Rajasthan High Court - Jodhpur
M/S Suresh Kumar Kothari vs State Of Rajasthan on 3 May, 2019
Equivalent citations: AIR 2019 RAJASTHAN 124, AIRONLINE 2019 RAJ 363
Author: Arun Bhansali
Bench: Arun Bhansali
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Arbitration Application No. 18/2018
M/s Suresh Kumar Kothari, A Registered Partnership Firm,
Situated At A-32 Karninagar Pawanpur, Tehsil And District
Bikaner
----Petitioner
Versus
State Of Rajasthan, District Collector, Bikaner
----Respondent
For Petitioner(s) : Mr. Pradeep Choudhary.
For Respondent(s) : Mr. Girish Joshi.
HON'BLE MR. JUSTICE ARUN BHANSALI
Order 03/05/2019 This application under section 11 of the Arbitration and Conciliation Act, 1996 ('the Act') has been filed by the applicant seeking appointment of an independent arbitrator for resolving the dispute between the parties.
It is, inter-alia, claimed in the application that the applicant was awarded contract for Manufacturing & Supplying of 35 lacs Pucca Bricks at Kiln R.D. 750 Ist (Labour & Carriage) by order dated 22.08.1988 and an agreement Annex.4 in this regard was executed between the parties. For resolving the dispute between the parties Clause 19(a) of the agreement contains arbitration agreement.
It is, inter-alia, claimed that the applicant concluded the requisite work in May, 1991 and thereafter started raising demand for his outstanding payment, when he was informed that a sum of Rs.1,10,576/- was outstanding in the applicant. Whereafter, (Downloaded on 28/06/2019 at 01:33:05 AM) (2 of 4) [ARBAP-18/2018] reference has been made to certain communications in the year 2001, 2002, 2004, 2006 and ultimately, a notice dated 23.02.2018 calling upon the respondents to make payment, which was responded to raising counter claim of a sum of Rs.91,860/-, on which the applicant issued notice dated 30.06.2018 (Annex.12) seeking reference of dispute to the arbitrator in terms of Clause 19(a) of the agreement. It is claimed that the same has not been responded to and therefore, the present application for appointment of arbitrator has been filed.
A reply to the application has been filed by the respondent referring to various communications and raising dispute that the applicant has waived his right for appointment of arbitrator, the claim made was barred under the law and that the application, therefore, deserves to be dismissed. However, existence of arbitration agreement between the parties has not been denied.
When initially, the matter came up before the Court on 14.09.2018, it was noticed that the applicant was seeking payment of a sum of Rs.3,97,078/- alongwith interest from the year 1991 and time was granted to counsel for the applicant to make submissions, when reliance was placed on judgments in M/s. EMM ENN Associates v. Commander Works Engineer & Ors. :
AIR 2016 SC 3079, M/s. Wesford Financial Inc. Panama v. Bharat Heavy Electricals Ltd. : AIR 2016 SC 3447 and M/s Ajmer Singh & Company v. State of Rajasthan & Ors. : S.B. Arbitration Application No.10/2015, decided on 08.02.2017 by a Co-ordinate Bench of this Court, whereafter, the notices were issued to the respondents.
Learned counsel for the parties made submissions in terms of the averments made in the application and the reply, while (Downloaded on 28/06/2019 at 01:33:05 AM) (3 of 4) [ARBAP-18/2018] learned counsel for the applicant submitted that there being an arbitration agreement between the parties and a dispute therefore, in terms of Section 11(6-A) of the Act, the dispute needs to be referred to the arbitrator and learned counsel for the respondent alleged that the entire dispute being ex-facie barred by limitation.
I have considered the submissions made by learned counsel for the parties and have perused the material available on record.
The issue as raised in the present application and effect of the fact that the dispute was raised belatedly, was considered by a Co-ordinate Bench of this Court in the case of M/s Ajmer Singh & Company (supra), wherein also, the submissions made were that in respect of work completed in the year 1994, the dispute was raised after 19 years and was therefore, apparently barred by limitation, it was, inter-alia, observed / laid down as under :-
"7. The only objection raised by the respondent is that the claim of the petitioner is barred by limitation and therefore, no arbitrable dispute exists, which could be referred for adjudication to the arbitrator.
8. In the matter of 'Wexford Financial Inc. Panama Vs. Bharat Heavy Electricals Limited' (2016) 8 SCC 267, the Hon'ble Supreme Court has specifically held that the matter with regard to the claim sought to be referred to arbitration being barred by law has to be decided by the arbitrator and not by the Chief Justice/Designate in proceedings under Section 11(6) of the Act. The Court held :
"We have heard the learned counsel for the parties at some length. The material facts are not in dispute. That a Service Provider Agreement was executed between the parties is admitted. That Article 7 of the said agreement provides for settlement of the dispute in relation to the agreement by way of arbitration is also not in dispute. That disputes have actually arisen between the parties in relation to the agreement is also evident from the averments made in the pleadings. The only method for determination of such disputes is by way of arbitration. Whether or not the petitioner has provided the services envisaged under the agreement and, if so, whether the said services were adequate and satisfactory are matters that can be examined only by the arbitrator. So also the question whether the claim made by the petitioner is time-(Downloaded on 28/06/2019 at 01:33:05 AM)
(4 of 4) [ARBAP-18/2018] barred cannot be examined in the present proceedings and shall have to be left open to be raised before the arbitrator. There is, in that view, no gainsaying that the present petition under Sections 11 (5) and 11 (12) shall have to be allowed with appropriate directions, particularly when this Court is concerned primarily with the question whether an arbitration agreement exists between the parties and if so whether the disputes falling within the scope of the agreement have arisen for determination. Our answer to both these questions being in the affirmative, the petitioner has made out a case for appointment of an arbitrator and for reference of the disputes for adjudication to him/her."
(Emphasis supplied)
9. Thus, keeping in view the authoritative pronouncement of the Hon'ble Supreme Court in Wexford Financial Inc. Panama's case (supra), the question with regard to the claim of the petitioner being barred by limitation is not required to be gone into in the present proceedings."
The issue in the present case being identical, the same is squarely covered by the law laid down above.
In view of the above factual and legal position, the application is allowed. Mr. Pukhraj Sankhla, Retired Chief Engineer, Irrigation Rajasthan, R/o Amar Singh Marg, Outside Nagori Gate, Jodhpur (Mobile No. 9672444499) is appointed as a sole arbitrator to adjudicate upon the dispute between the parties in terms of the arbitration agreement and as per the Manual of Procedure for Alternative Dispute Resolution, 2009, as amended upto date. Respondents would be free to raise also objections before the arbitrator. The above appointment is subject to necessary disclosure being made under Section 12 of the Act.
(ARUN BHANSALI),J 183-Rmathur/-
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