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1999 Supreme(Bom) 154
IN THE HIGH COURT OF BOMBAY
(PANAJI BENCH)
R.M.S. Khandeparkar, J.
Shri Nyaneshwar Bhiku Dhargalkar ..... Petitioner.
Versus
Executive Engineer, P.W.D., Goa..... Respondent.
Arbitration Application No. 8 of 1998, decided on 26-2-1999.
Advocates appeared :
S.G. Dessai, S.A. with Ms. Sulekha Kamat, for the petitioner.
H.R. Bharne, G.A. for the respondent.
Headnote:Section 11-Res judicata-Application for appointment of arbitrator filed under Section 20 of Arbitration Act, 1940 was held not maintainable as Arbitration and Conciliation Act was applicable to matter in dispute-Court even though holding that application was not maintainable held the application under Section 20 of the Arbitration Act was barred by limitation-The Court having held that application under Section 20 was not maintainable Court had no jurisdiction to decide the question of limitation-Order in the matter of limitation was without jurisdiction-Such order would not operate as res judicata in application filed under Section 11 of the Arbitration and Conciliation Act.-Before a plea of res judicata can be given effect, the following conditions must be proved-(1) that the litigating parties must be the same; (2) that the subject matter of the suit also must be identical; (3) that the matter must be finally decided between the parties; and (4) that the suit must be decided by a court of competent jurisdiction. Where the Civil Court had no jurisdiction to entertain the application under Section 20 of the Arbitration Act, 1940 in relation to the matter in question, it was not permissible for the Civil Court to give any finding in relation to the merits of the case or even including pertaining to the fact as to whether the right to claim money under the agreement between the parties still subsists in favour of the applicant or not. The finding of the Civil Court in relation to the bar of limitation cannot be said to be a decision by a court of competent jurisdiction in the matter and, therefore, the plea of res judicata is not available. AIR 1976 SC 1569-Ref.
Section 20-Arbitration and Conciliation Act, 1996--Civil Procedure Code, 1908, Section 11 and Order XX, Rule 5-Resjudicate-Issue of jurisdiction-Work contract-Final bill not yet prepared-Still there is no bar of limitation for application for reference to arbitration-Application under Section 20 of old Act, 1940Court holding it has no jurisdiction Then no need to decide other issues-Decision, if made, is without jurisdiction-Plea of res judicata not applicable for such decision.-Once it is not disputed that the Civil Court had no jurisdiction to entertain the application under Section 20 of the old Act in relation to the matter in question, it was not permissible for the Civil Court to give any finding in relation to the merits of the case or even including pertaining to the fact as to whether the right to claim money under the agreement between the parties still subsists in favour of the applicant or not. Being so, the finding of the Civil Court in Order, dated 19.4.1997 in relation to the bar of limitation cannot be said to be a decision by a court of competent jurisdiction in the matter and, therefore, the plea of res judicata is not available to the respondent and does not arise for consideration in the present proceedings.
The contention of the respondent that on own showing of the applicant, the work was completed on 10th April, 1991 and that therefore, the claim of the applicant in the year 1996 itself was barred by the law of limitation cannot be accepted in view of decision of the Apex Court in the matter of Major (Rtd.) Inder Singh Rekhi v. Delhi Development Authority. Considering the ruling of the Apex Court in the said decision, it must be held that though on completion of the work the right to get payment would normally arise, but where final bill is not prepared, such a right cannot be said to have been barred by law of limitation unless the party fails to take necessary recourse to Section 11 of the new Act within 3 years from the date of assertion of the claim prior to the issuance of the final bill. In the case in hand it is not in dispute that the final bill has not been prepared. It is also undisputed fact that the applicant sought to assert the claim firstly by letter, dated 6.6.1995 and then by letter, dated 31.1.1996 and till then the final bill was not issued. Being so, it cannot be said that the application under Section 11 is barred by the law of limitation.
