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1999 Supreme(Bom) 151
BOMBAY HIGH COURT
R.M.S. Khandeparkar, J.
NYANESHWAR BHIKU DHARGALKAR - PETITIONER
v.
EXECUTIVE ENGINEER - RESPONDENT
Second Appeal No. 8 of 1998,
Decided on: February 26, 1999
Sh. S.G. Desai, Sr. Advocate with Sulekha Kamat, Advocate for the Petitioner.
Sh. H.R. Bharne, Govt. Advocate for the Respondent.
The cause of arbitration arises on service of a notice requiring the appointment of an Arbitrator, and the application for appointment of Arbitrator must be filed within 3 years from that date.
Headnote:
ARBITRATION - APPOINTMENT OF ARBITRATOR - LIMITATION - RES JUDICATA - APPLICABILITY OF LIMITATION ACT, 1963 - SECTION 43 OF ARBITRATION AND CONCILIATION ACT, 1996 - CAUSE OF ARBITRATION - SECTION 37(1) OF ARBITRATION ACT, 1940 - SECTION 3 OF LIMITATION ACT, 1963 - SECTION 11(6) AND (8) OF ARBITRATION AND CONCILIATION ACT, 1996.
Fact of the Case:
The petitioner, a contractor, entered into an agreement with the respondent, a government body, for the improvement and black-topping of a road. The work was completed on 10th April, 1991, but the final bill was not prepared and the accounts between the parties were not settled. The petitioner claimed payment of dues from the respondent by letter dated 6th June, 1995, and served a notice dated 31st January, 1996, calling upon the respondent to refer the matter for arbitration. The respondent did not comply, and the petitioner filed an application under Section 20 of the Arbitration Act, 1940, which was dismissed by the Civil Court on the grounds of limitation and applicability of the new Arbitration and Conciliation Act, 1996. The petitioner then filed an application under Section 11 of the new Act for appointment of an Arbitrator.
Finding of the Court:
The Court held that the application for appointment of Arbitrator was not barred by the principle of res judicata, as the earlier dismissal of the application under the old Act was due to lack of jurisdiction of the Civil Court. The Court also held that the application was not barred by limitation, as the cause of arbitration arose on service of the notice dated 31st January, 1996, and the application was filed within 3 years from that date. The Court appointed Shri G.D. Kamat, retired Chief Justice of Gujarat High Court, as the Sole Arbitrator to settle the disputes between the parties.
Issues: 1. Whether the application for appointment of Arbitrator was barred by the principle of res judicata? 2. Whether the application was barred by limitation?
Ratio Decidendi: 1. The principle of res judicata is not applicable where the earlier dismissal of an application was due to lack of jurisdiction of the Court. 2. The cause of arbitration arises on service of a notice requiring the appointment of an Arbitrator, and the application for appointment of Arbitrator must be filed within 3 years from that date.
Final Decision: The Court appointed Shri G.D. Kamat, retired Chief Justice of Gujarat High Court, as the Sole Arbitrator to settle the disputes between the parties.
R.M.S. Khandeparkar, J. - This is an application for appointment of Arbitrator in terms of provisions contained in Section 11 of the Arbitration and Conciliation Act, 1996, hereinafter called as "the new Act".
2. The respondent invited tenders for the work of improvement and black-topping of the road to Bhutakuwada and Josewada in me village for 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 16th 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 and 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 the 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 he 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/
