Arbitration Case No.269 of 2006 1
IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH
Date of Decision : 31.07.2009
Chandi Constructor Pvt. Ltd. ....Petitioner
versus
State of Haryana .....Respondent
CORAM : HON'BLE MR.JUSTICE J.S.KHEHAR.
Present : Mr.R.K.Shukla, Advocate, for the petitioner.
Mr.Ashish Kapoor, Addl. A.G. Haryana, for the repsondent.
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J.S.KHEHAR, J.
Through the instant petition, Chandi Constructor Private
Limited, Patiala, sought arbitration of a dispute with the respondent arising
out of a contractual agreement dated 8.6.1999. The arbitration clause
admittedly applicable to adjudicate the disputes in the contractual
relationship between the parties has been appended to the written statement
as Annexure R-1. The same is being extracted hereunder:
“24.1. If the contractor believes that a decision taken by the
Engineer was either outside the authority given to the
Engineer by the Contract or that the decision was wrongly
taken, the decision shall be referred to the Arbitrator within
28 days of the notification of the Engineer’s decision.”
Based on the aforestated arbitration clause, it is the sole
contention of the learned counsel for the respondent that the claim raised
by the petitioner herein on 13.11.2001 was barred by time and could not be
entertained. In this connection, it is submitted that the period of limitation
Arbitration Case No.269 of 2006 2
would commence from the date of agreement dated 8.6.1999. In order to
demonstrate that the agreement was terminated on 27.9.2000, the learned
counsel for the respondent has invited this Court’s attention to the
communication addressed to the petitioner, a copy of which is appended as
Annexure R-9 with the written statement. A perusal of Annexure R-9
reveals that the contractual agreement between the parties was sought to be
terminated in terms of Clauses 59.2 (a) and 59.2 (e) of the conditions of the
contract. So as to determine whether or not the petitioner had been duly
intimated in terms of the arbitration clause extracted herein above, reference
should essentially be made to Clauses 59 & 60 of the conditions of the
contract. Having perused clauses 59 & 60 of the conditions of the contract,
it is apparent that the termination of the contract can be rendered on one of
the 8 eventualities depicted under Clause 59.2 whereupon payment has to be
made to the contractor under Clause 60.1. It is only when the aforesaid
consequences of determination are finalized, the contract would be deemed
to be terminated.
On the other hand, with regard to the the communication dated
27.9.2000 (Annexure R-9) referred to herein above, which expressly
indicates that the amount recoverable from the petitioner on termination of
the contract was being worked out and would be intimated to the petitioner
separately, learned counsel for the respondent has invited this Court’s
attention to a communication dated 24.8.2001 (Annexure R-12) informing
the petitioner to deposit a sum of Rs.40,459/-, and thereafter its reminder
dated 5.9.2001 (Annexure R-13). The aforesaid issues remained under the
consideration of the respondent till 13.11.2001. It is only thereafter that the
Arbitration Case No.269 of 2006 3
final decision must be taken by the respondents so as to enable the
petitioner to seek its remedy. It is only on 13.11.2001 that the petitioner
sought appointment of an arbitrator in terms of arbitration clause extracted
herein above. In view of the above, there is hardly any justification to
accept the contention of learned counsel for the respondent to the effect that
the request made by the petitioner for appointment of arbitrator was
delayed. In view thereof, the solitary contention raised by learned counsel
for the respondent not to appoint arbitrator is hereby declined.
Mr.O.P.Gupta, retired District and Sessions Judge from the
Superior Judicial Services of the State of Haryana, is hereby appointed as
Arbitrator. The Arbitrator shall determine his fee and other terms and
conditions keeping in mind the total liability involved in the controversy.
The petition stands disposed of.
31.07.2009 (J.S.KHEHAR) Mohinder JUDGE