IMPORTANT POINT
Arbitrator cannot be appointed on a stale claim.

JUDGMENT

M.R. Shah. J.

Feeling aggrieved and dissatisfied with the impugned order dated 19.03.2021 passed by the Calcutta High Court in Arbitration Petition No. 748/2019, by which the High Court has dismissed the said application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 1996 Act'), preferred by the appellant herein, the original applicant has preferred the present appeal.

2. That the appellant herein was issued work order in the year 1982. That the work was executed in the year 1986. According to the appellant herein, he executed excess quantity of work beyond the schedule quantity of work to be done. Therefore, he was entitled to the additional amount for the excess quantity of work done. It is the case on behalf of the appellant that a lot of correspondence was made by the appellant, however, the amount due and payable with respect to the excess quantity of work done was not paid. The appellant through letter dated 31.05.2018 requested the General Manager of South Eastern Railway to release the amount due or refer the dispute to the arbitrator under clauses 63 & 64 of General Conditions of Contract (GCC) under the 1996 Act, however, no action was taken on the said letter. Thereafter vide letter/communication dated 22.10.2018, again the same request was made to the General Manager, South Eastern Railway either to pay the amount which was overdue or refer the dispute to the arbitrator, which was repeated vide communications dated 11.01.2019 and 11.03.2019. According to the appellant, thereafter the appellant sent the Statement of Claim which was payable to him as per the work order dated 7.4.1982 issued by the railway authorities, which was executed up to 11.05.1986 and the work order dated 15.01.1984, which was executed up to 26.08.1985. According to him, as per the statement of claim, the total amount due and payable was Rs. 1,19,46,297/-.

2.1 Thereafter, the appellant sent a legal notice through his advocate on 31.07.2019 invoking the arbitration clause and seeking appointment of an arbitrator by the office of the General Manager. However, the arbitrator was not appointed as per clauses 63 & 64 of GCC. The appellant hereafter filed the present Arbitration Petition before the High Court under Section 11(6) of the 1996 Act and prayed to appoint the arbitrator to resolve the dispute between the parties. By the impugned order, the High Court has dismissed the said application on the ground that the arbitration petition in 2019 is hopelessly barred by limitation.

2.2 Feeling aggrieved and dissatisfied with the impugned order passed by the High Court dismissing the arbitration petition under Section 11(6) of the 1996 Act on the ground that it is barred by limitation, the original applicant has preferred the present appeal.

3. Shri Pijush K. Roy, learned counsel appearing on behalf of the appellant has vehemently submitted that the High Court has materially erred in dismissing the arbitration petition under Section 11(6) of the 1996 Act on the ground of limitation.

3.1 It is submitted that from the date of issuing the legal notice invoking the arbitration clause and after waiting for 30 days and thereafter when the application under Section 11(6) of the 1996 Act was made, the same cannot be said to be barred by limitation.

3.2 It is submitted that the cause of action to file the application under Section 11(6) of the 1996 Act can be said to have arisen after completion of 30 days of service of legal notice invoking the arbitration clause and the request to appoint the arbitrator was made. It is therefore submitted that from the date of issuance of legal notice invoking the arbitration clause and after expiry of period of 30 days, the limitation would start from the date of completion of 30 days from the date of serving the legal notice invoking the arbitration clause. Heavy reliance is placed on the decision of this Court in the case of Bharat Sanchar Nigam Limited vs. Nortel Networ