Delhi District Court
South District vs M/S A.K. Builders on 7 February, 2023
IN THE COURT OF DISTRICT JUDGE (COMM-02),
SOUTH DISTRICT, SAKET COURT, NEW DELHI
OMP (COMM.) 62/21
Shaheed Bhagat Singh College
Through its Principal
University of Delhi
Sheikh Sarai (Triveni) Phase-II,
New Delhi-110017 ..... Petitioner
Versus
M/s A.K. Builders
Through its Proprietor
Shri Arun Kumar Tandon
Regd. Office at :
105A Santnagar, New Delhi
Also at : G-241, Sector-56
Noida-201301 (UP) ..... Respondent
Date of Institution: 01.10.2021
Arguments concluded on : 16.01.2023
Date of Judgment: 07.02.2023
JUDGMENT
1. This is a petition U/s 34 of Arbitration & Conciliation Act, 1996 (hereinafter referred to as "Act") whereby an award dated 24.06.2021, passed by Maj. General K.T. Gajria (Retd), Ld. Arbitral Tribunal is challenged by the petitioner, Shaheed Bhagat Singh College (hereinafter referred to as 'College').
2. In brief, facts leading to filing of this petition, as stated by petitioner/college, are that it is a Premiere College as a part of University of Delhi and is having its office at Sheikh Sarai, Phase-II, New Delhi and respondent M/s A.K. Builders (hereinafter referred to as 'Claimant') is a Sole Proprietor firm of Shri Arun Kumar Tandon having its registered office at 105-A, Sant Nagar, New Delhi. It is stated that respondent/college had invited tenders for 'Construction of rooms on the 2nd Floor and the college in the Existing hall of the evening classes Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 1 of 20 block of the college at an estimated cost of Rs.7.5 Lacs and the work was awarded the claimant firm on 06.08.1997 for an amount of Rs.9,52,958.30 paise vide letter number SBSC/474 dated 06.08.1997 signed by Shri N.A. Siddiqui, the then Principal of the College and a formal contract to that effect was entered on 28.08.1997 into between the parties. It is stated that as per the contract, the scheduled date of commencement was 14.08.1997 and the completion was 13.02.1998 i.e. in a time period of 6 months. It is stated that it was explicity stated in the letter of award that the work was to be done under the directions of Architect M/s Suresh Goel & Associates, S-83, Panchshila Park, New Delhi, however, the work was not completed on the scheduled date.
3. It is stated that in the course of performance of the above contract, certain disputes arose between the parties for the adjudication of which the claimant invoked the Arbitration clause in the contract agreement on 19.01.2006 and requested the respondent/College to appoint an Arbitrator. Subsequently, claimant filed a petition before Hon'ble Delhi High Court and the petition was registered as Arbitration Petition No. 216 of 2010. Hon'ble Delhi High Court directed the competent authority to appoint an Arbitrator in terms of Clause No. 52 of the agreement and accordingly, appointed Shri S.K. Gupta, Retd. Chief Engineer from DRDO (Ministry of Defence) to adjudicate the disputes. In reference to Letter No. CS-SDC/149/2017/155 dated 24.07.2017, received from the Office of Assistant Registrar, University of Delhi, South Campus, respondent/College apprised the claimants vide letter dated 13.11.2017 about the appointment of arbitrator. It is stated that Shri S.K. Gupta did not enter into reference and refused to act as an Arbitrator vide his mail dated 24.11.2017. Claimant again requested the Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 2 of 20 competent authority for appointment of Arbitrator in terms of the orders passed by Delhi High Court for adjudicating the matters of disputes within 15 days vide letters dated 21.12.2017 and 26.02.2018. Thereafter the Acting Principal, Shaheed Bhagat Singh College apprised the claimant vide letter no. CS-SDC/124/SBSC/2019/101 dated 06.05.2019 regarding the appointment of the present sole arbitrator to adjudicate into the disputes between the parties. It is stated that the tenure of the arbitral tribunal, with the consent of both the parties was extended by six months, however, even considering that since March, 2020, certain reliefs have been announced by the court regarding the period in respect of prevalence of Covid, the award is made within the period as specified by the Act. It is stated that due to the effects of Covid, hearings could not be held as frequently as would have been desirable. Notwithstanding this subsequently, hearings were held through Video Conferencing and concluded finally with written arguments being submitted by both the parties and final written arguments came from the claimant on 14.01.2021. It is stated that preliminary hearing was held on 27th July, 2019; formal hearings commenced thereafter and were concluded on 14th January, 2021, when both the parties indicated that they do not need any further hearing for making their submissions.
