v4...R.epId,.v.»B--y V
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 2}". DAY OF APRIL 2009
BEFORE
THE HON 'BLIE MRJUS TICE S. A131) UL Nxiziixin J .
CIVIL MISCELLANEOUS PETIT:I,0N;'N£§;62;f2?)'dc5f'
Between:
M/s Sri Bale: Gopal C0nst1'uctibn,s Ltclti " _' V
(Formeriy M/s Shree IugaiinathConsLi'uc%;iens§"--Igtd,
Reptd. By its Managing Diieczioi', V "
6-3-1 105, Rajbhavan Road, So.1"i":a1j»i.gi';(Ja;* _ «V :
Hyderabad M 500 _. ff-.__..,§'Petiti0:1er.
And : V' A z T
Union of_!--n.dia,
~ 'The Genera}'?s/1_z1nagc:1',
' ix)
V.S0u'ih.iWeS:::iiLnV'Railway,
* A Hub} i, K~a"i:'na'1iaka.
T1ie..Chiei* Administrative 0-i'i'i_cei- (C),
' A Sou{h..Wes{ern Railway,
V. ' Miller Road.
' V'--B:1i1ga1(>re.
re
3 The Chief Engineer (C),
South Western Railway,
Hubli, Karnataka.
(By Sri N.S. Sanjay Gowda, Adv.) ._
This Civil Misc. Petition is fiiieptlimtnder'Section 1l.v.1.(5~)__ot' the
Arbitration and Conciliation Act, i996:.praying to~.appoint Soie
Arbitrator with regard to the dispute bet'wjeenthe pet.itioner and the
respondent, etc. V * .
This Civil Misc. Petititincorniithgion fo1=..2\di_i;i.s£3ion this day,
the Court made the io_iitswing:." V V - « "
The'peti.ti'on.er"Visifa."Company incorporated under the
Companies Ac't..__lit1v.i:1g' its're;gist_ered office at Hyderabad. it was
Vpf€Vi(}L1f3.5§':y known as "{"SI'j_'JagE'ti111E1lh Constructions Limited' and its
V"n_Vame"has beenpC«h_ang_ed to the present name. It has been executing
W01'§(S oi? 'vai*it)a.':g -.Cje=nVtra1 and State Governments Organisations and
theit: inst1jurn.e:itaiities. The second responcient had called for
A tei:ajei'si"for execution of earthwork in widening of existing cutting
"and einbank:.nent, forming trolly refugees, side drains, c:onstrt:ction
it
I
.
of retaining walls, ballast retainers and protective works in R..€’-t1C.h’fiV
V111 between KM 57/1 and KM 66/} (excluding K0d’Ei:é2.if&’l,IV;1:il.lF
yard) between Dongal and Yedakumari stations thimjgit
10.11.1998. The otter made by the pet1.;1on.¢.r.}&u;is;..,.i’1ir.: “1§wese:.,_
Therefore, the second respontfentil’ the t)i’i.e1′.;.e£f_L
petitioner through his letter dated ietitet at
Annextire ‘B’. In terms of initial value 01′
the work was should be
completed tlieijétitilteiolhaeeeptanee letter
ie. the 10.11.1999. The
said the petitioner to deposit an
amount o1’Rs.3.lakhs Sé{:’~Urlly deposit and the said amount
__has sinee been 1*eeeve1’ed fl”()11″i the running bills of the petitioner
“‘~7:’1n(fi the 1*e:spon.Cie1it:~.yliave the said amount lying with them.
1 tE1eie._ets.se of the petitioner that on receiving the
1 acceptance lt:*.te1*.’..–i’t commenceti the work. As the work had to be
1′ -‘««_ex~eeuted iiighat section where plying of vehicles will he very
(‘=31 {
difficult more particularly in rainy season. To ply the V€3i1i_Lf’vi{‘)$”-i_l’1K’~.,
the forest area, the respondents should obtain pe1’in.is_sjion’front”;.
