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High Court Of Delhi
PURAN CHAND NAGIA - Appellant
Versus
AVIATION EMPLOYEES COOPERATIVE HOUSE BUILDING SOCIETY - Respondent
Suit 200A of 1981
Decided On : 04/10/1989
ARBITRATION - FILING OF ARBITRATION AGREEMENT - LIMITATION - PERIOD OF LIMITATION FOR FILING PETITION FOR REFERENCE OF DISPUTES TO ARBITRATION - COMPUTATION - ARBITRATION ACT, 1940, S. 11(6).
Fact of the Case:
Petitioner, a contractor, entered into two contracts with the respondent society for construction work. The contracts contained arbitration agreements. Disputes arose between the parties, and the petitioner filed petitions for filing of the arbitration agreements in court and reference of the disputes to arbitration. The respondent society contended that the petitions were barred by limitation.
Finding of the Court:
The court held that the disputes were covered by the arbitration agreements and that the petitions were within limitation. The court directed the respondent society to file the arbitration agreements in court and refer the disputes to arbitration.
Issues: 1. Whether the disputes between the parties were covered by the arbitration agreements? 2. Whether the petitions were barred by limitation?
Ratio Decidendi: 1. The arbitration agreements were very wide and applied to all disputes and differences arising out of the contracts or in connection with the contracts or the carrying out of the work. The disputes enumerated in the petitions were covered by the arbitration agreements. 2. The period of limitation for filing a petition for reference of disputes to arbitration is three years from the date when the right to apply accrues. In the present case, the right to apply accrued when the disputes arose. The disputes arose when the respondent society refused to make payment to the petitioner. The letter of the respondent society dated 18th March 1978, in which it stated that it would verify facts and get back to the petitioner, did not amount to a refusal to make payment. Accordingly, the petitions were within limitation.
Final Decision: The court allowed the petitions and directed the respondent society to file the arbitration agreements in court and refer the disputes to arbitration.
( 1 ) THE work of construction of Roads-Storm Water Drains etc. was awarded by Respondent-Society to the petitioner on 26th December 1972. The contract admittedly contains an arbitration agreement. Petitioner seeks filing of the arbitration agreement in court and reference of disputes enumerated in Para II of the petition to arbitration. This contract is subject matter of Suit No. 200-A/81.
( 2 ) IN Suit No. 201-A/81 the work in question is construction of Sewerage work in the Colony of the Aviation Employees Cooperative House Building Society at Shahdara, Delhi. The said work was awarded by the respondent-Society to the petitioner on 28th May 1973. Admittedly this contract also contains an arbitration clause similar to the one which is subject matter of Suit No, 200a/81. In this suit also petitioner seeks filing of the arbitration agreement and reference of disputes enumerated in Para 11 of the petition to arbitration in accordance with the arbitration clause.
( 3 ) THERE has been common correspondence between the parties in respect of the aforesaid two contracts. The facts arc more or less similar. This order will dispose of both the aforesaid suits.
( 4 ) IN reply the main defence raised by the respondent is that the petition is barred by limitation. The existence and validity of the arbitration agreement has not been disputed. On the pleading of the parties the follow- ing issues are framed:
1. Are there any disputes between the parties which are liable to be referred to arbitration ? If so, what the disputes are? (Onus objected to ). 2. Is this petition within time ? 3. Relief.
( 5 ) PARTIES were directed to file affidavits by way of evidence. The petitioner has filed his own affidavit by way of evidence whereas the respondent has filed the affidavit of Sh. Yash Pal Kapoor, its Secretary, by way of evidence in the suits. Issue No. 1
( 6 ) THE disputes are enumerated in Para 11 of the petition. The petitioner-contractor is claiming balance payment of running bills as also payment for additional work alleged to have been done by him. The petitioner has also claimed payment of final bill and certain damage etc. It has not been shown to me how the said disputes are not covered by the arbitration agreement. The arbitration agreement as contained in Clause 37 is very wide and applies to all the disputes and differences arising out of the contract or in connection with the contract or carrying out of the work. It cannot be said that the payments of running bills or additional work or payment of final bill have not arisen out of the contract or in connection with the contract or the carrying out of the work under the contract. In my opinion, all the disputes enumerated in Para 11 of the petition are liable to be referred to arbitration. Learned counsel for the respondent has not disputed that the said disputes are covered by the arbitration agreement but has submitted that the petition is not within limitation which question will be considered under issue No. 2. In view of the above, issue No. 1 is answered in favour of the petitioner.
( 7 ) ISSUE No. 2 The case of the petitioner is that the work was completed in the year 1977 and the petitioner repeatedly requested the Society to make the payment. The Society by its letter dated 18th March 1978 intimated the petitioner that after verifying and tallying their record with the bills submitted by the petitioner, it shall revert back to him in regard to decision of the Society. The letter dated 18th March 1978 is not disputed by the respondent-Society. The case of respondent-Society is that the Society was making ad-hoc payments to the petitioner in respect of the bills raised by him. The payments were made in accordance with the running bills raised and a sum of Rs. 4. 18,600 approximately has been paid to the petitioner as on 6th May 1975 after making full and complete adjustments of the Income-tax deducted at source, price of coal-tar drums etc. The case of the
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