4. This court has heard submissions advanced by Shri G.K. Pathak, Ld. Counsel appearing for the petitioner/College and Shri Sanjay Bansal, Ld. Counsel appearing for the respondent/Claimant and perused the material placed on record.
5. Shri G.K. Pathak, Ld. counsel appearing for the petitioner/College submitted that as per para 16 of the Award, the admitted facts regarding the award has been mentioned as the claim is Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 3 of 20 barred in terms of Section 43 of Arbitration and Conciliation Act, 1996 r/w section 2(j) and Part II of the Schedule of the Limitation Act, 1963.
6. Section 43 of Arbitration and Conciliation, Act 1996 provides as under :
(1) The Limitation Act, 1963 (36 of 1963) shall apply to arbitration as it appliesto proceedings in court.
(2) For the purposes of this section and the Limitation Act 1963, an arbitration shall be deemed to have commenced on the date referred to in section 21.
7. It is submitted that the claim before the Ld. Arbitrator does not speak of any final bill and its date or its submission date and the impugned award is passed without any reference of dates whatsoever whereas the Hon'ble High Court of Delhi in its order dated 22.5.2012 has observed that the issue of limitation to be decided by the Ld Arbitrator and thus prima-facie the award is bad u/S 34 (2) (a) (iv) apart from being in conflict with public policy of finding under sub clause (b)
(ii) of the Arbitration and Conciliation Act, 1996.
8. It is submitted that Article 18 of the Limitation Act, 1963 (Part II-Suits relating to contracts) provides that for the price of work done by the plaintiff for the defendant at his request, where no time has been fixed for payment, the limitation period would be three years from the date when the work is done. The respondent has intentionally and deliberated omitted to mention any date and the Ld. Arbitrator has also failed to appreciate the same while passing the impugned Award.
9. It is submitted that Hon'ble Supreme Court in Para 12 of the Judgment in 'Bharat Sanchar Nigam Ltd. & Anr. v. M/s Nortel Networks India Pvt. Ltd.' held as under :
Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 4 of 20"12. The period of limitation for filing a petition seeking appointment of an arbitrator/s cannot be confused or conflated with the period of limitation applicable to the substantive claims made in the underlying commercial contract. The period of limitation for such claims is prescribed under various Articles of the Limitation Act, 1963. The limitation for deciding the underlying substantive disputes is necessarily distinct from that of filing an application for appointment of an arbitrator. This position was recognized even under Section 20 of the Arbitration Act 1940 ..."
10. Next, Ld. counsel for petitioner submitted that in 'M/s Shanti Conductors Pvt. Ltd. & Anr. v. Assam State Electricity Board', it was held that the period for commencement of limitation for the filing of suit under Article 113 begins when the right to sue accrues and Hon'ble High Court of Delhi in the matter titled as 'Satender Kumar and Ors v. Municipal Corporation of Delhi and Ors.' [Arb P No. 345/2008, 253 and 254 of 2009] observed in Para 16 sub-para (iii) that :
"(iii) As regards contracts for execution of building work, Article 18 comes into play in that when no specific date for payment is fixed, limitation commences and the cause of action accrues for the purpose of limitation on the completion of work."
"(v) No fresh period of limitation can arise simply because letters and reminders are written time and again, attempting to keep the claim alive although the claim by virtue of Article 18 of Limitation Act, 1963 has become clearly time barred."
