Point of Law : when the applicant has asserted their claim and the respondent failed to respond to such claim, the failure of the respondent is liable to be treated as a denial of the claim of the applicant.

JUDGMENT :

P.B. Suresh Kumar, J.

This appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 (the Act) is directed against the order dated 22.2.2020 in A.OP No.1247 of 2015 on the files of the Court of the Additional District Judge-V, Ernakulam. The appellant was the respondent in the said proceedings.

2. The appellant, hereinafter referred to as “the Railway” has awarded to the respondent, hereinafter referred to as “the Contractor”, a work in connection with the construction of an over bridge. The work was completed during the year 2008. Even though periodical payments have been made by the Railway to the Contractor in the course of execution of the work, final measurements of the work were taken by the Railway only on 10.02.2012. The final bill of the work was drawn by the Railway only thereafter and the balance payment was released to the Contractor on 13.12.2012. In the meanwhile, on 12.01.2010, the Contractor had raised a claim on the Railway in connection with the work for a sum of Rs.1,19,77,350.43/-. Later, before the disbursement of the final payment, when the Contractor was asked to submit a No Claim Certificate in terms of the contract, the Contractor submitted a No Claim Certificate without prejudice to their right to pursue the claim made on 12.01.2010. Since the final payment was released to the Contractor without considering the claim submitted by them on 12.01.2010, the Contractor sought resolution of the dispute relating to the said claim by appointing an arbitral tribunal as provided for in the contract. The said request was made by the Contractor on 03.04.2014. In response to the said request, the competent authority of the Railway constituted an arbitral tribunal comprising of three officers of the Railway for adjudicating the claim raised by the Contractor.

3. Before the arbitral tribunal, the Railway contended, among others, that the claim of the Contractor is barred by limitation. The basis of the contention was that in the absence of any provision in the contract fixing a time for payment for the work done, the claim, if any, for the price of the work done should have been raised by the Contractor within three years from the date of completion of the work and insofar as the work was completed during 2008, the request made on 03.04.2014 for reference of the dispute relating to the claim made by the contractor on 12.01.2010 for resolution of the dispute by recourse to arbitration is barred by limitation. The arbitral tribunal chose to decide the said contention as a preliminary issue and after hearing both sides, found that the claim made being one for the price of the work done, the cause of action to seek reference of a dispute relating to the same for adjudication by recourse to arbitration has arisen on completion of the work and the request for reference made three years after completion of the work is barred by limitation. In the light of the said finding, the arbitral tribunal rejected the claim of the Contractor as one barred by limitation.

4. The Contractor challenged the decision of the arbitral tribunal in A.OP No.1247 of 2015 before the court below invoking Section 34 of the Act. The court below, on a consideration of the facts and circumstances of the case, set aside the arbitral award, holding that the date of the final bill, and not the date of completion of the work, is the crucial date in the case on hand for reckoning the period for seeking reference of the dispute for resolution by recourse to arbitration and since the request was made within three years from the date of the final bill namely 13.12.2012, the claim is well within the period of limitation. The Railway is aggrieved by the said decision of the court below.

5. Heard the learned counsel for the Railway as also the learned counsel for the Contractor.

6. The learned counsel for the Railway did not contend that the finding rendered by the arbitral tribunal on a question of limitation cannot be said to be perverse