernent of V
arbitration) with respect to the ‘:;.oiisirii.3n’ti’t;ted.”
l0. Inypt§esenit§§:_;c’ase’,–the t’inal”‘bilil per Annextire ‘C’
was sei’ved:’o_n the ‘p6_tViVlitjfl€.tI””£1li”‘2Q:f1..2002. He has not made any
claim in writing’-within 90i’tiay’s7ifro11i the date of receipt of the
V..–intimatiV_ona peti’tion«e–r” has filed the aforesaid Civil
Misceiianeotxs ‘P(“i;v'[i”.iAV(i)iIl.£1l”‘[(‘3l’ five years of the service of intimation
V at Anneiture ‘B’;ih_’hich is clearly barred by time. The petitioner
ought to havetiled this petition within three years of the receipt of
theifin_tiin”a~tion above. Article l3’7 of” thc Limitation Act lays
_do’wnii:hat any application for which no period of limitation is
it
I
T4
provided elsewhere in the saici scheduie, three years
ailowed when the right to apply accrues. Thus. the _p53£i{ib’aif ‘i~sAA 5’ ‘
cleariy bamzd by time. E1 is accordingiy rc:_j_ep,te__<1. I\'c;-'é(")L~;"1';~.;~..: . "
BMM/2142009