In Para 20, it was held that :
"To conclude, I must refer to the twin principles which are the objectives for the enactment of the Limitation Act. The first objective is that there must be a quietus and a lid put on the filing of litigation and resolving of disputes by a particular period of time. The second principle is that due to long passage of time vital evidence which would be the defence of the opposite party is bound to get lost or misplaced. Therefore seeking adjudication of claims preferred after long lapse of time would cause more injustice than justice."
11. Ld. counsel for petitioner submitted that the Arbitrator has failed to appreciate the limitation period. He Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 5 of 20 referred 'JC Budhiraja v. Chairman, Orissa Mining Corporation Ltd. & Ors.' [1971-1973 of 2000]. It is submitted that in Para 21, it was observed as under :
"21. The arbitrator committed an error apparent on the face of the record and a legal misconduct in holding that the entire claim was within time. His assumption that if the application filed by the contractor in 1980 under section 8(2) of Arbitration Act for appointment of an Arbitrator was in time, all claims made in the claim statement filed before the Arbitrator appointed in such proceeding under section 8(2) are also in time, is patently erroneous and is an error apparent on the face of the record. ..."
12. In the matter titled as 'Progressive Constructions Ltd. Versus National Hydroelectric Power Corporation Ltd.' [Arb. Appeal No. 92/2007] it was observed under Para 22 that :
"22. As far as the plea of the petitioner on the basis of Inder Singh Rekhi (supra) is concerned, Article 18 to the Schedule of the Limitation Act prescribes the Limitation of three years commencing from the date when the work is done, for the price of work done, where no time has been fixed for payment. In the present case the time of 30 days from completion of work was fixed for the petitioner to submit the final bill and the time of three months thereafter was fixed for the respondent to make the payment. The said period of four months from the date of completion i.e. 30th April, 1993 would expire in end of August, 1993 and the claims could have been made only within 3 years thereafter i.e. till the end of August, 1996. The claims have been made long thereafter. As aforesaid, the notice for appointment of arbitrator was given only on 29th December, 2006. The claims, if any, of the petitioner as on that day were not within limitation. Reliance in this regard can be placed on J.C. Budhiraja Vs Orissa Mining Corporation Ltd (2008) 2 SCC 444. Besides the claims having stood forfeited, abandoned and waived under Section 28 as prior to its amendment, the claims are even otherwise barred by time. Moreover Inder Singh Rekhi (supra) which is on an interpretation of Section 20 of the 1940 Act also makes a distinction between the Limitation for making the claims and the limitation for preferring the petition for appointment of arbitration. In the present case the Supreme Court having held that the appointment of arbitrator shall not be made when the claim is palpably barred by time, or when a dead claim is sought to be resurrected, even if it were to be held that the petition Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 6 of 20 under Section 11(6) has been made within three years from failure to appoint the arbitrator, the same will still not succeed if the claim is sought to be agitated are barred by time."
13. It is argued that Ld. Arbitrator has failed to note that respondent/Claimant shrewdly omitted to mention about the provisions of the agreement whereby the Respondent/Claimant was to comply with the requirements of the terms and conditions in regard with the alleged final bill and the Petitioner College having never received any certified alleged final bill from the Architect/Respondent, the claim deserved no consideration. It is urged that para 38 of the special terms and conditions reproduced as under would apparently make it clear that the claim is based on concocted facts as the claimant has never submitted any certified bill by the Architect as mandated in the contract documents:
"38 FINAL BILL: Final Bill as based on joint measurements of the work executed and duly accepted by the contractor shall be submitted by him within 90 days of the completion of work. The final bill shall then the verified and checked by the Architect and returned to the owner for payment. Should the contractor fail to take appropriate action as above, within the period prescribed, the site engineer shall take the measurements jointly with the Architect's representative and prepare final bill which will be final and binding on the contractor and the contractor shall have no right to dispute the same."
