IN THE HIGH COURT OF CHHATTISGARH, BILASPUR
Sanjay K. Agrawal, J.
Shashikant Agrawal - Applicant
Versus
The State of Chhattisgarh, Through the Secretary, Town Administration and Development & Ors. - Respondents
Civil Revision No.128 of 2015
Decided On : 20-07-2016
Arbitration Act - Section 37 – Jurisdiction – Claim of compensation - petitioner was awarded a contract by the Nagar in which upon execution of work, the petitioner was paid retaining 5% of the amount against which the petitioner invoked clause 28 of the agreement i.e. the arbitration clause and when the dispute was not resolved, he made a request to the Chief Municipal Officer, Nagar and ultimately raised dispute Chief Engineer vide and notice regarding appeal was served to the petitioner on 11-6-2013 and 29-7-2013, and thereafter, the reference petition was filed learned Arbitration Tribunal by its impugned award rejected the same holding that final payment was made and as the cause of action arose on that day, the petitioner ought to have filed request as per the terms of clause 28 of the agreement, to the Chief Municipal Officer, Nagar within fifteen days from the accrual of cause of action but the petitioner did not invoke the jurisdiction of the Chief Municipal Officer within the prescribed period of limitation and therefore, his reference petition is barred by limitation - Arbitration Tribunal also after having held the reference petition to be barred by limitation cursorily examined the claim on merits and held the petitioner not entitled for any relief against which this revision has been filed under Section 19 of Act of as stated above – Held, Reference petition was filed within the period prescribed in proviso to Section 7-B(1) of Act of which cannot be held to be barred by limitation by any stretch of imagination and as such the petitioner has invoked the jurisdiction of the Tribunal after approaching the final authority as provided under clause of works contract in accordance with the judgment of the Madhya Pradesh High Court in Sanjay and this is the reason why the Arbitration Tribunal on the earlier date of hearing heard the matter on admission and admitted the reference petition for hearing as prescribed under Section 7-B of Act of - This further strengthens the fact that the respondent Nagar has raised no objection with regard to limitation of the reference petition – Thus Arbitration Tribunal is absolutely unjustified in dismissing the reference petition on ground that final authority has not been approached as per the agreement within the period prescribed in the agreement learned Arbitration Tribunal after having held that the reference petition is barred by limitation at paragraph 12 of the award cursorily held that the reference petition is having no merit - Such a course is clearly impermissible in law. The learned Arbitration Tribunal, in all fairness, could not have held so after having held the reference petition to be barred by limitation. While deciding the merits of a claim, the claim has to be adjudicated on the basis of full appreciation and full elaboration of oral and documentary evidence brought on record. Such a dismissal of claim on merits after holding reference petition to be barred by limitation and without discussing the pleadings and evidence at length, cannot be countenanced - In view of aforesaid discussion it is held that reference petition filed by petitioner was perfectly within the period of limitation as provided under Section 7-B of the Act of and it was required to be decided by Arbitration Tribunal on merits only - Arbitration Tribunal is absolutely unjustified in dismissing reference petition holding it beyond limitation and contrary to the well settled law particularly, ignoring binding judgment of the Division Bench of this Court in Construction Company - Civil revision is allowed
1. Invoking Section 19 of the Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983 (for short 'the Act of 1983'), the petitioner contractor has filed this revision questioning legality, validity and correctness of the award dated 17-11-2015 passed by the Chhattisgarh Madhyastham Adhikaran, Raipur (for short 'the Arbitration Tribunal') in Reference Case No.18/2013, whereby the reference petition instituted by the petitioner herein has been rejected on the ground that it is barred by Section 7-B of the Act of 1983 as well as on merits.
2. Aforesaid challenge has been made on the following factual backdrop:-
(2.1) The petitioner was awarded a contract by the Nagar Panchayat, Baradwar in which upon execution of work, the petitioner was paid Rs.12,24,094/- on 8-3-2010 retaining 5% of the amount i.e. Rs.64,500/- against which the petitioner invoked clause 28 of the agreement i.e. the arbitration clause and when the dispute was not resolved, he made a request to the Chief Municipal Officer, Nagar Panchayat, Baradwar on 11-1-2013 vide Exs.A-45 and A-46 and ultimately raised dispute on 25-4- 2013 to the Chief Engineer vide Ex.A-47, and notice regarding appeal was served to the petitioner on 11-6-2013 and 29-7-2013, and thereafter, the reference petition was filed on 25-10-2013. The learned Arbitration Tribunal by its impugned award rejected the same holding that final payment was made on 8-3-2010 and as the cause of action arose on that day, the petitioner ought to have filed request as per the terms of clause 28 of the agreement, to the Chief Municipal Officer, Nagar Panchayat, Baradwar within fifteen days from the accrual of cause of action but the petitioner did not invoke the jurisdiction of the Chief Municipal Officer within the prescribed period of limitation and therefore, his reference petition is barred by limitation. The Arbitration Tribunal also after having held the reference petition to be barred by limitation cursorily examined the claim on merits and held the petitioner not entitled for any relief against which this revision has been filed under Section 19 of the Act of 1983 as stated above.
3. Mr. Chandresh Shrivastava, learned counsel appearing for the petitioner contractor, would submit that the learned Arbitration Tribunal has committed grave legal error by dismissing the reference on the basis of limitation and merit. He would further submit that Section 7-B of the Act of 1983 prescribes limitation for admission of the reference petition for which the dispute is firstly required to be referred for the decision of the final authority under the terms of the works contract upon accrual of the dispute and thereafter, one year from the date of communication of the decision of the final authority, the reference petition is to be filed before the Tribunal. He would also submit that in the instant case, the question of limitation was considered by the Tribunal on 14-3-2014 and the petition was admitted for hearing after having satisfied that the reference petition is within limitation and thereafter, the Tribunal is precluded from reexamining the question of limitation particularly when the respondent Nagar Panchayat has not raised any such plea of limitation in the written statement to the reference petition. He would also submit that the learned Arbitration Tribunal has failed to consider the fact that in the works contract there is no concept of cause of action, here the question would be the cause of arbitration. He would also submit that cause of arbitration accrued from the date when the claimant first acquired either a right of action or a right to require that an arbitration should take place upon the dispute concerned. He would lastly submit that in the present case, the dispute was firstly referred to the Chief Municipal Officer and thereafter, the Chief Engineer and thereafter, within the period prescribed under Section 7-B (1) (b) of the Act, the reference petition was filed and the Tribunal is absolutely unju
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