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High Court Of Delhi
K.C.SHARMA - Appellant
Versus
D.P.A. - Respondent
Suit 1714A of 1996
Decided On : 01/09/1998
ARBITRATION - APPOINTMENT OF ARBITRATOR - LIMITATION - QUESTION OF LIMITATION FALLS WITHIN THE PROVINCE OF THE ARBITRATOR AND NOT THE COURT - COMPETENT AUTHORITY FAILED TO APPOINT ARBITRATOR WITHIN 15 DAYS OF THE RECEIPT OF THE NOTICE - COMPETENT AUTHORITY ABDICATED HIMSELF OF THE POWER TO APPOINT ARBITRATOR UNDER THE CONTRACT - COURT GETS THE JURISDICTION TO APPOINT AN ARBITRATOR BY OPERATION OF SECTION 8 (1) (A) OF THE ARBITRATION ACT, 1940.
Fact of the Case:
Petitioner submitted a tender for the work of Construction of SFS Houses at Sarita Vihar, Pkt. Dande SH : Construction of Temp. Office Building Near Circle Office, Sarita Vihar. The tender was accepted and an agreement containing an arbitration clause was executed between the parties. The petitioner completed the work by July 13, 1991, to the satisfaction of the respondents. The final bill was paid by the respondents in August 1992, but it did not include all the claims of the petitioner. The petitioner invoked the arbitration clause and requested the respondents to appoint an arbitrator, but the respondents failed to do so.
Finding of the Court:
The court held that the question of limitation falls within the province of the arbitrator and not the Court. The court also held that since the respondent failed to appoint an arbitrator within 15 days of the receipt of the notice, the respondent abdicated himself of the power to appoint an arbitrator under the contract and the Court gets the jurisdiction to appoint an arbitrator by operation of Section 8 (1) (a) of the Arbitration Act, 1940.
Issues: 1. Whether the claims of the petitioner were barred by limitation? 2. Whether the respondent forfeited its right to appoint an arbitrator?
Ratio Decidendi: 1. The question of limitation falls within the province of the arbitrator and not the Court. 2. If no arbitrator had been appointed within 15 days from the date of receipt of the notice the Competent Authority had abdicated himself of the power to appoint arbitrator under the contract and the Court gets the jurisdiction to appoint an arbitrator by operation of Section 8 (1) (a) of the Arbitration Act, 1940.
Final Decision: The petition was allowed and Justice P. K. Bahri, retired Judge of this Court, was appointed as an arbitrator to adjudicate upon the claims of the petitioner.
( 2 ) DDA, respondent No. 1, has contested the petition by filing written statement. It is not disputed that the work was awarded to the petitioner and the date of start of the work was October 17, 1990 while that of completion of work was April 16, 1991, as alleged. It is stated that site was made available to the petitioner from time to time and information with respect to decision of extra work/additional work was given well in time. Petitioner was permitted to bring the bricks on January 22, 1991. Running payments were made on the basis of the work executed by the petitioner. It is further alleged that by the letter dated June 4, 1992 petitioner was asked to submit the final bill but he failed to submit the same. Eventually final bill was prepared by the respondents and paid to the petitioner. Nothing is payable to the petitioner. It is not denied that the petitioner requested respondent No. 2 for appointment of an arbitrator on May 18, 1995, as alleged. However, this request was made by him after the expiry of the limitation period. Liability to pay the claims made by the petitioner is emphatically denied.
( 3 ) SUBMISSION advanced by Shri Alakh Kumar appearing for the respondents was that under clause 25 of the agreement entered into between the parties if a contractor does not make demand for arbitration in respect of the claim in writing within 90 days of his receiving intimation from the Engineer-in-Charge that the bill is ready for payment, the claim of the contractor will be deemed to have been barred by time. According to him, final bill was prepared and paid by the respo
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