14. Ld. counsel for the petitioner/college argued that Respondent/Claimant also failed to firstly comply with the provisions of the contract regarding the architect to have certified the alleged bill if any, and further failed to bring on record the facts that Shaheed Bhagat Singh Evening College (which is a separate and distinct entity as on date) to be a separate party and even the Architect who was supposed to verify the alleged bill has not been made party, thus the Arbitrator has failed to appreciate the fact of non-joinder of the necessary parties. It is Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 7 of 20 argued that in absence of the compliance of material terms as agreed regarding Completion certificate, No objection Certificate, alleged Final Bills, if any to be verified and certified by the Architect, together with the fact having admitted the payments for which further claims have been made, the Impugned Award deserves to be set-aside.
15. Shri Sanjay Bansal, Ld. counsel appearing for the Claimant submitted that College had filed the present petition to avoid the payment towards work done as awarded to the Claimant by the Ld. Arbitrator and that the petition filed by the College is not maintainable in its present form as the College had not filed original award or its certified copy with this petition. It is submitted that the Ld. Arbitrator had rightly passed an award considering the law of limitation of three years from the date of cause of action and also had considered the commencement of Arbitral proceedings in terms of Law and awarded the claims in favour of Claimant. It is submitted that the College had raised the question of limitation as the Claimant had not filed claim within a period of 90 days in para 18 of reply filed before the Ld. Arbitrator is beyond the law of land as provided in Section 28 of Indian Contract Act and duly considered by the Court in several judgments on this issue.
16. It is submitted that the Ld. Arbitrator had rightly considered letter dated 11.08.2004 (CD-21) and letter of invocation of Arbitration dated 19.01.2006, duly admitted by College in their submissions. It is submitted that the the cause of action existed on 11.08.2004 up to which date the appellant was in process of release of payments and hence the present Petition deserves to be dismissed on these grounds alone. It is submitted that the College had wrongly challenged the award passed by Ld. Arbitrator as beyond the scope/provisions of Section 34 of Act 1996 Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 8 of 20 and that no grounds as provided in Section 34 of Act is taken in the challenge petition. It is argued that the Ld. Arbitrator is sole judge of quality and quantity of evidence adduced before him and he had considered all cogent evidence, facts and documents and had conducted several hearings before making and publishing the award on 24.06.2021, therefore, the award passed by the Ld. Arbitrator on the basis of facts & evidence adduced is perfectly valid and binding between the parties. It is submitted that the College had filed the present petition beyond the provisions of Arbitration and Conciliation Act 1996 and as if they had filed an appeal against the orders of Ld. Arbitrator and not just challenge Petition. It is submitted that the petition is filed to delay the release of payments for the work done by the Claimant.
17. It is argued that the College has challenged the award as if it is an appeal against the award and according to law no such appeal is admissible and therefore petition deserves to be dismissed. It is submitted that the College had alleged incorrect grounds to challenge the Award as passed by Ld. Arbitrator on wrong notion. It is submitted that Ld. Arbitrator considered the pleadings on record documents and evidence on record and terms and conditions of contract agreement as well as law and had given cogent reasons while passing award. It is submitted that the Ld. Arbitrator awarded payment against work done and interest as accrued and cost of arbitration in the present arbitration towards balance payment for work done on the basis of documents produced in the final award and had given finding of fact that the College is responsible for release of payments for the work done and interest and cost. It is submitted that the Ld. Arbitrator rightly awarded the cost of Arbitration in favor of claimant for the amount paid by the Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 9 of 20 Claimant towards Arbitration expenses.
18. In support, Ld. counsel for the Claimant relied upon the judgment of Hon'ble Supreme Court, titled Mc Dermott International Vs. Burn Standard Co. Ltd. Appeal (Civil) 4492 of 1998, decided on 12.05.2006 where it is held that :-
"It is trite that the terms of the contract can be express or implied. The conduct of the parties would also be a relevant factor in the matter of construction of a contract. The construction of the contract agreement is within the jurisdiction of the arbitrators having regard to the wide nature, scope and ambit of the arbitration agreement and they cannot be said to have misdirected themselves in passing the award by taking into consideration the conduct of the parties. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. Interpretation of a contract is a matter for the arbitrator to determine, even if it gives rise to determination of a question of law. (See Pure Helium India (P) Ltd. v. ONGC [(2003) 8 SCC 593] and D.D. Sharma v. Union of India [(2004) 5 SCC 325]).
