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High Court of Delhi
THE HONOURABLE MR. JUSTICE VIPIN SANGHI
M/S. Raj Kishan & Company
Versus
National Thermal Power Corporation
O.M.P. No. 320 OF 2010
Decided on : 12-09-2012
ARBITRATION - Limitation - Counter claim - Whether the counter claim of the respondent was barred by limitation - Held, that the issue of limitation is a mixed question of fact and law and cannot be raised for the first time in proceedings under Section 34 of the Arbitration and Conciliation Act, 1996.
Fact of the Case:
The petitioner raised certain claims on the respondent and demanded payments from the respondent vide letter dated 22.02.1999. On 09.08.1999, the respondent disputed the said claims. It was alleged that the petitioner had stopped the work and did not restart the same despite notice. It was also stated that the respondent had no alternative but to get the balance work executed at the petitioner’s risk and cost. It was specifically stated that “there is a lot of owner issue materials outstanding with M/s RKC which is required to be returned to NTPC. The detail of the outstanding owner issue material based on the last RA Bills no.142 is accounted and enclosed as Annex-I. It is a matter of record that no efforts have been made to return balance owner issue material inspite of repeated verbal and written requests”. The respondent demanded the petitioner to return the balance owner issue material. It was stated that the total recoveries amounted to Rs.283 lacs approximately which includes recoveries against unaccounted owner issue material. It was stated that in case the amount of Rs.283 lacs is not paid within 15 days, the respondent would be constrained to seek arbitration under clause 56 of the GCC for recoveries. In Annexure III of this letter, the respondent at serial No.5 claimed an amount of Rs.1,79,81,140 “against FOC material”. The respondent issued a communication dated 06.12.1999 (R47) to the petitioner in response to the petitioner’s letter dated 25.08.1999. The respondent in this communication, inter alia, stated: “....With respect to the release of the payment due, it is pertinent to mention that the same has not been released in order to recover the outstanding advance arisen out of material reconciliation amounting to Rs. 180 lacs approx. For which detailed calculations have already been enclosed in terms of material accounting/reconciliation as per special condition of contract vide our letter dated 9.8.99.” (emphasis supplied)
Finding of the Court:
The plea of limitation cannot be decided as an abstract plea of law divorced from the facts. As explained in Ramesh B. Desai v. Vipin Vadilal Mehta 2006 (5) SCC 638 “a plea of limitation is a mixed question of law and fact.” Consequently, unless the plea of limitation is raised at the earliest point in time before the learned Arbitrator, it cannot be adjudicated upon as a mixed question of law and fact.
Issues: Whether the counter claim of the respondent was barred by limitation.
Ratio Decidendi: The issue of limitation is a mixed question of fact and law and cannot be raised for the first time in proceedings under Section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision: The objection petition is dismissed with costs quantified at Rs.30,000/-, to be paid by the petitioner to the respondent.
VIPIN SANGHI, J.
1. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”), is directed against the arbitral award dated 13.11.2009 and the order of modification dated 22.02.2010 – passed by the Arbitral Tribunal comprising Hon”ble Mr. Justice P.K. Bahri (Retd.).
2. The brief facts, leading to the present petition and relevant for the present purposes, are summarised as under:
2.1. Respondent herein awarded a contract for General Civil Work Package (4 x 210 MW) at its NCPS (Project) Dadri District, Gautum Budh Nagar, U.P. to the Petitioner herein. A formal contract was executed between the parties on 21.03.1989.
1. 2.2. It appears that the petitioner raised certain claims on the respondent and
demanded payments from the respondent vide letter dated 22.02.1999. On 09.08.1999 (vide R-46), the respondent disputed the said claims. It was alleged that the petitioner had stopped the work and did not restart the same despite notice. It was also stated that the respondent had no alternative but to get the balance work executed at the petitioner”s risk and cost. It was specifically stated that “there is a lot of owner issue materials outstanding with M/s RKC which is required to be returned to NTPC. The detail of the outstanding owner issue material based on the last RA Bills no.142 is accounted and enclosed as Annex-I. It is a matter of record that no efforts have been made to return balance owner issue material inspite of repeated verbal and written requests”. The respondent demanded the petitioner to return the balance owner issue material. It was stated that the total recoveries amounted to Rs.283 lacs approximately which includes recoveries against unaccounted owner issue material. It was stated that in case the amount of Rs.283 lacs is not paid within 15 days, the respondent would be constrained to seek arbitration under clause 56 of the GCC for recoveries. In Annexure III of this letter, the respondent at serial No.5 claimed an amount of Rs.1,79,81,140 “against FOC material”. The respondent issued a communication dated 06.12.1999 (R47) to the petitioner in response to the petitioner”s letter dated 25.08.1999. The respondent in this communication, inter alia, stated:
“....With respect to the release of the payment due, it is pertinent to mention that the same has not been released in order to recover the outstanding advance arisen out of material reconciliation amounting to Rs. 180 lacs approx. For which detailed calculations have already been enclosed in terms of material accounting/reconciliation as per special condition of contract vide our letter dated 9.8.99.” (emphasis supplied)
2.3. On 10.05.2000, the petitioner sent a communication to the Manager (CCD) of the respondent stating that:
“...Disputes and differences arose between M/s. Raj Kishan & Co. And N.T.P.C as the Manager (P.H) N.T. P.C Vidyut Nagar has not made the payment even though notice was sent vide letter no.RKC/HO/SKG/99/2547 dated 22.2.99.
Subsequently, various correspondence have also been made which reconfirms/crystallize that dispute formed earlier could not be amicably settled but remain as a dispute, requiring adjudication, inspite of various efforts made by the parties to reconcile.
However at this stage it is very clear that dispute and difference remain as it is.”
The petitioner requested for payment within 15 days failing which, the petitioner stated that it would be free to approach a forum for sorting out the dispute.
1. 2.4. On 31.5.2000, the petitioner addressed a communication to Shri V.K. Srivastava, Sole Arbitrator of the respondent stating that disputes and differences had arisen between the parties as the Manager of the respondent had not made payment even though notice was sent vide letter dated 10.05.2000. The sole Arbitrator was called upon to adjudicate the disputes thus formed. The disputes and differences were shown in Annexure A to this communication. On 15.0
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