Section 11(6) and Limitation Act, Section 137-Application for appointment of arbitrator-Limitation of three years from date of accrual of cause for arbitration action-Date of completion of work pursuant to the accepted tender not relevant-No final bills settled-Application filed within three years of service of notice not barred by limitation.-In view of Section 43 of the Arbitration and Conciliation Act, provision of Article 137 of the Limitation Act shall apply to the arbitrati0n application. The application could be filed within three years of the date when the right first accrues, or cause for arbitration has arisen. The cause of arbitration could be said to have arisen from the date the party serves a notice upon the other party requiring the appointment of an arbitrator for settlement of disputes between the parties. Therefore, the cause of action arose in favour of the applicant contractor on service of notice, dated 31.1.1996 upon the respondent. Undisputedly, the application was filed in High Court on 30.9.1998 hence, it was not barred by law of limitation. Though, on completion of work the right to get payment would normally arise but where the final bill was not prepared till the service of notice, the dispute arose on service of notice.
2.The respondent invited tenders for the work of improvement and black-topping of the road to Bhutkuwada and Josewada in the village of Socorro. The tender of the petitioner in that regard was accepted by the respondent and the work order was issued on 16-11-1989, and simultaneously the formal agreement between the parties was executed. The date of commencement of the work was 30th November 1989 and the date stipulated for completion of the work was 22nd February 1991. However, on account of certain extra work which was to be carried out, the work could be completed only on 10th April 1991. Moreover, it is the contention of the applicant that the accounts between the parties were not finally settled for a long time and, therefore, the petitioner by notice dated 6th June 1995 formulated his claims for payment of amount due to the petitioner from the respondent on account of the work carried out by the petitioner and called upon the respondent to pay the said dues within 15 days from the receipt of the said letter. Since the respondent neither replied the said letter nor paid the dues, it is the contention of the petitioner that the disputes and differences arose between the parties and, therefore, in terms of Clause 25 of the said agreement between the parties, the petitioner issued notice dated 31st January 1996 calling upon the respondent to adjudicate and settle the dispute that had arisen between the parties as a result of non-settlement of the claim listed by the petitioner in his letter dated 6th June 1995 and therefore called upon the respondent to appoint an arbitrator in the matter and to refer the dispute for the adjudication. Inspite of the said letter, the respondent did not comply with the request of the petitioner and therefore, the petitioner filed an application under section 20 of the Arbitration Act, 1940, hereinafter called as "the old Act" before the Civil Court at Panaji. The same was registered as Special Civil Suit No. 11/96/A. By Order dated 19th April, 1997, the Civil Court, Panaji dismissed the said application on two grounds, firstly the applicability of the provisions of the new Act to the matter in question and secondly, the claim being barred by the law of limitation. The petitioner preferred the appeal against the said order and the same was registered as the Appeal from Order No. 12/97 and it was disposed of by this Court by its Order dated 17th August 1998. By the said order, this Court confirmed the order of the trial Court that the provisions of the new Act are applicable to the matter in question. Thereafter on 30-9-1998, the petitioner filed the present application in this Court.
3.The respondent by its affidavit-in-reply has objected to the said application on two grounds, namely, that the application is grossly barred by law of limitation and secondly, that it is barred by the principle of res judicata inasmuch as the petitioner's earlier application before the Civil Court was dismissed with the finding that the claim of the petitioner was barred by the law of limitation and the said finding was not disturbed by this Court in the judgment dated 17th August 1998 passed in Appeal from Order No. 12 of 1987.
4.Upon hearing the learned Advocates for the parties and on perusal of the record, the points for determination which arise before the application can be considered on merit are: (1) whether the application filed by the applicant is barred by the principle of res judicata on account of dismissal of the application by the Civil Court by its Order dated 19-4-1997 holding that the claim of the applicant is barred by the law of limitation and the said finding having not been disturbed by this Court in its judgment dated 17-8-1998 in Appeal under Arbitration Act No. 12/97;
(2)