Once, thus, it is held that the arbitrator had the jurisdiction, no further question shall be raised and the court will not exercise its jurisdiction unless it is found that there exists any bar on the face of the award."
19. In Rashtriya Ispat Nigam Ltd. v. Dewan Chand Ram Saran, Civil Appeal No. 3905 of 2012 decided on 25.04.2012, Hon'ble Supreme Court held :
"In any case, assuming that Clause 9.3 was capable of two interpretations, the view taken by the arbitrator was clearly a possible if not a plausible one. It is not possible to say that the arbitrator had travelled outside his jurisdiction, or that the view taken by him was against the terms of contract. That being the position, the High Court had no reason to interfere with the award and substitute its view in place of the interpretation accepted by the arbitrator."
20. In Sumitomo Heavy Industries Ltd.. v. ONGC, Civil Appeal No. 3185 of 2002 it was held the Court held :
"The umpire has considered the fact situation and placed a construction on the clauses of the agreement which according to him was the correct one. One may at the highest say that one would have preferred another construction of Clause 17.3 but that cannot make the award in any way Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 10 of 20 perverse. Nor can one substitute one's own view in such a situation, in place of the one taken by the umpire, which would amount to sitting in appeal. As held by this Court in Kwality Mfg. Corpn. v. Central Warehousing Corpn. [(2009) 5 SCC 142: (2009) 2 SCC (Civ) 406] the Court while considering challenge to arbitral award does not sit in appeal over the findings and decision of the arbitrator, which is what the High Court has practically done in this matter. The umpire is legitimately entitled to take the view which he holds to be the correct one after considering the material before him and after interpreting the provisions of the agreement. If he does so, the decision of the umpire has to be accepted as final and binding."
21. Ld. counsel for the Claimant submitted that the findings given by Ld. Arbitrator is based on evidence adduced by the parties and cannot be said to be arbitrary, capricious or perverse. It is urged that in Associate Builders vs. Delhi Development Authority, (2015) 3 SCC 49, it was held by Hon'ble Supreme Court that the Arbitrator is master of quantity and quality of evidence, secondly it is held that no interference is required in the award, when the arbitrator's approach is neither arbitrary nor capricious. Further it is also held in this case, that Patent illegality must go to the root of matter.
22. It is argued that the Ld. Arbitrator had rightly awarded the award on the claims and counter claims as raised before him after giving full opportunity to both parties and on the basis of cogent evidence and had considered the pleadings and evidence. It is further submitted that the Ld. Arbitrator had considered all documents, pleadings and evidence while passing an award and that the award dated 27.06.2019 passed by Ld. Arbitrator is neither perverse nor against the public policy of India. It is submitted that the Ld. Arbitrator had passed an award for balance payments for work done, interest and cost and rightly awarded the claims. It is submitted that the petition filed deserves to be dismissed with Cost as petitioner tried to drag to the respondent to unnecessary Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 11 of 20 litigation by filing the present petition against as award which was passed by Ld. Tribunal on the basis of cogent evidence and pleadings on record.
23. It is submitted that Award is not open to challenge on the ground that the Arbitral Tribunal had reached a wrong conclusion or had failed to appreciate the facts; the appreciation of evidence by the arbitrator is never a matter which the Court considers in the proceeding under Section 34 of the Act, as the Court is not sitting in appeal over the adjudication of the arbitrator.; as was held by Delhi High Court in the case of NTPC Ltd vs Marathon Electric Motors India Ltd., 2012 SCC OnLine Del 3995. It is submitted that Hon'ble Supreme Court in the case of Associate Builders vs Delhi Development Authority (Supra) has restricted the scope of public policy, so the court does not act as a court of appeal and consequently errors of fact cannot be corrected. An error relatable to interpretation of the contract by an arbitrator is an error within his jurisdiction and such error is not amenable to correction by Courts as such error is not an error on the face of the award; as was held by Supreme Court in the case of Steel Authority of India Ltd. vs Gupta Brother Steel Tubes Ltd., (2009) 10 SCC 63.
