Delhi High Court
Shri J.K. Anand vs Delhi Development Authority & Anr. on 16 May, 2001
Equivalent citations: 2001(59)DRJ380
Author: J.D. Kapoor
Bench: J.D. Kapoor
ORDER J.D. Kapoor, J.
1. Through this application under Sections 16(c), 20 and 33 of the Arbitrating Act, 1940, award dated 8th June, 1994 is sought to be set aside.
2. The question involved for determination is whether the Arbitrator was competent to reject the claim of the petitioner on the ground that the demand for Arbitrator was not made within 90 days from the date of the final bill as per clause 25 of the Agreement.
Clause 25 of the agreement provides as under:-
"It is also a term of the contract that if the contractor does not make demand of arbitration in respect of any claim in writing within 90 days of the intimation from the Engineer-in-Charge that the bill is ready for payment the claim of the contractor will be demand to have been waived absolutely and the Delhi Development Authority shall be discharged and released of all liabilities under the contract in respect of those claims."
3. The validity of the above clause of the agreement cropped up for consideration in M/s. Hindustan Construction Corporation Vs. Delhi Development Authority . In the aforesaid case also, the arbitration was not demanded within 90 days and the claims of the petitioner were dismissed on that short ground alone and not on merits. It was held that clause 25 is hit by an amendment which has been made to Section 28 of the Contract Act (vide Amendment Act I of 1997) whereby clause (b) has been incorporated therein. Section 28 of the Contract Act provides as under:-
"Every agreement:-
(a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or
(b) which extinguishes the rights of any party thereto, or discharges any party thereby, from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights."
4. Perusal of the aforesaid provisions shows that these are applicable to the facts and circumstances of this case in hand. It was observed that clause 25 of the agreement that the contractor's right to claim arbitration comes to an end after the expiry of 90 days from the date of intimation of the final bill being ready for payment deprives the contractor of a very valuable right to claim the amount which was due to him from the respondent.
5. Since the Arbitrator did not decide the claim on merits and the clause (b) of Section 28 of the Contract Act keeps the rights of the contractor to claim the amount which was due to him alive irrespective of clause the amount which was due to him alive irrespective of clause 25 in the agreement, the application is allowed.
6. As a result, the award dated 8th June, 1994 is hereby set aside with the direction to the Arbitrator to decide the claims of the petitioner on merits. However in case of non-availability of the Arbitrator, a new Arbitrator shall be appointed by the authorities and he shall render the award within the statutory period.
7. The suit as well as IA stand disposed of.