Karnataka Forest Departinent. Due to peculiar site cond_i’tti.on’:;.:’th_e
petitioner had executed works beyond the gagreen1’c«.nt’tquafntiti.e-sV’that _ 7
were reguiarised belatedly due to gwhichii’p_ayi.nents .i:_i_ue'”{;o tyltich it is not in a gfigitititi to file the copy of the said
G’
agreernent before this Court. However, the respondents 23ccepite._(;li’-.
the work executed by the petitioner and periodical payinents'”w’ei”e.eh
made though belatedly, Although the petitioner had”eX’eciuteld’=thc.V
work to the extent possible, the 2″” respo’itdeiit’ ‘o_n’~83.2ft)l)’3¢.”*1./_A
(Annexure ‘C’) requested the petitionerto increase the
3. It is further contended that th”e._agifeeineiit’-isgugovernfzd by
the General Conditions ol”co’n_trztc_tA gt)Vu€’fllll}.vvg”«I’llt3 Engineering
Department of South–Western Rai’lwayiV_ar-id tilevSpiec.ial Conditions
of Contract appent_le’dh”e;to’ the”.agre’en1ent._Clat:ses 63 and 64 of
General Conditions of7″‘Cor;ttra’ct_deal ‘with resolution of disputes
through arbitr’ation, Since’. theiljresporidents were not xnaking
_.pay.tnen,t:s§ “petitioner”eddi’essed a letter dated l9.6.2007 calling
npontheg 2’19 .t’espon’d.ent to pay certain arnounts as stated i.n the said
letter; iespolrtdeiits did not pay the amounts demanded, the
pet.it.ioner invol<e'<:l Clause 651 of the General Conditions of Contract
requested the 1" respondent to constitute an arbitral Trihuital
for resolxling the dispute betwjficgn the parties as per its notice at
{
Annexure 'G'. Since the procedure has failed, petitioner has fii"e–r..i
this petition under Section E 1(6) of the A1'bitration and Conciiiaititinf. *
Act, 1996 ('Act" for short) for appointment of a sole E1'i'hi:[1'2Zti.:()'I". to
resoive the dispute and the outstanding is;§uies"h'etweei1.;th.e_"psi.a'ties"
in accordance with the provisions of, the agreefiiieiiiti' in
No.S25/AM'/99-00/GC/BNC dated 1s;caiis99. 3
4. The respondents have filed tviteiit st_:1te’tn.ent”i0’t’ objections
contending that t!1e..p’e.tvit;ionei1_ouight’t’«.!itix€e-.conii)leted the work
within at perioci offeight’i”in(>4fi’t§’.’-:3A}1s;.i:stiotilated in the letter of
acceptanceieglated ‘.:’i.£:):9t’;3.t.bi'”F.h:é””‘i)etitioner did not complete the
work though eiglititegtteiisioaas”were granted and the East extension
was up–,to’A 3V0.”3.2()03i Asoper AI]I1€XUi’6f\\ 601 anti ‘Es, petitioner has
‘n1ade”his fii”st.Vc.laiim__ in June, 2007 i.e. 4 years after the last
extension,’There€foreT;= the ciztim is stale and barred by time.
2 A’ .’5.–~.TheHpetitioi1er has filed rejoinder contending that there is
a.i.’.–ch2tnge of name of the petitioner from ‘M/s Sri J’ztgan.nath
ii
Constructions’ to ‘Sri Balagopai Constructions Limited’ and it
further contended that petitioner has been re1n.indin~g..¢’th.e’
respondents on various occasions to record final ineasu1fC.1’ncnts.arid
prepare the final bill. In spite of coinpletion <)f':_ngorli_lVl isllrtotljpavicl.
terms of the agreement remain ialive 2iI}5C’.V’l1C.1_1i3§§.”il,’ cannot be said
that the claims raised by the petitioner are t.stt1’lc:V V
6. lVl1avee li’e.a1″cl lithe lea_rned’Counsel for the parties.
‘7. It in dis_pnt.e that. the agreement between the parties
gV_o’€:erned by ‘Generalv Conditions of contract governing
V’-,Enwgiiiee1’ln_gaDefjartment oi’ South~ Western Railway and the
special condilti<;)nsl of the contract appended to the agreement.
lq_'Clauses.. 63. and 64 of the Geneifal Conditions of the contract
'1;i*VoVi'des for the settlement of the dispute through arbitration. which
are as under:
it
“Settlement ofD1’sputes:
