Delhi High Court - Orders
M/S Arsh Construction vs Central Public Works Department on 13 July, 2022
Author: V. Kameswar Rao
Bench: V. Kameswar Rao
$~8
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 601/2021
M/S ARSH CONSTRUCTION ..... Petitioner
Through: Mr. Anil Mittal and Ms. Komal
Aggarwal, Advs.
versus
CENTRAL PUBLIC WORKS DEPARTMENT ..... Respondent
Through: Mr. Niraj Kumar, Sr. Central Govt.
Counsel for CPWD
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
ORDER
% 13.07.2022
1. This petition has been filed by the petitioner for appointment of an arbitrator.
2. Vide agreement executed between the parties herein in the month of September, 2012, work of construction of Quarter Guard Building and Amenity / Community Block at BSF Campus, Bhondsi, Gurgaon, Haryana was allotted to the petitioner for a total amount of ₹1,50,20,326/-. The date of completion of the work was April 1, 2013. The petitioner gave a performance guarantee of ₹7,52,000/- in favour of the respondent. The time for completing the work was extended from time to time. The work was completed on December 5, 2013. The defect liability period was also over after one year of the completion of the work. The petitioner raised the final bill in the month of December, 2014.
3. It is the case of the petitioner so contended by Mr. Anil Mittal, learned counsel for the petitioner that certain amounts were withheld by the Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:16.07.2022 17:01:41 respondent from the final bill.
4. On March 24, 2017, petitioner requested the respondent for release of the balance amount withheld from the final bill. He stated that the respondent released further amount of the final bill.
5. On May 9, 2018 petitioner again requested the respondent to pay the withheld amounts. This was followed by letter dated May 28, 2020. On July 20, 2020, the petitioner has raised claims for ₹65,42,123/-. The said claims of the petitioner were rejected vide letter dated August 24, 2020. Even the subsequent request of the petitioner was rejected vide letter dated December 22, 2020.
6. The submission of Mr. Anil Mittal, learned counsel appearing for the petitioner is, the stand taken by the respondent that all the claims being time barred, is clearly untenable. According to him, as the payments were made from time to time, (though not complete), the claims made by the petitioner are live claims and can be adjudicated through the process of arbitration. Even otherwise, the issue of limitation is a mixed question of fact and law and as such the same needs to be adjudicated by the learned Arbitrator. He has relied upon the judgment of the Supreme Court in the case of Bharat Sanchar Nigam Ltd. & Anr. v. M/s Nortel Networks India Pvt. Ltd., Civil Appeal Nos.843-844/2021, March 10, 2021, wherein the Supreme Court has said „unless the claims are ex-facie barred by time and if there is a little doubt with regard to the aspect of limitation, the matter should be referred to the Arbitration‟.
7. On the other hand, Mr. Niraj Kumar, Sr. Central Govt. Counsel, appearing for the respondent CPWD would contest the submission made by Mr. Mittal by contending that in the initial communication the petitioner had Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:16.07.2022 17:01:41 only sought for amounts withheld from the final bills. Cleverly, vide letter dated July 20, 2020, petitioner has for the first time raised claims for ₹65,42,123/-, which claims are clearly barred by time and cannot be adjudicated by the learned Arbitrator. He states, the Judgment of the Supreme Court in the case of Bharat Sanchar Nigam Ltd. & Anr. (supra) clearly lays down that the claims which are ex-facie barred by time, should not be referred for arbitration. He seeks the dismissal of the petition.
8. Having heard the learned counsel for the parties, there is no dispute that the work was completed in the year 2013. The petitioner raised the final bill in the year 2014. Certain amounts were paid from the final bill. It is only in the year 2017 that a letter was written by the petitioner to the respondent for making payment of the withheld amounts. Similar letter was also written by the petitioner on May 9, 2018 and May 28, 2020. For the first time on July 20, 2020, the petitioner made a claims for ₹65,42,123/- which claims were rejected by the respondent being time barred.
9. I find vide letter dated May 9, 2018, petitioner had made a claims under three heads, i.e., pending defects - ₹ 1 Lac, non-submission of deviation - ₹ 2 Lac and water proofing - ₹19,999. The claims for ₹65,42,123/- made by the petitioner on July 20, 2020 includes claims beyond what have been claimed on May 9, 2018. I find the said claim for ₹65,42,123/- also includes an amount of ₹ 3,19,999/- which was on account of balance payment not released, i.e., withheld for defects, non-submission of deviation items. Ex-facie, the claims for ₹65,42,123/- are barred by time having not been raised immediately after the completion of work, i.e., in the year 2013 or even thereafter in 2014 when certain payments were made. The Supreme Court in the case of Bharat Sanchar Nigam Ltd. & Anr.
Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:16.07.2022 17:01:41(supra) on which reliance has been placed by Mr. Mittal clearly held as under:
"47. It is only in the very limited category of cases, where there is not even a vestige of doubt that the claim is ex facie time- barred, or that the dispute is non-arbitrable, that the court may decline to make the reference. However, if there is even the slightest doubt, the rule is to refer the disputes to arbitration, otherwise it would encroach upon what is essentially a matter to be determined by the tribunal.
xxx xxx xxx 53.2. In rare and exceptional cases, where the claims are ex facie time-barred, and it is manifest that there is no subsisting dispute, the Court may refuse to make the reference."
10. In view of the settled law, the claim other than ₹3,19,999/- being ex- facie barred by time, the same cannot be referred for adjudication by Arbitrator. Even the claim of ₹3,19,999/- is within time or not, need to be adjudicated. Merely certain amounts have been paid, shall not prima facie extend the limitation. Accordingly, this Court deem it appropriate to refer the parties to Delhi International Arbitration Centre (DIAC), who shall appoint an arbitrator from its panel for adjudication of the claim of the petitioner with regard to ₹3,19,999/- at document A-3 of page No.9 of the documents submitted by the petitioner, as it pertains to payment of balance amounts.
11. The appointment of the learned Arbitrator shall be as per Rules framed by the DIAC. The Arbitrator shall give disclosure in terms of Section Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:16.07.2022 17:01:41 12 of the Arbitration and Conciliation Act, 1996. All the pleas of the parties are left open.
12. The petition stands disposed of.
V. KAMESWAR RAO, J JULY 13, 2022/jg Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:16.07.2022 17:01:41