24. Admittedly, the scheduled completion of the work order/award in question was 13.02.1998 and the Respondent/Claimant having not taken any step since 1998, the claim of the Respondent/Claimant even for arbitration is deemed to have been waived of within the meaning of agreed terms and conditions apart from being hit by limitation as the alleged bill submitted in the year 1995 does not extend limitation in any manner.
25. It is submitted that in claim for interest is barred in terms of Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 12 of 20 Clause 39 of special terms and conditions having agreed between the parties reproduced as under:
"39. CLAIM FOR INTEREST : No claim for interest will be entertained by the owner with respect to any money or balance, which may be in its hands owing to a dispute between the Owner and the Contractor or with respect to any delay on the part of the owner in making interim or final payment or otherwise."
26. The legal position is well settled that a broad distinction has to be maintained between the decisions which are perverse and those which are not and interference by the Court under Section 34(2)(b)(ii) does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts. An award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence. ('MMTC Ltd. Vs. Vedanta Ltd.', AIR 2019 SC 1168; 'Union of India vs. Chenab Construction Company (Regd.)', 2019 SCC OnLine Del 10515; 'Ssangyong Engineering & Construction Co. Ltd. Vs. National Highways Authority of India (NHAI)', (2019)15SC C 131), 'Parsa Kente Collieries Limited vs. Rajasthan Rajya Vidyut Utpadan Nigam Limited', AIR2019 SC 2908; 'Patel Engineering Ltd. Vs. North Eastern Electric Power Corporation Ltd. (NEEPCO)', 2020 SCC OnLine SC 466 and 'Anglo America Metallurgical Coal PTY Ltd. vs MMTC Ltd.' 2020 SCC OnLine SC 1030).
27. In the present case the work contract is dated 06.08.1997. Vide order dated 22.05.2012 of Hon'ble Delhi High Court, the Vice Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 13 of 20 Chancellor, Delhi University had to appoint an Arbitrator within two weeks from the date of receipt of the order to enable the Arbitrator to adjudicate upon all disputes and differences including claims and counter claims between the parties and that it will be open for the respondent to raise the plea of limitation before the Arbitrator who will decide the same in accordance with law unaffected by any observation made by the court in the order passed. In Para 13 of the aforementioned order dated 22.05.2012, it was observed as under :-
'The arbitration clause has not been denied by the respondents. It is also not in dispute that the petitioner has carried out the work, as awarded by the respondents. Having regard to the communications placed on record, prima facie, it shows that the petitioner has been repeatedly calling upon the respondents to clear the outstanding bills, which the respondents have failed to do so. It is also noteworthy that in response to the communication of the petitioner respondent no. 2 on 02.05.2001 had informed the petitioner that audit of their capital fund account had been pending for a long time and a clear picture would emerge only after the same has been finalized. The respondents, at no point of time, rejected the bill of the petitioner. There is also force in the submission of learned counsel for the petitioner that the question of limitation may be kept open for the Arbitrator to decide the same.'
28. It was kept open for the respondent/college to raise the plea before the Ld. Arbitrator for deciding the same in accordance with law.
In Union of India Vs. L.K. Ahuja & Company (1988) 3 SCC 76 as well as in Progressive Constructions Ltd. case (supra). It was held that if ex- facie the claims are barred by limitation i.e. from the admitted facts it can be made out that the claims are barred by limitation. If however, there is a disputed question of fact to decide the issue whether the claims are time barred or not, then this issue is left open for decision in the arbitration proceedings. The main ground raised on behalf of the College is that award is liable to be set aside being time barred and the Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 14 of 20 Ld. Arbitrator has not dealt with the point of limitation in the award dated 24.06.2021. As per Section 43 of the Arbitration & Conciliation Act, indisputably, the Limitation Act, 1963 applies to the arbitration as it applies to the proceedings in court.