63. Matters finally determined by the Railway: Al.}_m~.
disputes and difference of any kind whatsoever a1*i:__4ing’ » ” ‘
out of or in connection with the eomraci, w_hiether:f~
during the progress of the work or «’:l-i’t’é1T”-it?-2’CO!§1]pl.€tlOI§._ ‘ A
and whether before or after the de:te1’m.,i’nial’ion1’0f”the
contract shall be referred by’ the CenL_1’$;iet01′
Railway and the Railway shalliV”w:ili1in 120″ ~day’s–Vé:f’Iei”;:
receipt of the C0n{rac;–‘uqi”s l'(‘”3p’l””E$.*’ir’5′.i:’:1″iia[“l”\’).1’1 makeikmd
notify decision on all rfiatlters forifwliieihi/VVi3i’evision has
been.vméieleeiiiifieleiilfijes; l8, 39, 43(2), 45m),
55, M2) and 62(l)(b) of
GenereivVCenclii.ienis”nf €.lie’—-eeni{1″aet or in any clause fo
the.special’L0i1d’i:iens.i0fifhe eoniraet shall be deemed
af$’:”‘e>§.Ce;3l.ed mziiiier:s’–‘–«sl2all stand specifically excluded
~ :”f1’QI1;._the p_urview of the arbitration clause and not
. ’15efe1’1’e«:l°i<)_ 21i'h'i'£i5ati0n.
64(1′)(i);:. Demand for Arbirratioiu In the event of any
AA dispute or difference between the parties here to as to
lil’1t;’AC0HS{fUCfiOI} or operation of this ecmtraet, or the
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respective rights and liabilities of the parties on any
matter in question, dispute 0}’ difference on any 2
account or to the withholding by the Railwayspi’
any certificate to which the Contractor may claiit1.to~ ”
entitled to, or if the Railway fails towrnake
within £20 days, then and in any such case,;bit.tj except’ –.
in any 0.!’ the ‘excepted tnatters’ i*et’erred_to in chtuse ‘~
63 of these conditions, the C>()£vlil’i1§3E()l’, “afteri.1.20-tdays”
but within 180 days of his preseiitingg his final claim on?
disputed matters, sl1all4″ti.eina’iAid pin” –wri.tii’i’ig that then
dispute or difference be rel’er1’ed=to arb.itrati.on;
(ii) – The deinand for arb.i.tration’ i.s’i1:1_1l ifspeeify the
rnatiiers w_hich:are_ in qu.es’tion or subject of the dispute
or dif§7ere’nce as arse Ih’3__A’E.I’1’I’.t5uill of claim item–wise.
Only such d’ispute(s;; oir~.-“difference(s) in respect of
\’.ihichi’~the dernand has been made, together with
A «.pcic:t1nt’erclai”:tt_s or set or shall be referred to arbitration
and ‘iv”i7I’3é3.:5;[(€i’S shalt not be included in the
i A re’t’erence)-
V . yi(§i)(a)”‘– The arbitration proceedings shall be assumed
” .t_o_,i’1ave commenced from the day, a written and valid
demand for arbitration is received by the railway.
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(b) The claimant shall submit his claim stating that the
facts supporting the claims alongwitli all rele\.rant”–i ”
documents and the relief or remedy sought ag:ii_ns’t”‘
each claim within a period of 30 days from
appointment of the Arbitral Tribunal;
(c) The Railway shall submit its del’e4ncei’statenientand ‘
counter claim(s). if any, within.t__a'”periodvof 60. S
receipt of copy of claims frotniii’-TVri.biunal therefafterf
unless otherwise exte_nsionhasVi”t3eenVy”‘granted by
Tribunal.
(il’£’)i.:_ N_o_ne’w_’vc]aiVi’nyshall’be added during proceedings
by eithei’– party.’ party may amend or
st1lJ})leme’nt [113 r,?ri2inal~.–“iclaim or defence thereof
during~tl1e coiursevof arbitration proceedings subject to
‘ « _ accetitaaiceby Tribunal; having due regarci to the delay
Vein’ i:1,aki,n g it.–._
Contractor(s) does/do not prefer his/their
‘ .. ;specific and final claims in writing, within a period of
* of i’eceivi.ng the intimation from the Railways
that the final bill is ready for payment, he/they will be
lit
“I1
deemed to have waived his/their elaim(s) and the
Railway shall be dischtirged and released of all
liabilities under the contract in respect of
claims.”
8. It is evident from Clause 64(l)(iv) that if thefieoiitraetor:A
does not prefer his specific and final el;1irn’i1i.w1i’.itin.;g Witliin
period of 90 days after receiving the intimz1tio_n:’froni Rzii_iwt;ys’~ ‘
the final bill is ready for payment, “h.ex”will be’-.cfeeme’.:.i hiive
waived his claim and the Rz1ii<w;1y shtillliiibevjidiseinirged and released
of all liabilities under the cont1'z1c.tf.in re'spet:t of ithef claim.
