JUDGMENT
R.C. Lahoti, J.
(1) This is a petition under Section 20 of the Arbitration Act, 1940, registered as a suit.
(2) Consequent to a tender of the petitioner for certain construction work having been accepted by the respondent contract No. 10/EE/RPD-6/DDA/DDA/85-86 was executed between the parties. Disputes have arisen between the parties at the end of the contract. Disputes raised by the petitioner putting forth certain claims not accepted by the respondents have been set out in para 6 of the petition. The petitioner has sought for reference of disputes to adjudication by arbitrator in accordance with Clause 25 of the Contract between the parties. According to the arbitration clause disputes arising out of the contract between the parties are liable to be referred to the sole arbitration of a person appointed by the Engineer Member of Dda at the time of dispute. However, a sub para of the arbitration clause reads as under : “IT is also a term of the contract that if the contractor(s) does/do not make any demand for arbitration in respect of any claim(s) in writing within 90 days of receiving the intimation from the Engineer in charge that the bill is ready for payment, the claim(s) of the contractor(s) will be deemed to have been waived and absolutely barred and the Delhi Development Authority shall be discharged and released of all liabilities under the contract in respect of those claims.
(3) Prayer for appointment of Arbitrator has been resisted by the respondent Dda mainly on the ground that the demand for arbitration by stating the claims in writing was not made by the petitioner within 90 days of the petitioner having signed the final bill ready for payment and so the petitioner’s prayer was rightly turned down. It is submitted that the petitioner had signed the final bill on 5th August, 1992 while the demand for arbitration was made on 12.11.1992 which having been made on 99th day, i.e., beyond 9 days of the time prescribed was Liable not to be entertained.
(4) The petitioner maintains that the bill was signed on 26.8.1992 and not 5.8.1992. Still by way of abundant caution an application under Section 37(4) of the Arbitration Act, 1940 has been moved by the petitioner seeking condensation of delay in making the demand for arbitration. The petitioner has stated that there is a marginal delay in making the demand and if the petitioner is left unheard, his huge claim which the petitioner estimates at Rs. 24,76,949.00 is sure to be lost.
(5) Section 37(4) of the Arbitration Act reads as under : (A) Where the terms of an agreement to refer future difference to arbitration Provide that any claims to which the agreement applies shall be barred unless notice to appoint an arbitrator is given or an arbitrator is appointed or some other step to commence arbitration proceedings is taken within a time fixed by the agreement, and a difference arises to which the agreement applies the court if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper.
(6) Provision of a “time bar clause” in an arbitration agreement is valid, legal and reasonable. It has to be borne in mind that the question of invoking Section 37(4) by a petitioner would arise if while invoking the jurisdiction of court under section 20 of the Arbitration Act the petitioner concedes his demand for arbitration having been made beyond time and seeks indulgence of court under Section 37(4) of the Act on the ground of “undue hardship”. If it is disputed whether the demand was barred by time or not then that question has also to be left to be determined by the arbitrator. [See: Ved Parkash vs. Union of India, and JaiChand Bhasin Vs. Union of India ]. The learned counsel for the petitioner has therefore taken a stand that the petitioner admits his demand having been made belatedly by 9 days and seeks being relieved by the court of undue hardship to him.
(7) Section 37(4) above quoted came up for the consideration of their. Lordship of the Supreme Court in Sterling General Insurance Co vs. Planters Airways, . It is to be noted that section 37(4) is not dependent for its applicability on the availability of “sufficient cause” alone. The paramount consideration is the existence of undue hardship on the party aggrieved. Their Lordships have held that a liberal view of the meaning of the words” undue hardship” will have to be taken. It flows from paras 14 and 18 of the judgment of their Lordships that the question of undue hardship shall have to be answered by reference to the following factors : (I)THEamount at stake,. (ii)The reasons for delay; (iii)If any material prejudice would be caused to the opposite party by extending the time; (iv)If there would be undue hardship to the claimant if time is not extended, i.e. if the consequences would be excessive and out of proportion to the fault, if any, of the claimant in not being prompt.
(8) Applying the above said tests, it appears that the petitioner has not willfully delayed the claim being preferred. There is a genuine dispute, at least a genuine doubt lurking in the mind of the petitioner if the bill was signed on 5th or 26th of August, 1992. Comparing the quantum of the petitioner’s claim with the marginal delay in demanding the reference to arbitration it is clear that non extension of time would entail such consequences on the petitioner which would be too harsh and out of portion to the delay.
(9) For the foregoing reasons. I.A. No. 9838/93 under section 37(4) of the Arbitration Act is allowed. The delay of nine days is condoned.
(10) The petition under Section 20 of the Arbitration Act is allowed. The Engineer Member Dda is directed to appoint an arbitrator consistently with clause No. 25 of the Contract between the parties within a period of six weeks from the date of communication of this order and refer the disputes raised by the petitioner for adjudication by the arbitrator. (II)THEmain petition and I.A No. 9838/93 stands disposed of. (iii)Let a copy of this order be communicated to the Engineer Member, Dda, New Delhi.