29. This court finds no merit in the contention raised by Ld. counsel for the petitioner. In the impugned award, it has been noted that the formal contract has entered between the parties on 28.08.1997. As per the contract, date of completion was 13.02.1998. The work was to be completed under the directions of the architect, M/s Suresh Goel & Associates. The work was not completed on the scheduled date. Claimant invoked arbitration clause on 19.01.2006 and requested the respondent to appoint the arbitrator. Subsequently, claimant filed the petition no. 216/2010 before the High Court u/S 11 of the Act for appointment of the arbitrator. Earlier Shri S.K. Gupta, Retd Chief Engineer, DRDO had been appointed as an arbitrator who, did not enter and refused to act as an arbitrator vide his mail dated 24.11.2017. Respondent/Claimant requested the competent authority for appointment of the arbitrator vide letter dated 21.12.2017 and 26.02.2018. Thereafter vide letter dated 28.06.2019, Major General K.T. Gajria (Retd) had been appointed as an Arbitrator in terms of order of the High Court.
30. According to the Claimant, there was increase in the scope of the work in terms of the original contract and the College was liable to pay the dues for extra work and that there was breach of contract by the College and also a security deposit was not being released. According to the College, all the bills which were certified by the architect had been paid to the Claimant who was claiming against those work which were never allotted to it and was not part of the contract. Para 24 of the Award Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 15 of 20 further notes that the 4th and the final bill was submitted by the Claimant on 01.07.1999 and the same was not submitted through the Architect as per the agreed practice and the agreement dated 26.08.1997 and no mandatory no dues, no claim certificates as well as site clearance certificate was attached with the final bill and, therefore, the final bill presented by the Claimant was to be treated as null and void. It was further the case of the College/Petitioner that the Evening College in respect of which work order was placed was distinct and separate entity and was required to be made a party and, therefore, Claimant's claim is not maintainable.
31. It is pertinent to note that on behalf of College, as regards limitation, the point which was raised before the Ld. Tribunal was that the claim is barred in terms of the provisions of General Conditions of contract as Claimant had not made demand for arbitration within the prescribed period of 90 days after receiving intimation from it that the bill was ready for payment.
32. Clause 52 of the Agreement dated 28.08.1997 reads as under:-
"It is also a term of the contract that if the contractor(s) do/does not make any demand for arbitration in respect of any claim(s) in writing within 90 days of receiving the intimation from the owner that the bill I ready for payment, the claim of the contractor(s) will be deemed to have been waived and absolutely barred and the society shall be discharged and released of all liabilities under the contract in respect of these claims".
33. According to this Clause, demand for arbitration is to be made by the contractor within 90 days of receiving the intimation from the owner/College that the bill is ready for payment failing which the claim of the contractor was to be deemed to have been waived and Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 16 of 20 absolutely barred. There is nothing on arbitral record to indicate that the College/Petitioner had intimated the contractor/Claimant that the bill/final bill is ready for payment.
34. Para 38 of the special terms and conditions reads as under :-
"39 FINAL BILL: Final Bill as based on joint measurements of the work executed and duly accepted by the contractor shall be submitted by him within 90 days of the completion of work. The final bill shall then the verified and checked by the Architect and returned to the owner for payment. Should the contractor fail to take appropriate action as above, within the period prescribed, the site engineer shall take the measurements jointly with the Architect's representative and prepare final bill which will be final and binding on the contractor and the contractor shall have no right to dispute the same."
35. According to the petitioner/College, no bill which was duly certified or verified and checked by the Architect regarding the claim amount of Rs.1,16,554/- was submitted. As regards the other claims i.e. security deposit of Rs.50,000/-, the petitioner/College had not denied the same. As regards claim of Rs.1,53,245/- with respect to construction of store room and Rs.61,760/- w.r.t. construction of toe wall, the version of the College before the Ld. Tribunal was that those amount have already been paid. As regards claim of Rs.89,248/- for miscellaneous work in the Evening Block, it was the case of petitioner/College that evening college is separate entity and claimant had not produced any document to prove the execution of the said work. As regards claim of Rs.2,20,156/- for construction of additional staircase, case of the petitioner/college was no work order was placed on the claimant and no bill was pending.