9. His not the”;-:tse«ot”the” respondents that they have issued
an intimation’ thzitlithe finz’t’lAi’t,i,ll”‘i.sV ready for payment. The case of
the respondents is ii”i3.{_ petitioner has made his first claim in June,
V’?.20O7’« :1l’t”er i”c)u”r’…yet1rs after the last extension and therefore, the
chiinji b2t1*;*e’d,_h34i’VV’it.inie. The provisions of the Limitation Act
V an liesto a1i=bitrat’i’on as it it lies to other roeeedintzs of the Court,
LP A PP P ..
Vr’i”S star from Section 43 of the Act. Article :37 of the
K”.
4_ . by 1im.i.ta§ti()nI~
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Limitation Act makes it obligatory for claims to be filed
three years from the date of accrual of cause of action. .»”Fhe_A’:;.ai6.7.j’ , A’
Article lays down that any other application for which nolpeitied “(iii a
limitation is provided elsewhere in the Artiel»es,thre’.e ype4arsiI.t}eriod;p.
is allowed when the right to apply acci’ties:i”*As7’peri:c.lafisep”G6l(
of the General Conditions of the’rit_oi’;~tyract, it is
contractor does not prefer his final writing
within a period of 90 days from the
Railways that the finalbill is jforv lwill be deemed
to have waived his2p’claiin.’ It is. not the respondents that
they have sent inVtiir1*=::1’t.iAoisi_tha–t_tlrie final bill is ready for payment.
Therefore, p1′.l1;1*k£1__’f£1Cie,iiI_at1’l..0i’w[l;l_t3 View that the claim is not barred
lo. Apex cider’ in SHREE RAM MILLS LTD. VS.
(P) LTD. —- (2007) 4 SCC 599, has held that
while c’o_nsidei”in§_j~i’an application under Section ll of the Act, the
-. justice. or his designate has to decide about the teri’itorial
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jurisdiction and also whether there exists an arbitration agi’eem_enti’~.
between the parties and whether such party has 21ppi’o2fehed”–.tlje.i i”
Court for appointment of the arbitrator. (_3_hiei”–‘J’tisti’ee’;
examine as to whether the claim is a dead ‘e”ne~”orliin
whether the parties have already
have recorded sat.isfnction of their gins and tibliitgativeiiis or
Whether the parties satisfaction
regarding the fina11cialA’el;-iirnst.’i’ii’exiiimii.ni.ifii parties have
recorded their _the” there will
he no questionVof”i:1riyii–s;s_uVe in this sense that the
Chief Justice has there remains anything
to be decided between iiheii);trtiefs= in respect of the agreement and
_Vaiiything_§.&«to ‘he decidedv between the parties in respect of the
‘a_gi’ee1’ne_nt ai1d.wyhiet.h_ei’ the parties are still at issue on any such
Iilallt’;-[‘A.’.i”f~ the Chief’;lt1stice does not, in the strict sense, decide the
issue, in ‘li’1El{l”€3’VCl}[, it is for him to locate such issue and record his
i’:~;ati.sliaetio:1 that such issue exists between the parties. It is only in
~th:1t that the finding on a live issue is given. The same thing
I4
is about the limitation, which is aiways a mixed question of
and fact. The Chief Justice only has to record his sa.!§isféeti§;–:i_f _
that prima facie the issue has not becometlead hy”ti”1e.::ia;5se of
time or that any party to the agree111erit has not slept to-aetV:i’t._s_A in
rights beyond the time per111ittedwt$_y'<-lgiw ~-agiitate
covered by the agreement. All his
satisfaction that the p£ll'ilCSvi"i~.£ll~':€"ntV)t rights and the
matter has not been hai'i'ed I am of the
View that the VVtoWV'zi'trhit1'21ti(in under
Section ll(v6)__Vo:f to a coneiusion
that the pJ:O.Cee.dir.tisiV"es*e- by'time.. The said question is a
mixed questioii tofiawxandi i7ac'ti,iy=hieh has to be re–examined by the
_. fc1i'blti."3E.O_ilf along with the other questions.
«V hi' I'. Fl7cnce,..¢l pass thewfollowingz
ORDER
A Civii _M'iscelianeous Petition is allowed.
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b). Horfbie Justice Sri M.P.Chinnappa, Retired Judge of this
Court is appointed as the S016 Arbitrator to resoive the dispute
between the parties ariseing out of the agreement dated 18.6. E999.___
C). The question of limitaiion is 21130 kept open 1’01’
arbitrator to decide.
(1). Registry is directed £0 send 3. cgp.y.__Qf {1:i$§”OV’rdei§»t(i5″tiieV
learned Arbitrator.
e). The parties are directed to b_ei1::Vtheir.(3w11 <'Qsi:~:,
BMM/–