1985 Supreme(Del) 15

High Court Of Delhi
UTTAM SINGH DUGGAL AND COMPANY PRIVATE LIMITED - Appellant
Versus
INDIAN OIL CORPORATION - Respondent
Suit 697-A of 1983
Decided On : 01/08/1985

The court held that the arbitration clause in the contract is valid and enforceable. The court further held that the petitioner's claim is not a notified claim as defined in clause 1.0.23.0 of the contract, and therefore, it is not covered by the arbitration agreement. The court also held that the petitioner is not entitled to any extension of time under S. 37(4) of the Arbitration Act, 1940, as the time limit for giving notice of the claim was not fixed by the arbitration agreement.

Headnote:

ARBITRATION - NOTIFIED CLAIM - TIME LIMIT - EXTENSION OF TIME - SECTION 37(4) OF THE ARBITRATION ACT, 1940 - APPLICABILITY - INTERPRETATION OF ARBITRATION CLAUSE - DISTINCTION BETWEEN BAR OF CLAIM AND BAR OF RIGHT TO ARBITRATE - CONSTRUCTION OF CLAUSE 6.6.1.0 OF THE CONTRACT - NOTICES SENT BY THE CONTRACTOR DO NOT FULFILL THE REQUIREMENTS OF CLAUSE 6.6.1.0 - PETITION UNDER SECTION 20 OF THE ARBITRATION ACT, 1940 IS NOT MAINTAINABLE.

Fact of the Case:

The petitioner, a contractor, entered into a contract with the Indian Oil Corporation Limited (IOCL) for construction of certain works at Faridabad for the R and D Centre of IOCL. The contract contained an arbitration clause. Before proceeding further, it is better to set out the relevant clauses of the contract, between the parties touching on the arbitration. These are :-- (I) "1.0.23.0. notified Claim shall mean a claim of the contractor notified in accordance with the provisions of Clause 6.6.1.0. hereof." (II) "6.6.1.0. Should the contractor consider that he is entitled to any extra payment o,- compensation in respect of the works over and above the amount due in terms of the contrac as specified in. Clause 6.3.1.0. hereof or should. the Contractor dispute the validity of any deductions made or threatened by the corporation from any Running Account Bills or any payments due to him in terms of the Contract, the Contractor shall forthwith give notice in writing of his claim in this behalf to the Engineer-in-Charge and the Site Engineer within 10 (ten) days from the date of the issue of orders or instructions relative to any works for which the Contractor claims such additional payment or compensation, or on the happening of other event upon which the Contractor bases such claim, and such notice shall give full particulars of the nature of such claim, grounds on which it is based, and the amount clamed. The contractor shall not be entited to raise any dain. nor shall the Corporation anywise; be liable in respect of any claim by the Contractor unless notice of such claim shall have been given by the Contractor to the Engineer-in-Charge and the Site Engineerin the manner and within the time aforcsaid, and the Contractor shall be deemed to have waived any or all claims and all his rights in respect of any claim not. notified to the Engineer-in-Charge and the Site engineer in writing in the manner and within the time aforesaid." (III) "6.6.3.0. Any or all claims of the Contractor notified in accordance with the provision of clause 6.6.1.0. hereof as shall remain presist at the time of preparation of Final Bill by the Contractor shall be separately included in the Final Bill prepared by the Contractor in the form of a Statement of claims attached thereto, giving particu!ars of the nature of such claim, grounds on which it is based, and the amount claimed, and shall be supported by a copies of the notice (s) sent in respect thereof to the engineer-in-Charge and Site Engineer under Clause 6.6.1.0 hereof. In so far as such claim shall in any material particular be at variance with the claim notified by the Contractor within the provioson Of 6.6.1.0 hereof, it shall be deemed to be a claim different from the notified claim with consequence in respect thereof indicated in Clause 6.6.1.0 hereof, and with consequences in respect of the notified claim as indicated in Clause 6.6.3.1 hereof." (IV) "6.6.3.1. Any and all notified claims not specifically reflected and included in the Final Bill in accordance with the provisions of Clause 6.6.3.0 hereof shall be deemed to have been waived by the contractor. and the Corporation shall have no liability in respect thereof and the Contractor shall not bo entitled to raise or include in the Final Bill any claim (s) other than a notified claim conforming in all respects in accordance with the provisions of Clause 6.6.3.0 hereof."

Finding of the Court:

The court held that the claim in the present case is not covered by the arbitration agreement or that it is not within the scope of the arbitration agreement. It also held that the petitioner is not entitled to any extension of time under S. 37(4) of the Act. All these issues are thus held in favor of the respondent Corporation and against the petitioner contractor.

Issues: 1. Is the claim within the scope of the arbitration agreement? 2. If so, if such a claim is covered. by the arbitration agreement? 3. If issues 1 and 2 are decided against the petitioners, then are the petitioners entitled to extension of time under Section 37 (4) of the Arbitration Act?

Ratio Decidendi: The court held that the arbitration clause in the contract is valid and enforceable. The court further held that the petitioner's claim is not a notified claim as defined in clause 1.0.23.0 of the contract, and therefore, it is not covered by the arbitration agreement. The court also held that the petitioner is not entitled to any extension of time under S. 37(4) of the Arbitration Act, 1940, as the time limit for giving notice of the claim was not fixed by the arbitration agreement.

Final Decision: The petition under Section 20 of the Arbitration Act, 1940 is dismissed with no order as to costs.