36. Admittedly, no final bill as required in the aforementioned para 38 of special terms and conditions had been submitted. Indisputably, petitioner had carried out the contracted work as awarded Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 17 of 20 by the respondent vide agreement dated 06.08.1997 and also the additional work. The material on record shown by the parties indicates that the claimant had been repeatedly calling upon the respondents to clear the outstanding bills, which the petitioner/college had failed. The letters were exchanged and meeting had taken place vide letter dated 29.03.2001, the claimant had submitted the requisite documents for releasing of the payment. It is pertinent to note that in response to the communication of the petitioner, respondent no. 2 on 02.05.2001 had informed the petitioner that audit of their capital fund account had been pending for a long time and a clear picture would emerge only after it is finalized and completed. It was also mentioned therein that his claim had been referred to the auditor which they shall be able to proceed further in the matter only after he is able to determine liability of the college towards the claimant. Then there are letters dated 07.01.2003, letter dated 01.07.1994 vide which final bill for the class rooms and partitition in the existing hall of second floor at Evening Block alongwith measurement duly recorded in the Measurement Book was sent. Vide letter dated 11.08.2004 written by Principal of the college to the claimant asking him to arrange to procure copy of the Lay Out Plan of second floor of Administrative Block of the Evening College from the Architect to enable them to take further necessary action in the matter. Vide letter dated 17.08.2000, claimant responded to the Principal informing that the needful work done and they were once again requested to release the payment. There is nothing on record to show that petitioner/college at any point of time had rejected the bill of the claimant. In case, the contractor had failed to do the needful or to take appropriate action as required under the condition of the contract within the period prescribed.
Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 18 of 20There is nothing on record to show that the Site Engineer had taken the measurements jointly with M/s Suresh Goel & Associates-the Architect's representative to prepare final bill. Thus, no final bill which petitioner/college was supposed to prepare had been prepared, otherwise the same would have been final and binding on the contractor/claimant having no right to dispute the same.
37. According to the respondent, a sum of Rs.8,45,653/- was paid for the contracted item of work with the rate of 5% in built (Rs.44,508/-). As regards the rebate of 5% offered by the claimant vide letter dated 21.07.1999 admittedly, it was a condition rebate in case the payment was made to the claimant within seven days from the date of submission of the bill. Since the petitioner/college had not made the payment within the offered time, the petitioner/college could not have claimed that rebate.
38. In the circumstances having regard to aforenoted position of law and the factual matrix available before the Ld. Arbitrator, this court finds no merits in the contention of the Ld. counsel for the petitioner/College that the claim is barred in terms of the provisions of General Conditions of contract as Claimant had not made the demand for arbitration within the prescribed period of 90 days after receiving intimation from it that the bill was ready for payment. Regarding the delays and the track history of the arbitration proceedings, dates and events have been noted above and need not be repeated.
39. This court finds that none of the ground raised by the learned Counsel for the petitioner is covered with the purview of Section 34 of A&C Act and it cannot be observed that the Award is in conflict with the public policy of India or Ld. Arbitrator had dealt with the Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 19 of 20 dispute not falling within the terms of the submissions or is in contravention of fundamental policy of Indian law. This court does not find any patent illegality as well in the award. This court cannot substitute its opinion in place of the opinion of the Ld. Tribunal who has taken a reasonable view of the entirety of the factual matrix. In the result, this court finds no merits in the petition and no ground for interference is warranted in the award. Accordingly, this petition U/s 34 of A&C Act deserves to be dismissed. Order accordingly. No order as to costs. File be consigned to record room.
(Dictated and announced today i.e. on 07.02.2023).
(VINAY KUMAR KHANNA) District Judge (Commercial Court-02) South Distt., Saket, New Delhi Shaheed Bhagat Singh College Vs. A.K. Builders - OMP (Comm) 62/21 Page 20 of 20